Illinois End of Session Recap

The Illinois Legislative Session is now complete. Below is a final recap and list of bills that passed or did not pass, and the Chamber's position on them. 

Successes 

River Edge Redevelopment Zone (RERZ) – Passed (Supported)

Late in session, the Department of Commerce and Economic Opportunity Omnibus was introduced with language around the creation of a quantum campus and other provisions that include the creation of a River Edge Redevelopment Zone in each of the following communities: Moline, Rock Island and East Moline. This creates new tools in the toolbox for economic development which will complement existing enterprise zones.

The River Edge Redevelopment Zone program provides for the following: 

• RERZ provides several incentives authorized by State law. Two of these – sales tax exemption and property tax abatement (if offered in the zone) – are administered by the local zone administrators. The others involve tax incentives that are claimed on your Illinois Income Tax filing forms. 
• Dividend Income Deduction:  Allows individuals, corporations, trusts and estates to deduct an amount equal to dividends paid to them by a corporation that conducts substantially all of its operation in the RERZ from their taxable income. 
• Interest Income Deduction:  Allows financial corporations to deduct an amount equal to the interest received for a loan for development in an RERZ from their corporate State Income tax. Loans must be secured by property located within an RERZ. 
• New Construction Jobs Credits: Allows eligible project owners to deduct received tax credits from their taxable income. Tax credits are issued based on the incremental income tax attributable to the River Edge construction employees employed on an eligible project. 
• Building Materials Sales Tax Exemption:  Allows for exemption of sales tax on construction materials for non-residential projects within the RERZ.  Forms necessary to claim this “point-of-sales” exemption are available from the local administrator. 
• Property Tax Abatement:  RERZs may offer property tax abatement within the zone. To determine if a property tax abatement is viable, contact the local zone administrator. 
• Site Remediation Tax Credit: The Illinois Income Tax Act 35 ILCS 5/201 (n), as amended allows a credit against the tax imposed by subsections (a) and (b) and shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site in a River Edge Redevelopment Zone. 

There will be a lag time from passage and signing of this act, to implementation of these zones. 

Workers' Comp – Passed (Supported)

The Illinois Chamber of Commerce led engagement on this year's Workers' Compensation Legislation which provides a very modest increase to fund the operations of the Workers' Compensation Commission. This was done with agreement on a future process that requires representatives of business and labor to come together and agree on legislation related to workers' compensation. On the House floor, it was made clear that the agreed bill process will be utilized next year on a broader range of reforms for Illinois. 

Tipped Wage – Failed (Opposed)

Legislation was introduced with the goal of eliminating Illinois “Tip-Credit”, a long-standing practice that allows companies that employ tipped workers to pay a lower wage than the statewide minimum wage IF, AND ONLY IF, an employee's tips add up to at least the statewide minimum wage. No employee is actually paid less than the minimum wage, but this credit allows for businesses (particularly restaurants) to keep prices lower by reducing their variable costs to labor. 

The bill was introduced and passed out of the House Labor & Commerce Committee, but failed to progress any further, representing a win for small business owners in the Quad Cities and Illinois. The Quad Cities Chamber worked in coalition with the Illinois Restaurant Association and local Illinois Licensed Beverage Association to stop this bill from passing. 

Other Issues of Interest

Middle Income Housing & Brownfield/Grayfield

The Chamber worked with Senator Mike Halpin (D) to introduce the Middle Income Housing Tax Credit and Updates to the Brownfield program and the addition of a Grayfield program.

During session, the Senate Revenue Committee held an initial subject matter hearing on the Middle Income Housing bill, which would create a new incentive to promote housing for individuals between 80% - 120% Area Median Income in Illinois. This would help to promote new housing development in an area of the Quad Cities that is currently struggling to attract such investment. During the interim, the Chamber will be convening stakeholders across the state to build support for the bill. We encourage any Chamber members interested in helping to promote this legislation to reach out to to the Chamber. 

The Brownfield/Grayfield bill did not receive a hearing. We will be reevaluating the bill given the new River Edge designation for our Illinois communities so they understand the potential impact and benefit of the program on Brownfield projects.

Day & Temporary Laborers – Passed 

This bill is generally seen as an improvement to the original Day and Temporary Labor Bill which caused a lot of concern. This does not address the severely problematic section of the original bill that refers to the monetization of benefits. However, that section is currently under injunction.  

The bill clarifies the intent of the original bill and improves the ability of Illinois companies to comply. While it does not fix everything, it is a step in the right direction while we await the final answer from the courts on benefits. 

Carbon Sequestration – Passed 

This bill creates the Safety and Aid for the Environment in Carbon Capture and Sequestration Act (which may be referred to as the SAFE CCS Act). It will regulate, and likely limit the implementation of Carbon pipelines, which have faced scrutiny from local governments in the past. 

The bill creates regulations related to pore sites and provides that the Illinois Commerce Commission grant an application for a certificate authorizing the construction and operation of a carbon dioxide pipeline if: 

• The applicant has applied for any other federal permits necessary to construct and operate a carbon dioxide pipeline. 
• The applicant has held at least 2 prefiling public meetings to receive public comment concerning the proposed carbon dioxide pipeline in each county where the pipeline is to be located.
• The applicant has directly contacted the owner of each parcel of land located within 2 miles of the proposed pipeline route, advising them of the proposed pipeline route and of the date and time of each public meeting to be held in the county in which each landowner's property is located. 
• The applicant has prepared and submitted a detailed emergency operations plan.  

The bill also prohibits the Commission from issuing any certificate of authority until the Pipeline and Hazardous Materials Safety Administration has adopted final revisions to its pipeline safety rules and the Commission has verified that the submitted application complies with those finalized rules.  

Procurement Omnibus (Progressive Design-Build) – Passed 

Among many provisions in the bill, the most impactful changes include: 

• Creation of the Progressive Design-Build Pilot Program Act, providing that the Capital Development Board may elect to use the Progressive Design-Build delivery method. Sets forth other provisions concerning procedures for selection and submission of qualifications, the award of contracts, pricing and federal requirements. 
• In a provision of the Illinois Procurement Code concerning mid-size business set-asides, provides that "mid-size business" includes a construction business with annual sales and receipts in excess of $14,000,000, but not over $45,000,000. 
• The Department of Natural Resources has the power to lease, from time to time, any land or property, with or without appurtenances, of which the Department has jurisdiction, and which are not immediately to be used or developed by the State if certain requirements are met. Provides that the Department may lease any land or property over which the Department has jurisdiction for the purpose of creating, operating or maintaining a commercial solar energy system or a clean energy project. 

Tax Omnibus - Passed

The Tax Omnibus was the subject of parliamentary discussion when the bill failed to pass verification of role call votes after members of the majority party left before the bill had officially passed on record. The bill contains a handful of problematic provisions including an extension of the Net Operating Loss Cap through 2027, while increasing the dollar value of the cap to $500,000. In addition it:

• Provides that, subject to certain exceptions, a payment card network, an acquirer bank or a processor may not receive or charge a merchant any interchange fee on the tax amount or gratuity of an electronic payment transaction if the merchant informs the acquirer bank or its designee of the tax or gratuity amount as part of the authorization or settlement process for the electronic payment transaction
• Caps the vendor discount at $1,000 per month
• Includes Chamber Tax Institute legislation changing the sales taxation of leasing from an upfront tax on the acquisition cost of the leased property paid by the lessor, to a tax on the rental charges paid by a lessee

Grocery Tax Changes – Passed

This bill removes the State's existing grocery tax, and allows for counties and municipalities (after January 1, 2026) to reimpose a grocery tax specific to their locality of 1%.