Illinois Legislative session recap

Following a short overtime session that lasted into the early days of June, the Illinois legislature has concluded a majority of its business. Highlights include the passage of a $42 billion budget, new legislative district boundaries being signed into law, changes in ethics laws, an agreement on affordable housing and much more. The Quad Cities Chamber advocated throughout the session for our annual priorities and saw success in many of the issue areas important to our regional businesses. Outlined below are highlights of legislation passed this session related to the Chamber’s priority areas.

State Budget

• After receiving $8.1 billion in federal assistance through the American Rescue Plan Act, and an increase in expected State revenues, the legislature passed a budget that contains various changes to tax policies that affect Illinois business and their owners. Most notably of the changes that will result in approximately $650 million more in State revenue include:
  • Reversal of the franchise tax phaseout: the budget eliminates the planned phaseout of the Illinois corporate franchise tax, which the Governor had previously agreed to as part of 2019 budget agreement.
  • Decoupling from the federal 100% bonus depreciations provided in the 2017 Tax Cuts and Jobs Act.
  • Capping the Corporate Net Operating Losses: net operating losses are limited to $100,000 per year after 2021 and prior to 2025.
• Of the $8.1 billion received in American Rescue Plan Funding, the State plans to spend $2.5 billion of that allotment this year. A total of $1.5 billion is set to be spent on economic recovery programs to help hard-hit businesses. Another $1 billion has been earmarked to accelerate capital improvements in the Rebuild Illinois program. The annual spending plan also includes paying back a $2 billion loan the State took out from the Federal Reserve in December. The budget includes funding to make the annually required contribution to fund state pensions, funding schools with an additional $350 million as called for in the funding formula and ensures local governments would receive their full share of state income tax revenue. The budget includes no new income taxes on Illinois residents.

Elections

• The Democrat-controlled process of re-drawing legislative districts has been completed for Illinois House and Senate seats, with the Governor signing legislation finalizing the proposal. Congressional maps have yet to be announced and will be done after U.S. Census data is received later in the year. Because of the delay in the data, the 2022 primary election has also been moved from March 15 to June 28.

COVID-19 Recovery

• Following the Governor’s signature on SB104 last week, the pandemic prompted cocktails-to-go law has now been extended through Jan 1, 2024. Additionally, the bill allows retailers to offer adults a free alcoholic beverage with proof of vaccination, from Thursday, June 10 through Saturday, July 10, 2021.
• HB353 - A bill that would have increased the minimum wage for essential workers to $20/hour during the COVID public health emergency, did not pass during the legislative session.

Business Climate and Taxation

• SB 2531 - Utilizes an IRS-approved method that would allow pass-through businesses, such as S-corporations and partnerships, to bypass the $10,000 cap on the State and Local Tax (SALT) deduction that was created by the federal Tax Cuts and Jobs Act in 2017. Passed both chambers, becomes law with Governor’s signature
• SB 58 – Reduces the license plate renewal fee for small trailers to $36 per year. Passed both chambers, becomes law with Governor’s signature
• HB 118 - Provides that an employee is entitled to recover damages of 5% (rather than 2%) of the amount of any underpayments in wages for each month following the date of payment during which such underpayments remain unpaid. Passed both chambers, becomes law with Governor’s signature

Economic Development

• HB34 – Makes changes to the Illinois Enterprise Act concerning eligibility, mainly that the Department of Commerce and Economic Opportunity may consider information released in the most recent American Community Survey. Provides that for Enterprise Zones scheduled to expire on or after Jan 1, 2024, an application process shall begin five years prior. Passed both chambers, becomes law with Governor’s signature
• HB 1855 – Establishes the DCEO Innovation Voucher Program for the purpose of fostering research and development in key industry clusters leading to the creation of new products and services that can be marketed by Illinois businesses. Passed both chambers, becomes law with Governor’s signature
• HB 3743, now Public Act 102-0009 contains the Small Wireless Facilities Deployment Act. The legislation extends the Act for an additional three years and seven months to continue attracting private investment into Illinois’ wireless broadband networks.

Transportation & Infrastructure

• SB 1232 – In an effort to allow airports to have more authority to make their own financial decisions, this legislation streamlines how federal money can get to local airports. Additionally, the bill eases approval processes for construction and development for hangars, allowing individual airports to move forward on their own timelines. Passed both chambers, becomes law with Governor’s signature.
• HB 399 – Creates the High-Speed Railway Commission which will create a statewide plan for a high-speed rail line and feeder network, including the cities of Rockford, Moline, Peoria and Decatur. Provides that the Commission shall conduct a ridership study and shall make findings and recommendations concerning a governance structure, the frequency of service, and implementation of the plan. Passed both chambers, becomes law with Governor’s signature
• HB3739 – The Lead Service Line Replacement Notification Act will require water utilities statewide to replace all lead service lines and creates a low-income water assistance program to help fund financial assistance and water projects that include lead pipe replacement. Passed both chambers, becomes law with Governor's signature

Workforce Development

• HB2877, now Public Act 102-0005 – Creates the COVID-19 Federal Emergency Rental Assistance Program Act. This legislation outlines the framework for distributing the $1.5 billion in rental assistance for renters and landlords who struggled to get through the pandemic. Residents who fell behind on payments can apply for us to $25,000 which will be paid directly to the landlord or housing provider.

Read the Iowa Legislative Recap