2022 End of Session Report

By Cozen O'Connor Public Strategies

Overview

Over the course of their spring 2022 legislative session, Illinois lawmakers passed a bevy of bills designed to shore up state finances and woo Illinois voters ahead of the 2022 election cycle.

The General Assembly’s April 9 adjournment, more than a month earlier than normal, allows state officials to hit the campaign trail ahead of the state’s June 28, 2022 primary election – and to leverage their legislative successes for election advertisements.

Indeed, election-year politics shaped the course of the truncated spring legislative session: buoyed by federal coronavirus aid and a historic $2 billion FY 2022 budget surplus, state lawmakers approved a slate of measures designed to crack down on crime, offer temporary tax holidays, and send direct aid to voters struggling to cope with rising inflation.

FY 2023 Budget

The state’s $46.5 billion FY 2023 spending plan, laid out in House Bill 900 and House Bill 4700, seeks to shore up the state’s historically beleaguered finances and provide relief to industries hit hardest by the COVD-19 pandemic.

The package adds $1 billion to Illinois’ “rainy day” fund and makes a $200 million contribution toward pensions over the statutorily required amount, bringing the total pension contribution to $500 million. Additionally, the legislation increases the Local Government Distributive Fund – a critical revenue source for Illinois municipalities – from 6.06 to 6.16 percent of the state’s income tax.

In all, state Democrats posit the budget could pave the way for additional credit rating upgrades. Minority Republicans, meanwhile, posit the spending plan fails to place the state on a path to long-term fiscal stability, arguing that Illinois – once it exhausts its share of one-time, pandemic-era relief funds – will remain unequipped to handle future economic downturns.

Revenue Omnibus

In addition to the budget, state lawmakers passed a sweeping revenue omnibus bill (Senate Bill 157), creating a suite of tax breaks and funneling direct relief to Illinois residents and businesses struggling with inflation. The sprawling package’s most notable components are detailed below.

• Direct Checks: The bill will send $50 checks to single filers and $100 for spouses filing joint returns, plus an additional $100 for each person claimed as a dependent (up to three). Checks will go to single-filers making less than $200,000 and joint-filers making up to $400,000.
• Tax Breaks for Residents: The bill establishes a 5% sales tax holiday on school supplies and clothing items costing less than $125 from Aug. 5-14; expands the state’s earned income tax credit; pauses the 2-cent a gallon increase in the state tax on gasoline for six months; and halts Illinois’ 1% grocery tax for a year. Additionally, homeowners will get a one-time break on their property tax bills, for a maximum of $300. Democrats say these tax credits are possible through a roughly $2 billion budget surplus expected at the end of Fiscal Year 2022.
• Business Relief: SB 157 includes a variety of  tax credits for state businesses and job creators.
  • EDGE Extension: The package provides for a 5-year extension (through June 30, 2027) of the state’s Economic Development for a Growing Economy (EDGE) Tax Credit Program, which provides annual corporate tax credits to qualifying businesses which support job creation and capital investment. The package additionally makes the EDGE program refundable for start-ups.
  • Paid Leave Credit: The bill establishes a new credit of up to $1,000 for private employers that permit employees to take paid sick leave in excess for 30 days to donate their bone marrow or organs.
• UI Trust Fund: Finally, SB 157 extends the deadline for negotiations on the $1.8 billion deficit in the unemployment insurance trust fund to Jan. 1, 2023. The previous deadline of July 3, 2022 would have triggered what lawmakers call “speed bumps” in state statute that are designed to force stakeholders to negotiate. Had no action been taken, the so-called “speed bumps” were estimated to drive up costs in the system by $409 million in tax increases on employers, and $318 million in benefits for jobless workers.

Public Safety

Between the state’s budget and a suite of public safety oriented bills, lawmakers put a couple billion dollars towards violence reduction, public safety, and anti-crime programs. New money was appropriated for expanded expressway cameras, body cameras, evidence retention and first-responder mental health and child care. Notable measures passed this session include:

• Organized Retail Theft: Amid a spike in retail theft, House Bill 1091 makes organized retail crime a felony for those who steal more than $300 in merchandise from stores and 1) commit assault or battery at the store or 2) intentionally damage property. The bill also expands the abilities of state’s attorneys prosecuting organized retail crime by allowing them to prosecute all aspects of such an offense – even if portions of the robbery took place outside their jurisdiction. The bill additionally requires online marketplaces, like eBay, to independently verify the identity of “high-volume third-party” sellers.
• Highway Cameras, Carjackings, and Vehicle Theft: Lawmakers passed a suite of bills to crack down on rising car-related crimes.
  • Highway Cameras: House Bill 4481 will allow the State Police, Illinois Tollway, and Department of Transportation to install highway observation cameras in 22 counties across the state. Currently, only Cook County is permitted to install state-owned observation cameras on highways. Police would be able to use the cameras for tracking vehicles involved in violent crimes and carjackings and for monitoring expressways for shootings. House Bill 260 will add cameras along Jean-Baptiste Pointe DuSable Lake Shore Drive in Chicago.
  • Carjackings: House Bill 3699 expands the Motor Vehicle Theft Prevention and Insurance Verification Act to include carjackings. Bill sponsors say the legislation allows law enforcement to target carjackings more specifically – rather than focusing on vehicle theft more generally. House Bill 601 adds new items to the list of what the state considers “burglary tools” individuals can use to break into a vehicle or home in an effort to crack down on vehicle thefts. Finally, House Bill 3772will prevent car owners from being charged storage or towing fees if their cars are stolen.
• Ghost Guns: House Bill 4383 bans the sale, transfer, and possession of “ghost guns” – or guns without serial numbers – except in very limited circumstances.
• Witness Protection: House Bill 4736 creates a Violent Crime Witness Protection Program to financially assist witnesses to crimes with safety precautions. It additionally creates a grant program for local police departments to offer cash to individuals who provide information leading to arrests.

Legislation Tracked for BOMA

• House Bill 4600: Contractor Industry Bond Reform, Contractor Wage Claims
  • Summary: HB 4600 establishes a task force to study construction industry bond reform and makes amendments to the Illinois Wage Payment and Collection Act. Its enforcement is contingent upon implementation of HB 5412, which passed both chambers of the General Assembly on April 8, 2022.
    • Construction Industry Bond Reform Task Force: HB 4600 creates the Bond Reform in the Construction Industry task force, which will be charged with studying methods to reduce the cost of insurance in the private and public construction industry while protecting owners from risk of nonperformance. The task force will be comprised of industry stakeholders; representatives from the Offices of the Governor, State Treasurer, and Director of Insurance; and members appointed by state legislators. The task force is required to report its findings and recommendations to the General Assembly no later than March 1, 2023. This provision sunsets on December 31, 2023.
    • Wage Payment and Collection Act Amendments: HB 4600 amends the state’s existing Wage Payment and Collection Act to provide that – for contracts entered into on or after July 1, 2022 – a primary contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a structure assumes and is liable for, any debt owed to a claimant by a subcontractor at any tier acting under, by, or for the primary contractor for the wage claimant’s performance of labor included in the subject of the contract between the primary contractor and the owner. This provision is applicable to projects where the aggregate costs exceed $20,000. The following parties will be exempt from liability: (i) primary contractors who are parties to a collective bargaining agreement on the project where the work is being performed; and (ii) primary contractors making or taking a contract in Illinois for the alteration or repair of an existing single-family dwelling or to a single residential unit in an existing multi-unit structure. Claims made under this section must be filed with the Department of Labor or filed with the circuit court within 3 years after the wages, final compensation, or wage supplements were due.
  • Status: HB 4600 passed both chambers of the General Assembly on April 9, 2022, and must be transmitted to Gov. JB Pritzker by May 9, 2022. It will take effect once House Bill 5412 is signed into law.

• House Bill 5532: Land Bank Exemption
  • Summary: HB 5532 provides for certain property tax exemptions for land bank authorities and tweaks language regarding fees paid by purchasers and assignees.
    • Land Bank Exemption: HB 5532 amends the property tax code to provide that the all properties owned and held for future use by the Cook County Land Bank Authority, South Suburban Land Bank and Development Authority, and the Northern Illinois Land Bank Authority are exempt from property taxes.
    • Fees: HB 5532 requires all purchasers or assignees of a property at a tax sale must pay the clerk postage plus the sum of $10 dollars (currently, state statute requires this of “the purchaser or assignee”). Additionally, purchasers or assignees must prepare and deliver to the clerk of the Circuit Court of the county in which the property is located, “the notice provided for, together with the statutory costs for mailing the notice by certified mail, return receipt requested” no less than one month nor more than six months prior to the expiration of the period of redemption. This provision does not apply to a county or taxing district acquiring tax certificates to property.
  • Status: House Bill 5532 passed both chambers of the General Assembly on April 1, 2022 and must be transmitted to Gov. JB Pritzker by May 1, 2022. It will take effect immediately upon becoming law.

• Senate Bill 1975: Homestead Exemption
  • Summary: SB 1975 provides for the automatic renewal of the Persons with Disabilities Homestead Exemption; streamlines certain benefits for low-income seniors; increases the general homestead exemption for populous counties; increases the senior homestead exemption maximum for populous counties; and decreases the interest rate under the under the Senior Citizens Real Estate Tax Deferral Act.
    • General Homestead Exemption: SB 1975 increases general homestead exemption to the Collar Counties. Under the bill, for taxable years 2023 and thereafter, the maximum reduction is $10,000 in counties with 3,000,000 or more inhabitants, $8,000 in counties that are contiguous to a county of 3,000,000 or more inhabitants, and $6,000 in all other counties.
    • Senior Homestead Exemption Maximum: SB 1975 increases senior homestead exemption to the Collar Counties. For taxable years 2023 and thereafter, the maximum reduction is $8,000 in counties with 3,000,000 or more inhabitants and counties that are contiguous to a county of 3,000,000 or more inhabitants and $5,000 in all other counties.
    • Senior Citizens Real Estate Tax Deferral Act: SB 1975 decreases the interest rate under the Senior Citizens Real Estate Tax Deferral Act. If the taxes deferred are for a tax year prior to 2023, then interest will accrue at the rate of 6% per year. If the taxes deferred are for the 2023 tax year or any tax year thereafter, then interest will accrue at the rate of 3% per year.
    • Persons with Disabilities Homestead Exemption: For taxable years 2022 through 2027, in any county of more than 3,000,000 residents, and in “any other county where the county board has authorized such action by ordinance or resolution,” SB 1975 allows chief county assessment officers to automatically renew the homestead exemption for certain individuals with disabilities. Assessment officers cannot automatically renew an exemption if: the physician, advanced practice registered nurse, optometrist, or physician assistant who examined the claimant determined that the disability is not expected to continue for 12 months or more; the exemption has been deemed erroneous since the last application; or the claimant has reported their ineligibility to receive the exemption.
    • Low-Income Senior Citizens Assessment Freeze Homestead Exemption: SB 1975 amends the process by which senior citizens prove eligibility for the Assessment Freeze Homestead Exemption, which provides seniors with limited income protection against real estate tax increases due to increasing property values. Specifically, SB 1975 allows enrollment in programs like the Supplemental Nutrition Assistance Program or Low Income Home Energy Assistance Program to serve as an alternative to income valuation when determining eligibility.
    • Veterans Property Tax Study: SB 1975 directs the Department of Revenue to conduct a study of the impact of the homestead exemption for veterans with disabilities on the property tax base for St. Clair County, Lake County, Will County, Madison County, Rock Island County, and DuPage County. The study must be completed no later than June 30, 2023. A report of the Department's findings must be submitted to the Governor and the General Assembly as soon as possible after the study is complete.
  • Status: SB 1975 passed both chambers of the General Assembly on April 9, 2022, and must be submitted to Gov. JB Pritzker by May 9, 2022. It takes effect upon becoming law.

• Senate Bill 3069: Homeowner Association
  • Summary: SB 3069 provides that an interested association may, on behalf of all or several of the owners that constitute the association, file an appeal to the Property Tax Appeal Board or intervene in an appeal filed by a taxing body. SB 3069 defines "association" as: (1) a common interest community association; (2) a unit owners' association; or (3) a master association.
  • Status: SB 3069 passed both chambers of the General Assembly on April 8, 2022, and must be submitted to Gov. JB Pritzker by May 8, 2022.

• Senate Bill 3097: Property Tax Notice of Redemption
  • Summary: SB 3097 amends the property tax code; in provisions concerning the scavenger sale, the new legislation repeals provisions that require the county clerk to mail notice of the expiration of the period of redemption within 30 days from the date of the filing of addresses with the clerk. SB 3097 further requires the purchaser of the certificate of purchase to prepare the notice of the expiration of the period of redemption and deliver it to the clerk of the Circuit Court no more than 6 months and no less than 111 days prior to the expiration of the period of redemption. It further requires the clerk to mail the notices no less than 3 months prior to the expiration of the period of redemption.
  • Status: SB 3097 passed both chambers of the General Assembly on April 8, 2022, and must be submitted to Gov. JB Pritzker by May 8, 2022. The legislation takes effect immediately upon becoming law.

• Senate Bill 3613: Hydrogen Economy Task Force
  • Summary: SB 3613 creates the Hydrogen Economy Task Force, which will be tasked with 1) establishing a plan to create, support, develop, or partner with a Hydrogen Hub in Illinois; (2) identifying opportunities to integrate hydrogen in the transportation, energy, industrial, agricultural, and other sectors; (3) identifying barriers to the widespread development of hydrogen, including within environmental justice communities; and (4) recommending government policies to catalyze the deployment of hydrogen in the state economy. The twenty-four member task force – which will be comprised of industry stakeholders, academics, state agency officials, and Illinois legislators – will be required to report to the Governor and the General Assembly by December 1 of each year on its activities, findings, and recommendations.
  • Status: SB 3513 passed both chambers of the General Assembly on April 6, 2022, and must be submitted to Gov. JB Pritzker by May 6, 2022. The legislation takes effect immediately upon becoming law; its provisions sunset on June 1, 2023.