Advocacy Activities of the Illinois CPA Society
Welcome to Capitol Assets, an email newsletter from the Government Relations office of the Illinois CPA Society. Capitol Assets provides you with information on state legislation and regulations affecting CPAs and CPA Firms.
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Volume 22, Issue 2, June 2010
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Legislative Update
by Martin Green, Vice President of Government Relations
ICPAS Passes Legislation to Extend Registered CPA Option
The Illinois CPA Society was successful during the Spring legislative session in passing House Bill 6415 to extend the registered CPA option from June 30, 2010 to July 1, 2012. The bill also updates Illinois’ peer review requirements to mirror changes the AICPA has made to peer review standards. The House and Senate overwhelmingly passed House Bill 6415, and the measure is now awaiting Governor Quinn’s signature. ICPAS government relations staff is working with the Governor’s staff to secure action by the Governor prior to the scheduled June 30 sunset of the registered CPA option.
Passage of ICPAS sponsored legislation is good news during a very busy Spring legislative session that was focused on sustentative policy reforms in the areas of public pensions, nursing home regulation, McCormick Place operations, to name a few. Even with these policy advances, the General Assembly failed to address the state’s mounting structural budget deficit and opted instead to continue borrowing, making cuts and granting emergency budget authority to the Governor to meet the funding demands of state government operations.
ICPAS government relations staff worked closely throughout the Spring session with legislators and legislative staff on a variety of issues ranging from consultation on technical issues relating to partnership income for services to the partnership, the upsides and downsides to a tax amnesty program and audits of credit unions.
The year 2010 is a watershed year politically in Illinois. Former Governor Blagojevich’s highly publicized criminal trial began on June 3 and will serve as a backdrop for the November election where Illinois voters will go to the polls and cast votes for a U.S. Senator, members of Congress, Governor, Constitutional officers, members of the Illinois General Assembly and a Constitutional Amendment on gubernatorial recall. The U.S. Census Bureau is also in the process of conducting the decennial census which will be used by the Illinois legislature for the redistricting process when boundaries in Congressional districts and districts for the General Assembly are redrawn.
And finally, ICPAS government relations staff continues to work closely with the AICPA on federal legislative and regulatory issues. Advocacy efforts were successful for the profession in opposing aiding and abetting in amending SOX 404(b) as a part of the Restoring American Financial Stability Act of 2010. The final legislation passed by the U.S. Senate is now in conference committee to reconcile the bill with the House version, the Wall Street Consumer Protection Act of 2009.
We always appreciate your comments and suggestions on Capitol Assets, the Government Relations portion of the website and on matters of interest to the profession. I may be reached at greenm@icpas.org or at the government relations office at 1.800.572.9870.
Legislative Items of Interest
BUDGET
Fiscal Year 2011 State Operating Budget: Senate Bill 3660 (Sen. John Cullerton, D-6, Chicago; Rep. Barbara Flynn Currie, D-25, Chicago)—Gives the Governor broad powers to cut state agency spending and borrowing from dedicated funds. Also includes provisions that allow state contracts to be reviewed for rebidding. Status: The bill passed both chambers on May 27 and is awaiting the Governor’s action.
Budget Authorization: House Bill 859 (Rep. Barbara Flynn Currie, D-6, Chicago; Sen. Donne Trotter, D-17, Chicago)—Authorizes $26.2 billion in general revenue spending for state government operation. Status: The bill passed both chambers on May 25 and is awaiting the Governor’s action.
Pension Borrowing: Senate Bill 3514 (Sen. Jeffrey Schoenberg, D-9, Evanston; Rep. Barbara Flynn Currie, D-6. Chicago)—Authorizes the state to borrow $3.7 billion to make the state’s contribution to the state public pensions. Status: The bill passed both chambers and is in the Senate awaiting concurrence in House Amendments 1, 3, 4 and 5.
REGULATORY
Public Accounting Act Amendment: House Bill 6415 (Rep. Robert Rita, D-28, Blue Island; Sen. Iris Martinez, D-20, Chicago)—The Illinois CPA Society (ICPAS), working with Rep. Rita, introduced legislation to amend the Illinois Public Accounting Act to extend the registered CPA sunset from June 30, 2010 to July 1, 2012 and to update the peer review section to conform with AICPA peer review standards. Status: The legislation overwhelming passed the House and Senate on May 3 and is awaiting the Governor’s action.
Credit Union Audit/Proxy: House Bill 4865 (Rep. Tom Holbrook, D-113, Belleville; Sen. William Haine, D-56, Alton)—ICPAS supports! Amends the Illinois Credit Union Act concerning an annual external independent audit, and provides that a copy shall be completed and mailed to the Director of the Illinois Department of Financial Institutions no later than 90 days after December 31 of each year, provided that a credit union may obtain an extension of the due date from the director (rather than mailing the audit upon completion). Status: The bill passed both chambers on April 27 and is awaiting the Governor’s action.
Use of IDFPR License Information by Third Parties: House Bill 6194 (Rep. Sandra Pihos, R-42, Glen Ellyn; Sen. Carole Pankau, R-23, Roselle)—Provides that any information kept by the Department of Financial and Professional Regulation (IDFPR) that includes a licensee’s name, address and profession shall not be used by a third party for the purpose of marketing goods or services not related to the licensee’s profession. Statute: The bill passed both chambers on April 29 and is awaiting the Governor’s action.
License Expungement: Senate Bill 2604 (Sen. Pamela Althoff, R-32, Crystal Lake) and House Bill 4975 (Rep. Angelo Saviano, R-77, Elmwood Park; Sen. Pamela Althoff, R-32, Crystal Lake)—Provides that a licensee disciplined under a licensure act administered by the Division of Professional Regulation of the Illinois Department of Financial and Professional Regulation for an offense relating to the failure to pay taxes, child support or student loans or relating to continuing education or advertising may file a petition to have their offense removed from the department’s website if certain conditions are met. The legislation provides that removal of the offense is not considered an expungement of the offense from the licensee’s disciplinary record. Status: Senate Bill 2604 was tabled by the sponsor on March 11, and House Bill 4975 was placed on third reading in the Senate on April 23.
Pension Reform: Senate Bill 1946 (Sen. John Cullerton, D-6, Chicago; Rep. Michael Madigan, D-22, Chicago)—Legislation was passed and signed by the Governor with bipartisan support to reform Illinois’ six public pension systems. The legislation offers slimmer benefits to new public employees in an effort to whittle down the state’s $80 billion in unfunded pension liability. Reforms to municipal fire and police pensions are expected to follow. Status: It is now Public Act 96-0889. The measure’s effective date is January 1, 2011, and some parts are effective April 14, 2010.
TAXES
Tax Amnesty: Senate Bill 377 (Sen. Dan Kotowski, D-33, Park Ridge; Rep. Lou Lang, D-16, Skokie)—From October 1, 2010 to November 8, 2010, taxpayers can make good on taxes owed to the state that were accumulated between June 30, 2002 and July 1, 2009. The amnesty program is expected to generate about $250 million. Status: The bill passed both chambers on May 27 and is awaiting the Governor’s action.
Sales Tax Holiday: Senate Bill 3658 (Sen. Deanna Demuzio, D-49, Carlinville; Rep. Keith Farnham, D-43, Elgin)—Lowers the sales tax from 6.25% to 1.25% on clothing and school supplies from August 6-15, 2010. Status: The bill passed both chambers on May 27 and is awaiting the Governor’s action.
Cooperatives: Senate Bill 1826 (Sen. John Sullivan, D-47, Rushville; Rep. Frank Mautino, D-76, Spring Valley)—Eliminates an erroneous tax decision that disadvantages cooperatives, subjecting them to double taxation. The bill was amended in committee to address some technical concerns on behalf of the Department of Revenue. Status: The bill passed both chambers on May 3 and is awaiting the Governor’s action.
Small Business Tax Credit: Senate Bill 1578 (Sen. Michael Noland, D-22, Elgin; Rep. Michael Madigan, D-22, Chicago)—Legislation was passed and signed by the Governor that creates a $2,500 tax credit for every job created by small businesses. The credit is limited to companies that employ less than 50 workers and applies to each job created. The bill limits the state’s exposure to $50 million. Status: It is now Public Act 96-0888. The effective date of legislation is April 13, 2010.
Taxation for Publicly-Traded Partnerships Cleanup: Senate Bill 3646 (Sen. Linda Holmes, D-42, Aurora; Rep. Barbara Flynn Currie, D-25, Chicago)—Corrects an oversight in the legislation that was passed during the fall veto session to repeal a short-lived law that would have increased partnership income tax liability by 50%. The repeal of that law ultimately failed to apply to publicly-traded partnerships. Status: The bill passed both chambers on April 28 and is awaiting the Governor’s action.
Estate Tax: Senate Bill 3694 (Sen. Don Harmon, D-39, Oak Park)—Amends the Illinois Estate and Generation-Skipping Transfer Tax. Provides that for persons dying after December 31, 2010 (instead of December 31, 2009) the "state tax credit" is the amount of the federal credit for state tax allowable under the Internal Revenue Code. Effective immediately. Status: The bill remains on third reading in the Senate.
GENERAL GOVERNMENT
Procurement Reform: Senate Bill 3576 (Sen. Jeffrey Schoenberg, D-9, Evanston; Rep. Barbara Flynn Currie, D-6, Chicago)—Corrects shortcomings in previous legislation, clarifies procurement communication shortcomings and defines subcontractor. Status: The bill passed both chambers on May 7 and is awaiting the Governor’s action.
Primary Election Date: Senate Bill 355 (Sen. Deanna Demuzio, D-49, Carlinville; Rep. Elaine Nekritz, D-57, Northbrook)—Governor Quinn signed legislation moving the Illinois primary election date back from the first Tuesday in February to the third Tuesday in March. The primary was moved to February when then Senator Obama was running for the democratic presidential nomination. Status: The bill is now Public Act 96-0886. The measure’s effective date is January 1, 2011.
Illinois Power of Attorney: House Bill 6477 (Rep. Emily McAsey, D-85, Lockport; Sen. A. J. Wilhelmi, D-43, Joliet)—Amends the Illinois Power of Attorney Act by making numerous substantive and stylistic changes. Status: Passed both chambers on April 29 and is awaiting the Governor’s action.
Sunshine Commission Act: House Bill 4836 (Rep. David Reis, R-108, Willow Hill; Sen. Matt Murphy, R-27, Palatine)—Creates the Illinois Sunshine Commission with the goal of conducting a thorough review of relevance, efficiency and effectiveness of state government programs. Status: Passed both chambers on April 27 and is awaiting the Governor’s action.
Governor and Lt. Governor Run As Team: House Bill 5820 (Rep. Lou Lang, D-16, Skokie; Sen. Kwame Raoul, D-13, Chicago)—Provides for the joint nomination of candidates for the offices of Governor and Lieutenant Governor. Status: Passed both chambers on April 27 and is awaiting the Governor’s action.
Governor Recall, HJRCA 31 (Rep. Jack Franks, D-63, Woodstock)—Provides for the recall of the Governor by petition of the state’s electors and for the election of a successor Governor. The measure was adopted by both houses, was effective on October 15, 2009, and will appear on the November ballot. Status: Adopted by both chambers on October 15, 2009.
Regulatory Items of Interest
Illinois Board of Examiners Updates Administrative Rules on Educational Requirements—The Illinois Board of Examiners has proposed updated administrative rules for educational requirements to sit for the uniform CPA examination. See proposed rules. See current rules.
Division of Professional Regulation Director Submits Resignation—Long-time Director of the Division of Professional Regulation Daniel Bluthardt submitted his resignation effective March 28, 2010. The division regulates 60 professions including certified public accountants. Donald Seasock, Deputy Director of Enforcement, has been appointed Acting Director.
Peer Review 2012 Licensure Requirement—As a condition for 2012 license renewals, firms and sole practitioners who provide licensed services must complete peer review every three years. This licensure requirement brings Illinois into line with 44 other states and the Uniform Accountancy Act (UAA). Read more.
Illinois Administrative Rules—Administrative rules authorize state agencies to exercise authority delegated to them by legislation. The ICPAS government relations office closely monitors proposed or emergency rules of interest to CPAs and CPA firms. Read the regulations.
Government Relations Office News
CPA PAC Contributions—The Illinois CPAs for Political Action (CPA PAC) will consider contributions to members of the Illinois General Assembly, legislative leaders and Constitutional officers prior to the November general election. The CPA PAC serves as a strong collective voice for CPAs and CPA firms and provides a foundation for successful legislative advocacy. The checks will be delivered to officials through ICPAS’ network of legislative contacts.
New Representatives in the Illinois General Assembly:
- Michael Carberry (D-36, Oak Lawn) was appointed to take the seat of Rep. James Brosnahan who resigned to focus more on his law practice.
- Robyn Gabel (D-18, Evanston) replaced Rep. Julie Hamos who resigned to become the Director of the Illinois Department of Health Care and Family Services. Rep. Gabel is the Democratic nominee for the seat in the November general election.
- Camille Lilly (D-78, Chicago) took the place of Rep. Deborah Graham who resigned her seat to serve as alderman on the west side of Chicago. Rep. Lilly will be on the ballot in the November general election.
Legislative Contact Program
Members of the Legislative Contact Program were called upon and were responsive to contacting officials at both the state and federal levels about issues affecting the profession.
Legislative contacts are needed for the following state officials:
Representatives: Senator:
Edward Acevedo (D-2, Chicago) John Sullivan (D-47, Rushville)
Mary Flowers (D-31, Chicago)
Andre Thapedi (D-32, Chicago)
Call 800.572.9870 or send an email to McKamyC@icpas.org to volunteer to be a legislative liaison to these and/or other legislators. Read more about the program.
Mobility—Alaska became the 47th state to pass mobility legislation, and New York and the District of Columbia currently have legislation pending. The National Association of State Boards of Accountancy has developed a State Mobility Law Index for practitioners. Read more on Illinois’ mobility law which was passed in 2007 and effective on January 1, 2008.
State Briefs
Illinois General Election Will Be November 2, 2010—Illinois voters will cast votes for Illinois United States Senator (Burris' seat), members of Congress, Governor, Lt. Governor, Attorney General, Secretary of State, Comptroller, Treasurer, all 118 seats in the Illinois House of Representative and 21 seats in the Illinois Senate. Early voting begins October 11, 2010 and ends on October 28. The last day to apply for an absentee ballot is October 25, 2010 and November 1, 2010 is the absentee voting deadline. Visit ICPAS Legislative Action Center Election Guide here.
Appellate Court Clarifies Tolling of Statute of Limitations, Accountant Malpractice 1st Dist.
Federated Industries v. Reisin 1-09-1487 (March 29, 2010) Cook Co., 3rd Div. (QUINN) Affirmed—Court properly dismissed accountant malpractice action as untimely filed. Statute of limitations in accountant malpractice case involving increased tax liability begins to run when taxpayer receives statutory notice of deficiency per Internal Revenue Code Section 6212 or at time when taxpayer agrees with IRS' proposed deficiency assessments. Read opinion.
Circuit Court Approves Lawsuit Settlement on Business Fees for Workers' Compensation—Cook County Circuit Judge Daniel Riley approved a settlement agreement in The Illinois State Chamber of Commerce v. John Filan, et al., No. 04 CH 6750. The settlement agreement outlines that escrowed surcharge money will be used to improve the operation of the Workers' Compensation Commission and pay down loans by commission relsurchafunds. Read settlement.
National Briefs
FTC Extends Deadline for Identity Theft Red Flags Rule—At the request of several members of Congress, the Federal Trade Commission (FTC) is delaying enforcement of the Red Flags Rule through December 31, 2010 so that Congress can consider legislation that would affect the scope of entities covered by the rule. Read FTC news release. Read ICPAS regulatory alert.
IRS Proposes New Preparer Registration—The Internal Revenue Service released its recommendations regarding tax preparer regulations on January 4. The IRS recommends a number of steps that it plans to phase in beginning with the 2011 filing season. Read more. Read more on IRS proposal.
U.S. Senate Passes Financial Regulatory Overhaul Legislation—The Senate approved far-reaching financial rules with the passage of the Restoring American Financial Stability Act of 2010 (S. 3217, Sen. Dodd) on a vote of 59 to 39. Read more. Read fact sheet.
We Want to Hear From You . . .
Please send comments, suggestions or additional information you would like to see in future issues of Capitol Assets to McKamyC@icpas.org