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Marty Green's Capitol Update
Legislative Activity Picks Up in the Spring Session
Despite a slow start to the spring legislative session, the Illinois General Assembly has kicked into full swing, churning out legislation as the third reading deadline nears for substantive bills to be heard. The Senate has sent 245 bills to the House, while the House has sent 324 bills to the Senate.
There are several tax bills awaiting House votes. So far, the House Revenue Committee hasn’t voted on any tax or revenue bills but has held subject matter hearings on bills where they’ve taken testimony. My sense is there’ll be a revenue omnibus bill that the committee will advance to the full House for consideration. While all of this is going on, both chambers will also need to begin voting on the FY 25 State Operating Budget and the trio of bills that accompany it.
In addition to all this, the Chicago Bears recently submitted a comprehensive lakefront plan that includes a mix of private/public funding. Chicago Mayor Brandon Johnson’s presence at the announcement signals he supports the proposal. As for the White Sox? They have some challenges, the least of which is a foreseeable new venue.
As you’ll see below, there’s a tremendous amount of activity going on, and things will continue to move at a very fast pace. We encourage you to use our many resources to stay informed. I’m looking forward to seeing many of you next week—in person and virtually—at the Government Conference in Springfield on May 1 (there’s still time to register). As always, stay in touch, and reach out if you have questions.
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LATEST LEGISLATION
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New Law Would Allow 529 Rollovers Into Roth IRAs
HB 5005/SB 3133 allows a college savings pool account to be rolled over into a Roth individual retirement account (IRA) to the extent permitted by Section 529 of the Internal Revenue Code. This is an initiative of State Treasurer Mike Frerichs, whose office oversees and manages the college savings program. Status: HB 5005 pending Senate Assignments Committee/SB 3133 passed the Senate and pending in the House State Government Administration Committee.
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Bill Seeks to Expand High School and Community College Partnerships
HB 5020 expands the options for students seeking to enroll in dual-credit classes by allowing high schools to partner with community colleges outside their community college district. Status: Pending Senate Assignments Committee.
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Illinois Human Rights Act Amendments Pursue Limited Predictive Analytics Use
HB 3773 provides that an employer that uses predictive data analytics for employment decisions may not consider the applicant’s race or zip code when using as a proxy for rejecting an applicant in the contexts of recruiting, hiring, promotion, renewal of employment, selection for training, etc. The bill also prohibits use of race or zip code in determining an applicant’s creditworthiness, resulting in a rejection of credit or other adverse credit-related action. Status: Pending Senate Assignments Committee.
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Proposed Bill Would Remove Medical Debt From Credit Reports
SB 2933 prohibits consumer reporting agencies from including medical debt in their reports. Status: Pending House Consumer Protection Committee.
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Proposed Amendment Expands Paid Leave to Airline Flight Crews
HB 4596 expands the Paid Leave for All Workers Act to include employees covered by federal regulations, including airline flight crew employees. The business community has expressed concerns with the amendment, as it undermines negotiations and agreements that exempt airline flight crews. Status: Pending in House Rules Committee.
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Bill Amends Biometric Information Privacy Act
SB 2979 amends the Biometric Information Privacy Act to limit the liability for violations to a per-person rate as opposed to a per-collection basis. This legislation directly addresses damages from the Illinois Supreme Court decision in Cothron v. White Castle Systems Inc. Status: Pending House Judiciary-Civil Committee.
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Bill Seeks Changes to the Minimum Wage Law
HB 5345 provides that on and after Jan. 1, 2025, an employer shall not be entitled to an allowance for gratuities, and they shall pay each employee no less than the applicable minimum wage rate. The bill also addresses home rule communities that have a higher minimum wage rate, specifying that the higher of the two rates shall be paid. Status: Pending in House Rules Committee.
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Legislation Aims to Study Fairness of Property Tax System
SB 3455 provides that the Illinois Department of Revenue (IDOR), in consultation with the Illinois Department of Commerce and Economic Opportunity, shall conduct a study to evaluate the property tax system in the state. IDOR may also determine and make recommendations on whether the existing property tax levy assessment and appeal and collection processes are reasonable and fair. Status: Pending in House Revenue and Finance Committee.
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Changes in Property Tax Notices Proposed
SB 3567 provides that a truth in taxation notice shall be conspicuously posted on a taxing district’s homepage or on a webpage accessible through a direct link from the homepage for at least 30 consecutive days. Status: Pending in House Revenue and Finance Committee.
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Proposed Data Match System to Help Identify Delinquent Taxpayers
SB 3617 provides that IDOR may design and implement a data match system, pursuant to which IDOR shall enter into agreements with financial institutions in the state, for purposes of identifying accounts of delinquent taxpayers. Status: Pending in House Revenue and Finance Committee.
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New Estate Tax Exemption Proposed
For the purposes of calculating the State Death Tax Credit, HB 4600 changes the $4 million estate tax exclusion amount to a $6 million exemption that would increase each year according to what’s reported in the Consumer Price Index at that time. Also, the bill provides for a special valuation method for farmland. Status: Pending in House Rules Committee.
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Student Loan Assistance Sought via an Income Tax Deduction
SB 3273 creates an income tax deduction for student loan assistance received by an employee from a qualified community foundation. Status: Pending in Senate Assignments Committee.
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Changes Proposed to the Timber Tax
HB 5237 would repeal a 4% fee on the sale of timber grown on a timber grower’s land. The bill further repeals provisions that require a person buying from a timber grower to deduct payment equal to 4% of the purchase price. Status: Pending in House Rules Committee.
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Bill Creates Cargo Transport Fee Act
SB 2784 creates the Cargo Transport Fee Act and provides that a fee is imposed upon each entity that’s an interstate carrier or an intrastate carrier if certain criteria are met. The Joliet area intermodal facility is the target of this legislation. Notably, Chicago O’Hare International Airport would qualify as an intermodal facility, according to the legislative language. Status: Pending Senate Revenue.
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Changes Proposed to Property Tax Code
SB 3396 provides that a property owner who sustains loss or damage by reason of issuance of a tax deed is entitled to payment from the indemnity fund in the equity amount described in the tax deed. It also requires that the equity claim be filed within 90 days after the tax deed is recorded. Status: Pending in Senate Assignments Committee.
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Homestead Property Tax Exemption Sought for World War II Veterans
HB 612 (House amendment No. 1) grants a homestead property exemption for World War II veterans with disabilities. Status: Pending in Senate Assignments Committee.
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POLICY & POLITICS
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Illinois’ Three-Year Budget Forecast Released
The Illinois General Assembly’s nonpartisan budget forecasting arm released a three-year budget forecast, illustrating and predicting various economic activities and revenue trends for the state. The Commission on Government Forecasting and Accountability estimates Illinois personal income tax revenues are likely to increase by more than $4.2 billion. Based on the now-established 20-year average state spending growth rate of 4%, the state’s general funds deficit would grow to $6.581 billion in fiscal year 2027.
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Addendum Issued to Form IL-1065
IDOR recently issued an addendum to the 2023 Form IL-1065 instructions to include new filing requirements for investment partnerships. Investment partnership withholding for each applicable partner must now be reported to IDOR on Schedule B.
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Notary Services Now Available Online
Notarization services can now be performed electronically through 12 service providers listed on the Illinois Secretary of State’s new online portal. All parties can participate remotely, and notaries are allowed to use electronic signatures and seals. Individuals using the service must have a valid ID and access to a device supporting audio-video communication.
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Secretary of State Issues Modernization and Efficiencies Report
Illinois Secretary of State Alexi Giannoulias recently released a report, which details the progress his administration has made toward achieving greater modernization and efficiencies in the multitude of services the office provides to the public, businesses, and corporations.
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Non-Solicitation/Non-Compete Agreement Guidance Issued
Navigating the ever-changing complexities of non-compete agreements can be challenging, with additions such as the Illinois Freedom to Work Act, which gave added protections to employees, and the Federal Trade Commission’s new rule that would curtail the unfair use of non-compete clauses. The Illinois courts have also addressed this practice, and through rulings, have identified interests that are “reasonable and necessary to protect legitimate business interest of the employer.” More information on navigating non-compete agreements can be found in a recent Insight magazine article and in the Illinois State Bar Association’s publication, Illinois Lawyer Now.
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Should Illinois Eliminate the State Grocery Tax?
Central to Gov. J.B. Pritzker’s proposed FY25 State Operating Budget is the elimination of the 1% state tax on food items for home consumption known as the “grocery tax.” The University of Illinois Institute of Government and Public Affairs recently released a policy spotlight on the pros and cons of eliminating this tax, highlighting the fiscal impact on units of local government. Additionally, Keith Staats, JD, executive director of the Illinois Chamber Tax Institute, shared his thoughts on the matter in his latest spring 2024 Insight column.
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ICPAS’ Federal Call to Action on STEM
The Illinois CPA Society (ICPAS), along with the AICPA and other state societies, have been working with Congress to include accounting in STEM designation for grades K-12. ICPAS recently sent an all-member “Federal Call to Action” communication, asking members to contact their legislators to ask that they co-sponsor accounting STEM legislation. See ICPAS’ Legislative Action page for assistance drafting and sending an email to your elected officials.
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INSIDE INSIGHT MAGAZINE
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Preparing for the 2024 CPA License Renewal
The 2024 CPA license renewal period is quickly approaching. Here are four steps CPAs should complete now to avoid potential delays.
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