End of Session Report 2020

Dan Reitz | IOGA Lobbyist

The Illinois General Assembly returned to Springfield last week.  The COVID-19 Special Session was scheduled for three days.  Lawmakers returned for a fourth day on Saturday and worked past midnight into Sunday before approving a fiscal year 2021 (FY 21) spending plan.  This was the first-time lawmakers had met since the State’s stay-at-home orders were put in place. The Special Session’s agenda was limited to just seven issues:

  1. COVID-19 pandemic or other disasters;
  2. The State Budget and its implementation;
  3. Economic recovery, infrastructure projects, and funding thereof;
  4. The explanation, arguments for and against, and the form for constitutional amendments as required under the Illinois Constitutional Amendment Act;
  5. Laws or authority scheduled to be repealed prior to June 1, 2021;
  6. The 2020 General Election and the State Board of Elections; and
  7. The hospital assessment program.

Budget:  The House and Senate passed a $42.8 Billion budget package.  The plan is not perfect, and the budget is not balanced. The main reason for an unbalanced budget is uncertainty associated with the State’s revenue. Fallout from COVID-19, including business closures, increased unemployment, and changes in consumer spending, make it difficult to predict how much money the State will collect in tax and fee revenues as well as how much federal assistance will be made available to the State.

Legislators’ most important goal was to approve a FY 21 spending plan, but they also had to address several statutes that were set to expire or needed immediate attention and ensure the state was set up to capture federal stimulus dollars. In the end, lawmakers accomplished their goals and will most likely not return to Springfield until veto session in November.  They will then have a better picture of the budget shortfalls and will have to adjust accordingly.

Election code:

The bill requires election authorities to expand public education efforts on the State’s vote by mail process and ease vote by mail application process for many voters. Vote by mail applications will be automatically sent to people who recently registered to vote and to every person who applied to vote in any election since 2018.

Election day will be a school holiday under the bill. While the day is already considered a holiday for most state employees, expanding the status for schools enables empty school buildings to be used as election day polling places.

The bill also calls on local election authorities to appoint panels of election judges to verify the mail in ballots. The panels will be made up of 3 election judges from different political parties. The judges may reject a ballot if 1) all three judges agree the voter’s signature on file does not match the signature submitted with the mail in ballot or 2) if a majority of the judges agree the mail in ballot does not contain a signature, the mail in ballot was opened, the voter already voted, or the voter was not registered in that precinct. If a ballot is rejected, both the voter and the State Board of elections must be notified, and the voter may be given an opportunity to cure the issue.

Election authorities will be required to accept mail in ballots, even if the ballots are returned with insufficient postage, and they may set up secured, ballot drop boxes for voters to leave ballots postage-free.

These changes will only be in place for the remainder of 2020.

Property tax

This bill also provides permissive language for counties choosing to waive penalty fees and interest on some or all late property tax payments.

In counties that have declared a local disaster, eligible property owners that qualified for a homestead exemption for disabled persons, veterans, and senior citizens assessment freeze in tax year 2019 may not be required to file an application in order to receive the exemption for the 2020 taxable year.

In addition, this bill would postpone tax sales and scavenger sales until there is no longer a statewide COVID-19 public health emergency.

Legislative Update May 13th

Dan Reitz | Lobbyist

Illinois lawmakers will return to Springfield next week, May 20th through the 22nd to resume a spring session interrupted by the coronavirus pandemic.

The House will relocate to the Bank of Springfield Center.  All House Democrats are being asked to sign a pledge to follow IDPH precautions when they return. They include getting tested before the session resumes, getting a temperature check on session days, wearing a mask at all times and traveling alone. He asked that all House Republicans also sign the pledge.

The Speaker’s office issued a memo to members advising them of how session will be conducted in a location remote from the Capitol. The Illinois State Police will provide security at the building and only a limited number of the public will be admitted.

Committee hearings will be conducted on the floor. The House clerk will conduct roll call votes when they are required.

The Senate will meet in the Capitol.  The Senate is expected to operate under normal rules.

On Tuesday, Gov. JB Pritzker said he wanted lawmakers to return to Springfield to act on economic relief measures for the coronavirus pandemic.

“The legislature must convene so that we can begin to put our financial and economic house back in order even as we battle this terrible virus,” he said during his daily briefing. “The General Assembly needs to pass a comprehensive plan to support families, small businesses and small towns.”

He said he wanted increased rent and mortgage assistance for families, grants and loans for small businesses and tax credits for small business job recovery. He also wanted assistance for small cities and towns to help with their first responder costs.

Lawmakers have been involved in working groups for weeks trying to negotiate legislation that absolutely must be passed during the spring session. Foremost among them is approval of a state budget. However, it will be a budget that could lose more than $4 billion of revenue that was anticipated before the pandemic hit, forcing businesses to close and putting people out of work. At the same time, there will be pressure to increase spending on programs to help those who have been hurt by the virus and its effects.

Beyond the budget, lawmakers are pushing to get other bills heard.  It is unclear if the General Assembly will hear any legislation that is not directly related to the pandemic during an abbreviated session.

Restore Illinois

The Governor’s office published this document on May 5, 2020. It outlines a public health approach to safely reopen our state. It is a 5 phase plan.

You can view the document here. 

Illinois House & Senate Working Groups

Dan Reitz | IOGA Lobbyist

The Illinois House and Senate are currently working from home. They are both planning on using working groups to formulate a plan of action in these uncertain times.

Working groups have been established on a range of topics to evaluate the items necessary to deal with the ongoing coronavirus, and to be able to act once legislators can reconvene in Springfield.

Legislators are meeting to determine what legislation is deemed essential from these working groups and to formulate a plan to move legislation through both chambers and to the governor. They are also discussing plans in case we are still under a stay at home order through May.

The Senate has released its list of members on their working groups. The House will release their list soon.

Federal Legislative Update – CARES Act

Dan Reitz | IOGA Lobbyist

Federal: The U.S. Senate passed H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act or the ‘‘CARES Act,’’ the nearly $2 trillion negotiated legislation responding to the coronavirus pandemic and effects on the economy. The House is scheduled to pass the legislation on Friday.

Some Highlights: The legislation continues to provide direct payments to individuals and families, over $350 billion in financial support for small business and additional financial assistance including direct grants through the Small Business Administration, and at least $454 billion of a $500 billion fund for any U.S. businesses, states, or cities for loans and loan guarantees under a new program administered by the U.S. Treasury and lending flexibilities established by the Federal Reserve. The legislation added specific oversight to this fund under an Inspector General appointed specifically for the purpose of auditing the relief funding. Additional specific relief within the $500 billion authorization provides $29 billion to passenger and cargo airlines and $17 billion for industries necessary to national security. The legislation provides over $200 billion in financial aid to local governments, $100 billion in financial assistance to hospitals, and another nearly $340 billion in funding for federal agencies.

There are a number of tax provisions in the legislation that will be of interest:

Section 2302. Delay of payment of employer payroll taxes – This provision allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees for the rest of the year.

  • Employers generally are responsible for paying a 6.2-percent Social Security tax on employee wages. The provision requires that the deferred employment tax be paid over the following two years, with half of the amount required to be paid by December 31, 2021, and the other half by December 31, 2022.

Section 2303. Modifications for net operating losses – This provision relaxes the limitations on a company’s use of losses.

  • Net operating losses (NOL) are currently subject to a taxable-income limitation, and they cannot be carried back to reduce income in a prior tax year. The provision provides that an NOL arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income. These changes will allow companies to utilize losses and amend prior year returns, which will provide critical cash flow and liquidity during the COVID-19 emergency.

Section 2304. Modification of limitation on losses for taxpayers other than corporations – This provision modifies the loss limitation applicable to pass-through businesses and sole proprietors, so they can utilize excess business losses and access critical cash flow to maintain operations and payroll for their employees.

Section 2305. Modification of credit for prior year minimum tax liability of corporations – This provision allows companies to accelerate the timing to claim prior years AMT credit.

Section 2306. Modification of limitation on business interest – This provision temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30-percent limitation to 50 percent of taxable income (with adjustments) for 2019 and 2020.

  • As businesses look to weather the storm of the current crisis, this provision will allow them to increase liquidity with a reduced cost of capital, so that they are able to continue operations and keep employees on payroll.

Section 2301. Employee retention credit for employers subject to closure due to COVID-19 – This provision provides a refundable payroll tax credit for 50 percent of wages paid by certain employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19-related shut-down order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year. The credit is based on qualified wages paid to the employee. For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related circumstances described above. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shut-down order. The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit is provided for wages paid or incurred from March 13, 2020, through December 31, 2020.

As of 3/26/2020

Illinois State Legislative Update

Dan Reitz | IOGA Lobbyist

The Illinois House has canceled session for the week of March 30. Committee deadline for House bills has been extended to April 24. 3rd reading deadline for House bills is now set for May 8. The Senate is following the same schedule. Both chambers were scheduled to be off the next two weeks. Legislators were told to be available in case they need to come back into session. Most legislators I have spoken to expect further cancellations.

The deadline for filing state taxes has been extended to July 15 to match the federal filing deadline.

As of 3/26/2020

IOGA Letter to Governor Pritzker – Essential Need for Oil & Gas

IOGA sent the following letter to Governor Pritzker concerning the essential need for oil and gas businesses during this unprecedented time. The product our members produce
is not only vital to our state’s infrastructure but will also help to move and produce the products necessary to keep Illinois’ citizens supplied with the essentials needed for their lives
at home.

This letter encourages the Governor to careful consider the oil and gas industry in any future directives during this time.

Read the letter here. 

April 1, 2019 Legislative Report

April 1, 2019 Report | Dan Reitz

All the legislation listed below were the bills listed at the convention that were opposed by IOGA.  Each of these bills were either defeated or assigned to a subcommittee and never heard in the committee to which they were assigned.

They have all been Re-Referred to the Rules committee.  They should stay there the rest of this legislative session unless they are reassigned for another purpose. We have several legislators to thank for helping to defeat these proposals.

Bill committee deadline has passed in both the House and the Senate.  There are several bills that we are still tracking that may affect IOGA and our members.  I am still awaiting late action by the Senate and will send a list out later this week.

Legislation:

HB 282 (Rep Gabel-D-Evanston) Amends the Illinois Oil and Gas Act. Defines terms. Specifies information to be included in an application for a well permit. Provides that horizontal wells or wells drilled using directional drilling are prohibited from classification as confidential. Provides that the Department of Natural Resources shall post a weekly notice on its website indicating all permits issued during the preceding week. Specifies information to be included in a well drilling and a completion report for horizontal wells or wells drilled using directional drilling. Provides that, subject to specified provisions, the Illinois State Geological Survey and the Department shall make public well drilling and completion reports for horizontal wells or wells drilled using directional drilling by posting the information on their websites. Sets forth requirements relating to the furnishing of chemical disclosure information to the Survey or Department under a claim of trade secret. Sets forth appeal procedures for the denial of a trade secret request. Provides that information furnished under a claim of trade secret is protected from disclosure if the Survey or Department determines that it has not been published or disseminated or become public knowledge and the information has competitive value. Requires the Survey or Department to adopt rules concerning information furnished under a claim of trade secret to a health professional who states a need for the information and articulates why the information is needed. Provides that the Survey or Department shall disclose information furnished under a claim of trade secret to specified personnel when there is a release of a chemical or additive used for drilling or completing a well and it is necessary to protect public health or the environment. IOGA Opposed

HB 1562 (Rep Guzzardi-D- Chicago) Amends the Illinois Oil and Gas Act and the Hydraulic Fracturing Regulatory Act. Requires as part of the permit application for drilling or hydraulic fracturing operations the written consent of each owner of a mineral interest affected by the removal of minerals in the conduct of the proposed operations and each surface owner affected by the removal of minerals in the conduct of the proposed operations, unless he or she is the mineral interest owner and has provided consent as such. Provides that notwithstanding any other provision of statutory or common law, a person shall not drill, conduct hydraulic fracturing operations, or remove minerals as a result of any means regulated by the Acts including, but not limited to, horizontal drilling, without the express, written consent of each owner of a mineral interest affected by the operations or removal of minerals in the conduct of the operations. Provides for enforcement by the Department of Natural Resources with penalties and cessation of operations for violations, and payment of treble the full market value of the mineral resource extracted in violation to the owner of the mineral interest. IOGA Opposed

HB 2054 (Meier-R-Okawville) Amends the Illinois Hydraulic Fracturing Tax Act. Provides that monies received under the Act shall be used only for the payment of pension obligations of the State of Illinois. Effective immediately. IOGA Neutral

HB 3238 (Chapa LaVia) Creates the Hydraulic Fracturing Prohibition Act. Provides that no person shall conduct high-volume horizontal hydraulic fracturing operations in Illinois. Amends the State Finance Act. Repeals a provision creating the Oil and Gas Resource Management Fund. Repeals the Illinois Hydraulic Fracturing Tax Act and the Hydraulic Fracturing Regulatory Act. Effective immediately. IOGA Opposed

HB 3383 (Dedich-D) Amends the Hydraulic Fracturing Regulatory Act. Adds a reference to horizontal drilling with fracturing operations. Adds provisions concerning a county board or governing body’s approval or denial for a request to consent for a local siting of a well site and operations. Makes other changes to provisions concerning permit applications, public notice, and public comment periods. IOGA Opposed

HB 3386 (Guzzardi-D) Amends the Hydraulic Fracturing Regulatory Act. Provides that no person shall conduct high volume horizontal hydraulic fracturing operations in Illinois and that any high volume horizontal hydraulic fracturing permit issued before the effective date of the amendatory Act is revoked. Repeals the other substantive provisions of the Act. Repeals the Illinois Hydraulic Fracturing Tax Act and the State Finance Act provisions listing the Oil and Gas Resource Management Fund as a special fund. IOGA Opposed

HB 2728 (Mah-D) Amends the Environmental Protection Act. Provides that the Environmental Protection Agency shall ensure that possible adverse economic, social, and environmental effects on environmental justice communities relating to any permit or permit renewal have been fully considered prior to publishing a draft permit or permit renewal for public comment, and that the final decision on the permit or permit renewal is made in the best overall public interest. Provides that any person or entity seeking a permit or permit renewal in an environmental justice community shall give public notice with specified information to the residents of the environmental justice community. Provides that environmental justice community residents shall have 90 days following a community meeting to submit comments to the Agency. Provides that a permit applicant for permitted activity sited in an environmental justice community shall enter into a community benefits agreement with the unit of local government in whose jurisdiction the permit applicant has applied. Provides that the community benefits agreement must, at a minimum, contain provisions requiring the permit applicant to mitigate the environmental and public health impact of the permitted activity in the environmental justice community. IOGA Opposed

HB 2839 (Gong-Gershowitz-D) Amends the Code of Civil Procedure. Provides that unless the action is governed by the procedures or provisions of another statute, a person suffering legal wrong because of a final administrative decision, or adversely affected or aggrieved by a final administrative decision, is entitled to judicial review of the final administrative decision to the same extent, with the same rights and the same responsibilities, as a person who is a party, except that a person seeking judicial review is not entitled to relief if there was a previous public hearing at which the person failed to present his or her position. Provides that to the extent necessary, such a person may provide new or additional evidence to the court for the limited purpose of demonstrating the legal wrong or adverse effect or impairment that he or she has experienced or may experience as a result of the final administrative decision. Provides that the right to judicial review under the new provisions is limited to final administrative permitting decisions made by the Department of Agriculture, Environmental Protection Agency, Department of Natural Resources, Department of Public Health, or Department of Transportation that impact the public trust in the waters and lands of this State, State parks or natural areas, threatened or endangered species, surface or groundwater quality, air quality, or other matters affecting the right to a healthful environment under the Illinois Constitution. Makes a corresponding change in a Section concerning the scope of review. IOGA Opposed

HB 3093 (Moeller-D) Amends the Public Utilities Act. In its determination of public convenience and necessity for a proposed pipeline or facility designed or intended to transport crude oil and any alternate locations for such proposed pipeline or facility, requires the Illinois Commerce Commission to consider any evidence presented by a party or other entity that participates in the proceeding regarding the impact of the proposed pipeline or facility on environmental externalities. Provides that “environmental externalities” means benefits or costs, generated as a by-product of economic activity, that do not accrue to the parties involved in the activity and are benefits or costs that manifest themselves through changes in the physical or biological environment. IOGA Opposed

SB 1527 (Fine-D) Amends the Eminent Domain Act. Provides that, with specified exceptions, if either party in the condemnation action demands a trial by jury, the condemning authority shall not be granted title or possession and the owner shall not be restrained from denying access to the property until the jury ascertains compensation. IOGA Opposed