Spring Session 2021 Legislative Report

Fortunately, we did not have any legislation that adversely affected the Oil and Gas industry this session.  The General Assembly worked through Memorial Day weekend and wrapped up in the early hours of June 1^st.  The House adjourned at 2:40am and the Senate at 3:07am.  The Senate will reconvene at 10am this morning and the House recessed to the call of the chair.  Most of the major items were taken care of before the May 31^st simple majority deadline passed.  All votes taken now require a 3/5 majority, which is now 71 votes to pass the House and 36 votes to pass the Senate.  An omnibus energy bill is the only major piece of legislation looming over the legislature, which will be called when language is agreed upon between all parties.

ENERGY

At the heart of the session extension is a comprehensive energy bill pushed by the Clean Energy Jobs Act (CEJA).  House and Senate negotiators had been working with the Governor’s office to reach an agreed bill.  Key components are keeping the Exelon nuclear fleet in operation, extending a rate formula for utilities, extending credits for renewable energy and stronger ethics language in the wake of ongoing investigations regarding Commonwealth Edison.  CEJA wants a carbon tax but it was not included in the package that was moving forward.  Legislative leaders had an agreement on all major items except the Exelon incentives.  Language exempting coal-fired Prairie State Energy in Washington County was included in the legislative draft language.  Exempting coal-fired CWLP in Springfield was also being considered.  As staff was working on final language, the Governor’s office finally reached an agreement to keep the Exelon plants open.  This should have been the last major negotiated item.

CEJA and the Governor then demanded that all coal fired plants be shut down by 2035 and all gas fired facilities end by 2045. Organized Labor and coal interests objected, and the bill was not filed.

BUDGET

In the late hours of Memorial Day, the appropriation legislation was introduced in SB 2800. The budget for next year is $42.2 billion.  Illinois is scheduled to receive $8.1 billion from the federal government through the American Rescue Plan Act (ARPA).  The FY 22 budget has appropriated $2.5 billion from ARPA with the remainder subject to appropriation in Fiscal Years 2023-2025.

The bill was approved with 72 yes, 44 no, and 1 present votes in the House and the Senate approved it with 37 yes and 21 no votes.

In order to reach the necessary revenue to deal with the projected deficit from GRF, the governor’s office had proposed closing or reducing numerous tax incentives.  The Legislature’s budget incorporated only four from the original list:

• Eliminate accelerated depreciation allowed under the Federal Tax Cut & Jobs Act.The state estimates by removing this accelerated depreciation, it will generate $214 million for the state. The federal TCJA allowed a business to take 100% depreciation deduction in the year of purchase for qualifying assets.
• Cap Corporate Net Operating Loss (NOL) Deduction at $100,000 per year. This caps the amount a business can carry forward its NOL to future years. It is estimated the state will see an increase in tax revenues of $314 million.
• Align Treatment of Foreign-Source Dividends to treatment of Domestic Source Dividends.This was another tax incentive provided by the Federal Tax Cut & Jobs Act that allowed corporations to deduct foreign source dividends at 100% and global intangible low-taxed income at 50%. It is estimated the state will see an increase of tax revenue of $107 million.
• Stops the Corporate Franchise Tax phase out.In 2019 legislation was approved to begin the gradual phase out of the Corporate Franchise Tax by 2024. The BIMP bill eliminates the first $1,000 in Corporate Franchise Tax currently in place. It is estimated this will cost businesses $20 million.

ETHICS

SB 539 prohibits all fundraisers by a legislator or executive branch official statewide on or before session days. Currently, these events were only prohibited in Sangamon County on session days.  It would prohibit any legislator or executive branch officer to engage in lobbying for pay a unit of local government while in office. It provides that a violation will be a Class A misdemeanor. Also, any individual appointed to an executive agency, board or commission who controls a political action committee must freeze those funds while an appointee.

It further creates a 6 month ban for a legislator or executive branch official from becoming a lobbyist after leaving office. It also makes changes to make the Legislative Inspector General to be more independent in his or her operations and investigations.

It changes the way in which legislators are paid. If a legislator were to leave office, he or she would only be paid a pro-rated per day rate. Currently, a legislator can get paid a full month’s salary if he or she holds office for 1 day of the entire month.

The bill also requires anyone paid to be a lobbyist at the local level (municipal, county, township) to register with the Secretary of State, to be subject to all the requirements of being a state lobbyist.  The legislation requires consultants to subject to the same reporting requirements as lobbyists and register with the Secretary of State.

 2022 PRIMARY DATE CHANGE-REDISTRICTING

The General Assembly moved the 2022 Primary Election date to June 28th for this election cycle only. The bill delays the start of circulating petitions for candidates from established parties to January 13, 2022. The petitions would be submitted between March 7th through March 14th. The bill also lowers the number of signatures on petitions by approximately 1/3. Deadlines for mail-in ballot, early voting, and other voting requirements will be adjusted to match the new June 28th Primary Election Date.

The bill also makes other changes in the election code dealing with voting. It establishes the General Election Day of November 8, 2022, as a state holiday. Public schools would be closed and allowed to be used as public polling places. Curbside voting would be allowed not just on Election Day, but also during early voting. Election authorities will be required to have one common voting location open on election day either at the location of an election authority or in the authority’s largest municipality that will allow any registered voter to vote there instead of their polling place. Finally, it establishes the ability for a voter to request permanent mail-in ballot status.

Regarding local government redistricting, the bill makes several changes. It allows counties to use any data it wishes for redistricting of county board districts, including the US Census American Community Survey 5-year data. For most counties, it pushes the deadline back to complete their redistricting until December 31, 2021 vs. the current July 1, 2021, deadline. For counties with a voter elected county Chairperson or a County Executive, these individuals have until the third Wednesday in November 2021 to present their proposed redistricting plans.

The bill addresses the process for filling vacant seats in the General Assembly. Before the replacement of a State Senator or Representative, the committee making the replacement shall publicly make available the names of the committeepersons, the date, time, and location of the meeting, and how interested parties wishing to apply may do so. It also changes the process if a Senate or Representative District has a vacancy. The replacement committee will be the chair of the appropriate central committee and two appointees by the chair if the district is wholly within the County.

All 118 Representatives and 59 Senators will run in new districts in 2023.  New boundaries were established in HB 1777 to comply with the redistricting required after each census.  New Supreme Court boundaries were also established.  The Congressional maps will be voted on at a later date.  Illinois will lose one Congressional seat based on the U.S population.

TRAILER TAX

SB 58 creates a new class of small trailers. The new class of trailers will be classified as “Utility Trailer” (UT) are of one axel, weighing under 2,000 pounds, used primarily for personal or individual use, and not owned by a commercial business. The bill establishes a fee of $36 annually for the new UT plates and decreases the TA plate, which is a trailer of more than 2,000 but less than 3,000 pounds to $36 from $118 annually. The bill does increase the fee a certificate of title from $150 to $155 and all state revenues generated from this additional $5 will be deposited int the Road Fund.

The bill also changes the way in which the sales tax is collected on vehicle trade-in at $10,000 or more through a car dealership. The bill restores the full credit trade-in rates that had been capped at $10,000. The bill does put in place a new rate structure for person-to-person vehicle tax levels