Significant pieces of legislation passed

Observations and comments about state government by State Representative Robert W. Pritchard.

Despite all the frustration over the state budget and damage being done by legislative inaction, there were some significant pieces of legislation passed in a bipartisan manner this spring. In this report I will cover some of them and ask that you go to my website to read about other important bills that passed out of the General Assembly. The web list of key issues is rather long so I have organized the bills by subject area and provided an index.

As the state fiscal year ends June 30, many school officials have been inquiring about payment of outstanding bills owed to schools by the state. The Comptroller reports insufficient funds to pay a host of bills at this time so he will withhold payment until there is enough revenue.

Even though authorization for appropriations generally ends with the fiscal year, I anticipate the school payments will be made eventually. The legislature passed HB3660 which extends the period in which FY2010 bills could still be paid from August 31 to December 31. This will give the state six months of FY2011 revenue to pay current bills and as a result recipients won’t have to go to the Court of Claims to fight for payment.

The Comptroller recently did make about $164 million in mandated categorical payments to schools. Bills for special education, early childhood, bilingual education and reading improvement are still being held.

McCormick Place Gets Needed Makeover

This reform piece of legislation was passed to salvage the convention business for Chicago. As ever-increasing costs have lured conventions from Chicago’s McCormick Place, a dire need has arisen to provide much needed reorganization, new labor contracts and financial stabilization for the convention center. As a result, the Illinois General Assembly passed Senate Bill 28 to reorganize the governing board, called the Metropolitan Pier and Exposition Authority (MPEA), and appoint a new Authority manager.

The legislation enacts major changes in labor-management relations at McCormick Place, and extends several MPEA bond issues and taxes used to service these bonds. The debt extensions will raise additional funds to subsidize the operations of McCormick Place and, in turn, hopefully make McCormick Place once again a hot spot for convention business.

Telecom Deregulation Makes Illinois Competitive

Continuing Illinois’ multi-year push toward deregulation of key Illinois business sectors, the General Assembly enacted major telecom deregulation legislation in 2010. SB 107 reduces regulatory burdens upon operators of Illinois telephone “landlines,” which are losing market share as more Illinois residents turn to wireless phones.

The new law is intended to attract new jobs and retain existing jobs in the telecommunications industry. The legislation also maintains high standards for service quality by promoting competition in the marketplace. The bill is intended to keep prices down and service up for basic landline use. Basic landline costs would also be frozen for three years until the bill sunsets in July 2013.

New Certification for Principals

The standards for becoming a school principal were raised considerably in recognition of the important role the principal plays in school leadership and student learning. Principal Preparation Programs must reorganize their courses and supervision of candidates for principal certificates.

Beginning July 1, 2014, current holders of a general administrative certificate will have the option of converting to a principal endorsement. The Principal Preparation Program focuses on the business and academic part of principal leadership. In order to obtain a principal endorsement, the individual has to complete an approved program, hold a master’s degree or higher and have a minimum of 4 years of teaching or school service personnel experience.

Higher Education Short Term Borrowing Approved

State universities and community colleges have been struggling to meet payroll payments due to the state’s failure to make timely appropriation payments. As a result, public universities and community colleges made a consolidated effort to promote two pieces of legislation (SB 642 and SB 2615) to provide them with the ability to borrow until the state payments are received.

This is not good public policy but is essential when the state ignores its responsibility for funding higher education. An educated, skilled workforce is critical for attracting employers to Illinois, putting people to work, and increasing lifetime earnings.

Landmark Nursing Home Reform

Based on recommendations by the Governor’s Nursing Home Safety Task Force, legislation was passed to increase requirements on the Illinois’ nursing home industry in three areas: 1) The Pre-Admission Screening and Background Check Process, 2) Set and Enforce Higher Standards of Care, and 3) Expand Home and Community-Based Residential and Service Options.

Senate Bill 326 requires facilities to develop residence care plans that both increase quality of care and encourage community-based residential options for all residents. The bill sets forth the procedure for mental health screenings, requires reassessments of individuals with mental illness, and expands the background check process for those seeking admission in a nursing home. Staffing ratios are also increased by the legislation. Further legislation is anticipated to fund the new oversight that will increase the fees and costs for nursing home services.

State and Local Pension Reform Passed

In response to the state’s worsening economic condition, legislation was passed to reduce the state’s obligation for future pension payments to teachers, college and university personnel, state workers, judges and legislators.

Senate Bill 1946 creates a two-tier system for state employees who enter a public pension fund after January 1, 2011. The standardized benefits raise the retirement age to age 67 with 10 years of service to receive full benefits and a reduced pension benefit for retiring at age 62 with 10 years of service. Cost of living adjustments are reduced to the lesser of 3 percent or ½ the consumer price index. The new law also prevents a person from collecting a pension and going back to work under another pension system, commonly referred to as “double dipping”.

New Veteran and Service-members Court Created

HB 5214 creates a new veterans court, to be modeled after veterans courts now operating in New York State. The veterans court will be partly paid for by a $10 additional fine already imposed on all criminal convictions for the use of the county mental health courts and county drug courts.

The bill acknowledges the challenges of post-traumatic stress disorder (PTSD), traumatic brain injury, clinical depression, drug dependency, alcohol dependency, and affiliated challenges facing U.S. veterans and service personnel, and asserts that the Illinois criminal justice system must recognize these veterans and steer them towards treatment for service-related disabilities associated with their presence in a criminal court of law. A Veterans and Service-members Court is a court with an immediate and highly structured judicial intervention process for substance abuse treatment, mental health, or other assessed treatment needs of eligible veterans and service-member defendants.

Department of Agriculture Fee Increases

House Bill 4866 increases many fees charged by the Department of Agriculture. Double digit percentage budget cuts for several years combined with fund balance sweeps have left the department unable to hire the essential number of inspectors to carry out needed regulatory functions. Feed, egg, and meat inspection does not have sufficient funding to hire inspectors. This bill continues to shift the cost responsibility for inspection from the public to the producer.

Illinois Edges Closer to Open Adoption State

HB 5428 allows for the release of a birth certificate by adult adoptees or surrendered persons born in Illinois before January 1, 1946. Adult adoptees and surrendered persons born on or after January 1, 1946, will be given their non-certified birth certificate only if the birth parent takes affirmative steps to file specified forms with the Illinois Adoption Registry. For years many people have sought records to identify their birth parents and health information. The failure of the birth parent to take file necessary documents to prevent disclosure effectively results in a presumption that they have consented to the release of identifying information.

Intervention for Youth Engaged in “Sexting”

The General Assembly took an important first step toward dealing with the emerging trend of teens exchanging and redistributing sexually explicit photographs via email and text messaging, known colloquially as “sexting.” HB 4583 creates a new non-criminal avenue for authorities to intervene in cases of teen sexting that come to their attention. Such minors can be adjudged “minors requiring authoritative intervention” and required to perform community service and/or obtain counseling or other appropriate services.

Landlords Allowed to Bar Problem Individuals from Rental Property

HB 5523, among other provisions, states that an affirmative defense by a tenant does not prevent a landlord from seeking possession solely against a tenant, household member, or lessee who perpetrated an act of domestic violence. The affirmative defense also does not prevent a landlord from seeking possession against the entire household, including the household member who was the victim of domestic violence, if their continued tenancy would pose an actual and imminent threat to other residents, or to the landlord or his or her agents.

Primary Date Moved Back to March

The date of the 2008 Primary Election was moved from March to February to provide momentum to the presidential election of then Senator Barack Obama. A lack of participation from the electorate in the midst of winter and a campaign schedule that favors incumbents over challengers, forced the legislature to move the primary date back to March. SB 355 changes the primary date to the third Tuesday in March. Many of my colleagues and I are still pushing for the primary to be closer to the general election.

Payday Loan Loophole Closed

Since 2005, the General Assembly has worked to plug a loophole in the Payday Loan Reform Act (PLRA) which allowed lenders to make loans for 113 days or longer at interest rates as high as 900 percent. HB 537 creates two new loans that will better regulate interest rates and close the loophole.

One loan type caps interest rates on loans for $1,000 to $3,999 at 99 percent annual percentage rate (APR). The second new loan for amounts of less than $1,000 caps interest rates at 435 percent APR. This legislation entices the payday lenders to begin lending under their own Act once again and eliminates “dual licensure” for payday lenders.

Banks Push Affirmation of Interest Calculation

The Illinois Interest Act allows parties to a business loan to contract for any interest rate that they choose as long as this method of calculation is clearly disclosed in the business loan documents. The Illinois Bankers Association states that many Illinois bankers and lenders throughout the nation have long employed the so-called “365/360” method of calculating the interest rate for business loans, in order to create equal monthly payments despite the fact that five months do not have 31 days.

Recently, a rash of class action law suits and defenses to commercial loan foreclosures are challenging that the interest rate was not fully disclosed. SB 1118 amends the Interest Act and codifies that a bank may use any rate or amount of interest over a year based on 360 days. This area of statute only applies to commercial loans and not consumer loans.

Amnesty Offered to Delinquent Taxpayers

The Illinois General Assembly finally has approved a tax amnesty program similar to one I introduced earlier this year. If approved by the Governor, the amnesty will begin on October 1 and end on November 8, 2010. SB 377 applies to delinquent taxpayers with outstanding debts to the State for taxes that should have been paid between June 30, 2002 and July 1, 2009.

If the taxes are paid during the amnesty period, no additional penalties or interest will be levied but if the taxpayer continues to be delinquent, the penalties and interest will be doubled. The tax amnesty is estimated to collect approximately $250 million in one-time revenue that will be divided half for the Common School Fund, and half for General Revenue.

Tax Credit for Creating Jobs

To help reduce unemployment, the legislature passed the Small Business Jobs Creation Tax Credit Act. SB 1578 provides a $2,500 tax credit to any small business that hires new employees. The business must have less than 51 employees to qualify and state funding is capped at $50 million. Businesses should apply to the Department of Commerce and Economic Opportunity (DCEO) for certification.

Go to my website for other significant bills passed by the legislature this session. As always, feel free to call my office if you have questions about legislation.