Illinois Insights Special Edition: Spring 2023 Legislative Session Report (5/31)

Spring 2023 Legislative Session Report

Overview

The spring 2023 legislative session marked a return to normalcy in the first full session since the COVID-19 pandemic, with Illinois lawmakers passing a bevy of bills to improve the state’s finances, spur business and economic development, adequately address pension underfunding, support healthcare costs for migrants, and invest in the state’s youth.

Despite blowing past their self-imposed May 19 end date, lawmakers were still able to adjourn ahead of a May 31 deadline after which a three-fifths majority vote would be required to pass bills with an immediate effective date.

The Illinois General Assembly adjourned in the early morning hours on Saturday, May 27, after the House passed the budget.

Budget/Appropriations

Just after 2:30 a.m. Saturday, May 27, the Illinois House voted 73-38 along party lines to pass a $50.6 billion Fiscal Year 2024 budget, which Gov. J.B. Pritzker touted as his “fifth balanced budget,” vowing to sign it. The 3,400-page budget takes effect July 1 and largely preserves the budget Pritzker proposed in February.

• Budget and Budget Implementation: The state’s $50 billion-plus FY 2024 spending plan, laid out in Senate Bill 250 (budget) and House Bill 3817 (BIMP), allocates funding and makes investments in early childhood and higher education, workforce development, and efforts to fight violence and poverty.
  • State Finances: The package includes more than $180 million to the state’s Rainy Day Fund, putting it on track to pass $2 billion. It also allocates $200 million more than statutorily required to the state’s pension stabilization fund. Additionally, the budget makes a $112.5 million increase to the Local Government Distribution Fund, increasing the state’s income tax receipts from 6.16 percent to 6.47 percent.
  • Health: The budget includes various funding for health-related measures, including $53.5 million allocated for the Illinois Department of Public Health in preparation for future public health emergencies following the COVID-19 pandemic.
    • Migrant healthcare: The package allocates $550 million for a program to provide healthcare for undocumented immigrants aged 42 and older that do not qualify for the traditional Medicaid program. The $550 million appropriation is half of what the Department of Healthcare and Family Services expects the program to cost. A total of $42.5 million is also allocated to Chicago and Cook County for migrant support.
    • Reproductive health: The budget includes $18 million to support reproductive health initiatives and $7.69 million to the 31 rape crisis centers throughout the state.
    • Healthcare workers: Additionally, the package includes a more than $200 million increase for Illinoisans with developmental disabilities and $24 million for homeworkers specializing in care for the elderly. It also provides a $2.50-per-hour wage increase for Illinois Association of Rehabilitation Facilities workers.
    • Homelessness: The package includes an increase of $85 million for HOME Illinois, a state program focused on homelessness prevention efforts, affordable housing initiatives, and other programs aimed at the goal of “ending homelessness in the state.”
    • Youth: The budget also allocates $22.8 million for a behavioral health program for children and a $75 million increase for the Illinois Department of Children and Family Services to increase staffing and improve facilities.
  • Education: The budget includes $250 million to begin the Smart Start Illinois program to increase childcare and early education accessibility, a $350 million increase for K-12 funding, and $45 million to fill teacher vacancies. The package includes an additional $100 million for Monetary Award Program (MAP) grant funding. Additionally, a $100 million increase in funding is allocated towards four-year public universities and community colleges. Notably excluded was $75 million for the Republican-backed Invest in Kids program that supports private school scholarships to low-income students.
  • Economic development: The package allocates $400 million to close major economic development deals and attract businesses to the state. It sets aside $40 million to increase the number of social-equity cannabis businesses and makes available $20 million for capital projects in metropolitan areas across the state. It also makes a $20 million investment in a new Illinois Grocery Initiative aimed at reducing prices and increasing affordability.
  • Violence prevention: The budget includes continued funding for the $250 million Reimagine Public Safety Act aimed at preventing gun violence and increasing youth engagement and employment programs. The package includes $15 million for the state’s violent crime witness protection program, $30 million to police departments for body cameras and squad car dashboard systems, and $10 million for the hiring and retention of police officers.
  • Cannabis: The bill decouples from the 280E federal provision bringing a win for the cannabis industry by removing barriers for profitability for small, minority business owners.
  • Springfield capital development: A $50 million appropriation is allocated for Springfield’s legislative office complex. The package provides state lawmakers a 5.5 percent wage increase, bringing their salary to $89,675.

• Revenue omnibus: The revenue omnibus (SB 1963) creates a suite of tax incentives and allows exemptions across a range of sectors. Some highlights of the bill include:
  • Parking Excise Tax
    • Provides that a booking intermediary that facilitates the processing and fulfillment of the reservation for an operator that may not be registered shall be collected on the purchase price by the intermediary on behalf of the operator and remitted to Illinois Department of Revenue (IDOR)
    • Requires the parking tax to be imposed not only on the purchase price but also on any separate service charge levied by a booking intermediary
    • Requires certain booking intermediaries to register with IDOR
  • Hotel Operators’ Occupation Tax Act
    • Provides that the tax imposed by this Act shall not apply to gross rental receipts received from the renting, leasing, or letting of rooms to organizations chartered by Congress to provide disaster relief beginning July 1, 2023
  • Angel Investment Tax Credit
    • Provides for an increase to a 35% tax credit (currently 25%), for investments made in women-owned, minority-owned, or persons with a disability-owned or downstate businesses
    • Increases the annual cap on Angel Investment Tax Credits to $15 million (now $10 million)
    • Provides that $2.5 million shall be reserved for investments in minority owned businesses, $1.25 million for woman/disabled-owned businesses, and $1.25 million for downstate businesses

• Property tax omnibus: The property tax omnibus bill (HB 2507) provides several changes to the state’s Property Tax Code’s policies and exemptions. House Bill 2507 includes the following provisions:
  • Alters veteran homestead exemptions for survivors of World War II, granting a 100 percent reduction in assessed property value regardless of disability
  • Implements a homestead exemption for surviving spouses of deceased police officers and rescue workers in an amount equal to 50 percent of the equalized assessed value of the property
  • Provides that real property used to provide services requiring a license (under the Nursing Home Care Act or the Specialized Mental Health Facilities Act) cannot be assessed at a higher level than residential property in the same area, allowing them to be assessed at the 10 percent residential rate over the 25 percent commercial rate.

Health Care

Deceptive Practices of Limited Services Pregnancy Centers Act

Senate Bill 1909 prohibits the use of deceptive practices by anti-abortion pregnancy centers to interfere with an individual seeking to gain entry or access to the provider of an abortion or emergency contraceptives. Upon the measure becoming law, so-called crisis respite centers can be sued under the Illinois Consumer Fraud and Deceptive Business Practices Act if they engage in “unfair methods of competition” or “deceptive acts or practices,” including the “use or employment of any deception, fraud, false pretense, false promise, or misrepresentation.”

Health insurance

The General Assembly passed House Bill 579 and House Bill 2296 to continue the state’s efforts to strengthen healthcare affordability in the state and reinforce consumer protections regarding unfair health insurance practices.

House Bill 579 creates a state-based health insurance marketplace and allows the state to expand healthcare access to ensure all Illinoisans have adequate health insurance, while also protecting Illinois from future federal policies that could disrupt enrollment.

House Bill 2296 is a consumer protection legislation that advances healthcare affordability for Illinoisans by instituting a rate review process to protect citizens from unfair insurance rate hikes and practices. It grants the Illinois Department of Insurance the power to review insurance rate changes and the authority to deny rate hikes that lack adequate justification.

Medicaid omnibus bill

Senate Bill 1298, the Medicaid omnibus bill, amends various healthcare acts reimbursement rates for numerous Medicaid-covered healthcare expenses. The bill includes the following provisions:

• Increases hospital reimbursement rates for specific inpatient and outpatient services
• Provides Medicaid reimbursement rate increases for both base charges and mileage charges for air and ground ambulance services,
• Provides that reimbursement rates will be increased by 30 percent for Medicaid-covered substance use disorder treatment providers in accordance with the criteria established by the American Society of Addiction Medicine, as subject to federal law,
• Includes enhanced monetary support for critical care hospitals and specialty service providers located in rural Illinois,
• Makes changes to and provides parity for the supportive living program rate for dementia care, as subject to federal approval,
• Provides Prospective Payment System rate increases and allocates $50 million for federally qualified health centers per a specific distribution method,
• Sets forth a rate increase for each Medicaid-occupied bed in mental health facilities, and
• Increases the reimbursement rate 14.2 percent for speech therapy and occupational therapy services.

Public Safety/Violence Prevention

The Firearm Industry Responsibility Act

The Firearm Industry Responsibility Act (HB 218) allows lawsuits against gun manufacturers and dealers that advertise or sell firearms to individuals below the legal age of 18 or to illegal “paramilitary or private militia.”

The measure also puts gun manufacturers under the Consumer Fraud and Deceptive Business Practices Act, allowing lawsuits to be filed by individuals and the Illinois Attorney General’s office.

Drones as First Responders Act

Prompted by the tragic Fourth of July mass shooting in Highland Park last summer, House Bill 3902 allows for increased drone use by Illinois law enforcement.

The measure allows law enforcement officers and police departments to use surveillance drones when monitoring special events such as parades and festivals. The measure permits drone usage to aid in search and rescue operations, and is sanctioned to use facial recognition technology only when necessary to prevent “imminent harm to life.” Drones can only be operated by law enforcement and requires public notification when in use.

Labor, Employment & Business

Gender Violence Act

Illinois lawmakers passed a measure that amends the Gender Violence Act to increase employer accountability and protect against gender-related violence in the workplace.

House Bill 1363 provides that an employer can be held liable for gender-related violence committed in the workplace if the employers failed to supervise, train, or monitor the employee who engaged in the violence or fail to take remedial measures in responses to complaints. HB 1363 establishes a four-year statute of limitation for bringing a claim of gender-related violence against an employer, except that if the person entitled to bring the action was a minor at the time the cause of action accrued, then the action must be commenced within 4 years after the person reaches the age of 18.

Transportation Benefit Program

The Transportation Benefits Program Act (HB 2068) requires all “covered employers” to provide a commuter benefit that allows employees to use pre-tax dollars to purchase a public transit pass, via payroll deduction, such that the costs for such purchases may be excluded from the employee’s taxable wages and compensation up to the maximum level permitted by federal tax law. HB 2068 applies to entities with 50 or more full-time employees that are geographically near a transit area.

It also requires the Regional Transit Authority (RTA) make publicly available a searchable map of addresses that are located within one mile of fixed-route transit service. The benefit must become available no later than the first regular pay period after 120 days of employment. HB 2068 becomes effective January 1, 2024.

Salary transparency/Equal Pay Act

State legislators passed HB 3129 along party lines that requires an employer with 15 or more employees to list the pay scale and description of benefits for jobs that will be physically performed, at least in part, in Illinois. The measure applies to job functions performed outside of Illinois, but the employee reports to a supervisor, office, or other work site in Illinois.

The measure also requires an employer to provide the pay scale and benefits to a third party if the employer outsources the posting for announcement or publishing purposes.

Paid leave

On March 13, Gov. J.B. Pritzker signed a bill (SB 208) mandating paid time off to be used for any reason starting in 2024.

The bill provides employees with up to 40 hours of paid leave per year without designation of reason, guaranteeing paid leave for previously uncovered reasoning such as sick leave, child mental health issues, appointments, vacation, and others, requiring paid leave to accrue at a rate of one hour for every 40 hours worked and barring employers from requiring employees to find their replacement.

The legislation applies to every employee working for an Illinois employer, excluding independent contractors and employees covered by collective bargaining agreements in the construction and parcel delivery industries.

Employee organ donation

HB 3516 amends the Employee Blood Donation Leave Act to allow employees to take up to five days of earned leave in any year-long period to serve as an organ donor. The earned leave would apply to employees working for any employer with 51 or more employees.

Consumer-owned containers

HB 2086 amends the Illinois Food, Drug and Cosmetic Act regarding the use of personal to-go containers at restaurant and retail establishments. The measure allows the use of consumer-owned containers to be filled or refilled with ready-to-eat or dry bulk foods by a food establishment subject to legal requirements, such as the cleanliness and sanitation of said containers.

Energy & Sustainability

Energy omnibus bill

Amendment 4 of House Bill 3445 grants electric utility company Ameren monopoly rights for the construction of regional transmission lines in the Midcontinent Independent System Operator (MISO) territory, which covers central and southern Illinois.

Illinois’ clean energy goals and initiatives require the construction of billions of dollars’ worth of new transmission lines, and the “Right of First Refusal” provision would grant Ameren control over the costs of the projects, eliminating the bidding process and potentially increasing prices and costs for Illinois taxpayers. Research has shown that competitively bid upon projects cost 40 percent less than those that are not competitively bid.

Many lawmakers, environmental groups, and the business community have spoken out against the provision, and Gov. J.B. Pritzker has threatened to veto the bill. The bill did not receive veto proof majority in the House.

Packaging & paper stewardship

SB 1555 creates the Statewide Recycling Needs Assessment Act and accompanying Advisory Council to provide advice and recommendations to the Environmental Protection Agency (EPA) regarding the newly created Act. The bill requires the EPA to appoint members to the advisory council by Jan 1, 2024 and provides that persons with data or information required to complete the statewide needs assessment to provide the EPA with the relevant data or information in a timely fashion.

Transportation

South suburban airport

Both chambers passed a measure (HB 2531) requiring the Illinois Department of Transportation (IDOT) to solicit design proposals from developers for the long-proposed South Suburban Airport in the Village of Peotone. The legislation instructs the department to commence the prequalification process within six months of the bill’s effective date. The airport, which has been considered for decades, will be designated “for air travel and domestic and global freight cargo.”

Miscellaneous

Red-light cameras

Following recent convictions in the “ComEd Four” trial and charges against several elected officials in connection with red-light camera company SafeSpeed, state lawmakers unanimously approved a sweeping ethics measure that places new restrictions on the red-light and speed camera industry’s involvement in state and local elections and government.

House Bill 3903 prohibits companies that provide equipment or services for automated traffic law enforcement such as red-light cameras, automated speed enforcement, or automated railroad crossings from donating to state and local candidates for public office.

The political campaign contribution ban applies to officers, large investors, and high-level employees at the companies, their immediate families and political action committees created by the companies. The bill also prevents state and local government officials from accepting jobs or contracts with those companies while in office, or for at least two years after leaving office.

The bill grants the Illinois Department of Transportation authority to review and either approve or revoke permits for automated traffic enforcement systems under certain circumstances.

All-gender, multi-occupancy restrooms

A bill (HB 1286) that amends the Equitable Restrooms Act to allow any multiple-occupancy restroom to be identified as an all-gender bathroom passed both chambers of the Illinois legislature on May 19.

The bill also requires that all-gender bathrooms include specified signage, floor to ceiling stall dividers, and no urinals along with requiring that certain newly constructed or previously existing restrooms be designated as gender-neutral.

Book ban prevention

Both chambers approved and sent to the governor legislation aimed at limiting libraries’ capacity to ban books and incentivizing them to implement policies to prevent the removal of texts from their collections.

The measure (HB2789), initiated by Secretary of State Alexi Giannoulias, allows the state to deny grant funding to libraries if they ban books for partisan reasons or if they fail to adopt policies prohibiting the practice of banning books.

CPS elected school board map

State lawmakers voted to pass an amendment to SB 2123 that extends the original July 1, 2023 deadline to adopt a new school board map for Chicago Public Schools to April 1, 2024.

Under current law, the new map will shift the board from a seven-person panel appointed by the mayor to a 21-member elected board by 2026. The transition will happen over the course of two election cycles, with 10 district members elected in November 2024 and the rest elected in 2026, along with a presidential 21^st seat chosen by a citywide vote.

Veto session

The Illinois General Assembly has posted its schedule for the veto session. The House and Senate will return to Springfield Oct. 24 -26 and Nov. 7-9.

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