IVCA Provides Updates for State and Federal Legislative Issues - 11.08.17

IVCA Provides Updates for State and Federal Legislative Issues - 11.08.17

SEXUAL HARASSMENT CHARGES TARGET LAWMAKER, CAPITOL CULTURE
 
Legislators return to the Capitol this week for the regularly scheduled Veto Session after a week off which featured explosive testimony by a woman who claimed she was harassed by Illinois State Senator Ira Silverstein (D-Chicago) while she as an issues advocate was attempting to pass legislation in the Illinois General Assembly.  The testimony came during a hearing on proposed legislation from Illinois House Speaker Michael J. Madigan (D-Chicago) to address the complaints being heard in Illinois and across the country concerning the working environment for women in the Capitol.
Reports re the charges and the subsequent emergency decision to appoint an Inspector General is here:  http://www.chicagotribune.com/news/local/politics/ct-met-illinois-legislature-sexual-harassment-20171103-story.html
 
VETO SESSION
 
In the first week of Veto Session legislators overrode the governor on a number of measures, some by unanimous votes, however he did prevail on one of his key agenda items which was to permit local units of government to create their own “right to work” zones.  A bill to prohibit such action was passed by the legislature, vetoed by the governor, overridden in the Senate but upheld in the House.  Opponents of “right to work” say they may try again to override the veto this week.
 
PENSION DISCLOSURE LEGISLATION VETOED/AMENDED
 
SB 779, which called on pension funds to provide greater disclosure of fees and expenses of investment managers (citing specifically private equity) had been approved on a 34-19 vote in the Illinois Senate on May 29.  It had not passed the House and is now in fact being “gutted” to take out all of the original language regarding fees and disclosure and is being used as a “trailer bill” to clean up inconsistencies of the recently approved Tier 3 pension plan.  The bill had been touted by the sponsor as a valuable for investors and the public but had been opposed by the Illinois pension funds for its potential to create adverse selection against them.  It is possible the sponsor could re-file the language and attempt to move it again in the Spring Session.
 
Governor Rauner vetoed another pension bill, SB 1714, which called for greater disclosure of pension fund efforts to make investments through minority owned businesses, female owned businesses and businesses owned by persons with a disability.  SB 1714 was vetoed by the governor but passed the legislature unanimously, which means if the sponsors decide to call for an override this week their chances of succeeding seem fairly high.
 
 
PRIVILEGE TAX ON THE SIDELINES
 
IVCA has been diligently working to educate lawmakers regarding the negative impact and consequences of even introducing bills to establish a “privilege tax” on the capital gains earned by investment managers in private equity.  SB 1719 and HB 3393 have been advanced by allies of the Chicago Teachers Union and others as a way to raise revenue in Illinois and to send a political message to the Governor.  Our position is it sends an extremely negative message to firms located here who are helping drive growth in the Illinois economy. 
 
SB 1719 passed the Senate 32-24 on May 23 and was approved by the House Revenue and Finance Committee, but not taken to the floor for a vote.  HB 3393 made it out of House Revenue and Finance but was not heard on the floor, after SB 1719 took over as the lead vehicle in this effort.  Both bills are in the Rules Committee, so they are for the moment on the sidelines, but in the Spring Session we will be watching and stridently opposing any efforts to bring them onto the legislative playing field again.  Please continue to reach our Executive Director Maura O’Hara if you would like to establish a line of communication with your elected state senator or representative on the privilege tax issue.
 
SCHOLARSHIP TAX CREDIT DETAILS
 
One primary reason Illinois was able to accomplish historic realignment in the way it funds K-12 education was the governor fought for and included a tax credit for persons making contributions to scholarships at private and parochial schools.  The Illinois Department of Revenue has just released further guidance on how the program will be administered, which is provided here:
SPRINGFIELD –  The Illinois Department of Revenue (IDOR) is announcing that general information regarding the Invest in Kids Act (IIK) (Public Act 100-0465), the recently enacted Illinois tax-credit scholarship program, is now available through its website tax.illinois.gov.  
Beginning January 2, 2018,  MyTax Illinois will begin accepting applications from individuals and businesses who wish to participate in IIK.  To apply, individuals and businesses must report their intention to make an authorized contribution to an approved Scholarship Granting Organization (SGO).  The SGOs, in turn, provide scholarships for eligible Illinois students to attend qualified non-public schools in Illinois.  Taxpayers can receive a tax credit equal to 75% of their approved SGO contribution.  Those interested in applying are strongly encouraged to register for a MyTax Illinois account as soon as possible to avoid any processing delays when the application system goes live on January 2nd.   
“We are making history in the state of Illinois,” said Governor Bruce Rauner. “Anyone who contributes to this scholarship program is making the best investment of all, one that ensures all of our kids have access to quality education and a brighter future."
IDOR is authorized to issue up to $75 million in IIK tax credits per calendar year, beginning in 2018 for taxes filed in 2019.  Approval to contribute will be awarded on a first-come, first-served basis in a geographically proportionate manner based on enrollment in recognized non-public schools in Illinois.  Approval is granted automatically as long as the regional and statewide thresholds have not been met.  
For the purpose of awarding credits, Illinois will be divided into five regions, coinciding with Illinois Appellate Court district boundaries.  Contributing taxpayers will be required to select the region, SGO, and amount they wish to contribute.  
The five regions and their proportionate share of tax credits are: 
Region 1, Cook County, 51.22%; 
Region 2, Northern Counties, 23.09%; 
Region 3, North Central Counties, 9.97%; 
Region 4, Central Counties, 7.50%; and 
Region 5, Southern Counties, 8.22%.  
For a listing of counties in each court district, visit illinoiscourts.gov.
 
Organizations choosing to become a SGO can begin applying for approval to issue certificates of receipt on December 1, 2017. 
For more information on the IIK tax credits, please view IDOR’s General Informational BulletinFAQs, and SGO Informational Bulletin now available at tax.illinois.gov.  Questions may be emailed to IDOR at: [email protected].  Be sure to check IDOR’s website periodically for additional IIK updates.