IVCA Provides Updates for State and Federal Legislative Issues - 12.06.17

VC/PE IN THE SPOTLIGHT OF 2018 CAMPAIGN FOR GOVERNOR
 
Opposition research on the business careers of Bruce Rauner and J.B. Pritzker, the two likely opponents for Governor of Illinois, is being shared furiously with the media and therefore IVCA members will see our industry highlighted during the 2018 campaign.
 
Illinois Governor Bruce Rauner faced scrutiny of his Private Equity career in 2014 in the Republican primary and in the General Election.  Governor Rauner has announced he is running for re-election, though he does face a primary challenge by conservative State Representative Jeanne Ives of Wheaton.
 
Democrats seem to be coalescing behind the candidacy of Venture Capitalist J.B. Pritzker, which is confirmed as a political reality by the direct confrontation between Rauner and Pritzker this week over the release of income tax information by the Pritzker campaign, followed by direct comments and press releases from the governor’s campaign critical of the use of trusts for tax purposes https://www.brucerauner.com/news/pritzkers-taxes-raise-questions-answers/

and then a more specific critique of the New World Ventures / Pritzker Group Venture Capital. 
https://www.brucerauner.com/news/jb-pritzkers-terrible-record-business-taxes/ 
The Pritzker campaign responded:
https://www.jbpritzker.com/pritzker-campaign-responds-bruce-rauner/ 
The governor has in recent days been subject to criticism by members of the Republican party who are supporting the Ives campaign and was pressed by reporters on his comment that he is “not in charge” of the state which were made during a session with reporters and were intended to highlight the control of the Illinois House by Speaker Michael J. Madigan. 
http://www.chicagotribune.com/news/local/politics/ct-met-bruce-rauner-madigan-not-in-charge-20171204-story.html 
This back and forth is getting extensive media coverage and IVCA members should anticipate that will continue up through election day.

 
IDOR PROVIDES ANGEL INFO
 
The Illinois Department of Revenue issued the following information on the Angel Investment Tax Credit Tuesday, December 5:
 
Applications to become a Qualified New Business Venture (QNBV) are now available online at ildceo.net/angel. Those interested in being certified as a QNBV are encouraged to complete and submit their application as soon as possible for review as we will be placing an initial listing of certified businesses on the website on January 2, 2018. Please note that only investments made on or after the date of certification as a QNBV are eligible for a tax credit.
 
I encourage all past applicants to please review the Program Documents on the website to become familiar with the current legislative language. All questions regarding the program and application submissions should be made to [email protected]. 
 
Please note, only QNBV applications are available at this time; the Department will release investor applications once the rulemaking procedures outlined in the Illinois Administrative Procedure Act (IAPA) [5 ILCS 100] is complete (no earlier than March 2018). 
 
Thank you for your interest in the Illinois Angel Investment Program and I look forward to working with you in 2018!
 

LEGISLATURE OUT OF SESSION
 
Committees of the Illinois General Assembly are holding hearings on issues ranging from managed care in Medicaid, legalizing recreational use of marijuana and conditions for safety in the state’s prison system.  They are not however in legislative session and won’t be until January 23 of 2018.  Governor Rauner is scheduled to give his 2018 State of the State address January 31 and his budget address on February 14.
 

PRIVILEGE TAX UPDATE – NO CHANGE
 
Both bills (SB 1719 / HB 3393) to impose a 20% “privilege tax” on the capital gains earnings of investment managers are in the House Rules Committee.  If you’re trying to pass a bill, you don’t want it stuck in the Rules Committee.  But when you’re trying to kill a bill, as we are with this misguided proposal, you have to stay vigilant.  IVCA members are encouraged to connect with our Executive Director Maura O’Hara about setting up an opportunity to visit with your state rep and senator to help them understand the issue and the damage which would be done to the Illinois economy if this tax were imposed.
 
 
BUDGET BATTLE LOOMS
 
A battle over the state budget has been waged throughout the governor’s first term and the FY 2109 budget process looks likely to follow in that tradition.  This summer, Democrats and a small alliance of Republicans, mostly House members, passed a budget and an income tax increase over the objections of the governor and then overrode his veto of those measures.  Fiscal analysts within the state and outside sources are warning the state’s budget is out of balance, short on revenue, and that even after a bond offering of $6.5 billion to pay vendors and providers there are still $8.9 billion in overdue bills at the Comptroller.  The legislature and the governor have found very little common ground on fiscal and budget issues, and heading into the election year of 2018, it’s a challenge to envision how they will now find any room for agreement or any reason to do so.