With a new administration, more than 50 freshmen legislators, some tough policy issues and two days of overtime, this year’s spring legislative session was certainly a challenging one.
The final days brought a flurry of activity on significant legislation including the passage of a state budget, a massive capital bill for statewide projects, legalization of recreational cannabis and a huge expansion of gaming.
While more than 6,000 bills were introduced in the 2019 spring session only 10 percent passed both chambers. Illinois REALTORS® statehouse team actively tracked more than 160 bills of particular interest. Here are key legislative issues:
Rent control legislation does not pass
The issue of rent control has been the subject of intense discussion, research, lobbying, grassroots and public outreach. This year’s efforts began with our Public Policy Meetings in January and we continued to work diligently throughout the spring session.
THANK YOU TO THE OVER 10,000 ILLINOIS REALTORS® who responded to our Call-For-Action on this issue and the outreach in Springfield and in the district. In 2019 there were several bills strongly OPPPOSED by Illinois REALTORS® which sought to repeal the Rent Control Preemption Act (a ban on enacting local rent control ordinances).
The intent of the legislation was to allow local governments, especially Chicago, to enact rent control by ordinance. Two of the bills- House Bill 255 (Guzzardi) and Senate Bill 2063 (Martinez) repealed the existing statute.
House Bill 2192 (Flowers) and House Bill 3207 (Ortiz), not only would have repealed the statute but CREATED a new Rent Control Act to establish rent control boards in EVERY Illinois county, mandating rent control regulations statewide.
HB 2192 also contained language regarding tax credits, procedures for terminating a tenancy or lease of one year or more and relocation assistance among other limitations and provisions.
After three years of anticipation and intense lobbying by both proponents and opponents of rent control and two separate “subject matter hearings,” House Bill 255 (Guzzardi) was called for a vote in the Commercial Law Subcommittee of the House Judiciary Civil Law Committee in late March. After another debate of the bill, it FAILED in the subcommittee on a roll call of 2-4-1.
We anticipate that this will continue to be a top priority issue in upcoming sessions.
Tripling of real estate transfer tax for nonresidential real estate stopped
As capital funding packages were being put together in the waning hours of spring session, a 716-page amendment was proposed to Senate Bill 690 that included a proposed tripling of the state’s real estate transfer tax on nonresidential real estate.
The state’s real estate transfer tax is in addition to many home rule municipal real estate transfer taxes that are in place. The current rate is $1 per $1,000 and House Amendment #2 to SB 690 would have increased the rate for nonresidential real estate to $3 per $1,000 of value.
This required a quick response from the lobbying team in voicing our strong OPPOSITION and the tremendous support from House Republican Leader Jim Durkin and his caucus to ensure this language was taken OUT of the bill in its final form.
Real estate license law rewrite approved
With near unanimous approval, Senate Bill 1872 (Anderson-Jones III/Rita) passed this year. SB 1872 represents the agreement between Illinois REALTORS® and the Illinois Department of Financial and Professional Regulation on rewriting and renewing the Real Estate License Act. For an in-depth explanation of the rewrite changes, see Legal Update on page 8. Signed into law (P.A. 101-357).
Property tax relief measures
Two property tax relief-related bills were approved and signed into law.
Senate Bill 39 (P.A. 101-77) creates the Illinois Property Tax Relief Fund within the state treasury. Moneys in this new fund are intended to pay rebates to residential property taxpayers. The legislation provides for the payment of rebates to be made beginning in the state’s 2021 fiscal year to those property taxpayers who receive homestead exemptions.
Senate Bill 1932 (P.A. 101-181) creates a new Property Tax Relief Task Force to identify the causes of increasingly burdensome property taxes in Illinois; review best practices in public policy strategies that create short-term and long-term property tax relief for homeowners and make recommendations to assist in the development of both short-term and long-term administrative, electoral and legislative changes needed for property tax relief. A final report is due Dec. 31, 2019.
Cook County assessor reporting requirements stalls
Various stakeholders, including Illinois REALTORS®, worked throughout the spring session on Senate Bill 1379, which was an initiative of the Cook County Assessor, to establish ANNUAL reporting requirements for tax purposes on most income-producing properties in Cook County. While the bill sought to require these procedures in Cook County, other counties would have had the ability to opt-in. The bill was OPPOSED by a large coalition of business groups, including Illinois REALTORS®. While language was crafted to address many of the concerns in the bill, no final agreement was reached, and the bill was not called for a vote in the House this spring.
The assessor has indicated that it is his intent to revive the bill, possibly as early as the fall session.
Local government consolidation measures approved
Illinois REALTORS® has consistently supported legislative efforts to eliminate or consolidate the staggering number of property tax-funded units of government in Illinois and three bills were approved in 2019.
House Bill 348 (McSweeney/Link) adds provisions to Illinois law dealing with the dissolution of a single township in McHenry County by a referendum vote and also establishes the procedure for abolishing a township road district in Lake or McHenry County if the roads of the district are less than 15 centerline miles in length. Signed into law (P.A. 101-230).
House Bill 3369 (Weber/Wilcox) provides that the village of Lindenhurst Board of Trustees may, by ordinance, exercise the powers of the sanitary district, including the district’s authority to levy and collect taxes. Signed into law (P.A. 101-111).
Senate Bill 90 (McConchie/Didech) provides for the dissolution of certain drainage districts wholly or partially contained within the Lake Michigan Watershed, the Chicago/Calumet Watershed, the Des Plaines River Watershed or Fox River Watershed. The county board or city council is directed, within 60 days after the dissolution, to reduce or eliminate the assessment. Signed into law (P.A. 101-298).
Local Government Residential Inspection Limitation Act
House Bill 2206, introduced by REALTOR® Rep. Sam Yingling, was STRONGLY SUPPORTED by Illinois REALTORS®. HB 2206 would codify what the U.S. Supreme Court has said is the fundamental right of owners and occupants of housing under the Fourth Amendment to the U.S. Constitution; that a unit of local government may not conduct a physical inspection of residential property without the voluntary consent of the owner or occupant of the property, a lawful warrant or a court order.
Despite the measure being UNANIMOUSLY approved in a House committee, it stalled in the House. The fight for this important initiative will continue in future sessions.
Ban on real estate broker/agent serving as a township assessor
Senate Amendment #1 to Senate Bill 683 (Morrison, J.) included language that would prohibit a person from serving as a township or multi-township assessor “if that person OR a member of that person’s immediate family is engaged in business as a real estate agent or broker in the territory over which the township or multi-township assessor has jurisdiction”.
The language defines “immediate family” as the person’s parent, child, spouse or sibling. This proposal was STRONGLY OPPOSED by Illinois REALTORS® and was also opposed by the Assessment Officials Association. The bill was ultimately not called for a vote by the sponsor.
Rental housing support fee increase
Senate Bill 2092 (Aquino), which would have increased the recording fee surcharge for each real estate-related document from $9 to $18, was defeated in the Senate Local Government Committee on a roll call vote of 3-3-3 (5 affirmative votes needed for passage).
The proceeds of the existing and proposed increased surcharge are earmarked for the Rental Housing Support Program.
Affordable rental housing incentives – possible action in fall session
Senate Bill 2259 (Cullerton) and House Bill 2168 (Feigenholtz), two property tax incentive proposals modeled after the Cook County Class 9 Program, were introduced and SUPPORTED by Illinois REALTORS®.
SB 2259 would provide statewide property tax incentives for newly-constructed or rehabilitated multi-family residential rental properties if the owner commits to keep rents in at least 20 percent of the units at or below maximum rent levels and units are occupied by renters with household incomes at or below maximum income limits for 10 years.
HB 2168 provides for a statewide program reducing the equalized assessed value of newly-constructed or rehabilitated rental property.
This bill has the same 10-year commitment for the owner but provides that at least 15 percent of the multifamily units have rents at or below maximum rents and occupied by renters with household incomes at or below maximum income limits. A subcommittee of the Senate Executive Committee held a subject matter hearing in July 2019 where both measures were discussed, and action could occur in the fall session.