GOVERNMENT AFFAIRS
Report    

June 28, 2019

This Week in Illinois 
 
Governor JB Pritzker has been busy that last couple weeks making the rounds and signing bills into law.  Here is a quick update on legislative matters that have recently been signed into law.

'REBUILD ILLINOIS' SIGNED INTO LAW 
Today Governor Pritzker signed the package of infrastructure investment bills (SB 1939 and SB 690) that will fund transportation infrastructure investments, along with investment in non-transportation infrastructure. The Illinois Chamber was present at the press event held in Joliet, within sight of the I-80 bridges slated for replacement soon as result of the Rebuild Illinois capital plan. Rebecca Mason of the Illinois Chamber's Infrastructure Council spoke at the event and highlighted the importance of infrastructure to our economy.

Rebuild Illinois contains $45 billion in new investment for the state's infrastructure. IDOT Acting Secretary Omer Osman indicated that IDOT will soon be releasing its new multi-year plan, which will include the new revenues available.

You can find a Chamber staff analysis on the new capital program  here.  


(Pictured Above: Rebecca Mason of the Illinois Chamber)

The other piece of the Rebuild Illinois infrastructure program addresses vertical capital needs.  This portion of the capital bill is laid out in SB 690 and would include funding for state facilities such as schools, park districts, libraries, etc.  

The vertical component also includes several other revenue related items such as the Chamber's data center incentive program (more on that below), six new casinos, slot machines at horse racing tracks, video gaming tax increase, parking excise tax, cigarette and e-cigarette tax increase, and trade-in credit modification for cars and light trucks.  

SB 690 also created the  "Level the Playing Field for Illinois Retail Act."  This provision in the legislation is a complicated and convoluted revision of the  Retailers' Occupation Tax and the Use Tax that converts certain out-of-state sellers to retailers under the ROT from Use Tax collectors and imposes local sales taxes on such sales using destination sourcing. (This is likely going to be amended in veto session.)  

The Illinois Chamber applauds Governor Pritzker for signing the Rebuild Illinois infrastructure package to bring more economic opportunity to Illinois.

We are thankful to the administration, legislators, stakeholders and staff who worked very hard to pass this historic legislation this session. The structural reforms contained in Rebuild Illinois, specifically the data center incentive, will help attract high-tech jobs to Illinois.


PRITZKER SIGNS CHAMBER DATA CENTER INITIATIVE INTO LAW 
As mentioned above, the Chamber's initiative to create a data center tax incentive program was included in the vertical capital bill, SB 690, and was signed into law today in Springfield.  

SB 690 or P.A. 101-31, officially creates a 100% state and local sales tax exemption for the purchasing of qualified tangible personal property for qualifying new and existing data centers. In addition, this new law creates an enhanced income tax credit for new data centers built in under-served areas. Qualifying data centers must meet various capital investment targets, employ a certain amount of people, and meet various energy building standards. Qualifying data centers making rehabilitation or new construction must enter into project labor agreements. Qualifying data centers must report various tax benefits to the Department of DCEO. DCEO shall submit a report to the General Assembly and the Governor yearly on the programs progress. The program sunsets after 10 years but any agreement entered with DCEO may last up to 20 years.

As many of you know, this has been an initiative of the Illinois Chamber's for over five years.  This was not made possible without the help of Chamber members and your investment to our organization.  With the enactment of this law, Illinois' technology ecosystem will no doubt be much stronger as a result of this new program.  

A full and complete Chamber staff analysis is available  here.  Oh, and a fun video below!  



PRO-BUSINESS REFORMS BECOME REALITY 
As part of the end-of-session compromise between the Governor and the four legislative leaders, a package of legislation that was introduced at the request of the business community was signed into law earlier this month.  

SB 689 - (P.A. 101-0009) included some significant pieces of pro-business reforms.  The following provisions of the new law are as followed: 
  • Franchise Tax amnesty
  • Gradual elimination of the Franchise Tax 
  • Manufacturers' Purchase Credit - This is now a complete exemption for production-related tangible personal property.  
  • Blue Collar Jobs Act - an EDGE type credit that provides an income tax credit in the form of a credit for incremental income tax withholding for construction jobs for High Impact businesses, businesses in Enterprise Zones and River Edge areas.  
The Chamber supported this piece of legislation.  Any one with questions are encouraged to contact Keith Staats.  


IL BECOMES 11TH STATE TO LEGALIZE CANNABIS 
This week, Illinois became the 11th state to legalize adult use of cannabis and the first state in the nation to do so through the legislature.  

HB 1438  was signed into law on Tuesday and is legislation to regulate recreational cannabis.  

The legislative sponsors worked and negotiated with the Illinois Chamber to provide the strongest workplace protections for employers in the country. Our goal was met of protecting employers with zero tolerance, drug free workplace and drug testing policies. Based on the final language and legislative intent, we are confident that employers will be free to continue to provide for safe workplaces through their reasonable, non-discriminatory employment policies.  In addition, the Chamber also advocated for local control, allowing municipalities to opt out of the retail sale.  Both employer protections and local control are in the final bill.  

In addition, the new law allows Illinois residents 21 and older to possess up to 30 grams of cannabis flower, 5 grams of concentrate and 500 milligrams of THC product.  The law also will expunge the records of some 800,000 people with criminal records.  

Please note: there likely will be additional changes to the law during the fall veto session which is scheduled to start on October 28th.

ETHYLENE OXIDE REGULATIONS SIGNED INTO LAW
Last Friday, the Governor signed two bills to regulate the use of ethylene oxide.  

SB 1852 - This bill was replaced with language from Leader Jim Durkin. The bill applies to sterilizers which requires sterilization operations to capture 100% of all ethylene oxide emissions and reduce ethylene oxide emissions to the atmosphere from each exhaust point by at least 99.9% or to 0.2 parts per million.

SB 1854 - The bill addresses emissions from facilities that emit ethylene oxide. The House Amendment 3 addresses the following: defines a facility impacted by the requirements set forth in the bill; requires dispersion modeling; requires a plan to describe how the facility intends continuously collect emissions information; and requires 180 days after the effective date no facility shall emit ethylene oxide unless the source obtains a permit from IEPA. Provides that "nonnegligible ethylene oxide emissions source" includes sources emitting 150 pounds of ethylene oxide as reported on the source's 2017 Toxic Release Inventory that is located in a county with a population of at least 700,000

ICYMI: END OF SESSION REPORT
In case you missed our  End of Session Report earlier this month, you can view it here!

CHANGE IN GENERAL ASSEMBLY 
Today, state Representative Robert Martwick (D - Chicago) was appointed to fill the vacancy left by retiring state Senator John Mulroe (D - Chicago).  Now-Senator Martwick was sworn in today by Judge Mulroe.  Martwick's state rep seat is expected to be filled in the coming weeks.   

Another change in the makeup of the General Assembly is expected to occur this weekend.  Retiring longtime state Representative Michael McAuliffe (R - Chicago)announced his last day in office will be tomorrow.  

Connect with the Chamber

  

If you have questions about the Government Affairs Report, contact Tyler Diers at [email protected]. Do not reply to this email. 

Illinois Chamber of Commerce

2017 Government Affairs Report | Tyler Diers, Editor