Association News

It has been a busy fall in Springfield at HBAI, and typically I would be writing you now with news from the end of Veto Session.  However, at this point, we are only in the midst of Veto Session.  The House of Representatives has scheduled Session Days for January 3 through January 11 in 2011, prior to the Inauguration of the newly elected General Assembly on Wednesday, January 12.
Thus far, the 2010 Veto Session has seen action on large, yet ancillary issues. 

Legislation recognizing Civil Unions in Illinoispassed both the House and Senate and the Governor has vowed to sign the measure into law in January.  Pension reform for future police officers and firefighters passed both Chambers.  The measure would increase by 5 years both the years of service requirement as well as minimum eligible retirement age for new hires.  The police and firefighter pension legislation also caps a maximum annual benefit.
The Illinois Senate also passed to the House omnibus Gambling expansion legislation, authorizing at least 4 new casinos in Illinois, including a land based Casino in the City of Chicago.  The House failed to address the legislation and speculation reigns on whether the legislation can clear the chamber.

Most interestingly, the House and Senate both created 3 new independent, bi-partisan Committees to address critical areas of concern in Illinois.  The Special Committees include: Medicaid Reform, Education Reform and Workers’ Compensation Reform.  The Home Builders Association of Illinois has been closely monitoring the activities and testimony before the Workers’ Compensation Committee. It is not known whether any of these Committees will produce legislation for consideration by either the House or Senate. However, Legislators seem intent on reducing insurance premium costs to employers while preserving safety and medical coverage for injured workers.

Furthermore, less than 24 hours after his election victory, Governor Quinn declared that voters had given him a mandate on an income tax increase.  However, no tax increase proposal was considered in either Legislative Chamber thus far in the Veto Session. It is speculated by many that any reform measures resulting from any of the 3 aforementioned Special Committees with be tied to an income tax increase, under a single vote.  This political maneuver will put pressure on Republicans to support an income tax increase.  Time will tell whether this hypothetical situation will play out.

In other recent Government Affairs activity, HBAI recently submitted public comment on proposed Illinois Department of Public Health changes to the Private Sewage Disposal Code.  IDPH submitted a complete overhaul of the Code to the Legislature’s Joint Committee on Administrative Rules, which will approve or reject the Code changes.  The Code changes were developed primarily to address the issue of residential surface discharge private sewage disposal systems and future IEPA regulations affecting their installation.  Illinois is the ONLY State that does not currently regulate surface discharge, and the US EPA has threatened to revoke IEPA’s jurisdiction under the Clean Water Act. Overall, the IDPH rules are well constructed; however there are a few significant problems that HBAI has asked be reconsidered.  Primarily at issue is the IEPA’s intention to wait until 2013 to implement any permit program.  Therefore, there is considerable time to enable any issues with the Code to be addressed.  HBAI will continue to advocate for the most possible consumer choice options with the least financial burden on the population while simultaneously ensuring compliance with Federal clean water regulations.

In other activities, HBAI has confirmed with Illinois Department of Public Health (IDPH) staff that there are no intentions of mandating residential fire sprinklers via the Illinois Plumbing Code.  The Department is pursuing technical changes to the Illinois Plumbing Code, which has not been updated since 2004.  However these changes focus on date references, materials, water distribution and venting.  IDPH staff confirmed the department had experienced internal conversations concerning installation jurisdiction of fire sprinklers and expanding the code to require full installation by a licensed plumber.  However, this change was not presented to the advisory council and is therefore not approved for inclusion in proposed Code changes to be submitted to JCAR.  IDPH staff assured HBAI that at no time was there conversation or consideration of mandating residential fire sprinklers within the Illinois Plumbing Code.  HBAI will closely monitor any draft Code proposals when they become available for public comment. In other words, there are plenty of Legislative and Regulatory affairs to maintain focus during the usually slow Fall and early Winter months.

It was a mixed year for the Housing industry with respect to Illinois state government.

HBAI successfully joined with the Illinois State Bar Association to enact much needed clarification of the Home Remodel and Repair Act.  SB 2540 provided that failure to comply with the Home Remodel and Repair Act would constitute a violation of the Consumer Fraud and Deceptive Business Practices Act; therefore providing essential clarity and stability to the Act.  The legislation passed both Chambers unanimously and was signed into Law by Governor Quinn as P.A. 96-1023.

Unfortunately, HBAI was unsuccessful in passing a Housing Income Tax Credit, in the form of SB 2997 and additional changes to the Developer’s Exemption to the Property Tax Code.  These two priorities of HBAI received very little attention from the House or Senate Revenue Committees. However, HBAI remains committed to pursuing significant tax benefits for housing in Illinois.  Furthermore, HBAI was unfortunately unsuccessful in securing the ability to hire part-time salespersons for the purpose of showing builder owned property.  The Illinois Association of Realtors placed restrictions on this ability in the Real Estate License Law passed in 2009.  HBAI attempted to remove those restrictions and restore decades old practice.  However, HBAI was unsuccessful in that effort due to intense opposition from IAR.

HBAI was also unsuccessful in defeating an organized labor initiative that increased fines on construction contractors that fail to display signage on trucks while on worksites.  The previous penalty was a petty offense with a maximum fine of $100.  With the passage of HB 4673 and its approval by Governor Quinn as P.A. 96-1179, the penalty was increased to a Class C misdemeanor and a maximum fine not to exceed $500.  HBAI joined forces with Mid-West Truckers to oppose the measure, however neither organized labor nor Senator Munoz nor Representative D’Amico, the sponsors of the measure, was willing to meet with HBAI or negotiate the legislation.

However HBAI was successful in defeating SEVERAL other legislative measures that would have dramatically regulated or increased the cost of housing.

HBAI was successful in defeating legislation that would have further increased housing costs or regulated the housing industry.  HBAI opposed and was successful in defeating the following legislation:

HB 1076 (Schmitz) would have mandated that land developers provide performance bonds to all subcontractors on a development project.  This would have required a developer to insure the cost of the project not only to the unit of local government, but also to the subcontractors.  This level of insurance is currently unobtainable in Illinois.  HBAI was successful in demonstrating the exorbitant cost and burden this would have placed on residential development, if it was even possible, at all.

SB 3001 (Garrett) enabled units of local government to impose an additional real estate transfer tax on the recording of real estate documents.  The tax money generated would then be used by local governments to subsidize affordable housing.  Ironically this legislation was the initiative of Lake County, Illinois, the county that #1 in the State in housing cost.  SB 3001 failed to receive the required number of votes to pass the Senate and lost by a vote of 20-30-2.

HBAI also successfully defeated efforts to revive SB 286, legislation enabling Counties to levy a property tax surcharge to be used to purchase the development rights from farmland.  By purchasing the development easements of farmland, the land continues to be owned and operated by the property owner as farmland, however it can never be developed or converted into another use.  EVER.  After HBAI defeated SB 286 in 2009, the proponents of the legislation attempted to initiate conversations seeking a compromise on the legislation in the Spring of 2010.  HBAI politely declined, citing philosophical opposition.

HBAI, in partnership with IAR and the Taxpayers Federation of Illinois, also created enough opposition to prevent the consideration of HB 4814 (Froelich); legislation enabling Fire Protection Districts to levy taxpayer funds in order to stockpile up to 3 years of operating expenses.  In addition, HBAI joined forces with other business interests, including the Illinois Manufacturers Association, the Illinois State Chamber of Commerce and NFIB in preventing the consideration of HB 3665 (Hernandez) mandating paid sick leave. However, HBAI’s largest legislative victory came in the temporary defeat of SB 43, legislation mandating the payment of prevailing wage on any and all projects located within the physical boundaries of a TIF District or Enterprise Zone.  The organized labor backed legislation was hotly opposed by HBAI and numerous other business and local government groups.  While the measure passed the Senate, it was held from consideration in the House.  HBAI expects the measure to return in the 97th General Assembly. Thank you for your continued support of HBAI and our grassroots government advocacy efforts.

Be well and do good.