The General Assembly returned to Springfield this week in an effort to conclude work on the state’s fiscal year 2011 budget and other items unresolved from the spring session. As reported by Kevin Lee from the Illinois Statehouse News the plan had included a $4 billion borrowing plan to allow the state to make its annual contribution to the state’s five public employee pension systems at a cost of about $1 billion in interest over the next eight years. While the House narrowly approved the borrowing plan, the Senate did not have the votes to pass it this week. The House and Senate may return in the next two weeks to attempt to either approve this element of the budget plan in the Senate or pass another option regarding the pension systems. There was approval given in both chambers for emergency budget powers that grants the governor broad discretion to reduce agency and program spending which will include borrowing from various dedicated funds.

In other action this week:

• Much to the frustration of the IAR and other groups and legislators a controversial landlord-tenant proposal that had received no consideration or debate all year was revived just before legislators left town this week. Last year an amendment was offered to House Bill 3690 that would require landlords in Cook County to include information about the name, age and disability status of occupants of rental premises in any demand for possession in an eviction proceeding. The IAR and other groups strenuously objected to this proposal from Cook County Sheriff Tom Dart’s office because it would require landlords to provide information they have no way of knowing or verifying and in some cases cannot even ask for by law. The IAR strongly believes that the Code of Civil Procedure should not be the method for connecting displaced tenants with needed social services which is Dart’s stated purpose of the proposal. Last year when the amendment was considered by the Senate Judiciary Committee, Senators cited many flaws in the proposal and the bill was held in Committee. On Wednesday of this week the bill was abruptly revived and transferred to the Senate Executive Committee. After testimony against the bill by the IAR the bill was once again held in Committee but another amendment tweaking the proposal was quickly filed and the bill was reheard in the Executive Committee. The bill was then advanced to the Senate floor over the objections of the IAR and other groups. The sponsor, Senator Don Harmon, has pledged to work with the IAR and other parties in seeking a consensus before it is called for a floor vote in the Senate.

   

• On Wednesday, the House concurred with the Senate amendments to two title insurance measures which marked final legislative action on these negotiated bills. House Bill 5409 will require title companies to provide buyers and sellers “closing protection” for the acts and omissions of their agents and permits (as opposed to requires) title companies to charge a fee for the closing protection (favored by IAR). The legislation also provides that IDFPR shall adopt rules to provide further guidance to protect against violations of RESPA. The House unanimously concurred with the Senate on changes to House Bill 5677, which amends the recently enacted “good funds” law regarding monies at closings. The bill was modified in the Senate with some language suggested by the IAR to clarify that earnest money held by a real estate broker and brought to the transaction on behalf of a buyer will not have to meet the more stringent requirements-like the wiring of funds- unless the earnest money is $50,000 or more. As we previously noted, the underlying “good funds” law establishes minimum requirements, and individual title companies may have more stringent company policies.

   

• The Senate concurred this week with the House on Senate Bill 3739--the Save Our Neighborhoods Act of 2010. Sixty days after being signed by the governor two new programs will be established - a foreclosure prevention program and an abandoned housing funding program within the Illinois Housing Development Authority (IHDA). An existing program that pauses the foreclosure process so that individuals can receive counseling is also extended under this legislation until July 1, 2013. The new programs are to be funded with an up-front foreclosure filing fee of a flat $50 paid by the foreclosing lender and a $1 per $1,000 fee (capped at $300) paid by the purchaser at a judicial sale of a foreclosed property. The legislation contains provisions regarding grants to approved counseling agencies for approved housing counseling and to approved community-based organizations for approved foreclosure prevention outreach programs which are to be allocated statewide by a specified formula. The bill also requires IHDA to make grants to municipalities to assist with removal, securing and enclosing costs. The IAR was NEUTRAL on this measure as were the various lending industry groups.

   

• Final legislative action occurred this week on House Bill 5429-the Homeowners’ Solar Rights Act. HB 5429, as approved by both chambers, is intended to prohibit a homeowners’, property owners’ or condominium unit owners’ association from adopting bylaws, deed restrictions or covenants that would prohibit the installation and use of a solar energy system. Associations will be required to adopt an energy policy statement regarding the location, design and architectural requirements of solar energy systems within 120 days after it receives a request for a policy statement or an application from an association member. If approval is required for installation or use of a solar energy system, the application must be processed within 90 days after the submission of the application. If an application is submitted before the association has adopted an energy policy statement, the 90 day period does not begin to run until the date that the policy is adopted. The association is given the right to determine the specific location where a solar energy system can be installed on the roof provided it does not impair the effective operation of the system and the solar energy system would be required to meet applicable standards and requirements imposed by State and local permitting authorities. The Act does NOT apply to any building greater than 30 feet in height.

   

• The House also took final action by concurring with the Senate amendments on House Bill 6241- which creates the Manufactured Home Installation Act. In addition to installation requirements the bill also provides for the classification, assessment and taxation of mobile homes as real property under specified circumstances. Mobile homes and manufactured homes that are located outside of mobile home parks and are taxed under the Mobile Home Local Services Tax Act continue to be taxed under the Mobile Home Local Services Tax Act until the home is sold or transferred or until the home is relocated to a different parcel of land outside of a mobile home park. If a mobile or manufactured home that is located outside of a mobile home park is relocated to a mobile home park, it must be considered chattel and taxed according to the Mobile Home Local Services Tax Act. The bill permits an owner of a mobile or manufactured home that is outside of a mobile home park to file a request with the county that the home be classified, assessed and taxed as real property. This Act, if signed by the governor, will take effect January 1, 2011.

   

• A significant economic development proposal for the Marion area in southern Illinois was finalized this week after the Senate concurred with the House on a roll call vote of 34-17-3 after a contentious debate. Senate Bill 2093, which creates the Innovation Development and Economy Act, contains various provisions concerning the establishment of STAR (“Sales Tax And Revenue”) bond districts. The proposal would divert state sales taxes to finance a proposed $375 million development in Marion. Proponents indicated that the entertainment and retail complex would create five thousand construction jobs and six thousand permanent jobs in the area. Governor Quinn had previously used his amendatory veto power to change a similar proposal slated for Glen Carbon based on the tax incentives. This measure was changed both in the location targeted for the project and in the incentive language. It is not known what the governor will do with this version of the proposal.

We will keep you posted on future legislative developments including bill signings. Please watch your email for any potential Call-to-Action regarding House Bill 3690 (discussed above) and any other matters of concern. THANK YOU for your interest and participation throughout the 2010 spring session!