Legislative Scene by Eugene Berghoff Director Government Services

CORPORATE PERSONAL PROPERTY TAX REPLACEMENT (H.B. 2569)

House Bill 2569 legislation to replace revenues formerly provided by the abolished personal property tax on business passed the 81st General Assembly June 30, 1979.

The measure provides a 2.85% income tax on corporations, a 1.5% income tax on partnerships and trusts and a .75% capital investment tax on utilities.

The revenues (approximately $519 million) would be divided into two funds, 51.6% for Cook County and 48.3% for the rest of the state. Funds would be allocated to local governments and school districts on the basis of their share of the 1978 personal property tax dollar for dollar.

It contains an unlimited growth factor with all increases in collections being returned to local governments.

The new taxes would be collected and distributed on a quarterly basis beginning July 31, 1979.

As of the date of this report (July 13, 1979) the bill has not been certified to Governor Thompson by Speaker of the House William Redmond.

Thompson has charged Speaker Redmond with purposely holding up the bill to embarrass him to the public.

Governor Thompson has stated he would veto the bill because it raises taxes rather than replaces the lost personal property tax.

The Governor recommended a 2.50% income on corporations and made the effective date January 1, 1979.

If he does veto the bill he will call a Special Session immediately for the General Assembly to reconsider his action. An amendatory veto would be presented to both Houses this fall.

We will report the final results of this important legislation upon it becoming law.

TAX RATE AND SPENDING LIMITATIONS (H.B. 2563)

This bill would have limited the annual growth in local property taxes to the rate of the average increase in the personal income of Illinois residents over the last five years (estimated 8%).

It passed the House but was returned to the Senate Revenue Committee after reaching 3rd Reading in the Senate. (First prize for worst bill of the Session).

We opposed this legislation as it would permit the state to mandate spending limitations on local elected officials. These spending and taxation decisions should be retained by the voters and local government units.

STATE MANDATED PROGRAMS (H.B. 662)

A new act to provide that the state reimburse units of local governments and school districts for their increased cost caused by state laws (enacted after January 1, 1980) creating new programs or expanding existing programs has passed both Houses and is on the Governor's desk.

It is one of the most important bills to pass this session.

BOND & DEBT LIMIT (H.B. 2730)

Amends various acts to adjust the authorized maximum bond indebtedness for units of local governments and school districts because of the loss of personal property assessed valuation.

It increases the debt limit from 2.50% to 2.875% without referendum to 5.75% with referendum. The amount of notes and anticipated warrants that could be issued based on the total equalized assessed evaluation was increased from 75% to 85%.

BRIEF LEGISLATIVE SYNOPSIS

The first session of the 81st General Assembly is history.

In January the Proposition #13 fever was high with many legislators who introduced over 150 bills (out of a total of 4220) to reduce spending at the state and local levels, reduce taxes, freeze assessments, abolish special districts, and other types of tax restrictions.

The majority were tabled in committee, referred to interim study sub-committees, held over to the 1980 Spring Calendar, or defeated.

Organizations representing local governments determined early in the session that they must join together in opposing this type of legislation. A Co-Ordinating Committee of Local Government was established with Gene Berghoff serving as Chairman and Deborah Miller of the Illinois Library Association serving as secretary. This group met periodically throughout the session to review bills and prepare uniform statements in support or opposition to legislation.

Together with the help of our members were able to retain existing taxing powers and block legislation to limit taxes and spending.

The IAPD/IPRA Joint Legislative Committee chaired by Robert Cole, Decatur; Gerald Oakes, Glencoe; with the advice of General Counsel Harris Fawell, did a superb job in providing leadership which produced a succesful year.

My thanks to our membership for responding to our pleas to contact their representatives and senators on pending legislation. Without this dedication and interest nothing could have been accomplished.

SPECIAL NOTE: For certified copies of bills approved by the Governor, write or telephone Mr. Donald Ed, Director of Index Division, Secretary of State, Capitol Building, Springfield, IL 62706; phone number (217) 782-7017. The charge for these copies is 50 cents per page.

STATUS OF BILLS

S.B. 287 - EGAN ET AL — Amends the Child Labor Law to allow minors under 16 to work at ice skating rinks owned and operated by a school or unit of local government. (Passed Senate; Passed House; Governor's Desk)

S.B. 303 - SOMMER — Amends the Park District Code. Allows that one of the four commissioners elected may serve a two year term of office. Effective immediately. (Passed Senate; Passed House; Governor's Desk)

S.B. 402 - RUPP — Amends the Park District Code. Authorizes park districts to issue revenue bonds for the purpose of constructing or expanding airports and landing fields in their districts. (Passed Senate; Passed House; Governor's Desk)

SB. 899 - MITCHLER — New Act providing for the deposit of unclaimed lottery prize money into a Fund under the direction of the Director of Local Government Affairs. Money in the Fund shall be distributed to the park districts in the State on a population basis. (Postponed Consideration)

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SB. 1150- LEMKE — Amends the minimum wage law. Authorizes an employee to recover underpayments and an equal amount as damages within 3 years. Authorizes the Director of Labor to supervise payments of previous amounts underpaid and requires the Attorney General to prosecute legal actions brought by the director under the Act. (Passed Senate; Amended House; Returned to Senate Labor Committee)

HB. 21 - DUNN ET AL — Amends "Act relating to alchoholic liquors". Prohibits sale or delivery of alchoholic liquor to persons under 21 years of age and their possession of alchoholic liquor. Deletes provisions relating to beer and wine for 19-year olds. (Passed House; Passed Senate; Governor's Desk)

H.B. 179 - PIERCE ET AL — Amends the Revenue Act of 1939. Changes the amount of assessment from 33-1/3% of actual value to 25% of actual value. Does not affect real property in counties which classify real property for assessment purposes. Effective immediately. (Passed House; Senate Revenue Committee)

HB. 444 - GRIESHEIMER — Amends an Act providing for the creation of forest preserve districts in counties having a population of less than 3,000,000. Prohibits districts from acquiring or condemning property within a municipality without the consent of such municipality. Amended to apply to counties of 600,000 or less. (Passed House; Passed Senate; Governor's Desk)

H.B. 611 - HUSKEY ET AL — Amends Park District Code Section prohibiting members from having any interest in any contract with the park district. Provides exceptions similar to those for municipality officers. (Passed House; Passed Senate; Governor's Desk)

H.B. 674 - WILLER ET AL — Amends the Park District Code. Provides that a park district seeking to become coterminous with one or more cities or villages may not annex, without a referendum, territory which has been in a particular municipality for more than one year, unless such territory so annexed is 120 acres or less. Effective immediately. (Passed House; Passed Senate; Governor's Desk)

H.B. 1028 - PIERCE ET AL — Amends Municipal Retirement Fund Article of the Pension Code to include governing boards of special recreation joint agreements without designatin of an administrative district within that Article. Removes the 3-year limit on the duration of such joint agreements. (Passed House; Passed Senate; Governor's Desk)

H.B. 1047-DONOVAN ET AL — Amends Park District Code. Authorizes park districts to issue revenue bonds for purpose of constructing airports and landing fields in their districts. (Passed House; Passed Senate; Governor's Desk)

H.B. 1464 - HOFFMAN ET AL — Amends the Act concerning governmental tort immunity. Allows a local public entity to insure itself against and pay, from the tort fund, claims arising under the Unemployment Insurance Act. Allows a local public entity to raise funds for these claims

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through its rate making power or taxing power. (Passed House; Passed Senate; Governor's Desk)

H.B. 2563 - SCHRAEDER, ET AL — Amends Section 162 of the "Revenue Act of 1939" and adds Section 162.01 thereto. Limits property taxes to be extended in 1980 and subsequent years to those amounts established and extended to each purpose or fund in the immediately preceding calendar year plus the average percentage of increase for the last 5 years in Illinois Personal Income. Provides for certain exceptions. Effective immediately. (Passed House; Returned to Senate Revenue Committee)

H.B. 2566 - CURRIE ET AL — Amends various Acts to require notice and a hearing where proposed budget or appropriation ordinance includes property tax revenues which represent an increase over the property tax revenue of the prior years' budget or appropriation ordinance by an amount exceeding the average annual increases over the past 5 years. This notice and hearing requirement is applicable to all units of local government and school district. No vote may be taken upon such proposed increase in property taxes until the hearing has been completed. Effective immediately. (Passed House; Passed Senate; Governor's Desk)

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