RSS Feed

IAR State Capitol Report

Members Only

The General Assembly was in session Tuesday May 5- Thursday, May 7 this week as both chambers cancelled the scheduled Friday session day. Both the Senate and the House concentrated on committee hearings although there was also some floor action.

STATUS OF IAR INITIATIVES

• As you recall, the legislation to rewrite the Real Estate License Act (Senate Bill 1894) was unanimously approved by the Senate in early April and is now pending in the House Executive Committee as House leadership continues to review the various regulatory Acts that sunset this year. While no vote was taken this week, two representatives from the United States Department of Justice were afforded an opportunity to read a prepared statement regarding their views on the “minimum services” provision in the license law. As you know, Section 15-75 of the Act, which was enacted in 2004, requires that all exclusive brokerage agreements must provide that the broker will provide certain minimum services. The Department of Justice believes that this provision stifles competition and alternative business models. The IAR strongly supports this provision as an essential consumer protection. The bill is scheduled for a hearing in the House Executive Committee next week. Senate Bill 1894 is sponsored in the House by Representative Kevin McCarthy. A summary of the provisions of the legislation, including the transition provisions, is available on the IAR website.
   
• House Bill 2439, which was unanimously approved by the House March 24th and was approved in the Senate Environment Committee and is now pending before the full Senate. This bill, sponsored in the Senate by Senators Iris Martinez and Don Harmon, amends the Illinois Radon Awareness Act to make necessary clarifications to the law, including a provision that clearly exempts transfers involving a dwelling unit located on the third story or higher above ground level, including dwelling units in condominiums and cooperatives.
   
• Senate Bill 1723, the IAR initiative to address backup or dormant Special Service Areas (SSAs), is currently inactive and will be the subject of further meetings over the summer.

ILLINOIS LAND BANKING ACT
As you know, the IAR has been actively lobbying against pending legislation (HB 1195 and SB 2101) that seeks to allow ALL municipalities in Illinois to create an independent entity called a “Land Bank Authority” (LBA). It is our understanding that the sponsor and proponents are intending to use one of these bills for limited provisions regarding liens and notices that have been agreed to by the lending lobby and the other bill will be used to advance the Land Banking Authority provisions- although no language has yet been submitted. The IAR will remain vigilant in our opposition and we urge you to continue to contact your elected officials. The IAR position paper on the Land Banking Authority legislation is also available on the IAR website.

In other action this week:

LEGAL /REGULATORY/TRANSACTIONAL ISSUES

• House Bill 72, sponsored in the Senate by Senator Pam Althoff, was approved in the Senate Transportation Committee and sent to the Senate floor for further consideration. HB 72 bans the use of cellular phones in school or construction/maintenance zones with limited exceptions. The IAR will continue to MONITOR this bill.
   
• House Bill 236, sponsored in the Senate by Senator Terry Link, was approved in Senate Judiciary Committee this week with an additional amendment attached. The bill in its current form amends the Mechanics Lien Act to require that a contractor for improvements of an owner-occupied single-family residence give the owner written notice within 10 days after recording a lien against any property of the owner. The notice is served when it is sent or personally delivered. If timely notice is NOT given and, as a result, the owner has suffered damages before notice is given, the lien is extinguished to the extent of the damages. The legislation stipulates that the mere recording of the lien claim is not considered damages. This new provision does not apply to subcontractors and applies to contracts entered into after the bill becomes law. IAR SUPPORTS this legislation.
   
• House Bill 271, sponsored by Senator A. J. Wilhelmi was also approved this week in the Senate Judiciary Committee and sent to the full Senate with an additional amendment to make changes requested by the Department of Financial and Professional Regulation. HB 271 creates the Community Association Manager Act and requires managers of community associations (condominiums, cooperatives, townhouse developments and other common interest communities) of more than 10 units to be licensed by the Illinois Department of Financial and Professional Regulation (IDFPR) after January 1, 2011. Among the requirements are satisfactory completion of twenty (20) classroom hours of community association management courses and an examination. Licensed real estate brokers and salespersons are exempt from the education requirement. A duplicate bill (SB 1579) is pending in the House. The IAR SUPPORTS these bills.
   
• House Bill 496 and Senate Bill 69, duplicate measures amending the Medical Practice Act and the Optometric Practice Act regarding prohibited “fee splitting” arrangements were both amended this week and advanced out of their respective committees. You may recall that these bills originally referenced certain lease arrangements which prompted a Call to Action by the International Council of Shopping Centers. The language prompting the concern was REMOVED and the IAR is NEUTRAL on both bills.
   
• House Bill 3962, sponsored in the Senate by Senator Iris Martinez, was DEFEATED in the Senate Criminal Law Committee this week following testimony in OPPOSITION to the bill by IAR. The bill sought to amend the Criminal Code to add various criminal offenses that may lead to a building being declared a public nuisance under the Code-including hosting a gathering where underage drinking occurs. In short, the IAR felt that these Liquor Control Act violations simply did not belong in this statute designed to address primarily violent organized gang crime issues on property including murder, kidnapping, gun and drug dealing, prostitution and dog fighting. The underlying Act provides for the court to bar any use of the property for a period of one year if the property is declared a nuisance. “Property” would include anything from single family homes to rental or commercial property.
   
• Senate Bill 253, sponsored in the House by Representative Skip Saviano, was approved in the House Financial Institutions Committee this week. However, the sponsor indicated that it is his intention to not advance the bill this spring to ensure that it is consistent with federal legislation or rules that are anticipated in the near future. The bill seeks to amend the Conveyances Act to require the lender to attach a mortgage rider identifying the various participants in a mortgage transaction including the mortgage origination company, the loan officer, the appraiser, the real estate broker, the lender funding the mortgage and the title insurance company. The IAR SUPPORTS this legislation.
   
• Senate Bill 1089, sponsored by Representative Mark Beaubien, was approved this week in the House Executive Committee. The bill amends the provisions of the Predatory Lending Database law to codify and clarify the existing practice whereby all mortgages that fall under the purview of that law must have either a certificate of compliance or certificate of exemption filed along with the mortgage document. An additional amendment was also approved in the Committee to define the terms "certificate of compliance" and "certificate of exemption" and to clarify that the failure to attach a certificate of exemption, if the requirements for an exemption are met, shall not affect the enforceability of the lien of mortgage. The IAR is NEUTRAL on this legislation which is pending in the House.
   
• Senate Bill 2112, sponsored by Representative Dan Reitz, was approved in the House Judiciary I-Civil Law Committee this week. The bill makes various changes to the Real Estate Timeshare Act including further clarification to provisions requiring that resale agents be licensed under the Real Estate License Act. The Committee adopted an amendment, requested by the IAR, to address concerns. The IAR SUPPORTS this bill now pending before the full House.
   
• The House State Government Administration Committee approved Senate Bill 2178 this week. The bill, sponsored by Representative Ron Wait, creates the Illinois Plain Language Task Force Act. The Task Force will be chaired by the Governor (or his designee) to conduct a study on, and propose legislative measures designed to realize the potential benefits of incorporating plain language in State government documents, statutes, and contracts into which the State enters and those among private parties. The IAR is NEUTRAL.

HOUSING/REAL ESTATE FINANCE ISSUES

• House Bill 155, sponsored by Senator Kim Lightford, was approved this week in the Senate Judiciary Committee. The bill amends the Condominium Property Act to provide that, with respect to the sale of a condominium unit by a unit owner, no condominium association shall exercise any right of refusal, option to purchase, or right to disapprove the sale, on the basis that the purchaser’s financing is guaranteed by the FHA. The bill is in response to the growing problem represented by HUD’s longstanding policy flatly denying FHA financing if a condominium association has a right of first refusal clause in their bylaws. It is not clear at this point how HUD will respond to the passage of such State legislation should the Governor sign it into law. The IAR is NEUTRAL on this bill.
   
• House Bill 821, sponsored by Senator Dan Cronin, was also approved this week in the Senate Judiciary Committee. The bill provides that if a condominium association changes its bylaws to prohibit the leasing of units, a condominium unit owned by a 501(c) (3) organization which is renting out that unit can continue to do so as long as they own the unit. This provision would also be applicable to common interest ownership associations. The IAR is NEUTRAL on this legislation.
   
• House Bill 3863, sponsored by Senator Jacqueline Collins, was also approved in the Senate Judiciary Committee this week. The bill amends the Code of Civil Procedure to deal with notice to tenants and other tenants’ rights within the context of a property being foreclosed upon. The Senate Committee approved an additional amendment to make numerous changes including the definition of "dwelling unit"; the duties of a holder of the certificate of sale or deed, a purchaser at a judicial sale, a mortgagee in possession, and a receiver relating to notice to certain occupants of dwelling units in mortgaged real estate; and possession of mortgaged real estate during foreclosure. The IAR is NEUTRAL.
   
• House Bill 4011, sponsored in the Senate by Senator Kwame Raoul, amends the Residential Mortgage License Act (RMLA) with respect to Illinois’ participation in the Nationwide Mortgage Licensing System and Registry. In short, this bill, approved by the Senate Financial Institutions Committee this week, establishes a comprehensive licensing and registration system for mortgage loan originators (MLOs) within the RMLA. Much of the MLO licensing language is lifted directly from the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, the federal legislation states are obligated to comply with by July 31, 2009. If a state doesn’t enact their own compliant licensing statute, HUD is charged with overseeing MLOs in that state. There are some concerns that the IAR has with some provisions, including the exemption language for persons performing only real estate brokerage activities in a transaction. However, this language may be difficult to change because of the federal mandate. The IAR continues to work with the Department and legislators in both chambers to ensure that Illinois enacts a well thought out bill that complies with the federal requirements.
   
• Senate Bill 154, which modifies the Condominium Property Act regarding quorum provisions for bylaw changes has been approved by both chambers and has been sent to the Governor. The bill would provide that unit owners in arrears on his/her regular or separate assessments for more than 60 days will not be counted for purposes of determining if a quorum is present. Unit owners would still retain the right to vote on amendments to the association’s bylaws. The IAR is NEUTRAL on this bill sponsored by Senator Susan Garrett and Representative Elaine Nekritz.
   
• Senate Bill 1560, sponsored by Representative Jehan Gordon, was approved this week in the House Judiciary I-Civil Law Committee. This bill provides that a deed restriction or restrictive covenant recorded after the effective date of the bill, may not prohibit or restrict the erection of an industrialized residential structure on real property, except for a deed restriction, restrictive covenant, or agreement that applies uniformly to all homes and industrialized residential structures in a subdivision may impose the same aesthetic compatibility requirements on an industrialized residential structure in the subdivision that are applicable to all residential structures in the subdivision. The IAR is NEUTRAL.

OWNER/TENANT ISSUES

• Senate Bill 1920, sponsored by Representative Bob Flider, was approved by the House Executive Committee this week after adopting an additional amendment to make the bill a shell bill to allow further discussion among interested parties to continue. The bill was introduced to seek changes in the Mobile Home Landlord Tenant Act. In particular, the bill sought to require a mobile home park owner to pay park tenants their relocation expenses or the value of their mobile home when a park closes. The bill also would have also have established a mechanism to enable tenants to purchase the park. The IAR will continue to MONITOR this issue.

ENVIRONMENTAL/HEALTH AND SAFETY ISSUES

• House Bill 170, sponsored in the Senate by Senator Pam Althoff, was approved this week in the Senate Environment Committee and sent to the full Senate for consideration. The bill would prohibit the construction or installation of a surface discharging private sewage disposal system by any person unless that person has a coverage letter under a National Pollutant Discharge Elimination System (NPDES) permit issued by the IEPA or the local public health department has a general NPDES permit issued by the IEPA and the system is covered under that permit. The effective date of this bill would be January 1, 2011 to give the IEPA the time to develop rules and regulations related to this issue. The IAR is NEUTRAL.
   
• Senate Bill 149, sponsored by Representative Sandra Pihos, was approved in the House Business & Occupational Licenses Committee this week. This legislation makes various changes to the Elevator Safety and Regulation Act including adding a reference to a local administrator of the Act. The Act is now administered by the Office of the State Fire Marshal. The bill also amends the make-up of the Elevator Safety Review Board to include a representative of an advocacy group for condominium owners. The Review Board is also specifically charged with making binding determinations regarding variances, interpretations and the installation of new technology. Certain upgrade requirements of the Act are also extended out to January 1, 2015. The IAR will continue to MONITOR this legislation.
   
• Senate Bill 2121, sponsored by Representative Frank Mautino, was approved in the House Executive Committee this week. The bill addresses the payment of smaller site construction site stormwater permit fees. These NPDES permit fees will be capped at an initial annual fee in the amount of $500 for applications received before January 1, 2010 and thereafter the fee will be $250 if less than 5 acres are disturbed and $750 if more than 5 acres. Importantly, this legislation provides that annual fees are not required for these permits after the initial annual fee is paid as part of the application. These bills represent an agreement with the IEPA, the real estate industry (including the IAR) and the agricultural industry. A duplicate bill, House Bill 629, is pending in the Senate. The IAR SUPPORTS these bills.

LAND USE/DEVELOPMENT/LOCAL GOVERNMENT ISSUES

• House Bill 328, sponsored by Representative Brandon Phelps, was approved this week in the House Cities and Villages Committee but its future is unclear as the pipe trades union has voiced opposition to the bill. This initiative of the Home Builders Association makes various changes to the Illinois Residential Building Code Act including a change in the definition of the term “residential building code". The IAR SUPPORTS this measure.
   
• House Bill 1003, sponsored by Senator Michael Frerichs, was approved in the Senate Local Government Committee this week. The bill amends the law related to pre-annexation agreements to add counties specified to follow certain procedures; land that is subject to an annexation agreement that is within 1.5 miles of the municipality is subject to the annexing municipality’s ordinances, control and jurisdiction and land that is more than 1.5 miles would either be under the jurisdiction of the county board if they vote to retain jurisdiction by a vote of 2/3 of the members OR if they agreed to allow the annexing municipality to have jurisdiction by a simple majority vote. Annexing municipalities would be required to file requests for jurisdiction with the county board on a case by case basis. The IAR is NEUTRAL.
   
• House Bill 3637, sponsored by Senator Toi Hutchinson, was approved in the Senate Commerce Committee this week. The bill directs the Department of Commerce and Economic Opportunity (DCEO) to implement and administer a pilot program during fiscal years 2010 and 2011 to encourage businesses to restore, refurbish, and retrofit existing buildings that have been vacant for at least 90 continuous days so that a business is able to occupy the building as a retail, professional, corporate, manufacturing, assembly, or distribution business. The DCEO, subject to appropriation, may make interest free loans for this purpose, but loans may not be made for any building that would be used for residential purposes. Loans are to be for a term of 10 years and the borrower must repay at least 5% of the original principal amount of the loan each year and the balance at the end of the term. DCEO is directed to report to the General Assembly on the effectiveness of this pilot program and to recommend whether it should be extended. The IAR SUPPORTS this bill.
   
• Senate Bill 138, sponsored by Representative Patrick Verschoore, was approved in the House Infrastructure Committee this week. This bill establishes a State minimum building code that will be in place for those local governments that do not have an adopted minimum building code. The bill provides that after July 1, 2011 newly constructed commercial buildings in “non-building code jurisdictions” must have an inspection by a qualified inspector prior to being occupied. These inspectors must either be qualified by the State, certified by a nationally recognized building official certification organization or have filed verification of inspection experience with the State’s Capital Development Board and can also include an individual qualified by an apprentice program certified by the Bureau of Apprentice Training (added by a House amendment). This qualification requirement does not apply to local building enforcement personnel if they have registered its adopted building code with the Illinois Capital Development Board. Local governments can also establish agreements with other governmental entities to issue permits and enforce building codes and to hire third-party providers to do the inspections. The bill defines commercial building, newly constructed commercial building and specifically exempts new residential construction. This issue has been the subject of negotiations for a few years. The IAR is NEUTRAL on this proposal.
   
• Senate Bill 286 sponsored in the House by Representative Mike Tryon was DEFEATED in the House Counties and Townships Committee after a lengthy debate. The measure sought to grant counties the authority to place a question on the ballot for a property tax to be levied for a county farmland preservation easement program. The IAR was NEUTRAL.
   
• Senate Bill 414, sponsored by House Majority Leader Barbara Currie, was approved in the House Transportation, Regulation, Roads and Bridges Committee this week after an amendment was adopted striking all provisions as negotiations are continuing. You may recall that this measure was an initiative of the Center for Neighborhood Technology to attempt to require that their Housing and Transportation Index be adopted as a planning tool for specific State agencies for screening and prioritizing investments in transportation, housing, and economic development projects or for siting new public buildings. The IAR will continue to MONITOR this issue as it is further amended in the House.
   
• The House Counties and Townships Committee approved an amendment to Senate Bill 587 this week similar to language earlier rejected in the Senate. The amendment, sponsored by Representative Bill Black, seeks to authorize all counties with a population of 100,000 or less that have a public building commission to build or otherwise provide for and maintain housing for post-secondary education students within the county. The IAR has serious concerns about this measure and will work with the sponsor to address those concerns. The IAR is OPPOSED.
   
• Senate Bill 1265, sponsored by Representative Julie Hamos, was approved by the House State Government Administration Committee this week. This bill amends the Freedom of Information Act to provide that "public records" includes all settlement agreements entered into by or on behalf of a public body, provided that information exempt from disclosure under the Act may be redacted. The IAR will continue to MONITOR this legislation.
   
• Senate Bill 1296, sponsored by Representative Mike Tryon, was approved in the House Executive Committee this week. This bill grants legislative authority to the village of Johnsburg to use limited quick-take eminent domain powers for a METRA rail station and storage yard. The IAR is NEUTRAL.
   
• Senate Bill 1413, sponsored by Representative Dan Reitz, was approved in the House Agriculture and Conservation Committee this week. The bill is related to the Illinois Forestry Development Act. The duplicate House bill (HB 1087) is pending in the Senate.
   
• Senate Bill 1511, sponsored by Representative Jehan Gordon, was approved in the House Counties and Townships Committee this week with an additional clarifying amendment attached. This bill would permit a county board to require that an occupancy permit be obtained for newly constructed residential dwellings outside the corporate limits of a municipality. The legislation had specifically prohibited a county board from imposing a fee these permits and the House amendment clarified that the “no fee” provision would only apply to those counties adopting this requirement AFTER the effective date of the Act. The IAR is NEUTRAL on this bill.
   
• Senate Bills 1784, sponsored by Representative Jim Sacia, was approved this week in the House International Trade and Commerce Committee after the Committee members adopted an amendment. Among the provisions of the House amendment was a narrowing of the jurisdiction of the newly created Upper Mississippi River International Port District and a lowering of the amount of the tax that could be imposed after approval of the voters. The IAR is NEUTRAL on this measure now pending in the House.

TAX ISSUES

House Bill 4120, sponsored by Senator Dan Kotowski, was approved in the Senate Revenue Committee this week after adopting an amendment to address concerns of some of the Committee members. The bill would allow any taxing district, upon a majority vote of its governing body, to abate any portion of property taxes if a new business first occupies a facility located on the property during the taxable year and the facility was vacant for a period of at least 24 continuous months prior to being occupied by the business. The Senate amendment provided that the abatement cannot exceed a TWO-year period (as introduced it was five) and the aggregate amount of abated taxes for all taxing districts cannot exceed $4 million.

Senate Bill 207, sponsored by Senator Michael Bond and Representative Ed Sullivan has passed both chambers. This bill, SUPPORTED by the IAR, enhances the information to be provided to the public regarding property tax assessments, including appeals. The legislation spells out information that must be included with mailed notices of changed assessments. The bill, if signed into law by Governor Quinn, would become effective January 1, 2010.

Senate Bill 242, sponsored by Senator John Sullivan and Representative Rich Myers, has passed both chambers. This bill extends the term of a TIF district in the city of Macomb by 12 years. The IAR was NEUTRAL on this measure.

The General Assembly will return next week on Tuesday, May 12, 2009.