Springfield Update

Illinois Association of REALTORS
Quorum Call Week in Review
July 20, 2007


Quorum Call is distributed Fridays when the Illinois General Assembly is in session. For more information, contact Greg St. Aubin, Director of IAR Governmental Affairs, gstaubin@iar.org, or Julie Sullivan, Assistant Director, Legislative and Political Affairs, jsullivan@iar.org. Full text of legislation cited in this newsletter can be found at www.ilga.gov.


- The General Assembly was in session all week with little progress made in the negotiations on the State budget but some movement on other issues such as the electric rate relief legislation. You may recall that this issue has been pending all year as the rates dramatically soared when the 10-year rate freeze was lifted. Particularly hard hit were those with all electric residences and/or businesses.

- Negotiations continued in the House this week on the legislation to infuse the RTA with significant funding. Senate Bill 572 includes a real estate transfer tax of $3 per $1,000 within the city of Chicago WITHOUT VOTER APPROVAL. The IAR STRONGLY OPPOSES this proposal that would give the statutory authority to levy a real estate transfer tax to a special taxing district governed by an APPOINTED Board. Without an elected and responsive entity a taxpayer has no way to voice their objection to this tax- clearly this is taxation without representation! We also object to the fact that this is ANOTHER LAYER of taxing authority on property owners in Chicago where a very high home rule municipal real estate transfer tax is already in place ($7.50 per $1,000 paid by the buyer) in addition to the State and county real estate transfer tax (combined $1.50 per $1,000 on the seller). The IAR is continuing our efforts to remove this funding piece from the legislation. Please continue to contact your Senator and Representative to urge that they reject this initiative.

- On Thursday, July 19th the House Executive Committee heard testimony and approved a revised version of the predatory lending/4050 legislation that has been discussed throughout the spring session. House Amendment #1 to Senate Bill 1167 is similar to SB 1674, which was pushed through the House in late May with the strong backing of Speaker Madigan, but was held up in the Senate due to opposition from the IAR and the Mortgage Brokers Association. After many negotiating sessions, the language was revised and placed on SB 1167. All of the lending groups, including the mortgage brokers, supported SB 1167 as amended, and the IAR took a NEUTRAL position on the bill, which now has no opposition.

This is the legislation that contains Attorney General Lisa Madigan’s mortgage lending initiative to enact requirements and restrictions applying to mortgage brokers (formerly in HB 1478), as well as a codification of the recently-filed rules to re-establish the Predatory Lending Database Program (the HB 4050 program).

As far as the HB 4050 program, the IAR was pleased that our strong opposition to the program being limited to ten contiguous zip codes on the southwest side of Chicago was heard, and that both the rule and the bill do not establish the program in this manner (the program now covers all of Cook County). As far as home buyers that must get counseling, the bill (as do the rules) will now apply only to first time buyers, and only if the loan they are seeking has certain characteristics: interest only, negative amortization, points and fees in excess of 5%, prepayment penalty, or ARM (the bill also apply to refi borrowers, but that has not been a major issue for REALTORS). Since the pending rules would have re-established the program anyway, the primary practical effect of the bill is to fix the program in statute rather than as an administrative rule. If enacted into law, the new program will become effective July 1, 2008.

As far as the Attorney General’s provisions in SB 1167, the IAR had some concerns with the application of the bill to all borrowers (the federal guidelines the bill is modeled after apply only to subprime borrowers), and with some of the language regarding “stated income” loans and ARMs. However, following negotiations, several changes favorable to our position were made.

The bill is now pending on Third Reading in the House.

- Also on Thursday, the House Revenue Committee met and unanimously approved concurrence motions with three Senate amendments to House Bill 1519. This legislation extends the life of TIFs in several communities from 23 to 35 years. These amendments are for the communities of Manteno, Chicago Heights, Rosemont and Stone Park. Concurrence by the House on these Senate amendments will mark final action on the legislation.

- The House Revenue Committee also had posted an amendment to Senate Bill 826 which made several changes to the provisions of the 7% assessment cap for Cook County contained in Senate Bill 13. The amendment made several technical changes to the bill suggested by the Cook County Assessor’s office and some substantive changes. However, the amendment was not called due to some additional changes that were being drafted. It is expected that the bill will be acted upon next week. Senate Bill 13 remains on the calendar in the Senate.

- Also this week the Senate Education Committee met each day to hear testimony on a variety of education and funding issues.

- The House and the Senate have adjourned for the week and will not be in session this weekend but will reconvene next Monday.

For more information, contact Greg St. Aubin, Director of IAR Governmental Affairs, gstaubin@iar.org, or Julie Sullivan, Assistant Director, Legislative and Political Affairs, jsullivan@iar.org.

Contact information for members of the House and Senate, notice of committee hearings, text of legislation and roll call votes are all available on the Illinois General Assembly’s Web site, www.ilga.gov.