Springfield Update

Illinois Association of REALTORS
Quorum Call Week in Review
November 2, 2007

Highlights of key activity at the State Capitol this week and a preview of key activity for the week ahead.

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.

“Information is the currency of democracy.”
~Thomas Jefferson

- The Illinois House of Representatives reconvened on Thursday, November 1 and the Illinois State Senate reconvened on Friday, November 2nd this week for the discussion of the mass transit issue and for final passage of the 2008 Budget Implementation Act.

- While both the House and Senate held hearings on the transit issue- NO final action occurred on either of the bills dealing with mass transit (Senate Bill 572 in the House or House Bill 3667 in the Senate). On Thursday, the House Mass Transit Committee held yet another hearing on the long term operations and capital funding for mass transit in Illinois and for consideration of House Amendment #10 to Senate Bill 572. At this hearing, the sponsor of the measure, Representative Julie Hamos, presented the latest amendment that contained the same funding mechanisms- a regional sales tax increase and authority for the city of Chicago to increase its real estate transfer tax without referendum. Also at this hearing, officials from the RTA and CTA reiterated that the latest “doomsday” scenario, effective November 4th, deep service cuts and fare increases would occur. The hearing also included discussion of alternate plans that had been suggested (see HB 4161 discussed below). Additionally Representative Jim Durkin filed House Amendment #11 which sought to sunset the sales tax and real estate transfer tax increases after three years. This amendment was not formally considered and remains in the House Rules Committee. Members of the Senate Executive Committee grilled the RTA and the CTA in a heated hearing on Friday afternoon. The Senators objected not only to the proposed House funding mechanisms but also questioned current and past operational issues of both the RTA and the CTA. IAR was on record in both hearings as an OPPONENT to the real estate transfer tax funding proposal. It was definitely the feeling in the Statehouse that momentum has begun to shift away from the new taxes as alternative plans begin to be given serious consideration in both chambers. Representative Fred Crespo was particularly helpful in the House Mass Transit Committee pointed to the many flaws of increasing the real estate transfer tax. THANK YOU TO ALL WHO HAVE CONTINUED TO RESPOND TO THE CALLS TO ACTION ON THIS ISSUE. IAR HAS BEEN THE CONSISTENT VOICE AGAINST SB 572!

- As noted, the House Republicans formally introduced an alternate mass transit plan this week. On Thursday Representative Angelo “Skip” Saviano introduced House Bill 4161 as the alternative plan which does NOT include a real estate transfer tax increase NOR a regional sales tax increase. HB 4161 relies on small fare increases coupled with use of the current sales tax collected on the sales of motor fuel in the counties that encompass the RTA region. Since the proceeds of this sales tax are currently deposited into the State’s General Revenue Fund there will be further discussion on how this will impact the State budget and if some other replacement revenue stream will need to be proposed. IAR applauds the efforts of the caucus to proactively pursue this alternative to the transfer tax increase/sales tax increase. The bill will continue to be discussed by the legislative leaders who pledged to continue working over the next 5-10 days on resolving this issue along with the capital plan and gaming expansion issue.

- Another important development on the issue also occurred on Friday as the Governor authorized a grant of $27 million to the CTA and the suburban bus board (Pace) to avert the scheduled fare hikes and service cuts the two boards had indicated would occur on Sunday. The grant is expected to keep the full schedule of buses and trains in operation through the end of the year as negotiations continue for a long term resolution of the issue.

- On Friday the Governor signed into law Senate Bill 1167 (Public Act 95-691). This is the revised version of the predatory lending/4050 legislation that was the subject of negotiations among all affected parties this session. The legislative negotiations resulted in several changes, favorable to our position, to the legislation. IAR was NEUTRAL on SB 1167 which includes requirements and restrictions applying to mortgage brokers as well as a codification of the recently-filed rules to re-establish the Predatory Lending Database Program (the HB 4050 program) in Cook County. IAR was pleased that our strong opposition to the Predatory Lending Database 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 new law 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 will apply to apply to borrowers who are refinancing. This new law will not become effective until July 1, 2008.

- The House took final action on House Bill 2353 on Friday, November 2nd approving the bill on a roll call vote of 61-47-4. HB 2353 amends the Illinois Affordable Housing Act to create the Illinois Housing Affordable Housing Capital Fund for the purpose of financing projects of the Illinois Affordable Housing Program as authorized by IHDA’s comprehensive plan. IAR was NEUTRAL on this legislation which has been sent to the Governor for his consideration.

- There was also final legislative action on House Bill 1514 which extends the life of a Tax Increment Financing District (TIF) in the city of DeKalb. IAR was NEUTRAL on this bill sponsored by Representative Bob Pritchard and Senator J. Bradley Burzynski.

- House Resolution 761, introduced by Representative Chuck Jefferson, was assigned to the House State Government Administration Committee this week. The resolution calls upon Congress to take emergency action to protect homeowners and banks by enacting a “Homeowners and Banks Protection Act”. Among the provisions of the resolution is the directive that Congress establish a federal agency to “place all federally and state charted banks under protection by freezing all existing home mortgages for a period of time, adjust mortgage values to fair prices, restructure existing mortgages at appropriate interest rates and writing off speculative debt obligations of mortgage-backed securities, financial derivatives and other forms of financial pyramid schemes”. Further, the resolution calls for a moratorium on all home foreclosures for the duration of the transition period.

- The General Assembly adjourned Friday afternoon, November 2nd with no indication of the specific date that they will reconvene.

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.