IVCA Provides Updates for State Legislative Issues – 02/16/2022
Illinois Venture Capital Association Illinois Legislative Report
David Stricklin / Stricklin & Associates
Wednesday, February 16, 2022
LEGISLATURE GRINDS TOWARD DEADLINES
With hundreds of introduced bills waiting to be heard before an impending deadline to get them out of the committees where they first started, Illinois legislators are spending most of this week online in committee hearings. The bill deadlines are a way of weeding out ideas and proposals which don’t have the momentum to make it over a routine hurdle. In the House that “committee deadline” is this week, in the Senate it is next Friday.
IVCA BILLS INCH AHEAD
An IVCA-backed bill to make further improvements in the Technology Development Account program overseen by the State Treasurer has moved to “Third Reading” in the Illinois Senate.
SB 3777 is a bipartisan bill putting additional structure around how the TDA funds are to be invested to produce adequate returns while also encouraging a broader pool of investment managers. The bill also calls for more detailed reporting of those metrics. Third Reading is when a bill is teed-up for final approval, in this case on the Senate floor. So far, the bill has not raised any opposition. The House version of the bill, HB 4364 is as of this writing on Second Reading, meaning it is slightly behind the Senate bill yet poised to continue to proceed. Our goal is to ultimately pass one of the bills through both chambers and have it sent to the governor for his signature.
The other significant piece of legislation is a technical correction to the Illinois Income Tax Code to refine the meaning of an investment partnership. SB 2430 is in the House Rules Committee, waiting to be sent to the House Revenue Committee. As mentioned above, this week the House if focused on getting bills introduced in the House through House committees. Once that deadline passes, the House is expected to take more time to hear bills sent over by the Senate, such as SB 2430. IVCA is working with our House sponsor, Rep. Jonathan Carroll, to make the case that this correction, while technical, could have ongoing negative impacts for Illinois-based funds.
CANNABIS IS ILLINOIS’ CASH CROP
Cannabis revenues continue to swell state coffers as Illinois marks the second anniversary of legalized marijuana sales. The monthly revenue report from the state Commission on Government Forecasting and Accountability COGFA documents the receipts and projects the trend to continue.
The upward trend is across the board, as Page 9 notes revenue for the first seven months of FY 22 are up $2.639 Billion. The governor in his budget address proposed taking advantage of the revenue results by making extra pension payments and stashing money in a “rainy day” fund among other things.
The COGFA report also details how the state is paying back a loan from the federal government taken on via the federal COVID relief legislation. Illinois Comptroller Susana Mendoza, the governor and other Democratic office holders have pointed to this as a sign of fiscal progress in a state long known for its financial woes. The governor’s Office of Management and Budget is quoted saying the better-than-expected revenue numbers led to paying off the $2 billion loan in its entirety resulting in a savings to the state of $82 million in anticipate interest payments.
GRIFFIN PUTS $20 MILLION BEHIND IRVIN
While you watched the Super Bowl last weekend – or perhaps any program on television – you noticed ads for Aurora Mayor Richard Irvin, who is being backed by hedge-fund billionaire Ken Griffin in his primary election for the Republican nomination for Governor. It’s a crowded field and Griffin’s choice to back Irvin is expected to help him distinguish himself from the pack. Whomever is nominated faces incumbent Governor JB Pritzker in November. For more on Mayor Irvin go here, with comments from Griffin here.
Griffin is most recently credited with supplying the resources for the campaign against the governor’s signature proposal to move Illinois to a graduated income tax rate. His endorsement and money, in a field of candidates who are not as wealthy as Governor Pritzker, who himself has shown every determination to spend what is necessary to first win election and now win re-election, is almost certainly to be determinative. Downstate conservative State Senator Darin Bailey is the one candidate who seems to have sufficient grassroots support to compete with Irvin, and he has attracted the attention of Illinois GOP super donor, Richard Uihlein, who could if he decides to make it a multi-multi-million dollar primary race here.