Government Affairs Roundup for 6.4.25

Chamber members:

Today’s roundup will be solely focused on what transpired over the last few days in Springfield concerning the state budget for fiscal year 2026 and other topics of what moved forward and what stalled.

State Budget Update
Illinois lawmakers approved a $55.2 billion state budget late Saturday night, closing a roughly $1 billion shortfall by leaning on a series of tax hikes targeting tobacco users, gamblers, and large out-of-state corporations. The budget, along with accompanying legislation, passed just before midnight—roughly 30 hours after it was first introduced.

Governor Pritzker praised the General Assembly for passing a balanced budget and blamed a “Trump Slump” for a $500 million drop in state revenues.

“Donald Trump’s incomprehensible tariff policies have put a tax on our working families and dampened the nation’s economic outlook,” Pritzker said at a press briefing alongside Lt. Gov. Juliana Stratton and Senate President Don Harmon. “The chaos and uncertainty from Republican proposals to cut healthcare, education, and jobs have made budgeting harder than ever.”

The General Assembly approved a $55.1 billion spending plan paired with a $55.3 billion revenue package for the next fiscal year. Key funding sources include expanded “sin taxes,” such as:

• Increased taxes on tobacco, nicotine pouches, and e-cigarettes
• A new tax on online sports betting
• Higher corporate taxes targeting out-of-state and foreign business income

The budget also includes (more on this below in the following information):

• $500 million for economic development, including site-readiness grants to local governments
• $200 million for early childhood workforce compensation grants
• $175 million boost to the Child Care Assistance Program, supporting care for 150,000 children

Among the revenue adjustments are:

•           $195 million – $228 million from a new tax amnesty program.
•           $171 million from delaying motor fuels tax revenue transfers to the Road Fund.
•           $237 million in fund sweeps.
•           $72 million in corporate tax hikes.
•           $45 million from shorting the state’s Budget Stabilization Fund.
•           $36 million from a new sports wagering tax.
•           $15 million from removing hotel tax exemptions from short term rental platforms.

Despite passing the main budget package, lawmakers left several high-profile items unresolved:

• Transit Funding Crisis: A proposed bill to reform mass transit governance and address a looming $770 million shortfall for CTA, Metra, and Pace failed to pass. Though the Senate approved a plan that included a controversial $1.50 tax on online deliveries, the House adjourned without taking up the measure. Lawmakers may return to Springfield to revisit the issue.
• Energy Reform: A sweeping energy bill that would have incentivized renewable development and strengthened the state’s power grid collapsed in the final hours. Disagreements over data center requirements and costs for large energy consumers derailed the measure.
• Pension Reform: A major proposal to overhaul the Tier 2 pension system, which affects public workers hired after Jan. 1, 2011, stalled. However, lawmakers did allocate $75 million toward a reserve fund for the program.

Here are some additional items that did not make it into the final budget and/or transit bill:
•           No delivery tax
•           No digital ad tax
•           No sales tax expansion
•           No real estate transfer tax hike

With the spring session adjourned, unresolved issues mentioned above are expected to dominate discussions in the coming weeks leading up to the fall veto session. Transit leaders in northern Illinois are set to meet soon to consider next steps as the region braces for a significant fiscal cliff.

Fiscal Year 2026 Budget Highlights from the Office of the Governor
The FY26 General Funds budget is a $55.1 billion plan that builds on Illinois’ fiscal progress while continuing transformative investments in early childhood, K-12 and higher education, health and social service programs, workforce and economic development, and restorative justice and violence prevention efforts, as well as investments in our natural resources and infrastructure.

Highlights –

FISCAL RESPONSIBILITY – 7th Balanced Budget

• This budget builds on six years of historic fiscal progress with balanced budgets, nine credit rating upgrades, and a $2.5 billion rainy-day fund by the end of FY26.
• Creates a $100 million “bridge” reserve fund to cover unexpected shortfalls in the fiscal year 2026 budget and provides additional tools to address (small) short-term pressures that may arise from federal funding cuts.
• Sets aside $75 million to help address expected additional contributions that will be needed to address the adjusting the Social Security Wage Base for State Tier 2 employees, while committing an additional $200 million to reducing state pension liabilities through the State’s buyout program.

EDUCATION
Early Childhood – Smart Start IL Year 3 Investments Include: $200 million for Early Childhood Workforce Compensation Grants

• $10 million for Quality Contracts
• $748 million in Early Childhood Block Grant funding
• K-12 Education $307 million increase for the Evidence-Based Funding (EBF) formula to fully fund tier funding
• $1.3 million increase for Career and Technical Education (CTE)
• $3.5 million for Social and Emotional Learning Hubs and the Resilience Education to Advance Community Healing Program

Higher Education

• $10 million increase for the Monetary Award Program (MAP) for a total of $721.6 million
• $50 million for AIM High merit scholarship programs
• $44 million increase (3 percent) for public universities ($35 million) and community colleges ($9 million) operational funding
• $2.9 million for the Common App Initiative
• $13 million for the Mental Health Early Action on Campus Act grants to universities and community colleges

HEALTHCARE AND SOCIAL SERVICES

• $25 million appropriation for a new Pharmacy Benefits Management (PBM) grant program called the Prescription Drug Affordability Fund.
• $15 million for the Medical Debt Relief Program. To date, the program has provided over $345 million in debt relief for more than 250,000 Illinoisans – which represents $170 in medical debt relief for every state dollar spent.
• $4 million increase for Department of Children and Family Services (DCFS) to bring on an additional 100 staff and $16 million to support scholarships for more than 1,000 youth.
• Department of Human Services’ (IDHS) budget funds an $0.80/hour wage increase for Developmental Disabilities Direct Service Providers.
• $175 million increase for the Child Care Assistance Program (CCAP) to support 150,000 children.
• Provides $263.7 million for Home Illinois to help address the challenges of homelessness.
• Includes $28.7 million increase to fund a $0.75/hour wage increase for the Department on Aging’s (IDoA) Community Care Program.
• Includes $63 million to support Home Delivered Meals for seniors.

PUBLIC SAFETY

• Includes $10 million for Homeland Security Preparedness and Response Grants.
• Includes $7.5 million in new funding for the Not-for-Profit Security Grant Program.
• Includes $40 million for grants and reimbursements for local law enforcement training expenses.
• The FY26 budget continues to prioritize gun violence reduction programs and resources through Reimagine Public Safety providing an additional $46 million in state support to maintain programs and services previously covered by COVID-era federal funds.

ECONOMIC DEVELOPMENT AND INFRASTRUCTURE

• Includes $55.5 million in new funding to support the following programs such as the Fast Track Grant Program ($7.5 million), Food Insecurity Grant Program ($5 million), Employer Training and Investment Program (ETIP) ($17 million), and the Leverage for Federal Programs Grant Program ($5 million).
• Includes $6.5 million for the Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) Phase I Matching Program.

CAPITAL
New capital highlights include:

• $500 million to Illinois Department of Central Management Services (CMS) and the Illinois Department of Commerce and Economic Opportunity (DCEO) for the new Surplus to Success program to prepare idle state properties for successful economic development and for investment in site readiness grants to local governments for economic development.
• $6.2 billion for new Illinois Department of Transportation (IDOT) construction projects, including $4.5 billion for road and bridge construction.
• $300 million to the Capital Development Board (CDB) for demolition and deferred maintenance projects at state facilities.
• $60 million for Department of Natural Resources (IDNR) to continue improvements of Adeline Geo-Karis Illinois Beach State Park.
• $35 million for IDNR’s Open Space Lands Acquisition and Development (OSLAD) grants.
• $75 million for DCEO’s prime sites business development programs.
• $50 million for the Rebuild Illinois Enterprise Grant Program.
• $50 million for the Illinois Works Pre-Apprenticeship Program.
• $30 million for Tech Innovation Hubs.
• $24 million for Manufacturing Training Academies.

A Look Back Before the Vote: Pritzker Vows to Veto Budget with Broad Tax Hikes on Working Families as Final Negotiations Heat Up
With just days remaining before the May 31 deadline to pass a state budget, Illinois lawmakers are racing to finalize a plan amid growing tensions over potential tax increases. Governor J.B. Pritzker made clear on Wednesday that he will veto any budget that includes broad-based tax hikes that burden working families.

“Anything that’s broad-based and would have a negative impact on working families, I would veto a budget like that,” Pritzker told reporters after an unrelated event.

The governor specifically ruled out increasing the individual income tax, corporate income tax, or sales tax — the state’s three largest revenue streams. He also dismissed the idea of expanding the sales tax to services like haircuts, lawn care, or garbage collection, a proposal that’s been floated in closed-door discussions among lawmakers.

While Pritzker’s firm stance drew a clear line in the sand, it left open the possibility of more narrowly targeted tax hikes. For fiscal year 2025, the governor backed about $900 million in business-related tax changes, including new levies on sportsbooks, and in his FY26 proposal suggested an additional $100 million from taxing electronic gambling and table games at casinos.

Still, no official tax proposals have surfaced, and key details of the budget remain hidden from most legislators — let alone the public. On the House floor Wednesday, Rep. Brad Halbrook (R-Shelbyville) criticized the secretive process and warned that taxpayers are once again being kept in the dark.

“There are 118 members in this chamber, and probably 80% of us — including Democrats — have no idea what is actually going to be in this budget,” Halbrook said. He likened budget season in Illinois to “watching a car crash over and over again, knowing what is going to happen.”

House Speaker Chris Welch (D-Hillside) urged his caucus to manage expectations, acknowledging that the drop in revenue projections for FY26 — down from $55.2 billion in February to $54.9 billion today — limits what can be spent.

“No one’s going to get everything they want,” Welch said. “We’re going to spend what we bring in, no more.”

Revenue trends are a mixed bag: Personal income tax collections remain strong, up 10% year over year. But corporate tax receipts have fallen by 8%, and sales tax revenues are largely flat, underscoring the challenge of funding new priorities.

One especially contentious idea under review is a digital advertising tax, which would target companies that advertise on social media and online platforms. The idea has not yet been formally introduced in legislation, but it has already triggered fierce opposition from Illinois business groups.

Transit Reform Plan Unveiled — But No Funding in Sight
After months of hearings, negotiations, and growing alarm over a looming financial crisis, Illinois lawmakers on Wednesday unveiled sweeping legislation to restructure Northern Illinois’ mass transit system. But while the bill lays out a comprehensive reform of governance, planning, and safety, it stops short of answering the most urgent question: how to fund a transit system barreling toward a $770 million fiscal cliff.

The financial crisis stems from the impending expiration of COVID-era relief funds that have propped up services for years. Without a funding solution, transit officials warn the consequences could be catastrophic: more than 50 ‘L’ stations could close, over half of CTA’s bus routes could be cut, and widespread service reductions could follow across the entire region’s system.

Major Overhaul: Northern Illinois Transit Authority (NITA)
At the heart of Senate Bill 2111 is the creation of the Northern Illinois Transit Authority (NITA), which would replace the current Regional Transportation Authority (RTA) beginning in 2026. NITA would serve as the new coordinating body for CTA, Metra, and Pace, with a governance structure aimed at improving efficiency and accountability.

• NITA’s 20-member board will be appointed by the Governor, the Mayor of Chicago, the Cook County Board President, and collar county leaders.

 

• Board members must bring experience in transportation planning, operations, or finance.

 

• Some NITA board members will also serve on the boards of local transit agencies to streamline governance and coordination.

Transit Access and Rider Experience
One highlight of the proposal is the move toward a universal fare system, allowing riders to transfer seamlessly between buses and trains without needing different tickets — a long-sought improvement to user convenience.

The legislation also includes:

• New Service Standards: Based on global best practices, these will guide performance metrics and quality expectations.

 

• Enhanced Regional Planning: The bill strengthens planning coordination across agencies for greater system-wide efficiency.

Public Safety and Rider Experience
To address safety concerns, the bill establishes a NITA Law Enforcement Task Force, led by the Cook County Sheriff, along with an Office of Transit Safety and Experience. These bodies would:

• Oversee crime prevention strategies, safety technology, and incident data collection.

 

• Prioritize the safety of riders and transit workers alike.

Funding Tools — But No Rescue Plan Yet
While the bill empowers NITA to engage in transit-oriented development (TOD) and sets a 25% farebox recovery ratio, it does not offer a concrete funding solution to the region’s growing deficit.

• NITA would be authorized to borrow money, partner with private developers, and pursue TOD projects.

 

• Performance audits would be conducted every five years by the Illinois Auditor General.

Advisory councils — including Regional Service Councils, a Riders Council, and an ADA Council — would give riders and communities a greater voice in service planning. But crucially, none of these measures resolve the immediate fiscal threat facing CTA, Metra, and Pace.

A Senate version of the bill expected to be announced Thursday may include possible revenue sources. One idea under consideration: new fees or taxes on large online platforms like Amazon or food delivery services, which contribute to road congestion and infrastructure wear but do not currently help fund public transportation.

Still, without firm agreement on revenue, the reforms may come too late to prevent service disruptions. As one transit official put it: “We’re designing a better bus — but we still don’t know if there’s gas in the tank.”

RTA Chair Dillard: Springfield’s Transit Plan Falls Short on Funding

Regional Transportation Authority Chairman Kirk Dillard is sounding the alarm over Illinois lawmakers’ proposed transit overhaul — not because of changes to governance, but because the numbers don’t add up.

A bill introduced by Sen. Ram Villivalam would restructure the RTA into a new entity and outline funding mechanisms aimed at helping the Chicago Transit Authority, Metra, and Pace avoid a looming $771 million operating shortfall when federal COVID-19 relief funds run out next year.

While the legislation includes several potential new revenue streams — such as a rideshare tax, a 0.25% collar county sales tax diversion, and an expanded real estate transfer tax — Dillard says the proposal fails to fully address the immediate financial crisis.

“Multiple revenue streams in the bill are deposited into a new transit-supportive development incentive fund, and others are dedicated to capital needs,” Dillard wrote in a letter Wednesday. “That leaves less than half of the new funding available for operations.”

According to Dillard, the revenue sources earmarked for operating expenses would generate only about $372 million — not even half of the $771 million needed to maintain current service levels.

The result? Without additional funding, transit agencies may be forced to cut staff and service beginning in 2026.

“We are grateful for the Senate’s attention to the fiscal cliff,” Dillard wrote, “but as proposed, the new revenue included in the bill fails to address the region’s transit operating budget gap and would result in significant service cuts.”

Dillard also flagged another concern: the proposed legislation includes a mandate for a regional transit police force — but no funding to support it.

“While the bill requires the regional entity to take on additional costs for new initiatives like a police force, it offers no dedicated funding,” he wrote. “That could further reduce resources available for core operations. Our focus today must be closing the budget gap to avoid service cuts in 2026.”

Pension Reform Letter from Group of Civic Leaders
Dear Governor Pritzker, President Harmon, Speaker Welch, Leader Curran, and Leader McCombie:

As we enter the final days of session, our collection of civic organizations is concerned about a final push for pension legislation that could undo much of the progress Illinois has made on slowing down pension liability growth.

Tier 2 pension legislation billed as “Tier 2 Safe Harbor Fixes” has surfaced in SB1937, House Amendment 1, sponsored by Rep. Jay Hoffman. Other amendments could emerge before the scheduled May 31 close of session. The proposed amendments go far beyond the Governor’s pension proposal as introduced in the FY2026 budget. They would be detrimental to the long-term fiscal stability and credit rating of the State of Illinois, contrary to claims their proponents have made.

Moreover, proposals covering the City of Chicago and other municipalities have received very little scrutiny, exacerbating the risk to taxpayers and the state budget if adopted. We are writing to express support for the caution and care Gov. Pritzker and the legislative leaders have applied before proceeding with any pension legislation during the spring session. However, the eleventh-hour filing of massive pension bills and the possibility they could be acted on swiftly compels us to reiterate the importance of care and diligence in consideration of any pension legislation.

Before implementation of any pension bill, actuarial estimates of the cost should be undertaken and distributed to all stakeholders. In addition, any pension legislation that is passed is permanent and benefits may not be reduced ever moving forward. So, a quick passage of a bill could severely impact the long-term fiscal condition of the state. Too much is at stake. There is no legal imperative to act ahead of the close of session. And more information is needed before the state responsibly can take action to address any shortfalls in the existing Tier 2 program.

We’ve written about this issue in three recent commentary pieces that highlight our concerns:
• Civic leaders: State lawmakers still have time to adopt a measured fix for Tier 2 pension problem
• David Greising: With state lawmakers in the final stretch, transit and pension proposals involve high stakes
• Civic leaders: Time for Illinois to pass a sensible Tier 2 pensions fix

We know that you are committed to protecting the fiscal progress our state has made over the past few years and understand the importance of protecting Illinois’ credit rating. If there is a chance that legislation could move toward a vote, we respectfully request a meeting with you in your Springfield offices before the legislature takes any action.

We greatly appreciate the work that you are doing and the challenges of the current fiscal situation that confronts the state. We are on hand to work with you in addressing the state’s pension challenges in ways that ultimately insure to the benefit of the state, employees and retirees, and all the people of Illinois.  Many thanks for your consideration.

Sincerely,

Derek Douglas, Civic Committee of the Commercial Club of Chicago
David Greising, Better Government Association
Joe Ferguson, Civic Federation
Jack Lavin, Chicagoland Chamber of Commerce
Lou Sandoval, Illinois Chamber of Commerce

Illinois Delays Controversial Credit Card Swipe Fee Law Until July 2026
Illinois lawmakers have delayed the implementation of the state’s Interchange Fee Prohibition Act, pushing the effective date back one year to July 2026. The law, which was originally set to take effect on July 1, 2025, aims to exempt state and local taxes, as well as tips, from credit card “swipe fees” charged by processors and banks.

The General Assembly approved the delay during the final hours of the spring legislative session amid mounting legal and logistical challenges. The law — the first of its kind in the nation — has become a flashpoint between banks and credit card companies on one side, and merchants and consumer advocates on the other.

Banking trade groups, including the Illinois Bankers Association, have already filed a lawsuit to block the law, citing overwhelming compliance costs and a lack of available technology to implement the changes.

“This law will cause widespread economic disruption,” said Ben Jackson, executive vice president of the Illinois Bankers Association. “The measure overwhelmingly benefits corporate megastores while placing an undue burden on small businesses and smaller financial institutions that form the backbone of our local economies.”

Opponents of the law — including airlines, credit card issuers, and major banks — argue that implementing the change could cost tens of millions of dollars and may even require retailers and consumers to conduct separate transactions for a single purchase.

Supporters of the law, including the Illinois Retail Merchants Association, argue that it would ease financial pressure on small businesses and consumers by reducing the fees merchants must pay on every transaction.

“By refusing to require compliance as originally intended, legislators are again taking hundreds of millions of dollars out of the pockets of working families and Main Street businesses and giving it to big banks and credit card processors,” said Rob Karr, president and CEO of the IRMA, in a statement posted on X (formerly Twitter). “We remain committed to ensuring this law is not delayed further.”

The original legislation was passed in 2024 as part of a broader budget deal that included reducing merchant compensation for collecting state and local sales taxes — a move estimated to generate $100 million in state revenue. To ease the financial impact on retailers, lawmakers included the swipe fee provision in the same package.

With the implementation now postponed until 2026, stakeholders on both sides are expected to intensify their lobbying efforts. While banks are pushing for full repeal, merchants are calling on lawmakers to hold firm on their promise to rein in swipe fees.

Illinois Lawmakers Pass Prescription Drug Pricing Reform to Support Small Pharmacies and Control Costs
Illinois lawmakers have approved a bipartisan bill aimed at curbing rising prescription drug costs while providing financial support to small, independent pharmacies struggling to survive.

The Prescription Drug Affordability Act imposes new regulations and fees on pharmacy benefit managers (PBMs), the third-party intermediaries that manage prescription drug benefits between insurance companies, pharmacies, and drug manufacturers.

One of the bill’s central goals is to end the practice known as “spread pricing,” where PBMs charge health plans one price for medications but reimburse pharmacies at significantly lower rates. This gap has contributed to the closure of many small-town pharmacies, threatening access to medications in rural and underserved areas.

State Rep. Natalie Manley (D-Joliet), the bill’s sponsor, explained, “Spread pricing creates an unsustainable business model for independent pharmacies.” The legislation prohibits PBMs from profiting off these pricing differences and requires them to return 100% of pharmacy rebates back to either patients or sponsoring organizations.

Additionally, the law bans PBMs from “steering” insured patients to pharmacies they own or have affiliations with, a practice critics say unfairly advantages large corporate pharmacy chains.

The bill also mandates greater transparency and accountability: PBMs must submit annual reports on pricing and business practices to the Illinois Department of Insurance. They will be assessed a $15-per-patient annual fee, with the first $25 million collected dedicated to a grant fund supporting local pharmacies.

Governor J.B. Pritzker praised the legislation, calling it “a transformational piece of legislation” that will position Illinois as a national leader in drug affordability. “Predatory pharmacy benefit managers have been the middlemen whose business practices too often jack up prescription drug prices and shut down small, independent pharmacies,” he said.

While the bill enjoys broad bipartisan support, it faces opposition from pharmaceutical industry lobbyists and PBM trade groups. Critics argue the fees and restrictions could drive costs onto insurance plans and consumers, ultimately raising drug prices at the pharmacy counter.

PBMs defend themselves as a necessary check on drugmakers’ pricing power. However, they have drawn criticism nationwide, including from former President Donald Trump, who sought increased transparency of PBM practices through an executive order earlier this year. Notably, states like Arkansas have already moved to restrict PBM ownership of pharmacies.

The new Illinois law represents a significant effort to regulate the powerful PBM industry, improve affordability, and protect independent pharmacies that often serve as lifelines in their communities.

Lawmakers Approve New Perks to Support Illinois Manufacturers

After years of focusing on incentives to attract new manufacturers, Illinois lawmakers have approved new tax credits aimed at helping existing companies stay and grow in the state.

The recently passed legislation authorizes the Illinois Department of Commerce & Economic Opportunity to offer tax credits ranging from 3% to 7% for manufacturers who invest at least $10 million to upgrade or expand their facilities.

Additionally, the state’s payroll tax credit program—previously focused on attracting new employers—has been expanded to benefit Illinois companies that invest at least $100 million and retain a minimum of 500 jobs.

The bill now awaits the signature of Governor J.B. Pritzker.

Mark Denzler, CEO of the Illinois Manufacturers Association, emphasized the importance of supporting current businesses: “We hear a lot from manufacturers who say: We invest in the state, but what are we getting? This legislation is about helping companies that are already here.”

In recent years, Illinois has also expanded economic incentives targeting emerging industries, including electric vehicles and batteries, quantum computing, microelectronics, and semiconductors.

Bills of Note:
Provided below are some of the key end-of-session bills that had movement over the last few days of session.

HB 3438 (Mass Transit Reform – passed Senate but did not advance in the House), SB 40 (Energy Omnibus – failed to advance).

• SB 2510 is the FY26 Budget appropriations bill
• HB 2755 is the revenue package
• HB 1075 is the Budget Implementation Bill (BIMP).

HB 1075, BIMP passed the Senate 32-23-0 and passed the House 74-41-0. This bill creates the Fiscal Year 2026 Budget Implementation Act. Adds, deletes, and makes changes to various statutory provisions as needed to implement the State budget for Fiscal Year 2026.

HB 2755, Revenue Omnibus passed the Senate 31-25-0 and passed the House 71-43-0. This bill seeks to raise $880 million in new revenues. Several items will create significant tax liabilities for Illinois businesses. Among the proposed revenue enhancements, there includes, over $350 million in new, broad, and anti-competitive income tax increases that limit the 80/20 exemption, reduce the GILTI income tax deduction, and changes related to combined apportionment. In addition, the revenue package creates a new sports wagering tax, expands the State’s hotel-motel tax to short-term rental platforms, increases and expands several tobacco product taxes, creates a new telecommunications surcharge, and imposes several new EPA (environmental) fee increases. Lastly, Tax Amnesty programs and many provisions of the FY26 Economic Development package were also included.

HB 3374, Bond Authorization passed the Senate 37-19-0 and passed the House 77-39-0, This bill may be referred to as the Bond Authorization Act of 2025. Amends the State Finance Act, the General Obligation Bond Act, and the Build Illinois Bond Act. Makes changes concerning the amount of bond authorizations.

SB 2510, FY26 Budget Appropriations passed the House 75-41-0 and passed the Senate 34-23-0. This bill makes appropriations and reappropriations for capital and operating expenditures and other purposes for State Fiscal Year 2026. The budget contains $55.4 billion in revenues and a $55.2 billion spending plan.

HB 1697 PBMs passed the House 115-1-1. This bill provides that the Department of Insurance shall use moneys deposited into the DCEO Projects Fund pursuant to specified provisions of the Illinois Insurance Code to make a grant to a statewide retail association representing pharmacies to promote access to pharmacies and pharmacist services. Provides that a pharmacy benefit manager or an affiliate acting on its behalf shall not conduct spread pricing, steer a covered individual, or limit a covered individual’s access to drugs from a pharmacy or pharmacist enrolled with the health benefit plan under the terms offered to all pharmacies in the plan coverage area by designating the covered drug as a specialty drug contrary to the specified definition. Provides that a pharmacy benefit manager or affiliated rebate aggregator must remit no less than 100% of any amounts paid by a pharmaceutical manufacturer, wholesaler, or other distributor of a drug. Provides that the contract between the pharmacy benefit manager and the insurer or health benefit plan sponsor must allow and provide for the pharmacy benefit manager’s compliance with an audit at least once per calendar year of the rebate and fee records remitted from a pharmacy benefit manager or its affiliated party to a health benefit plan. Provides that the changes made to provisions concerning pharmacy benefit manager contracts by the Act shall apply with respect to any health benefit plan that provides coverage for drugs that is amended, delivered, issued, or renewed on or after January 1, 2026. Sets forth provisions concerning pharmacy benefit manager reporting requirements. In provisions concerning pharmacy benefit manager licensure requirements, provides that on or before August 1, 2025, the pharmacy benefit manager shall submit a report to the Department that lists the name of each health benefit plan it administers, provides the number of covered individuals for each health benefit plan as of the date of submission, and provides the total covered individuals across all health benefit plans the pharmacy benefit manager administers. Provides that on or before September 1, 2025, a registered pharmacy benefit manager, as a condition of its authority to transact business in the State, must submit to the Department an amount equal to $15 or an alternate amount as determined by the Director by rule per covered individual enrolled by the pharmacy benefit manager in the State. Provides that on or before September 1, 2026, and each September 1 thereafter, payments submitted in provisions concerning pharmacy benefit manager licensure requirements shall be based on the number of covered individuals reported to the Department in specified provisions of the Illinois Insurance Code.

HB 2516, PFAS Product Ban passed the House 77-39-0 on concurrence. This bill provides that, beginning January 1, 2032, a person may not sell, offer for sale, or distribute for sale in this State the following products if the product contains intentionally added PFAS: cosmetics, dental floss, juvenile products, menstrual products, or intimate apparel.

HB 2987, Warehouse Tornado Response passed the House 99-15-0 on concurrence. This bill provides that the operator of a warehouse should coordinate with the warehouse’s local emergency services and disaster agency and fire department or fire protection district to create plans that, when implemented, will be consistent with the local jurisdiction’s response activities. Provides that copies of the plan and all updates made to the plan must be filed with the fire department or fire protection district in the jurisdiction in which the warehouse is located and the local emergency services and disaster agency in the jurisdiction in which the warehouse is located. Provides that warehouse facilities constructed after the effective date of the Act must provide the means, through modification, installation, or demonstration via rational analysis, to meet a life-safety performance level for tornado loading that is equivalent to, or exceeds, the life-safety performance level for the most onerous of other building code-prescribed extreme environmental loading events. Sets forth provisions concerning that evaluation. Provides that, in lieu of a risk-targeted approach, the evaluating design professional may elect to follow prescriptive methods as outlined in the Federal Emergency Management Agency standard P-431, Tornado Protection: Selecting Refuge Areas in Buildings and the Best Available Refuge Area Checklist to ensure that shelter areas designated in tornado safety plans are qualified as the best available refuge areas. Requires that the county keep on file a copy of the certifications of the persons doing inspections or examinations on its behalf. Provides that a building inspector may have a grace period of one year from the date of hire to acquire the certification required under these provisions. Amends the Illinois Municipal Code to add similar requirements for building inspectors.

HB 3438, Mass Transit Governance & Funding passed the Senate 32-22-0 but did not advance in the House – it is expected to have a perilous path to passage. Several concerns remain on the overall effectiveness of the new governance structure, lack of any significant efficiencies, and the new revenue proposed. These revenue sources include a $1.50 “climate impact fee” or per-package delivery fee. A new ground transportation tax (rideshare tax) of 10% of a gross trip fare in Chicago, Cook, and the Collar Counties. A new Real Estate Transfer Tax in Cook County (excluding Chicago) and the collar counties of $1.50 per $500 of property value. A new EV Charging Tax imposed at the rate of $0.06 per kilowatt hour of electric vehicle power. Redirect interest earned from the Road Fund to Mass Transit Funds.

HB 3638, Workplace Confidentiality Agreements passed the House 93-22-0 on concurrence. This bill provides that no contract, agreement, clause, covenant, waiver, or other document shall prohibit, prevent, or otherwise restrict an employee, prospective employee, or former employee from engaging in concerted activity to address work-related issues. With the amendment, removes a requirement that settlement or termination agreements that prevent an employee or former employee from working or from applying to work for an employer in the future must expire within 7 years.

SB 58, DCEO Regional Manufacturing passed the Senate 57-0-0 on concurrence. This bill provides that the Department of Commerce and Economic Opportunity may enter into grants, contracts, or other agreements to provide technical assistance in support of regional manufacturing partnerships in collaboration with the following: (1) employer associations representing manufacturers; (2) secondary and postsecondary institutions, including public universities and community colleges; and (3) workforce stakeholders, including local workforce innovation boards and local workforce innovation areas.

SB 246, Nonprofit Investment Pool passed the House 73-39-0. This bill provides that the State Treasurer may establish and administer a non-profit investment pool and an electronic payment processing program to supplement and enhance investment opportunities and secure electronic payment options otherwise available to not-for-profit corporations in the State. Provides that the Treasurer may receive funds paid into the pool for the purpose of holding and investing those funds.Provides that not-for-profit corporations exempt from taxation under Section 501(c)(c) or 501(c)(5) of the Internal Revenue Code are eligible to participate in the non-profit investment pool.

HB 2371, 340B passed House Executive on concurrence 12-0-0. This bill creates the Patient Access to Pharmacy Protection Act. Provides that no person, including a pharmaceutical manufacturer, may deny, restrict, prohibit, condition, or otherwise interfere with, either directly or indirectly, the acquisition of a 340B drug by, or delivery of a 340B drug to, a 340B covered entity or a 340B contract pharmacy authorized to receive 340B drugs on behalf of the 340B covered entity unless the receipt is prohibited by federal law; impose any restriction on the ability of a 340B covered entity to contract with or designate a 340B contract pharmacy; or require or compel a 340B covered entity or 340B contract pharmacy to perform the specified actions. Provides that each individual transaction of 340B drugs that is subject to a prohibited act, as specified, shall constitute a separate violation of the Act. Sets forth provisions concerning reporting requirements for a 340B covered entity and the Department of Healthcare and Family Services; 340B prescription drug applicability; preventing duplication of 340B discounts; enforcement of the Act by the Attorney General; penalties; and preemption.

SB 2008, Economic Development Incentives passed House Revenue as amended 11-6-0. This bill creates the Statewide Innovation Development and Economy Act. Among other things, this bill modernizes the use of the STAR Bonds economic development tool used to finance various projects. Creates the Advancing Innovative Manufacturing for Illinois Tax Credit Program.Makes changes to the Quantum Computing Campus incentive, Amends the EDGE Tax Credit and more. Allows the Illinois Department of Commerce & Economic Opportunity to offer a tax credit of 3% to 7% for manufacturers who invest at least $10 million in upgrading or expanding their facilities. Also expanded the state’s payroll-tax credit program, which has primarily been used to attract new employers, to be extended to Illinois companies investing at least $100 million and retaining at least 500 jobs. For a more detailed background view here.

HB 3200, Unemployment Insurance passed the House 115-0-0. This bill provides for the recovery of benefits awarded to individuals who are determined to not be eligible for those benefits, plus any penalties and interest, in accordance with specified provisions of the Act. Provides that the Director of Employment Security is authorized to cooperate with and enter into appropriate agreements with the State Treasurer for the recovery of unclaimed property held by the State Treasurer in the name of an individual who received benefits that the individual was determined to not be eligible to receive or in the name of an employer who owes contributions, interest, or penalties under the Act. Authorizes the Director to directly request and accept the return of funds from a debit card issuer for any debit card account that received benefits under specified circumstances. Specifies that provisions concerning voluntary leaving shall not apply to an individual who, prior to voluntarily leaving, for claims dated December 28, 2025 through December 24, 2028, is deemed to be unable to perform the individual’s work due to a mental health disability by a licensed and practicing psychiatrist and the employer is unable to accommodate the individual. Provides that the Director of Employment Security may cooperate with and enter into agreements with the State Treasurer for the recovery of unclaimed property held by the State Treasurer in the name of an employer who owes contributions, interest, or penalties under this Act.

Stay well,

Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct