Illinois House Floor Debate — February 20, 2014

"Members are asked to be at their seats. We shall be led in prayer today by Pastor Robert Freeman, who is with the Komer United Methodist Church in Springfield, Illinois. Pastor Freeman is the guest of Representative Scherer. Members and guests are asked to refrain from starting their laptops, turn off all cell phones and rise for the invocation and the Pledge of Allegiance."

"We shall be led in the Pledge of Allegiance today by the Gentleman from DuPage, Representative Reboletti."

"Roll Call for Attendance. Representative Currie."

"Thank you, Speaker. Please let the record show that Representatives Arroyo, Lilly and Welch are excused today." 09800098.docx 1  STATE OF ILLINOIS 98th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 98th Legislative Day 2/20/2014

"Representative Bost."

"On a count of 113 Members are present, a quorum is established. Mr. Clerk."

"Mr. Clerk, Agreed Resolutions."

"Representative Currie moves that the Agreed Resolutions be adopted. All in favor say 'aye'; all opposed say 'nay'. In the opinion of the Chair, the 'ayes' have it. And the Resolutions are adopted. Representative Moffitt, for what reason do you seek recognition?"

"Please state your point, Sir."

"Thank you, Representative. Members, if we can get a little order in the chamber. We're going to proceed to Bills on Third Reading. Mr. Clerk, House Bill 3749, Representative Franks. Please read the Bill."

"Representative Franks."

"Thank you, Mr. Speaker and Members of the General Assembly. This is a Bill that came to me over last summer. It's necessary to ensure that the tax-exempt status, which certain institutes of higher education hold in Illinois, is not abused. What we found is that certain universities outside of Illinois were giving interest-free loans and forgiving loans…"

"Excuse me, Members. Please have a little order and take the conversations to the rear of the chamber. Thank you. Representative Franks."

"Thank you. What we found was a problem in other states and we're trying to make sure it doesn't happen here. What we 09800098.docx 4  STATE OF ILLINOIS 98th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 98th Legislative Day 2/20/2014 found was that tax-exempt universities were giving interest- free and loans and also forgiving loans for second homes for professors at a time when students are taking on excessive debt and the schools are not forgiving those debts and those debts are not dischargeable in bankruptcy. I don't think that it's proper public policy for tax exempt institutions to be giving those type of loans and this would simply prohibit that act. I've reached out to almost every university in the state and gotten their response and they're not doing it now. But I think it's a very important piece of proactive legislation. I'd be happy to answer any questions."

"On that, we have Representative Hays."

"Correct."

"Good fences make for good neighbors. When we see other problems happening, I think it's smart that we don't suffer the same indignities. So, hopefully it won't… I don't… I'd… listen, I think the people in Illinois do a heck of a job and I think they're very well-committed and it may never be an issue, but let's… let's make sure it never becomes one."

"I appreciate it, but it is a real problem, 'cause it's happened in other areas and oftentimes, they just follow along the line. But I appreciate your comments."

"Representative Sandack."

"Sponsor will yield."

"Well, it's not a question of the borrowers, it's protecting. That's… I want to make that very clear. This is nothing to do with banks or loans. What we found is that universities that are tax exempt, thereby basically using our tax dollars, are giving interest-free loans and forgiving loans in other states for professors and connected insiders to buy second homes. I think that's outrageous at a time when our students are taking on huge debt, excessive debt, which I believe will be the next bubble and none of these universities are allowing their debt to be forgiven or interest-free. And I don't think it's fair, if you have a tax-exempt status, to do that. Now, if they're a taxable for- profit institution, I don't think there's anything we should say about that, because they have a different status. But they're getting a… they're getting a privileged status of tax exemption and then using that to give special privileges that 09800098.docx 6  STATE OF ILLINOIS 98th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 98th Legislative Day 2/20/2014 they're not affording to the students. I just don't think that's right."

"Yes."

"It could be. But it's non-taxable as well, in many cases, because it's additional… that's additional. Let's be honest, then, if it's going to be that type of compensation. But I don't think that tax-exempt organizations, if they're going to act like for-profit institutions, then they should be treated like for-profit institutions."

"What I did, I talked to, I think, over 20 of our universities. I talked to the Presidents of the colleges. I'd say Glenn Poshard was very excited about it. He thought it was important. There… a lot of them do give some type of loans, but they're not for a second home. They're not for that type of thing. Some… and they're usually for short-term bridge loans. We're not going to do anything to affect what those institutions are doing. This is much more localized in what we're prohibiting."

"Representative Riley."

"Will the Sponsor yield?"

"Sponsor will yield."

"Representative Franks, I have to tell… I have been trying to listen to the debate. It is a little noisy in here. So, I hope the question I ask you hasn't already been asked. But real world situation, I know a faculty member at a college somewhere else that's a Nobel laureate. I know a person that's engaged and is a nonpareil around the world in cancer research. As you know, there's a lot of competition to bring competent faculty to different universities and colleges. So, isn't a loan or can a loan be viewed as just an emolument that may be given to attract a person of that nature to come to your university?"

"I don't believe this would impede that at all. And I think we also have to consider that if we have to give interest-free loans or forgive loans for professors to get a second home, then we need to probably really rethink whether the tax-exempt status is appropriate. That's something that a tax… someone who's paying taxes can do."

"Yeah."

"But understand that we are subsidizing those tax-exempt universities and they should act as though they're tax-exempt universities. I think they need to be up-front on what compensation they'll be paying for… paying someone and that’s fine. But I don't think they should be allowing perks like 09800098.docx 8  STATE OF ILLINOIS 98th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 98th Legislative Day 2/20/2014 that when their students are not allowed to have their loans… given interest-free loans or forgiven."

"Representative Franks, one of the things, and I understand what you're saying and it… and it sounds really good, but a high level faculty member is not a student. And a high level faculty member can enhance the stature of a university, bring money into the university…"

"Oh… oh, I agree… oh, I agree with you…"

"…and bring top level students. And so, I think what's happening, and it's a point well-taken, you're taking the anecdote of some people that just happen to buy houses in the Hamptons and I wonder whether or not that's representative of those people who might have gotten a loan."

"I don't think it's a widespread issue. I just don't want it happening here. It's very… It does three basic things. I'm not sure you saw the analysis."

"Yeah. I read it."

"All right. Because it really…"

"That I read."

"All right. But I'm saying, can't you maybe even more narrowly tailor the Bill, that maybe it ends up as ordinary 09800098.docx 9  STATE OF ILLINOIS 98th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 98th Legislative Day 2/20/2014 income, taxable income or other kinds of things that would really address the problem. I think this is broadly…"

"I think this does. I mean, we did a lot of research on this. I can't tell you how much time we spent on this months. This was the… this was the best solution."

"Okay. Thank you for your answers."

"Thank you."

"Representative Franks to close."

"Thank you. I really appreciate the questions. This Bill, understand, only… it does three things. It prohibits making the loans to employees in a natural… at an annual interest rate that's lower than the prevailing loan interest rates at the time of the loan approval. You can't forgive these loans made to the employees. Folks, this is a question of fundamental fairness. We want… we need to treat our students as well as we treat our faculty, and to provide these perks by a nontaxpaying entity makes them act as though they are… that they ought to be paying taxes. They can't have it both ways. So, in order to protect our taxpayers, in order to protect our students, I'd encourage an 'aye' vote."

"Gentleman moves for passage of House Bill 3749. All in favor vote 'aye'; all opposed vote 'nay'. The voting is open. Have all voted who wish? Have all voted who wish? Have all voted who wish? Representative Crespo, Gabel, Kosel. Mr. Clerk, please take the record. On a count of 83 voting 'yes', 21 voting 'no' and 7 voting 'present', House Bill 3749, having received the Constitutional Majority, is hereby declared passed. On Supplemental Calendar #1, we have House 09800098.docx 10  STATE OF ILLINOIS 98th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 98th Legislative Day 2/20/2014 Resolution 790. Mr. Clerk, please read the Resolution. Mr. Riley."

"Thank you, Mr. Speaker. House Bill 790 establishes UIC Urban Planning Day, February 22, in the State of Illinois. Specifically on the 22nd, UIC will be celebrating the 40th anniversary of the College of Urban Planning and Public Affairs. This institution, CUPPA as we call it, is a great institution, been around for 40 years. It's only one of the two institutions in this state that offered an accredited master's degree in Urban Planning program. Of course, they offer master's degrees in Public Administration, PH.D.s in Public Administration. The fascinating thing about CUPPA is they've been really involved in the development and the social and economic health of the City of Chicago. I remember when we had redistricting, there was a member of he Urban Data Visualization Center that came down and did a fantastic presentation. We have the Voorhees Center for community economic development. We have other institutes that are really great and have been involved in the uplift of Chicagoland area and beyond. So, 790 basically establishes UIC College of Urban Planning and Public Administration Day in the State of Illinois."

"Representative Nekritz."

"Thank you, Mr. Speaker. I would like to commend Representative Riley for bringing this matter forth today and the timing could not be better for me. I'm joined today by my legislative director from my district office up in Buffalo Grove, John Amdor, who is a student in this program right this… right this minute, is about to get his master's in the 09800098.docx 11  STATE OF ILLINOIS 98th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 98th Legislative Day 2/20/2014 summer, we're hoping. So, I'm delighted that John could be here to see this Resolution adopted for the very program that he's participating in right now."

"Gentleman moves for the adoption of House Resolution 790. All in favor say 'aye'; all opposed say 'nay'. In the opinion of the Chair, the 'ayes' have it. And the Resolution is adopted. And now, allowing perfunctory time for the Clerk, the House will adjourn Session 'til Tuesday, February 25 at the hour of 12 noon. All in favor say… Representative Hurley moves for adoption of the Adjournment Resolution. All in favor say 'aye'; all opposed say 'nay'. In the favor… opinion of the Chair, the 'ayes' have it. And the House is adjourned."