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Illinois Pension Ethics Reform
Illinois pension ethics reform legislation quickly moved through the General Assembly the last few days of March 2009 and was signed by the Governor within 24 hours. Public Act 98-0006 provides significant reforms to how Illinois pension funds select investment consultants and advisors among other provisions. IVCA was generally supportive of the new law but was concerned about one key provision affecting fund-of-funds. In January 2011 an IVCA-sponsored bill addressing this provision was passed by the General Assembly and signed by the Governor….read more.
Illinois 2009 PPRT Increase and Repeal and possible changes in 2010
On July 15 2009, the General Assembly and the Governor signed a bill that would among many other provisions repeal the ability of a partnership or LLC filing a tax return in Illinois from deducting reasonable compensation paid to partners for services in computing the PPRT (Personal Property Replacement Tax), unless that amount is actually paid out as a guaranteed payment for services.
Following intense opposition from the business community, the General Assembly repealed the PPRT change during the veto session in October and the Governor signed the bill into law on December 16th.
During the 2010 spring legislative session, the General Assembly was reportedly reconsidering changing the partnership income deduction under PPRT. However, no action was taken.
The IVCA and its members worked for over two years to resolve the unintended consequences of Illinois Public Act 94-0079, enacted in 2005, which severely restricted under-funded pensions’ ability to invest in venture capital and private equity. In February 2007 through litigation brought by the National Foreign Trade Council the state was permanently enjoined from enforcing this law.
New
Legislation affecting the investment of public funds in "scrutinized entities" in
Gross Receipts Tax
IVCA is opposed to this tax. It makes
Personal Property Replacement Tax
Resolving of problem with the Personal Property Replacement Tax (
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Freedom of Information Act
Clarifying the Freedom of Information Act (FOIA), to explain the requirements for private companies receiving investments from public pension funds
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Although there was initial concern that a new 2008 law and Executive Order addressing Illinois' “pay-to-play” culture may cover private equity and venture funds which accept investments from the state pension plans, after careful review, it is the consensus among several prominent private equity attorneys that as a general matter private equity and venture funds with Illinois pension funds as LPs are likely not subject to the act or the Executive Order solely because of the investments made by the public pension funds. From a practical perspective, however, it may be advisable to comply with the political contributions ban to executive officeholders (Governor, Lt. Governor, Treasurer, Attorney General and Comptroller) if one has or will pursue contracts influenced by that office. The law covers Illinois public pension plans and designates the Governor as the official responsible for awarding contracts in this area. Many believe this would be the most prudent course of action given the considerable risks associated with making these political contributions while receiving public investments.