ISBA Statehouse Review for May 12, 2016

ISBA Director of Legislative Affairs Jim Covington reviews legislation in Springfield of interest to ISBA members. This week he covers IMDMA cleanup (House Bill 3898), Illinois Administrative Procedure Act (Senate Bill 323), Cannabis civil penalties (Senate Bill 2228), Limited Liability Company Act (House Bill 4361), Income shares and child support (House Bill 3982), Land Trust Beneficiary Rights Act (House Bill 4697) and Trust law (Senate Bill 2842). More information on each bill is available below the video.

IMDMA cleanup. House Bill 3898 (Martwick, D-Chicago; Mulroe, D-Chicago) is a cleanup of last year’s rewrite of the IMDMA for such things as referring to a section that no longer exists and correcting cross-references. It does contain some clarifying changes that may be considered as substantive, such as the following. (1) Clarifies for post-educational expenses that the guide is “in-state” tuition at the University of Illinois. (2) Clarifies that the 25-mile standard on relocation is based on an “internet mapping service.” (3) Clarifies the two-year ban from amending a judgment unless the child is endangered applies to parental decision-making responsibilities and doesn’t apply to parenting-time provisions. (4) Clarifies that a respondent who doesn’t file an appearance is not required to file a parenting plan unless specifically ordered to do so by the court. (5) It also includes a new Article 7 of the Parentage Act of 2015 affecting artificial reproduction that replaces the current Article that is considered to be outdated. It is on second reading in the Senate.

Illinois Administrative Procedure Act. Senate Bill 323 (Harmon, D-Oak Park) makes the following changes to rule-making by state government. Requires each state agency to make available its website the following: rulemaking procedures, including first notice of intended action including dates and times of any public hearings during the first notice; second notice of intended action, including the second notice document submitted to the Joint Committee on Administrative Rules; emergency rulemaking; preemptory rulemaking; regulatory agenda; and dates of JCAR meetings related to the rulemaking. Also requires agencies to accept comments either orally or in writing by first-class mail, fax, or email and to post those submissions on its website.  

Cannabis civil penalties. Senate Bill 2228 (Steans, D-Chicago; Cassidy, D-Chicago) makes several changes to the Code of Criminal Procedure. It replaces criminal penalties for possession of small amounts of cannabis (less than 10 grams) with a civil fine of $100-$200. The other change at issue replaces the current “zero-tolerance” prohibition of driving with any trace of cannabis in the driver’s bodily fluids with a per se standard of five nanograms/milliliter of whole blood or ten nanograms/milliliter in any other bodily substance. It’s passed the Senate and on third reading in the House.

Limited Liability Company Act. House Bill 4361 (Nekritz, D-Buffalo Grove; Harmon, D-Oak Park) is a huge rewrite of the LLC Act. Establishes distinctions between membership interests. Provides for the appointment of officers. Authorizes the use of oral operating agreements. Makes changes concerning electronic signatures. Makes changes regarding a member's right to information. Provides that members of limited liability company are not agents solely because of membership. Expands the scope of operating agreements. Makes changes concerning unauthorized distributions. Provides that creditors acquire only distributional rights. Requires judicial action for dissolution based upon illegality. Abolishes certain statutory buyout rights. Provides for domestication of foreign companies. Provides for conversion of business entities into other forms. Requires the filing of a post office address for service of process. Limits the ability of companies to transact business until an application is filed with the Secretary of State. Makes technical and other changes. Effective July 1, 2017. It’s passed the House and on third reading in the Senate.

Income shares and child support. House Bill 3982 (Kelly Burke, D-Oak Lawn; Hastings, D-Matteson) moves Illinois into the majority of other states that have an “income shares” model for adjudicating child support.  It’s passed the House and now on third reading in the Senate. It has a July 1, 2017 effective date.

Land Trust Beneficiary Rights Act. House Bill 4697 (Williams, D-Chicago; Hastings, D-Orland Park) provides that the rights of a beneficial owner may not be impaired in any way by the change of trustees if the identity of the trustee of a land trust has been changed by virtue of sale, assignment, appointment, or otherwise, but the beneficial owner or owners of the land trust remain unchanged. Provides that a change of trustees by a sale, acquisition, or appointment governed by the Corporate Fiduciaries Act is not a bar or defense to any court action filed by or in the name of either the previous trustee or the new trustee, regardless of whether the court action was originally filed in a representative capacity on behalf of the beneficial owner or owners. Passed the House and now in the Senate on third reading.

Trust law. Senate Bill 2842 (Silverstein, D-Chicago; Lang, D-Skokie) seeks to reverse the holding of the Mendelson case (2016 IL App (2d) 150084). It provides that the transfer of real property to a trust requires a transfer of legal title to the trustee evidenced by a written instrument of conveyance and acceptance by the trustee. Provides that for any interest in real property to become trust property in a trust of which any transferor is a trustee, the instrument of conveyance shall additionally be recorded in the appropriate real property records. Passed the Senate and now in the House Judiciary Committee.