Legislative Update - June 1 - 2011

A Done Deal

In the end, the expected fireworks never materialized as the House and Senate agreed this week to use the House’s lower revenue estimate of $33.2 billion to fashion the FY2012 state budget. The Senate had approved a budget that was approximately $1.2 billion higher than the House earlier in the month and observers were waiting for the gloves to come off and the budget battle royal, expecting that both chambers would dig in on their own budget versions. On Monday the Senate, generally agreed to the lower House spending level and sent that version of the budget to the Governor.

That’s not to mean that all Senators were happy, however. A few Democrats were downright apoplectic over that decision, and to try to assuage them the Senate added $430 million in spending to a capital projects authorization bill and sent it over to the House for consideration. But the House didn’t bite and moved to reject the amendment before adjourning. By doing so the bill, HB 2189, is in a position to be eventually sent to a conference committee, most probably in the fall, so that possible negotiations can take place and/or budget corrections or changes may take place.

Legislation was also sent to the Governor extending the lapse period from August 31 to December 31. Services must be performed prior to June 30 and vouchers for payment must be submitted no later than August 31. It also appears that the provisions of last year’s Emergency Budget Act that gave the Governor extraordinary budget powers, such as inter-fund borrowing and emergency rulemaking, will disappear on June 30.

As has been mentioned previously, this year the budget negotiations have been member-driven, the legislative leadership having provided members with an opportunity to assist in uprighting the state’s fiscal ship. While there is a great disappointment regarding the severe lack of funds, and even the adoption of a lower spending ceiling than was probably necessary, there is no question that the members rose to the occasion and created a budget document that, within limited fiscal constraints, actually tried to respond as well as possible to requests and concerns of advocacy groups and the public.

The reality of the situation was that the legislature was forced to approve a budget by May 31 and adjourn. State coffers have been below empty for the last few years and legislators realized that the time of reckoning had arrived. Punting, as has been the case over the last decade and a half, has been erased from the rulebook. Many difficult budget and funding decisions had to be made, and kicking them over past May 31, thereby requiring an even higher number of votes to enact the budget would have made an impossible situation even worse, with no telling what the consequences may have been.

One of the more interesting aspects of the budget deliberations this year was the cooperation seen in the House as both Democratic and Republican members joined together to make spending decisions. By doing so they provided cover for each other to justify funding levels that were not going to make anyone happy. Senate budget activity was a stark contrast. Democrats moved their budget ideas forward while Republicans complained about spending being too high. During an early press conference GOP Senators offered a plan to reduce state spending by $5 billion but never attempted to officially offer budget amendments to have aspects of their plan considered. When Senate Democrats actually had a few of the GOP budget cutting proposals drafted and submitted, Republicans didn’t exactly embrace them. So it goes it the game of posturing.

Governor Quinn has had minimal input in crafting the budget that was sent to him, in stark contrast to the way state budgets have been crafted for the last 30+ years. He now will have to decide whether he wants to sign, veto or change what the legislature sent him. Since the Constitution allows him only the right to reduce line items, it’s improbable that he’ll do that … since he wanted $2 billion more in authorization than the legislature sent him. If he vetoes the budget he can no doubt guarantee that he’ll get even less when a “rebound budget” gets to him. So, the odds are high that he’ll take what he’s been given and make the best of it.

Spoil(s) of Victory

The old adage, “to the victor go the spoils” used to be far more meaningful in days past than it is today. Court rulings restricting governmental personnel hiring (“Shakman”, “Rutan”) have hindered the opportunity for utilization of the spoils by office holders over the last 30-35 years, and other statutory limitations have hindered the free exercise of “spoilage” even further. So what’s one of the last huge spoils that remain unfettered in Illinois? Reapportionment. And that once every ten year exercise in constitutional compliance was on full display at the State Capitol over the last two weeks.

One party, Democrats, controlled the entire process for the first time since the adoption of the 1970 Constitution. Previous remap efforts in 1981, 1991 and 2001 were resolved after invoking the tie-breaking procedure enumerated in the Illinois Constitution and, as such, resulted in maps drawn by a commission long after the legislature adjourned. Were those maps partisan? Extremely. Democrats in 1981 and 2001, and Republicans in 1991, took full advantage of their control of the cartographer’s pen and tried to ensure their own legislative majorities for that upcoming decade while heaping a world of hurt on some individual members of the other party. 2011 has proved to be no different.

After months of reviewing new census data Democrats released their new state Senate maps on May 19 and the map of new House districts a day later. Hearings were held on subsequent days with Democrats claiming the new district alignment was “fair” and drawn “in accordance with all legal requirements” while Republicans wailed that, in their eyes, the new districts were “reprehensible”, “punitive” and an outrage. Nevertheless, the bill creating the new districts was rolled out of the House Redistricting Committee on a partisan roll call and moved to the House and then to the Senate where it was passed over vehement GOP opposition. The Governor has said that he will review the map before he acts on it to make sure it’s fair. Anyone who thinks that the Democratic legislature didn’t clear the map with Quinn before they passed it is kidding themselves.

The Constitution says that the map has to be signed into law by June 30. Any changes made by the Governor post May 31 would require a three-fifths vote to be effective immediately … and that would mean Republican votes would be needed. And they’re not voting for anything that would ostensibly make them the minority party for ten years. So will Quinn sign it? If by some long shot he doesn’t, and forces the commission procedure to be invoked, thereby possibly cooking the Democrat’s golden goose, he’ll be persona non grata with the legislature for the rest of his term of office. And he’s in bad enough repute now. So, expect the Governor to “join the team” and sign the map.

There is no doubt that the new map will cause some dislocation, particularly among Republicans. To create more desirable Democratic districts some of the others include two or three GOP legislators housed in the same district that may cause primary election contests between them, or perhaps some semi-forced retirements. Some other Republican legislators found their houses places in completely new territory, and to run in their former areas would have to move. (The Illinois Constitution allows legislators in the post-remap election to run in any territory that is created out of any portion of their former districts. The kicker is that if they choose to run from an area that they don’t live in they have to move into that new area no later than May 1 following the election … a very tough choice that has prompted many retirements rather than uprooting families.)

So, what’s next? The losing side always files suit, and almost always loses. The Illinois Constitution says that the Illinois Supreme Court has “original and exclusive jurisdiction” so any lawsuits will start and end there. Democrats have a 4-3 majority on the Court and presumably would uphold a Democratic map … on legal grounds, of course. But it also provides an interesting example of “what if?” had the intense effort to unseat Democratic Justice Thomas L. Kilbride been successful last November, thereby having given the GOP a majority on the court.

Most certainly suits will also be filed in federal court, but unless there are egregious violations of the Federal Voting Rights Act or other legal precedents they are not expected to get very far. So, for all intents and purposes, what we currently see is what we get.

Illinois is losing one congressional seat, and the congressional maps that Democrats approved took that into account … and then some. There was apparent pressure on state Democrats from Washington to try to embellish the numbers as much as possible. And they may have succeeded. If the prognostications hold, the state congressional delegation will shift from marginally Republican to heavily Democratic. Most, if not all, of the newly elected GOP congressman may be on jeopardy. It’s not surprising, then, to hear the loud complaints from Republicans about unfairness and undoing the results of the recent election. Lawsuits will certainly be filed, but the prospect of court intervention in dim. In 1991, Democrats in charge of the Texas legislature drew their congressional maps. After the 1994 Republican landslide gave Republicans control of Texas state government, then-Congressman Tom DeLay convinced the Texas legislature to “remap the remap”, and they did and in doing so completely reversed the actions that had taken place just a few years earlier. The U.S. Supreme Court ruled in their favor so the new Illinois congressional maps might be looked upon as child’s play compared to Texas.

In all cases, legislative and congressional members will be elected from these new areas in November, 2012. Current districts will stay in effect until then.

Bonding Plan Hits The Skids

After numerous discussions and attempts to focus on the need for borrowing to pay arrearages to state vendors, there was one final try over last weekend to force the legislature to take action. Initial estimates from the Governor early in the year suggested that $8.7 billion would be necessary pay backlogs. Later in the session that number was pegged at $4.5 million. Over the weekend the Senate introduced four amendments that, if approved, would have allocated $6.2 billion on bonding authority. After the first of the four amendments was defeated soundly the remainder were never called.

To attempt to show the need, sponsors divvied up the amounts on the amendments to show the need to assist various categories of vendors or providers. $1.5 billion was allocated to private vendors, $1.1 billion for state medical plan expenses, $2.8 billion to governmental entities, and $800 million for corporate tax refunds. That strategy failed.

While a number of legislators and others objected to adding to state debt, under current law the state is required to pay between 12% and 24% for late payments to state vendors and providers. Interest payments on bonds would be between 4% and 6%, so replacing the former with the latter could potentially saving the state millions of dollars. The legislature did approve legislation reducing the prompt pay penalty to 1% per month, or 12% annually but passed on the chance to give state vendors and providers some relief, as well as freeing up a few more precious dollars for purposes other than interest payments.

Pension Reform On Hold

Legislators can be very forceful and full of bluster when speaking in the abstract and in generalities, like balancing the state budget or enacting pension reform. But get down to specifics with some heavy constituent pressure thrown in and it’s often a different story. That’s exactly what happened with efforts to enact pension options for many current governmental employees.

Post election comments from many legislators on both sides of the aisle were replete with demands and suggestions that more pension reform was absolutely necessary. Legislation was prepared to allow current employees two options other than their current retirement benefit, along with some increases in employee contributions. House committee hearings were scheduled in May to consider and adopt the revised plan, and then all hell broke loose.

All last week large numbers of phone calls, the likes of which have been seldom seen in the state capitol, jammed legislative offices. Thousands of these calls, as well as messages and e-mails, certainly caught the attention of members of the General Assembly and the leadership. Suddenly, the bluster seemed to evaporate into thin air, replaced by some concern about whether or not supporting such a plan might potentially cause election problems. As a result of the intense lobbying effort, legislative leaders decided to shelve discussion of further reform until the fall, at the earliest. The same for efforts to force current governmental retirees to pay a portion of health care premiums.

It’s a guarantee that if any such plans were to be approved it would be challenged immediately in court. Legal scholars vary as to the meaning of the provision in the Illinois Constitution that treats pensions as a contract, but a vast majority of them seem to be of the opinion that courts would not approve.

Casino/Racino Supporters Hit The Jackpot

An estimated $1.5 billion in upfront license fees and hundreds of millions of dollars per year in annual gaming taxes will be realized by the state as the General Assembly approved the largest expansion of gaming in the last 20 years. If approved by the Governor, new casinos would be earmarked for Chicago, Park City (Waukegan area), south suburban Cook County, Rockford and Danville. In addition, state horse racing tracks would be permitted to have a specified number of slot machines during their racing meets, and gambling spaces at current casinos would be expanded.

The big conundrum for Governor Quinn will be whether to sign the bill or not. He has stated in the past that while he supported a casino for Chicago he opposed over aggressive gambling expansion. With the failed efforts to try to pass gaming expansion in the past, he also probably thought he’d never have to worry about it. He does now. And can he realistically pass up all that cash with the immense stack of unpaid bills that loom? That’s the $64,000 question.

Illinois Health Benefits Exchange

Prior to adjournment the legislature approved SB 1555 that creates the Illinois Health Benefits Exchange Law in accordance with the federal Affordable Care Act beginning in October, 2013. The purpose of the Exchange is to help individuals and small employers with no more than 50 employees shop for, select, and enroll in qualified, affordable private health plans.

To help prepare for 2013 the legislation describes the functions of the Department of Insurance, the Commission on Governmental Forecasting and Accountability. It also creates a Health Benefits Exchange Legislative Study Committee that issue a report no later than September 30, 2011 with recommendations on the Exchange’s structure, sustainability and stakeholder involvement.

Prescription Drug Disposal

House Bill 2056 that allows law enforcement agencies to collect and incinerate pharmaceuticals from residential sources and incinerate them in accordance with rules to be established by the EPA, was sent to the Governor for his consideration.

Legislative Appointments

Rep. Dena M. Carli has been appointed to take the place of Rep. Susana Mendoza who was elected Chicago City Clerk.

Veto Session

The dates of the veto session have been announced. The General Assembly will meet on October 25, 26, 27 and November 8,9,10.

Bills of Interest

Any bills that did not pass will be removed from subsequent reports.

HB 248 – Rep. May - Amends the North Shore Sanitary District Act. Authorizes the board of trustees of a sanitary district to enter into an agreement to sell, convey, or disburse treated wastewater with any public or private entity located within or outside of the boundaries of the sanitary district. (Current Status: Passed Both Houses)

HB 308 – Rep. Tryon/Sen. Link - Provides that beginning January 1, 2012, the Department of Public Health shall issue permits for the construction and modification of closed loop well systems. Provides for the certification and registration of closed loop contractors by the Department. Amends the Water Well and Pump Installation Contractor's License Act to make a technical and a related change. (Current Status: Passed Both Houses)

HB 1585 – Rep. Sente - Provides that "plumbing" includes rainwater harvesting distribution systems, but does not include any rainwater harvesting distribution system or rainwater harvesting collection system unless otherwise required by the Illinois Plumbing Code. Requires the Illinois Department of Public Health to adopt and publish a minimum code of standards for rainwater harvesting collection systems and rainwater harvesting distribution systems by January 1, 2012. Requires rainwater harvesting collection systems and rainwater harvesting distribution systems to be (A) used only for non-potable uses and (B) constructed in accordance with the Illinois Plumbing Code. Defines "rainwater harvesting collection system" and "rainwater harvesting distribution system". (Current Status: Re-referred to Rules Committee - dead)

HB 1657 – Rep. Bellock/Sen. Althoff - Adds an Illinois congressional delegation member, or his or her designee, to be appointed by the Governor to the Task Force on the Conservation and Quality of the Great Lakes. Provides that no later than June 1 of each year, the Task Force shall submit a report to the General Assembly outlining its recommendations concerning legislative actions to protect the water quality and supply of the Great Lakes. (Current Status: Passed Both Houses)

HB 1660- Rep. Bellock - Creates the Prescription Drug Repository Program Act. Requires the Department of Public Health to establish a prescription drug repository program, under which a healthcare facility may donate a prescription drug or supplies needed to administer a prescription drug for use by an individual who meets eligibility criteria specified by the Department. Sets forth requirements that prescription drugs or supplies must meet in order to be accepted and dispensed under the program. Provides that no drugs or supplies donated under the prescription drug repository program may be resold. Provides that nothing in the Act requires that a pharmacy or pharmacist participate in the prescription drug repository program. Provides for civil and criminal immunity for drug and supply manufacturers and pharmacists in relation to the donation, acceptance, or dispensing of prescription drugs or supplies under the prescription drug repository program. (Current Status: Re-referred to Rules Committee – dead)

HB 1704 – Rep. Bradley - . Provides that NPDES permit applications are deemed approved if not approved or denied by the Environmental Protection Agency within 120 days after being filed with the Agency. (Current Status: Re-referred to Rules Committee – dead)

HB 1955 – Rep. Holbrook - Provides an alternative procedure that a large public utility may choose in establishing the ratemaking rate base of a water or sewer utility that the large public utility is acquiring. Provides that the Commission's order that approves the large public utility's acquisition of the water or sewer utility shall include the Commission's decision establishing (1) the ratemaking rate base of the water or sewer utility and (2) the district or tariff group with which the water or sewer utility will be combined for ratemaking purposes. (Current Status: Re-referred to Rules Committee – dead)

HB 2056 – Rep. Osmond/Sen. Schmidt - Excludes from the definition of "pollution control facility" the portion of a site or facility used to incinerate only pharmaceuticals from residential sources that are in the possession or control of a law enforcement agency. Authorizes a law enforcement agency to collect pharmaceuticals from residential sources and to incinerate the collected pharmaceuticals in a manner that is consistent with rules adopted by the Agency. Authorizes the Department of State Police to use moneys in the Household Pharmaceutical Disposal Fund to make grants to local law enforcement agencies for the purpose of facilitating the collection and incineration of pharmaceuticals from residential sources. Defines "law enforcement agency". Amends the Unified Code of Corrections. Requires a $20 assessment to be levied against persons who commit specified drug offenses. (Current Status: Passed Both Houses)

HB 2879 – Rep. Davis - Provides that inspection fees for all commercial fertilizers and custom mixes shall be $1 per ton (up from 25¢ per ton). Provides that seven-eighths (up from one-half) of the $1 per ton inspection fee shall be paid into the Fertilizer Control Fund. Provides that not less than 50% of the funds appropriated to the fertilizer research and education program shall be used for projects designed to avoid or reduce water pollution that may arise from the use of fertilizer in agriculture. Increases the Fertilizer Research and Education Council members to 15 (up from 9) and provides qualifications for the additional members. (Current Status: Re-referred to Rules Committee – dead)

HB 3090 – Rep. Arroyo/Sen. Delgado - Provides that notwithstanding any provision of law, any person who is authorized to dispense prescription drugs in the State must accept, free of charge, expired or unwanted prescription drugs for proper disposal. Provides that the prescription drug dispenser shall make available to its customers or patients a container suitable for use as a receptacle that only permits for the deposit of items and the contents of which are locked and secured for the expired or unwanted prescription drugs. Provides that if a patient or customer is issued a prescription drug from a person who is authorized to dispense prescription drugs in the State and that prescription drug causes an adverse reaction and the patient or customer returns the remainder of the prescription drug to the dispenser, then the dispenser shall refund the full cost of the prescription drug to the patient or customer. (Current Status: Passed Both Houses)

HB 3099 – Rep. Tryon - Requires the rules of the Environmental Protection Agency and the Illinois Pollution Control Board to include a process for expediting the issuance of permits and licenses for all projects requiring permitting or licensure. Authorizes the Agency and the Board to engage the experts and additional resources that are reasonably necessary for implementing this process. Specifies that an expedited process applies only upon the request of the applicant and that any additional costs for using the process are to be borne by the applicant. (Current Status: Re-referred to Rules Committee – dead)

SB 38 – Sen. Garrett/Rep. Sente - Provides that "plumbing" includes rainwater harvesting distribution systems, but does not include any rainwater harvesting distribution system or rainwater harvesting collection system unless otherwise required by the Illinois Plumbing Code. Requires the Illinois Department of Public Health to adopt and publish a minimum code of standards for rainwater harvesting collection systems and rainwater harvesting distribution systems by January 1, 2012. Requires rainwater harvesting collection systems and rainwater harvesting distribution systems to be (A) used only for non-potable uses and (B) constructed in accordance with the Illinois Plumbing Code. Defines "rainwater harvesting collection system" and "rainwater harvesting distribution system". (Current Status: Passed Senate; House – Executive Committee - dead)

SB 1222- Sen. J. Sullivan - Provides that any public water district organized under the Public Water District Act is authorized to construct, maintain, alter, and extend its water main along, upon, under, and across any highway, street, alley, or public ground in the State. (Current Status: Re-referred to Committee on Assignments - dead)

SB 1682 – Sen. Link/Rep. Tryon - Requires the Illinois Department of Public Health, by January 1, 2012, to (i) establish standards for the certification and licensing of individuals and contractors constructing and modifying closed loop wells and (ii) issue permits for the construction and modification of closed loop wells. (Current Status: Passed Senate; House Consideration Postponed - dead)

SB 1903 – Sen. Clayborne - Provides that NPDES permit applications are deemed approved if not approved or denied by the Environmental Protection Agency within 120 days after being filed with the Agency. (Current Status: Senate – 2^nd Reading - dead)

SB 1981 – Sen. Garrett - Authorizes the Environmental Protection Agency to disburse grants from the Illinois Clean Water Fund to other State agencies, local governments, publicly owned entities subject to NPDES permitting requirements, and charitable organizations for the purposes of reducing water pollution and protecting surface and ground water quality and aquatic habitats. Authorizes the Agency to adopt rules to administer this grant program. (Current Status: Re-referred to Committee on Assignments - dead)