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2013 - Legislative Report and Alert July 31, 2013
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Illinois Section AWWA Members
Legislative Update
and Regulatory ALERT
Residential Fire Sprinklers


Sent to members and employees of those utilities and
organizations that have a company or utility membership.


LEGISLATIVE UPDATE | REGULATORY ALERT

TrialBy Fire?

Fora countless number of years the state fire organizations have been in the forefront in attempts to mandate fire sprinklers in all new construction, as well as retrofitting some older apartment buildings. Bills have been introduced in the legislature almost every year and none have gotten very far in the legislative process. But in the last few weeks there has been a new twist on the effort to secure this mandate … the administrative rules process through the Joint Committee on Administrative Rules (JCAR).

On June 28, the Office of the State Fire Marshall (OSFM) filed rules that were printed in the Illinois Register to do administratively what hasn't€™t been able to be accomplished legislatively. In addition to mandating the installation of sprinkler systems in all new construction, the proposal would require high rise buildings at least 80 feet tall and built before 1975 to install sprinkler systems.

The JCAR process can be arduous and cumbersome but the outcome is determined by the twelve legislators who comprise the committee rather than the 177 legislators who make up the General Assembly. On matters of a controversial nature the JCAR process can also be lengthy and mandatory sprinklers is one of the hottest issues to hit JCAR in years.

The OSFM will hold a public hearing on the rules on August 6 in Springfield. The initial comment period ends on August 12, but there is every expectation that there will be long discussions before a final decision is rendered, with the distinct possibility that the rule could be defeated or withdrawn as a final outcome.

When?

There is no doubt that all signs are pointing to some resolution to the pension reform impasse at some point in the not too distant future. Exactly when the resolution will occur is another story altogether. The Conference Committee appointed by legislative leaders seems to be working diligently, both through public hearings and private meetings, to find a solution. Some predict that there could be success by Labor Day while others look at the October veto session as the most likely time when there could be action taken. Whatever agreement it reached it will require a three-fifths vote to make it effective immediately, so that's another huge consideration that the Committee must take into account before any compromise plan is brought forward.

Over the past few months an alternative plan that was put forward a few months ago by the Institute for Government and Public Affairs at the University of Illinois and that received very little discussion has apparently now become a focal point for the Conference Committee to consider. The original plan, according to its proponents, saves as much money as the original House approved pension reform package. It includes higher contributions, changes the cost of living adjustment to one-half of the inflation rate compounded, guaranteed state payment mechanism, and other reforms. There most probably will be a large number adjustments to the alternative plan that will occur over the course of negotiations, but it could provide an appropriate compromise mechanism that would allow all sides to proclaim victory.

In the meantime, in the course of approving the FY2014 state budget, the Governor decided to sock it to the General Assembly by vetoing their salaries due to their inaction on pension reform. Comptroller Topinka has said it's legal, although she has questioned the wisdom. And legislators tend to have long memories. It's obvious that they can't override the Governor's veto before any pension reform legislation is approved. But, because they consider the salary veto "bush league and more for show, they no doubt will do their utmost to make sure that as little credit as possible goes to Quinn for the impasse resolution. During his tenure in office the Governor has not had a stellar record seeing success with his initiatives in the legislature. The extended forecast is for even more stormy weather.

Projecting The Future

As summertime of odd numbered years chugs to an end, it marks the beginning of political campaign season even though the last go-round ended only eight months ago. But, as candidates for statewide office and the legislature begin to declare candidacies, raise money and prepare to have election petitions on the street in five short weeks its "batten down the hatches in anticipation of what no doubt will be an interesting political year starting with the race for governor.

Overshadowing most of the gubernatorial news during the past month was Attorney General Lisa Madigan's decision to seek reelection and not run for governor. To most, the news of her decision was a shocker, but to others it was actually the most logical decision she could make as long as her father remains House Speaker. Regardless, the race for governor now becomes a literally a toss-up where both party primary elections will have a major impact on what happens in November, 2014 and especially thereafter. And no matter who is elected governor in fifteen months that individual will be facing an almost hopeless situation as Illinois's finances will face a steep precipice with the expiration of the temporary income tax only a few months later. Or will it?

There is no doubt that the General Assembly will receive tons of pressure from all sides with regard to the temporary tax, and those on the ballot both in the primary and general election are sure to be asked their positions on tax extension or repeal scores of times. But in the aftermath of the 2014 general election, just as the state can see the fiscal light at the end of the tunnel, will the legislature really allow the tax to expire? Or will they extend it? Or phase it out? Do the prospects one way or another depend on which party will control the governors' office?

Losing $7.5 billion in one second (literally the time it takes for the clock to go from 11:59:59 p.m. on December 31, 2014 to midnight) is going to be very difficult for anyone from any political party that occupies the governors chair to give that up. With the state projected to be somewhere in the neighborhood of $5.5 billion in debt before the loss of the temporary tax revenue, jacking that up to almost $13 billion in the blink of an eye will make fiscal pressure almost insurmountable.

What happens if Democrats win the Governor's race? The odds would favor an attempt extension or phase out the tax. Since the initial temporary income tax increase was approved with Democratic-only votes they may be prepared to argue, depending on what happens between now and then, that they put state finances on more sound footing with pension reform and have reduced the state debt from over $13 billion to a tad over $5 billion so an extension or phase-out could get the state over the hump. Arguing to make the tax permanent would not be the most prudent way of endearing themselves to the voting populace. It would certainly shore up state finances, but with the potential of exacting a very high price at the 2016 elections.

And if a Republican wins? Republican legislators hate the income tax increase with a passion and have constantly tried to repeal it or put Democrats on the spot about future tax plans. Since Democrats control the legislature and the governors office the GOP feels it can be as vehemently opposed as possible because they have very little stake in the game. But what if they take control of the governors office and their candidate-elect is looking at a fiscal sinkhole that will get almost three times as deep from the time he wins the election to the time he takes office? It will present quite a dilemma for both the victorious candidate as well as his legislative contingent for with the election victory also comes the responsibility to govern and provide state services.

There is no question that the next governor will be presented with numerous hurdles and will be forced to make many unpopular decisions, even if action is taken to provide more revenues, temporarily or otherwise. In fact,there are many who feel that the next person elected governor will have such difficulty that they'll more than likely be a one-termer. Because of that there are a few Democrats who have theorized that it might be better to have a GOP governor elected in 2014 who can then be defeated in 2018 and turn the office back to the Democrats just in time for the 2021 redistricting to take place.Far-fetched? Remember, this is Illinois.

Legislative Transition

Rep. Deb Mell (D-Chicago) has resigned. She has been appointed Alderman in the City of Chicago.

Rep. Pam Roth (R-Morris) has announced her intention to resign dueto her impending move out of state.

SessionSchedule/Deadline Dates

Here are relevant dates for the legislative session.

  • August 29  Final Day for Governor to act on legislation. (actual deadline is 60 days after Governor receives a bill from the General Assembly)
  • October 22-24 First Veto Session week
  • November 5-7 Second Veto Session week

Bills of Interest

HB1379 â€" Rep. Phelps/Sen. Haine - Provides an alternative procedure that a large public utility may choose in establishing the rate making 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 rate making 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 rate making purposes. Sets forth provisions concerning definitions, appraisers and their duties, rate making rate base, and rate cases. (Current Status: Sent To Governor)

HB 1522  Rep. Fortner/Sen. Koehler - Provides that  DuPage and Peoria counties may adopt a schedule of fees applicable to real property that benefits from the county's storm water management facilities and activities. Sets forth the circumstances under which a fee schedule may be adopted and the uses for the fees. Provides that any proposed fee schedule must be approved by a referendum in Peoria County before it can be imposed. Provides that the county shall provide notice to municipalities within its jurisdiction of any fees proposed and seek the input of each municipality with respect to the calculation of the fees. Provides that the county shall give land owners at least 2 years' notice before imposing the fee, during which time the county shall provide education on green infrastructure practices and an opportunity to take action to reduce or eliminate the fee. Further provides that a fee waiver shall be included for property owners who have taken actions or put in place facilities that are approved by the county that reduce or eliminate the cost of managing runoff. (Current Status: Sent To Governor)

SB 72 Sen. Haine/Rep. Tryon - Repeals the Industrial Hygiene Regulatory and Enforcement Fund. Repeals the Industrial Hygienists Licensure Act. Amends the Environmental Protection Act. Provides for the transfer of funds from the Industrial Hygiene Regulatory and Enforcement Fund to the Environmental Protection Permit and Inspection Fund. Provides that a community water supply that is exempt from regulation under the Public Water Supply Operations Act does not have to register a person who is in charge of the community water supply in order to be exempt from the Illinois Pollution Control Board's mandatory chlorination requirements. Recognizes Certified Industrial Hygienists certified by the American Board of Industrial Hygiene as environmental professionals who may, among other things, conduct Phase I and Phase II Environmental Audits. Amends the Rivers, Lakes, and Streams Act. Requires the Environmental Protection Agency to report on the water quality of Lake Michigan every 2 years or at the direction of the Governor (rather than every year or at the direction of the Governor). Effective immediately, except that the repeal of the Industrial Hygiene Regulatory and Enforcement Fund takes place on January 1, 2014. (Current Status: Signed By Governor PA 98-0078)

SB 1715  Sen. Frerichs/Rep, Bradley  Hydraulic Fracturing Regulation (Current Status: Signed by Governor  PA 98-0022)


REGULATORY ALERT

PublicHearing set for 9:30 a.m. on Tuesday, August 6, 2013 at the Office of the StateFire Marshall in Springfield, IL.

The Office of the State Fire Marshall has proposed a rule change to require Residential Fire Systems (RFS) in new residential construction. The proposed rule can be found in the June 28, 2013 volume of the Illinois Register, which can be accessed through www.ilga.govâ€" at the bottom left of the home page under Rules & Regulations.

The Illinois Section AWWA's Water Utility Council (WUC) met to discuss the potential ramifications for water utilities if this regulation is implemented.Following is a list of the issues that the WUC feels have not been considered or properly addressed by the Office of the State Fire Marshall:

  • Oversized water service lines will be needed to meet the flow demand of a RFS.
  • If dual service lines are installed, this would double the maintenance expense for the water utility and the customer.
  • Dual service lines would more than double the initial cost at the time of installation.
  • Dual metering would be required which includes ongoing maintenance, repairs, replacement, and reading/billing costs.
  • Increased backflow potential would need to be addressed by the water utility.
  • Backflow prevention equipment would be required.
  • Annual backflow prevention equipment testing is required.
  • Increased cost to the water utility to oversee the required annual testing and associated record keeping.
  • Increased public/utility liability for termination of service for any reason.
  • Fire protection will be disrupted when a service is discontinued.
  • Concerns with increased potential for freezing and water damage to property if water service is left on when the home is unoccupied.
  • There is a potential concern that some small water systems may need to increase their systems water pressure to supply enough pressure for the RFS to operate.
    • An approximate head loss of 29 psi through a water meter and backflow preventer could leave insufficient pressure for the RFS to operate properly.

Other issues that were discussed during the WUC meeting were:

  • More Public participation should be required prior to proposals for regulatory changes being initiated.
  • How will homes that are located outside of municipal water systems comply with this change in the regulation?
  • Does this proposed regulation only apply to residential dwellings constructed within a municipal water system?

Prompt action needs to be taken by water utilities. Individual water utility representatives can testify at the August 6, 2013 hearing. Speakers will be allowed 10 minutes each. Written comments can also be submitted to the Office of the State Fire Marshall before August 12, 2013. The ISAWWA  WUC also urges water utility representatives to contact your local and state representatives and inform them of your concerns, and let them know how this regulatory change would impact on your system.

July 31, 2013




Illinois Section AWWA

545 South Randall Road
St. Charles, IL 60174
Ph: 866-521-3595 x2 | Fax: 866-521-3591 | lisa@isawwa.org
www.isawwa.org




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