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Legislative Report - March 2014
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March 4, 2014

Water Loss Bills Study Bills Introduced

Two bills introduced this session, both companion bills, seek to create a Water Loss Accounting Awareness Act and would require a report to be submitted on or before July 31, 2015 that evaluates the latest possible information on water loss in Illinois. House Bill 5629 (Rep. Gabel) and Senate Bill 3047 (Sen. Kotowski) requires the Illinois Environmental Protection Agency, in consultation with the Department of Natural Resources, the Illinois Commerce Commission, the Illinois State Water Survey of the University of Illinois, and other local and regional water management leaders and interested parties as utilize existing data, policies, procedures, and institutional knowledge including publicly available reports from the federal Environmental Protection Agency, the American Water Works Association, and the State archives.

Senate Bill 3047 has been assigned to the Senate Environment Committee and House Bill 5629 has not yet been assigned to a standing committee.

Lowering Expectations

The weather has not been the only phenomenon providing a bleak existence to Illinoisans in February. During the month the House and Senate appropriations committees held hearings about the projected revenues that will be on hand during the next fiscal year and the information was about as frigid as the outdoor temperature. With the revenue from the temporary income tax in place the outlook for FY 2015 would be difficult but hopeful, without it the outlook is depressing at best.

Legislators rely on their Commission on Government Forecasting and Accountability (COGFA) to provide accurate revenue and spending forecasts, as well as providing and interpreting other economic data that can help them shape budget decisions. Historically, COGFA’s projections and forecasts have been far more accurate than the Governor’s Office of Management and Budget (GOMB), the Department of Revenue and others. COGFA’s testimony was very sobering.

Any discussion of state resources and budgets this year must include the “what ifs” of the temporary tax expiration, and the COGFA testimony to the committees did exactly that. Since the legislature has not determined the fate of the tax and probably won’t until after the November election, any revenue projections have to provide real time data and those figures show a decrease of approximately $1.6 billion due to the expiration of the tax. Keep in mind that the tax is set to expire halfway through the fiscal year so the full impact would be in the neighborhood of $3.2 billion for FY 2016. There are other revenue sources that will increase to offset a portion of the loss of income tax revenue, but the hit will still be substantial. But that may not tell the whole story.

In the last few weeks Senate President John Cullerton released a budget statement that projected an estimated yet another $1.6 billion in mandated state spending increases that adds significant stress to the budget picture. According to Cullerton the additional spending comes from an additional $669 Million in increased costs for required Medicaid services, $214 million in increased pension payments, $373 million for AFSCME contract increases and $278 million in local government revenue sharing. So the loss of $1.6 billion and the addition of an equal amount of spending should send the bean counters running for the exits. The process never gets easier.

This past week the House, as has been its recent custom, adopted its official revenue estimates for upcoming budget discussions. HR 842 and HJR 80 contain the first part of the budget creation roadmap. The next step, after the Governor presents his own budget outline, will be for the legislative appropriations committees to adopt their own spending limits and do the best they can to craft a document that will allow the state to function at least until January. The beginning of 2015 presents the best opportunity to extend, or not, the expiring tax. But talking about the uncertainty of January does not help budget decisions that have to be made in May. In the past when these budget dilemmas have presented themselves the legislature has dealt with the uncertainty by approving either a 6-month budget or a lump sum budget that gives all of the discretion (and headaches) to the administration. No telling at this point what their plan is and it won’t be crystal clear until near the end of the session.

As far as projected revenues for FY 2015 go the loss of $1.6 billion in personal and corporate income tax revenue is partially made up by gains in other revenue sources so the actual projected revenue loss with the temporary tax expiration is actually in the neighborhood of $586 million.

According to COGFA, the funds with the largest projected increases are sales taxes ($494 million) and federal sources ($273 million). Fund with the largest projected decreases are personal income taxes ($1.34 billion), corporate income taxes ($106 million) and riverboats ($56 million). If the temporary tax is extended then the state stands to have an extra billion on hand to pay help relieve some of the ever present budget pressures. If not, the next Governor is going to have his hands full trying to juggle an enormously heavy burden.

Prudent or Political Decision?

Just before the Governor was slated to provide his budget outline in February he requested an extension from the legislature to move his budget speech to the end of March, March 26 to be exact. According to the Governor’s Office more time was needed to try to put together his fiscal plan in light of changing revenue and spending pressures. According to opponents, the move was purely political so he would not have to divulge his budget plans before the March 18 primary election. Moreover, according to skeptics, by March 26 he’ll know who his November opponent will be so he can craft his budget document and speech with that in mind and enhance his reelection chances to boot.

On the one hand, postponing of the gubernatorial budget message has been more commonplace in recent years, having been put off a number of times. On the other hand, it is a very important political year so why tip off opponents before you need to? But, regardless, with elections and legislative action it’s numbers that count and the Governor and his party control the process, so March 26 it is.

And, because there’s potentially so much at stake in November there’s been a chilling of the atmosphere in the State House as well as outside. During the last few budget cycles there has been a streak of bipartisanship that has been evident as the General Assembly struggled to put a budget together. That may not be the case in 2014. Republicans feel like they have a shot at winning the Governor’s Office this year and they’re going to want to make Democrats make all the tough decisions by themselves, or will set such a high bar for cooperation that there will be no way to meet even anywhere toward the middle. And that posturing has already begun.

In the last few weeks Senate President Cullerton has extended the branch of “bipartisan cooperation” to Senate Republicans, a move where Cullerton has everything to gain and nothing to lose. In response, Senate Republican Leader Christine Radogno issued a list of demands that would be necessary in order for that cooperation to occur. Among the requests was the lapse of the temporary income tax in January, 2015, taking any discussion of a graduated income tax off the table, major worker’s compensation reform, no new or expanded programs in the next fiscal year, and others. Needless to say, each separately would be a non-starter to Democrats. Together, they form Mount Everest.

The upshot is that the Governor will present his budget in late March, the General Assembly will have time to put a budget plan together by the end of May, someone will win the election in November, and the most important questions regarding the future fiscal health of the state of Illinois that need to be answered won’t be until sometime next January.

Pension Reform Update

There is little information to report on the status of the pension reform litigation, except that four separate lawsuits have been filed and are now crawling through the legal process. There has been a report that an attempt will be made to consolidate all of the suits so they might progress faster through the courts, but there is no way to determine whether or not all parties will agree to that prospect. Because the lawsuits have been filed in Chicago, Springfield and Champaign may take some major miracle to decide which venue would be the best if, in fact, there was a consolidation agreement.

Bills Introduction Deadline Passes; Numbers Down

One of the things about the legislative process is the short window of time a legislator has to deal with subject matters of importance by introducing legislation. Imagine the freshman legislator who takes office in the middle of January and then finds out that the deadline for introducing bills is only four or five weeks away. Anything after that waits until next year. It’s hard to grasp for many legislative newbies who actually have the impression that the General Assembly is a deliberative body that works like in the movies. It doesn’t. And in the second year of a session things become far more limiting for a legislator because the focus of the second year of the session is primarily the budget. The limiting nature of the alternate year session also serves to dampen the number of bills that are introduced by members, and since many bills call for new spending they certainly aren’t going to be seriously considered with the state bleeding cash.

In the first year of this legislative session over 6,000 bills were introduced … 6,230 to be exact. However in 2014, the second year of the session a “mere” 3,244 were “placed in the hopper” … a little less than half. The House is always the more prolific of the chambers and 70% of the bills introduced in 2014 come from that chamber. But, regardless of how many bills start the process very few ever make it through. Last year of the 6,230 bills filed only 626, or 10%, ever reached the Governor.

Session Schedule/Deadline Dates

Here are relevant dates for the legislative session:

• March 10-14 – No session scheduled
• March 28 – House/Senate Committee Deadline
• April 11 – House/Senate 3rd Reading Deadline
• April 14-25 – No session scheduled
• May 16 – House/Senate Committee Deadline
• May 23 – House Senate 3rd Reading Deadline
• May 31 - Adjournment

Bills of Interest

HB 3635 – Rep. W. Davis - Provides that the Illinois Commerce Commission shall require all gas, electric, and water companies with at least 100,000 customers under its authority, all local exchange telecommunications carriers with at least 35,000 subscriber access lines, and a person or entity providing cable or video service to submit an annual report by April 15, 2014 and every April 15 thereafter, in a searchable Adobe PDF format, on all procurement goals and actual spending for female-owned, minority-owned, veteran-owned, and small business enterprises in the previous calendar year. Provides that each participating company shall include certain specified information in its annual report. Provides that each annual report shall include as much State-specific data as possible. Provides that the Commission and all participating entities shall hold an annual workshop open to the public in June of 2014 and every year thereafter on the state of supplier diversity to collaboratively seek solutions to structural impediments to achieving stated goals. (Status – House – Public Utilities Committee)

HB 4382 – Rep, Nekritz - Amends the Environmental Protection Act. Removes a provision requiring rule to include a requirement for a local match of 30% of the total project cost for projects funded through grants. Adds to the definition of "treatment works". Provides that the Water Pollution Control Loan Program shall be used and administered by the Environmental Protection Agency to provide any financial assistance that may be provided under a specified provision of the Federal Water Pollution Control Act for any projects eligible for assistance under that provision. (Status – House – Environment Committee)

HB 4699 – Rep. Tryon - Amends the Public Water Supply Operations Act. Provides that every community water supply in Illinois, with specified exemptions, shall have on its operational staff, and shall designate to the Agency in writing, either (i) one Responsible Operator in Charge who directly supervises both the treatment and distribution facilities of the community water supply or (ii) one Responsible Operator in Charge who directly supervises the treatment facilities of the community water supply and one Responsible Operator in Charge who directly supervises the distribution facilities of the community water supply. Defines "Responsible Operator in Charge". Establishes duties of Responsible Operators in Charge. Provides that a violation of the Act by a Responsible Operators in Charge shall be enforceable by administrative citation. (Status – House - Rules Committee)

HB 4717 – Rep. Cassidy - Creates the Urban Flooding Awareness Act. Defines "urban flooding". Provides that, by June 30, 2015, the Department of Natural Resources, in consultation with the Illinois Emergency Management Agency, the Illinois Environmental Protection Agency, the Illinois Housing Development Authority, the Department of Commerce and Economic Development, the Department of Insurance, the Federal Emergency Management Agency, the Metropolitan Water Reclamation District of Greater Chicago, the Illinois State Water Survey of the University of Illinois, and other State, regional, and local storm water management agencies, thought leaders, and interested parties, shall submit to the General Assembly and the Governor a report that reviews and evaluates the latest available research, laws, regulations, policies, procedures, and institutional knowledge concerning issues of urban flooding. (Status – House - Rules Committee)

HB 5454 – Rep. Poe - Amends the Illinois Municipal Code. Provides that each water commissioner shall receive the same compensation that shall be determined by the water commission (currently, the appointing authority). (Status – House - Rules Committee)

HB 5629 – Rep. Gabel - Creates the Water Loss Accounting Awareness Act. Provides that, before July 31, 2015, the Illinois Environmental Protection Agency, in consultation with the Department of Natural Resources, the Illinois Commerce Commission, the Illinois State Water Survey of the University of Illinois, and other local and regional water management leaders and interested parties as the Agency deems appropriate, shall submit to the General Assembly and the Governor a report that reviews and evaluates the latest available information on water loss in Illinois including existing data, policies, procedures, and institutional knowledge (including publicly available reports from the federal Environmental Protection Agency, the American Water Works Association, and the State archives). (Status – House - Rules Committee)

HB 5785 – Rep. Franks - Amends the following Acts and Codes to provide that, upon a majority vote of the boards of the entities created under the following Acts and Codes in favor of the proposition to annex or consolidate, then that entity shall cease: Property Tax Code, Counties Code, Cemetery Maintenance District Act, Civic Center Code, Conservation District Act, Downstate Forest Preserve District Act, Public Health District Act, Tuberculosis Sanitarium District Act, Museum District Act, Illinois International Port District Act, River Conservancy Districts Act, Solid Waste Disposal District Act, Street Light District Act, Surface Water Protection District Act, Water Service District Act, Water Authorities Act, Water Commission Act of 1985, and the Illinois Highway Code. Provides that on the effective date of the annexation or consolidation, all of the rights, powers, duties, assets, liabilities, indebtedness, obligations, bonding authority, taxing authority, and responsibilities of the entity shall vest in and be assumed by the governmental unit assuming the former entity's functions. (Status – House – Counties & Townships Committee)

SB 2770 – Sen. Althoff - Amends the Public Water Supply Operations Act. Provides that every community water supply in Illinois, with specified exemptions, shall have on its operational staff, and shall designate to the Agency in writing, either (i) one Responsible Operator in Charge who directly supervises both the treatment and distribution facilities of the community water supply or (ii) one Responsible Operator in Charge who directly supervises the treatment facilities of the community water supply and one Responsible Operator in Charge who directly supervises the distribution facilities of the community water supply. Defines "Responsible Operator in Charge". Establishes duties of Responsible Operators in Charge. Provides that a violation of the Act by a Responsible Operators in Charge shall be enforceable by administrative citation. (Status – Senate – 3rd Reading)

SB 2780 – Sen. Kotowski - Amends the Environmental Protection Act. Removes a provision requiring rule to include a requirement for a local match of 30% of the total project cost for projects funded through grants. Adds to the definition of "treatment works". Provides that the Water Pollution Control Loan Program shall be used and administered by the Environmental Protection Agency to provide any financial assistance that may be provided under a specified provision of the Federal Water Pollution Control Act for any projects eligible for assistance under that provision. (Status – Senate – Environment Committee)

SB 2928 – Sen. Link - Creates the Lake County Prescription Drug Disposal Pilot Program. Provides that the program shall facilitate the collection, transportation, and disposal of pharmaceuticals by law enforcement agencies. Requires the Director of the Illinois Department of Public Health to submit a report on the collection efforts and overall effectiveness of the program to the General Assembly and the Governor by January 1, 2016. (Status – Senate – 2nd Reading)

SB 2966 – Sen. Steans – Creates the Urban Flooding Awareness Act. Defines "urban flooding". Provides that, by June 30, 2015, the Department of Natural Resources, in consultation with the Illinois Emergency Management Agency, the Illinois Environmental Protection Agency, the Illinois Housing Development Authority, the Department of Commerce and Economic Development, the Department of Insurance, the Federal Emergency Management Agency, the Metropolitan Water Reclamation District of Greater Chicago, the Illinois State Water Survey of the University of Illinois, and other State, regional, and local storm water management agencies, thought leaders, and interested parties, shall submit to the General Assembly and the Governor a report that reviews and evaluates the latest available research, laws, regulations, policies, procedures, and institutional knowledge concerning issues of urban flooding. (Status – Senate – Environment Committee)

SB 3047 – Sen. Kotowski - Creates the Water Loss Accounting Awareness Act. Provides that, before July 31, 2015, the Illinois Environmental Protection Agency, in consultation with the Department of Natural Resources, the Illinois Commerce Commission, the Illinois State Water Survey of the University of Illinois, and other local and regional water management leaders and interested parties as the Agency deems appropriate, shall submit to the General Assembly and the Governor a report that reviews and evaluates the latest available information on water loss in Illinois including existing data, policies, procedures, and institutional knowledge (including publicly available reports from the federal Environmental Protection Agency, the American Water Works Association, and the State archives). (Status – Senate – Environment Committee)

SB 3055 – Sen. Biss - Amends the Illinois Water Well Construction Code. Changes the definitions of "modification" and "closed loop well". Makes other changes. (Status – House – Public Health Committee)

SB 3425 – Sen. McCann - Amends the Illinois Municipal Code. Provides that each water commissioner shall receive the same compensation that shall be determined by the water commission (currently, the appointing authority). (Status – Senate – Committee on Assignments)



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