Welcome to the Chemical Industry of Illinois

CICI ANNUAL MEETING - DECEMBER 3

CICI‘s Annual Meeting will be held on Thursday, December 3^rd , 2009, at the Holiday Inn Express O’Hare, Penthouse Ballroom, located at 6600 N. Mannheim Rd, in Rosemont. All CICI members are encouraged to attend. For more information and to register, follow this link: http://www.cicil.net/Flyers/annualmtg09.html

The day’s events begin with registration and a continental breakfast at 8:30 a.m. followed by the General Membership and Board of Directors meeting. The election of new CICI board members and officers will also take place. Doug Scott, IEPA Director, will discuss state environmental issues which impact the chemical industry.

This year’s Keynote Speaker will be Cal Dooley, CEO and President of the American Chemistry Council (ACC). Cal will be discussing issues of importance to the industry as it pertains to the federal government. After lunch, there will be an awards ceremony and a Regulatory and Legislative Affairs Committee meeting.

NEW COOK COUNTY VETO POWERS ON GOV’S DESK

While there won’t be an immediate roll back of Cook County’s penny-on-the-dollar sales tax hike, it may be much easier for the Cook County Board to override President Stroger’s veto if Governor Quinn approves HB 4625 (Walker, D-Arlington Heights). This measure reduces the number of votes needed for a veto override from a 4/5s to a 3/5s majority. The Cook County Board has been unable to override President Todd Stroger’s continued vetoes of the sales tax rollback proposal. A new proposed county ordinance has even been introduced again to accomplish this sales tax increase roll back.

ENERGY TAX EXEMPTIONS DELAYED IN SENATE

The Senate Revenue committee did not take up a CICI-supported measure, HB 4599 (Gordon, C., D – Coal City), exempting certain business enterprises designated by Standard Industrial Classification from the state’s energy taxes. Members of the Senate committee did, however, express support of the bill when it adopted technical amendments and may take up the measure for passage when they return after the New Year.

Specifically, the exemptions would be for natural gas and electricity used by any business enterprise that is properly assigned or included within one of the following Standard Industrial Classifications, as designated in the Standard Industrial Classification Manual prepared by the federal Office of Management and Budget: 10; 12; 13; 14; 15; 16; 17; 20; 21; 22; 23; 24; 25; 26; 27; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39.

CICI will keep you abreast of any developments to allow us to join neighboring states in offering this type of incentive to help energy intensive industries.

REPEAL OF PARTNERSHIP REPLACEMENT TAX GOES TO QUINN

The General Assembly finally finished repealing a 50% income tax increase for LPs, LLPs and some LLCs that elect to be taxed as a partnership the last week of the Fall Veto Session. The measure, HB 2239 (Madigan, D-Chicago), is currently awaiting action by Governor Quinn. CICI is cautiously optimistic the governor will sign this measure into law.

This tax increase was the subject of a CICI memo detailing this snafu. According to business tax experts, the change amends the Illinois Income Tax Act to subject most personal service income of partnerships, LLC's and LLP's to a 1.5% Illinois replacement income tax. Regrettably unless you are a tax expert, the change is almost impossible to decipher in the language of the bill, which appeared as a floor amendment on July 15th, the last day of the extended legislative session. The bill passed both the House and Senate with no dissenting votes and was signed into law by Governor Quinn. The measure took effect on July 15 for the 2009 tax year.

The reason for the change was represented as a technical “clean-up”. The 1.5% replacement tax is in addition to the personal income tax of 3% paid by each partner receiving his or her distributive share of partnership income, resulting in a 50% increase in tax. Illinois’ current 2.5% replacement tax for corporations remained unchanged.

CAMPAIGN FINANCE LIMITS ADVANCE TO GOVERNOR

For the second time this year, the General Assembly sent Governor Quinn legislation to impose campaign contribution limits in one of the few states that has never had them. Quinn vetoed a similar bill earlier this year, supposedly because of its inadequacy to reform the state's scandal-plagued campaign system. The governor did, however, say that he was “looking forward” to signing this compromise bill that would establish Illinois' first limits on campaign donations.

While this measure, SB 1466 (Harmon, D-Oak Park), had support from legislative Democrats and good government groups long advocating for some sort of limits, critics complained that it failed to limit contributions from legislative leaders during the general election, only primaries. Republican lawmakers complained that the bill concentrates power in the hands of a few political insiders.

Among the major provisions of the new bill are a new $5,000 limit on individual contributions and a $10,000 contribution cap on donations from an association, corporation, partnerships, or unions. Other political action committees may not contribute or transfer more than $50,000 to a candidate's fund. With the exception of legislative leaders, candidates for office may not have more than one political action committee. Other committees that were not created to benefit a specific candidate or ballot initiative may not receive or contribute more than $20,000 in a calendar year or $10,000 per election cycle. All contribution cap measures will take effect on January 1, 2011, after the current election cycle.

The legislation creates contribution limits for legislative leaders during primary elections but failed to impose any contribution cap during the heavily-contested general elections that determine the partisan makeup of the General Assembly. During the primary election season, contribution limits include a $200,000 cap for statewide office, $125,000 limit for senate races, and a $75,000 cap for the House of Representatives. Similar cap levels apply for judicial races. Candidates for the Supreme or Appellate Court can receive a maximum of $125,000 in Cook County or $75,000 in other regions. All donations to circuit court candidates are capped at $50,000. In counties with more than 1 million residents (Cook), $125,000 caps are set for countywide offices with lower $75,000 limits for other county officials. Caps in smaller counties are set at $75,000 and $50,000 respectively for countywide or local races.

New reporting requirements demand that any contribution to a political action committee must be reported within 5 days of receipt and include the name, address, and occupation of the person making the contribution. Committees will also have to report their campaign finances on a quarterly rather than semi-annual basis.

This new measure passed the House on a partisan vote of 66 “YES” to 49 “NO” followed by a vote of 36 “YES” to 22 “NO” in the Senate. No super-majority was needed in passing this bill as there is no immediate effective date.

NO CHANGES YET TO LOBBYING REQUIREMENTS, FEES

New legislation limiting the reporting for lobbyists and reducing fees had been introduced in the Illinois House and Senate during the Fall Veto Session but to no avail. One particular measure, HB 5 (Franks, D-Woodstock) is currently on the House Floor awaiting possible action when the legislature convenes in January. The proposed bill changes some of the provisions of a newly enacted law regulating lobbyists’ activities but, at this time, retains the annual $1,000 fee for all registered lobbyists and their entities. This is a significant increase from the current $350 fee for trade associations, law firms, businesses, etc., and $150 for non-for-profits (501C(3s)). Other notable proposed changes to the new law include limiting lobbyists reporting to bi-monthly from the current weekly requirement beginning July 1, 2010, providing enough time for the Secretary of State’s office to administer these new provisions.

As it stands now, however, the following are the new changes that will take effect January 1, 2010:

Lobbyist Registration Act

Revolving Door Prohibition

Implements strict 1 year ban for certain officials and employees: Banned officials and employees are prohibited from accepting employment or compensation for 1 year from an entity if that entity was party to a state contract(s) or change orders worth $25,000 or more (cumulative) or was the subject of a regulatory or licensing decision involving the official's or employee's state agency.

Please note that the Chemical Industry Council of Illinois Legislator is not intended to convey legal advice or set forth all legal requirements applicable to particular circumstances.

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