Welcome to the Chemical Industry of Illinois

CICI GENERAL MEMBERSHIP MEETING - MARCH 11

On March 11, CICI will be hosting a General Membership meeting to specifically focus on the potential shutdown of the Chicago locks and what we can do to stop the closure. Arguably the greatest threat to the long-term viability of many chemical facilities and storage terminals is the potential closure of access to Lake Michigan from the Chicago waterways.

It’s been estimated that over $17 billion worth (including $2 billion of chemicals) of product annually moves along the Chicago waterways. Many CICI members are located along the Chicago waterways, the Des Plaines and Illinois Rivers specifically because of barge access to the Great Lakes and Mississippi River.

At the meeting, we’ll have Bill Bolen of USEPA Region V who has a considerable authority on this issue as well as representatives from the US Coast Guard and American Waterways Operators (Barges) Association.

In addition, the meeting will also cover OSHA’s Global Harmonization Effort for labeling and classification of chemicals & OSHA’s National Emphasis Program; Overview of DHS’s new Personnel Surety Requirements; and Hidden Agendas: How Dubious Motives Can Lurk Behind Environmental Issues. There will also be an afternoon Legislative and Regulatory Affairs Committee meeting, which will cover many political, legislative, and regulatory issues the industry is facing.

For more information and to register, follow this link:

LAWMAKERS HEAR BUDGET WOES, CALLS FOR MORE REVENUE

If misery loves company, then Illinois’ budget problems have plenty of friends. The National Conference of State Legislatures (NCSL) delivered a report to a closed session of the State Senate this week revealing that most states across the nation are in just as bad a financial shape as Illinois. Illinois’ $13 billion hole is the second-largest in the country. Only California has a bigger budget deficit. But the NCSL report indicates that the same problems plaguing Illinois are troubling nearly 40 other states.

The report states there is simply not enough revenue from taxes coming into state coffers. Many would suggest that spending is out of control. The report blames poor budgeting and a poor economy but also that two-thirds of the U.S. economy is based on consumer spending, and the consumer has stopped spending significantly, to the point that it’s not just affecting state revenues but businesses as well.

Many lawmakers are split over whether a tax increase or steep budget cuts, or a combination of both, is the answer to this dilemma.

Governor Quinn will debut some of his budget proposals online next week. Legislators gave the governor an extension until March 10 to deliver his actual spending/budget plan for the next fiscal year.

CICI will have a detailed report of the state’s spending plan at that time.

Calls for Tax Increases

Meanwhile, about 2,000 people from mostly public labor unions and public interest groups rallied at the Capitol Wednesday to demand the state raise taxes instead of depending solely on budget cuts to solve Illinois' historic budget problems.

They called specifically for lawmakers to pass HB 174 (Miller, D-Chicago), calling for raising income taxes, applying sales taxes to many services and increasing tax exemptions.

Governor Quinn has been quoted as saying that the budget hole is simply too large to close through cuts. Quinn supports raising income taxes and has said he will try to pass an increase this spring. This job will be made even more difficult in an election year.

Some legislators in Springfield think a proposed change to the state’s constitutionally mandated flat tax, which is currently at 3% for individuals and 4.8% for corporations (not including the state’s 2.5% replacement tax) could help solve the state’s budget crisis.

A constitutional amendment to revoke the flat tax in order to give lawmakers the option of imposing a graduated tax system, which would impose higher tax rates on individuals earning more money, has been introduced and debated before but to no avail. Even if passed, the amendment would just get rid of the constitutional requirement for a flat tax. An amendment would require a three-fifths vote in both the House and the Senate before the question can even be placed on November’s ballot. Then lawmakers would have to craft a new tax structure in the spring of 2011 and implement it that summer.

CICI and the state’s business community and many in the General assembly would prefer officials assess the state’s spending habits before thinking about any permanent changes to the tax system.

Illinois Pensions in Last Place

And if the state’s budget problems and calls for higher taxes aren’t trouble enough, the Pew Center on the States released a report this week ranking states on pension funding, finding U.S. states have a collective funding gap of at least $1 trillion to provide the retirement benefits they have promised to public-sector employees. The Pew report listed Illinois in last place.

Illinois public pensions are in the worst actuarial shape, with only 54% of pension obligations funded. Illinois had set aside less than 1% of the funds it needs to provide the $40 billion in health care and other benefits for public retirees.

State and local governments will have to come up with the funding one way or another. The report suggested that states consider increasing the retirement age for new employees, trimming benefits to help their funds make ends meet and making employees pay more into the retirement system.

IEMA TIER I, II FILING FEES EMERGE

This measure, HB 5521 (Harris, D-Chicago) establishes fees, by administrative rule, for filing an inventory form. The bill also provides for the rules to establish procedures for collection, management, and disbursement of the fees and may include penalties for late filing of forms, though it may provide an exemption for state, county, and municipal entities, special districts, and other public bodies or political subdivisions that IEMA deems appropriate. The fees will be used for local emergency planning committees and for training initiatives authorized by the State Emergency Response Commission (SERC).

While CICI and many other groups will be opposed to the inclusion of establishing fees by rule, IEMA provided CICI with the following EPCRA Fee Proposal.

Charge each facility $100 (7393 facilities)

Charge an additional $100 per EHS Chemical*

Charge an additional $20 per non-EHS Chemical*

Proposed limits:

Create a “cap” of $2500 per facility and create a "cap" of $10,000 per owner/operator of multiple facilities.

Proposed Exemptions:

Facilities that voluntarily report (even though they are below the threshold). Municipalities, units of government, non-taxing bodies.

For small companies with just one chemical, the cost would be $120 per year (there are

approximately 1975 of these facilities). For facilities that have only one EHS Chemical and one regular (non-EHS) chemical on site, the cost would be $220 per year (there are approximately 1,17l of these facilities).

Note: This is preliminary and its purpose is to demonstrate how fees MAY be proposed if

IEMA's changes to EPCRA are passed into law.

*EHS stands for Extremely Hazardous Substance as determined by USEPA

POSSIBLE AGREEMENT ON LOBBYIST ACTIVITY, FEES

Due to a recent federal court decision in an ACLU lawsuit on the new lobbyist registration fees, indicating that the $1000 fee was an unconstitutional tax on the first amendment, and with the estimate from the Secretary of State’s (SOS) office as to the costs to run the program at $311 per lobbyist & entity, the following agreement is all but set to be included in a piece of legislation. Currently, there is no lobbyist registration or reporting due to a permanent restraining order in this case.

An amendment to the new law will be introduced that allows for the SOS to begin registering lobbyists and organizations at a registration fee of $300 all lobbyists and entities. For business lobbyists, this is a $700 savings from current law and a $50 savings from previous years’ fees. Reporting for 2010 will be at the twice a year schedule as done in previous years. Also, no money will be transferred to the general fund.

The SOS expects that it will take several months to develop the new reporting program that would allow for twice monthly reports while the legislature is in session and once a month otherwise. They will begin development of this program immediately with the plan to institute new reporting requirements in 2011.

The SOS will immediately appoint a panel to review the new law for inconsistencies, inappropriateness of requirements, reporting schedule, etc. with the purpose of make recommendations for a new lobbyist registration act to be passed and implemented in 2011 or 2012. This includes the possibility of adjusting the fees, up or down as necessary, to just cover the cost of program implementation.

COMMITTEE ACTION THIS WEEK

Dept. of Ag - Pesticide Fee Increases

The measure, HB 4866 (Reitz, D-Sparta), to increase the annual pesticide product registration fee from $200 to $300 made it out of the House Agriculture and Conservation Committee this week with the agreement that issues were still being discussed between CICI and the Department on possibly going to a 2-year registration with electronic filing.

The measure also increases or establishes other fees such as the annual experimental use permit fee, the special local need pesticide registration fee, the renewal fee for pesticide registrations, and the private pesticide applicator license fee. The bill also authorizes the Department of Agriculture to collect a public or commercial not-for-hire pesticide applicator license fee, a public or commercial not-for-hire pesticide operator license fee, and associated late fees.

The measure also requires certain agrichemical facilities to apply for an agrichemical facility containment permit and to pay a permit fee. It also requires a permit fee to be submitted with each permit application and each permit renewal application for those under the Lawn Care Products Application and Notice Act.

CICI will keep you abreast of any developments that occur.

Green Energy Financing

This proposal, SB 2505 (Frerichs, D-Champaign), provides that municipalities and counties may establish green energy special service areas and, if so, shall include only property for which each owner of record has executed a contract or agreement with the county or municipality consenting to the inclusion of the property within the green energy special service area. The bill provides that the owner of record of each parcel of property within a green energy special service area may arrange, through an agreement with the municipality or county, for specific energy efficiency improvements or renewable energy improvements and may obtain financing for such improvements through the process set forth in the ordinance establishing the special service area, generally property taxes. Further, counties and municipalities may levy property taxes in connection with green energy special service areas and may issue bonds in connection with those special service area projects and may sell, assign, or pledge those bonds to the Illinois Finance Authority.

This measure made it out of the Senate Revenue Committee this week and awaits further action on the Senate Floor.

Metro-East Area Floodplains

This bill, SB 2556 (Haine, D-Alton), concerns the problems associated with FEMA’s re-drawing of the floodplain maps in the Metro-East area of St. Louis. CICI is hearing reports that FEMA may be delaying this project for an unspecified amount of time but will have more details as they become available.

The legislation defines a "100-year floodplain" as the lowland and relatively flat areas adjoining inland and coastal waters, including flood-prone areas of offshore islands, that are inundated by a flood that has a 1% or greater chance of recurring in any given year or a flood of a magnitude equaled or exceeded once in 100 years on the average over a significantly long period. The bill also provides that areas that lie within an area protected by a levee or levees located in a flood prevention district established by the Flood Prevention District Act are deemed by operation of law not to be within the 100-year floodplain for the purposes of these Acts.

This measure made it out of the Senate Agriculture and Conservation Committee this week and awaits further action on the Senate Floor.

BRADY INVITED TO SPEAK AT CICI LEGISLATIVE DAY – APRIL 27

Mark your calendars and reserve your rooms. CICI will be holding its Annual Legislative/Regulatory Day in Springfield, Tuesday, April 27, 2010, at the President Abraham Lincoln Hotel, with an evening reception of legislators and key government officials at the Sangamo Club.

State Senator and GOP Candidate for Governor Bill Brady (R-Bloomington) has been invited to be the luncheon speaker this year.

This event is a great opportunity to mingle and get to know the key people in state government, like members of the Illinois General Assembly, Constitutional Officers, IEPA officials, the members of the Pollution Control Board, and other key government officials. At the 2009 reception, close to 200 legislators and government officials attended. Come thank those elected officials who are friends of the chemical industry.

The President Abraham Lincoln Hotel has a discounted block of rooms reserved for CICI. Reservations can be made by calling the hotel at 1-866-788-1860. CICI’s block of rooms will be available until Monday, April 5, 2010, so please make your reservations accordingly.

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.

Headquarters: 1400 E. TOUHY AVE., SUITE 110, DES PLAINES, IL 60018 · TEL :(847) 544-5995 · FAX :(847) 544-5999

Springfield: 400 W. MONROE, SUITE 205, SPRINGFIELD, IL 62704 · TEL :(217) 522-5805 · FAX :(217) 522-5815