HOUSE OF REPRESENTATIVES TO DISCUSS GRT

A rare House Committee of the Whole hearing will convene this Wednesday to take up the issue of Governor Blagojevich’s Gross Receipts Tax (GRT).  This committee is comprised of every House member and will meet on the House Floor.  This hearing is expected to take up the entire session day with testimony coming from the governor’s office, other constitutional office holders, proponents and opponents of the GRT.  The hearing begins at @ 9:00 am and will be televised though this link: http://www.ilga.gov/house/audvid.asp.

The animosity at the statehouse over the GRT boiled over onto the House Floor last week as House Republicans called for a debate on House Resolution 344, sponsored by House Republican Leader Tom Cross (Oswego) and over 60 other members that would officially oppose the GRT.  Even though this resolution is stalled in the House Rules Committee and will likely never be sent to a regular committee, it did not stop several members of the House – both Democrats and Republicans – from lambasting the governor’s proposal in an hour long debate, with even some “not-so-friendly-to-business-interests” Democrats calling on Governor Blagojevich to drop the idea of a GRT and negotiate an alternative.

And speaking of alternatives, the Civic Federation, an influential group of Chicago-area business leaders, has released a report today rejecting the GRT as a way to pay for the Governor’s budget plan, saying state income taxes - both personal and corporate - should be increased instead.  The Civic Federation is suggesting to lawmakers that they raise the state income tax from the current 3 percent to 4 percent for individuals, and from 4.8 percent to 6.4 percent for businesses.  The report also suggests that the governor’s current budget is unrealistic in terms of the state’s ability to meet its current outstanding obligations let alone provide billions more for healthcare, education, pensions, etc.

All of this is occurring at a time when weekend news reports are detailing a little known consequence of the GRT.  Blagojevich argues that businesses don’t pay their fair share of taxes and that the GRT is just a way to level that playing field.  However, the GRT could actually cut taxes for at least a few of the most profitable corporations in Illinois, including the Chicago Mercantile Exchange, the Chicago Board of Trade and a number of other highly profitable businesses that were not listed in these news reports.  For most businesses, the gross-receipts tax would effectively replace the existing corporate income tax.  Businesses with high pretax profit such as the aforementioned exchanges would benefit because the new tax, while levied on revenue rather than income, is set at a lower rate than the income tax.  

TESTIMONY TAKEN ON GLOBAL WARMING

The House Environmental Health Committee met last week to discuss the issue of global warming and current efforts in Illinois and across the country to reduce greenhouse gas emissions (GHG).  The Pew Center on Global Climate Change gave a power point presentation that overviewed various state policies concerning climate change. Governor Blagojevich’s Climate Change Advisory Group was also on hand to discuss their efforts.  This advisory group recently set a statewide target for reducing emissions to 1990 levels by 2020 and a further 60% reduction below 1990 levels by 2050.  The advisory group aims to produce recommendations by this July and is considering @25 measures, including setting caps on GHGs, setting new standards for cars and motor vehicle fuels, setting renewable energy and energy efficiency standards, setting carbon standards for electricity generation, and promoting smart growth and transit options.  Some of these measures have been introduced in bill form this year in the General Assembly and some, like the residential energy efficient building code to compliment the current commercial code (HB 1842, Hamos, D-Evanston) and renewable energy standards (SB 1184, Harmon, D-Oak Park) are still alive in the process.        

HOUSE EXTENDS PASSAGE DEADLINE AGAIN

While the deadline for passage of House Bills was originally Friday, April 27th, House Speaker Michael Madigan extended the deadline for all House bills for a second time, now until May 10.  The sponsors will have until this Thursday to try to advance their measures or the bills will presumably be sent back to the rules committee unless specifically extended for a third time.  The bills that CICI are currently working or monitoring that now have another session week to advance include:

Flame Retardant Ban
This bill, HB 1421 (Nekritz, D-Northbrook), would ban decaBDE, the most widely used of the brominated flame retardants, in mattresses, mattress pads, articles of furniture, televisions, computers, or other electronic devices. 

This product is widely regarded as safe by many health agencies around the globe and is a proven flame retardant that has been a component of diminished fire, injury, and casualty statistics around the country, saving the lives of those most vulnerable – children, the elderly, and, of course, firefighters.  CICI is aggressively fighting this junk science and fear mongering proposal along with many other business groups on the House Floor. 

While only a few of our members manufacture the flame retardant, its ban would have serious repercussions for the entire chemical industry.  No state or any jurisdiction in the country has outright banned this product in the applications where it’s currently being used and no one can show that anyone has ever been harmed in anyway by this product.  If Illinois can ban this safe and widely used flame retardant from existence, it can probably ban any chemical.  Your products could be next.       

Coal Gasification 
This measure, HB 1431 (Hannig, D-Gillespie), extends to July 1, 2015, rather than July 1, 2008, the date by which a gas utility other than a gas utility located in Jefferson County must have received all necessary permits for the construction and operation, currently must have commenced construction, of a coal gasification facility in order for provisions authorizing the utility to enter into a 20-year supply contract with a company for synthetic natural gas produced from coal through the gasification process. The bill also changes the language of the current law to provide that price restrictions in a supply contract must be at a specified amount at the time the contract is signed, instead of at the time the contract term commences. The bill also makes changes to the method by which it is determined that the cost for synthetic natural gas under such a contract is reasonable and prudent and recoverable through the purchased gas adjustment clause except for a gas utility located in Jefferson County and further provides that a utility located in Jefferson County shall be limited to selling 50% of its output of natural gas.  This bill is on the House Floor awaiting further consideration.

HOUSE FLOOR ACTION

Renewable Fuels
This piece of legislation, HB 2106 (Demuzio, D-Carlinville) is an initiative of the Illinois Farm Bureau and other agricultural interests in the state.  The bill makes several changes to the state’s renewable fuels development program.  First, it increases eligible grant amounts for renewable fuels facilities.  Secondly, the bill provides financial assistance to local governments and gas stations to install the necessary infrastructure for the use of majority blended ethanol.  The bill further establishes the Renewable Fuels Competitive Commercialization and Grant Program that will study and possibly fund ways to make the state’s renewable fuels industry more competitive and will specifically look at ways to increase vehicle mileage and reduce water usage.  Lastly, the bill sets out a program to assist in the construction and installation of railroad sidetracks and turnouts to more efficiently deliver raw materials and finished products for the industry.

This bill has been in negotiations for quite some time and came to fruition when the House amended this language onto a shell bill and easily passed it out of the House unanimously last week.  The bill now awaits further action in the Senate.     

Trucking Fee – Biodiesel Use
This proposal, HB 3667 (Moffitt, R-Galesburg), provides that, beginning January 1, 2008 and through December 31, 2013, the owner of a vehicle for which biodiesel has been purchased during the previous registration year is entitled to a reduction of the commercial distribution fee for that vehicle and sets forth the amount of the reduction based upon the amount of biodiesel purchased. 

This fee was established as part of Governor Blagojevich’s first budget in which many new and increased taxes and fees were enacted.  This bill passed the House with 114 “yes” votes and 2 ”no” votes and now awaits further action in the Senate.    

Expedited Permits for Oil Refineries
This measure, HB 3671 (Meyer, R-Bolingbrook) requires a rulemaking processes of the Department of Natural Resources, the Department of Transportation, the State Fire Marshal, the Pollution Control Board, and the Environmental Protection Agency include a process for expediting the issuance of permits and licenses for oil refineries.  Applicants must request the use of the expedited process and pay for any additional costs.  This bill made it out of the House last week with 90 ”yes” votes and 26 “no” votes and awaits further action in the Senate. 

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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