GRT DOESN’T GET ONE “YES” VOTE IN HOUSE

Only a day after the House of Representatives took testimony from Governor Blagojevich, other constitutional officers, labor and business leaders, the House advanced a resolution, HR 402, sponsored by both House Speaker Michael Madigan (D-Chicago) and House GOP Leader Tom Cross (R-Oswego), to the Floor to finally put the idea of the Gross Receipts Tax (GRT) to a vote. 

The non-binding resolution simply asked for a “yes” vote in support of the GRT or a “no” vote to reject the GRT.  Not a single lawmaker voted for the idea of $7.6 billion tax increase, while 107 voted against it, and 7 voted “present”. Speaker Madigan called the GRT a regressive tax on business that would be passed through to consumers, many of which are the least able in our society to take on additional costs.

Just a few hours before the vote was taken, the governor made a surprise request of lawmakers to cast a “no” vote. Blagojevich stated that the House should reject the HR 402 as a signal that they think it's too soon to take a firm position on the tax, even though the legislature is less than 3 weeks away from its scheduled adjournment with no budget compromise in sight.  This request infuriated many members of both parties, calling it an attempt to put a positive spin on a clear-cut defeat for his plan.
 
After this resolution was defeated and shortly before the House adjourned for the weekend, Speaker Madigan announced a Democratic Caucus meeting for Tuesday where they would discuss another tax bill, possibly one that increases the income tax.  Other news reports have the Senate Democrats looking at alternatives as well. 

At this point, it appears the current GRT is dead.  CICI’s primary concern now is that the alternatives don’t lay the entire burden of Blagojevich’s overly generous plans on the shoulders of the business community.  CICI will keep you informed as to the outcome of the meetings’ discussions.

As noted earlier in the week, Governor Blagojevich again increased his Gross Receipts Tax (GRT) plan to a full 1% on manufacturers, mining, agriculture, retailers, construction and wholesalers and everyone else to 2% and advanced it out of the Senate Executive Committee on a vote of 7 “yes” and 6 “no”.  The current $2 million exemption in gross receipts was not increased but a small credit was added for business with 25 or fewer employees.  It’s still uncertain how much more money this revised proposal would generate over the previous estimate of $7.6 billion.
 
All of the committee’s Republicans and Democrat Senator Louis Viverito (D-Burbank) voted against the proposal.  While all of the other Democrats voted for the GRT, many stated that they felt it was a work in progress and it needed to be moved to the Senate Floor for the debate to continue. 
 
For the full text of the legislation as it now appears on the Floor of the Senate, follow this link and go to Senate Amendment number 1 and 2: http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=51&GA=95&DocTypeId=SB&DocNum=1&GAID=9&LegID=26955&SpecSess=&Session=

3% PAYROLL TAX PASSES SENATE COMMITTEE

Unless you have 10 or fewer employees, a 3% payroll tax will be levied on every employer in the state if SB 5 (Jones, E., D-Chicago) is enacted into law.  The measure also passed out of a Senate Committee this week with 7 “yes” and 3 “no” votes and awaits further action.  For the full text of the legislation as it now appears on the Floor of the Senate, follow this link and go to Senate Amendment 1: http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=51&GA=95&DocTypeId=SB&DocNum=5&GAID=9&LegID=27215&SpecSess=&Session=
  
The business community, regardless of an employer’s commitment to providing quality healthcare benefits to its employees, is being asked to front the expenses of a universal healthcare program. Over 200,000 Illinois employers will pay approximately $2.2 billion in payroll taxes.  However, if you already have a qualifying health insurance plan, and it’s deemed adequate by the state, you supposedly will get a refund of your 3%.  Again, there is no guarantee how long that will take, considering the state’s backlog of unpaid bills.  

Universal state sponsored healthcare will cost approximately $4 billion a year, with most of the money coming from the GRT if the GRT is ever enacted.

Call your State Senator now, but only if he or she is a Democrat as Senate Republicans are united against this.  It is absolutely imperative that you inform them how detrimental these tax schemes may be to your business, your industry and the state’s economic future and to secure a commitment to oppose these taxes.

If you do not know who your State Senator is, follow this link and enter your facilities address and contact them in their Springfield offices as soon as possible: http://www.elections.state.il.us/DistrictLocator/AddressSearch.aspx

“DEEP POCKETS” LEGISLATION GETS NEW LIFE

The Illinois Trial Lawyer’s Association (ITLA) have finally got a new House sponsor, Rep. Julie Hamos (D-Evanston), for their most anti-business piece of legislation, SB 1296 (Cullerton, D-Chicago). The bill has been assigned to the trial lawyer friendly confines of the House Judiciary-Civil Law Committee.  A hearing on this bill is expected next week. CICI is opposed to this legislation.

This measure would provide that the apportionment of fault under joint liability only applies to the parties still remaining in the case at the time that a final determination is made. There is only one purpose for this bill: to enable personal injury trial lawyers to collect money from the defendant with the deepest pocket in a personal injury case, without regard to which of multiple defendants might be most at fault.  The trial lawyers can settle with those with the least financial resources -- even if they are most at fault – and go after the defendant with the most financial resources, even if that defendant had little fault.

This bill will enable the plaintiff to manipulate the defendant’s liability by preventing the jury from considering the fault of parties with whom the plaintiff chose to settle or dismiss. By manipulating the calculation of fault, the plaintiff’s lawyer will be able to pursue deep pocket defendants and require them to pay more than their fair share of liability. 

Current law provides fairness by allowing a jury to determine which people were really at fault for causing an accident and to require minimally responsible parties to pay only their proportionate share of damages.

HOUSE EXTENDS PASSAGE DEADLINE FOR THE 3RD TIME

House Speaker Michael Madigan extended the deadline for all House bills for third time, now until Friday, May 18.  The sponsors will have until next Friday to try to advance their measures or the bills will presumably be sent back to the rules committee unless specifically extended for a fourth time.  The bills that CICI are currently working or monitoring that now have another session week to advance include:

Gas Tax Emption for Manufacturing
CICI never thought this bill would ever see the light of day but it passed the Senate unanimously this week and now heads to the House for further action.  This bill, SB 1697 (Jacobs, D-East Moline) amends the Gas Use Tax Law and Gas Revenue Tax Act to provide that the natural gas tax is not imposed with respect to any use by most manufacturers including chemical, petroleum, paint, fertilizer, plastic, and photographic manufacturing.

CICI will aggressively work for the bill’s passage in the House.

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.

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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