BLAGOJEVICH’S BUDGET COLLAPSES

The Gross Receipts Tax (GRT) was the linchpin of Governor Blagojevich’s budget.  It has been said here many times that if the GRT fails, his entire budget collapses.  With last week’s vote on a House resolution calling for support of the GRT that didn’t receive a single “yes” vote, the GRT in its current form is all but in its grave.  As a result this means that Blagojevich’s budget, which was predicated on close to $8 billion in new revenue for universal health care, education and property tax relief, will have to be drastically altered. 

With the GRT now being pushed aside, discussion now focuses on other sources of revenue and to the budget itself.  There are numerous ideas floating around in Springfield at this time, including gaming expansions, income tax hikes, extending sales taxes to cover some services, a “no growth” budget that just spends current revenue growth, and an alternative minimum tax (AMT) on corporations, some based upon gross receipts that is likely a scaled down version of the GRT.  As these ideas are constantly in flux, changing by the day, it’s anyone’s guess at this time what will eventually be the outcome. 

This year’s Spring Legislative Session is scheduled to adjourn on May 31 but it’s very likely the legislature is looking at going into overtime.  Legislation with an immediate effective date passed after the May 31 deadline, i.e. the budget and the means to pay for it, requires a 3/5’s majority – 71 votes in the House and 36 votes in the Senate.  This may not matter much in the Senate, where the Democrats already have 37 votes but in the House the GOP would have to be part of any ultimate budget solution.

CICI will keep you informed on any developments.  Needless to say, we will adamantly oppose any expansions of government that is solely paid for by the state’s business community.

TRIAL LAWYERS ADVANCE THEIR AGENDA

Awards for Grief, Sorrow and Mental Suffering Goes to the Governor
This is a measure not quite as controversial as their deep pockets legislation (SB 1296) pushed by the Illinois Trial Lawyers Association but HB 1798 (Fritchey, D-Chicago) nonetheless went after the state’s business community with the aim of increasing award damages for grief, sorrow and mental suffering in wrongful death cases.  The legislation also originally added damages in cases where contributory negligence is a factor, redistributing any reduction of a contributory negligent party's damage award to dependents of the decedent. Under the current proposal, reductions based on contributory fault are not paid to anyone.  This particular language was removed at the request of the insurance industry, thus removing the insurance industry’s opposition. 

While the business community and civil justice reform advocates opposed this measure, the Senate advanced it to the governor this week with a vote of 31 “yes” and 23 “no”.

“Deep Pockets” Advances to House Floor
After having two Democrats replaced on the House’s Judiciary–Civil Law Committee, the Illinois Trial Lawyer’s Association (ITLA) were able to advance their most coveted piece of legislation, SB 1296 (Cullerton, D-Chicago), to the House Floor.  CICI and the state’s business community will continue opposing this measure as it awaits further action in the House. 

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. 

The goal of the current law is to provide 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.  The trial lawyers want this law changed in the name of more substantial jury awards.

The State’s Supreme Court is even scheduled to take up oral arguments in a case dealing with this topic on May 22. 

BILLS ADVANCING TO THE GOVERNOR

The following bills have all passed through the legislative process and are heading to the governor for further consideration.

Phosphorus in Detergents
This measure, HB 819 (Joyce, D-Chicago), was debated two years ago as the Metropolitan Water Reclamation District (MWRD) of Greater Chicago attempted to remove phosphorus in automatic dishwashing detergents.  An agreement between the MWRD and the detergent manufacturers produced this proposal which will reduce the amount of phosphorus in automatic dishwashing detergents from 0.8% to 0.5% by July 1, 2010.  The bill further prohibits home rule unit of local governments from regulating phosphorus in detergents. 

MWRD – Water Quality Projects
This proposal, HB 679 (McCarthy, D-Orland Park), changes the Metropolitan Water Reclamation District (MWRD) Act to establish that the term "construction purposes" includes water quality improvement projects and that they may issue bonds for the purpose of replacing, remodeling, completing, altering, constructing and enlarging water quality improvement projects. 

Electricity Reciprocity Agreements
This CICI-supported measure, HB 894 (Beiser, D-Alton), changes the 1997 electricity deregulation law to remove a provision requiring that, in order to grant a certificate of service authority, the Illinois Commerce Commission must find that an applicant, its corporate affiliates, or its principal source of electricity provides delivery services to the electric utility or utilities in whose service area or areas the transmission or distribution of electricity to end users will be offered that are reasonably comparable to those offered by the electric utility.   

This issue has long been debated in the courts since the 1997 deregulation law took effect.  It was put into statute at the behest of the International Brotherhood of Electrical Workers (IBEW), who wanted job protections, and the utility generators, who didn’t want the competition.  However, during the 10-year rate freeze period, generation in the state went from 60% to 90% capacity and utility generators no longer worried about other Alternative Retail Electric Suppliers (ARES) coming into the state and IBEW maintained their job protections, although some local union shops are divided on this issue.

If this measure is enacted into law, it would remove a huge barrier to competition for the electricity market in Illinois by encouraging more ARES’s, which, in turn, could mean better prices/rates for electricity.  CICI is encouraged by this bill and supported its passage.

Green Cleaning in Schools
This proposal, HB 895 (May, D-Highwood), creates the Green Cleaning Schools Act to require the Illinois Green Government Coordinating Council (IGGCC), in consultation with other agencies and interested stakeholders, including representatives of cleaning products, to establish guidelines and specifications for environmentally-sensitive cleaning and maintenance products for use in school facilities.  CICI and the Consumer Specialty Products Association (CSPA), originally opposed to the bill, worked with the sponsor of the measure to include various avenues for which these types of products can become certified with the concern for allowing the use of disinfectants, sanitizers, and anti-microbial agents. 

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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