The Senate Executive Committee unanimously approved Senate Amendment #5 to HB 824 yesterday, placing heavier restrictions on state contractors’ and potential state contractors’ ability to contribute to the governor’s campaign war chest. The legislation, as amended, specifically seeks to ban businesses and individuals with state contracts or bids for a state contract totaling more than $50,000 from making a political contribution to any candidate or incumbent that will decide what entities will get a contract with the state.

Senator Don Harmon and Representative John Fritchey announced last week that they had reached an agreement on an ethic proposal shortly before Senator Harmon introduced Senate Amendment #5. That agreement, however, has already been severely tested after Senate President Jones attempted to attach an amendment to HB 824 in committee that would have prohibited other statewide officials from receiving campaign contributions from those business entities, regardless of whether their office has any influence or bearing over the entity’s contract with the state.

Although President Jones ultimately backed off his amendment, his move indicates that road ahead for the new “pay to play” legislation may not be as smooth as Senator Harmon and Representative Fritchey appeared to suggest last week. Senator Harmon has already moved HB 824 to Senate Third Reading, stating he did not want to place the legislation at risk of any further hostile amendments. The President and members of his leadership, however, have pulled maneuvers in the past that could keep ethics reform locked in the Senate this session.

In the meantime, the Chamber has been working closely with the Senate and House sponsor to address some major concerns with the proposal, as it currently stands. While the Chamber supports the overall concept of restricting monetary influence over the state contract selection process that has run rampant within the current administration, the legislation currently penalizes businesses more than it does the candidates and officeholders that accept the illegal contributions. For a complete list of the Chamber’s concerns and recommended changes submitted to the bill’s sponsors, please click HERE.

The Chamber is currently working with legislative staff to draft an amendment that will, at the very least, define “contracts” so as to exempt Medicaid providers (cost-reimbursement contractors) and grants for job training and transportation purposes, as well as grants, loans and/or tax credit agreements for economic development projects. The suggested amendment will also attempt to streamline the registration requirements for affected business entities, seeking to remove public disclosure of minor and spouse information and reduce the current penalties on businesses for failure to comply with some of the more onerous requirements.

Although Senator Harmon has already expressed concern about moving the legislation back to 2nd Reading in order to attach additional amendments, he has indicated that the Chamber’s concerns could be addressed through trailer legislation. The Chamber will continue to work with the sponsors and staff to address these crucial changes.

Signs of Budget Battle Beginning to Emerge

With just three weeks left on the scheduled spring session calendar, any movement towards crafting a budget for Fiscal Year 2009, which begins in less than two months, has been virtually non-existent. This week, however, the House made the first move towards assembling a version of the Fiscal Year 2009 budget by releasing a flurry of agency appropriations shell bills that will most likely be amended to include various pieces of the budget for the upcoming fiscal year.

Unlike years past, the House has indicated that their version of a budget will not be included in one large bill, but rather, broken down into a series of bills divided by agency and in some cases, by program. Last year, the House and Senate passed their own competing versions of the Fiscal Year 2008 budget before finally “agreeing” to version of the budget weeks into the start of the current fiscal year. That budget, however, ultimately resulted in a blow-up of epic proportions between the House and Senate that has continued throughout this year.

While no specific Fiscal Year 2009 budget details have been released, the House Democrats have indicated that they may pursue a proposal that provides significant increases to social service programs, education, and other programs. The state’s current budget deficit, however, is creeping closer to the $1 billion mark and no agreement has emerged on a revenue source to provide significant funding boosts, much less to keep the state’s current funding levels afloat. Furthermore, while some of the legislative leaders and the Governor have met on a limited basis to discuss capital, they have not yet met to discuss the specifics of a Fiscal Year 2009 operational budget.

In the meantime, the House advanced two pieces of legislation this past week that would provide supplemental appropriations for the current fiscal year to various programs. HB 6339, sponsored by Representative Hoffman, seeks to provide slightly more than $20 million in supplemental funding to various Department of Transportation district offices to support the continued operation of maintenance vehicles. The House Appropriations-Public Safety Committee approved the bill unanimously and the bill currently awaits a final vote on House Third Reading.

The House Rules Committee also approved House Amendment #1 to HB 6334 to eliminate certain appropriations in the Fiscal Year 2008 budget in order to provide $220 million to help pay down the state’s growing Medicaid debts. The amendment has not yet been acted upon by the full House, but the next couple of weeks could prove highly contentious as months of political infighting could bubble over into a budget fight that may push another session into record overtime.

Senate Subcommittee Begins Hearings on Climate Change

The Senate Subcommittee on Global Warming and Energy Efficiency held the first of what could be a series of hearings throughout the summer on climate change legislation that emerged earlier in the session. Senator Don Harmon amended SB 2220 back in March to impose sweeping climate change mandates on businesses throughout the state. The legislation requires the state to reduce greenhouse gas emissions to the 1990 emission level by 2020, as well as impose mandatory greenhouse gas reporting, establish minimum efficiency standards for residential furnaces, establish an aggressive clean car fuel standard, create the “Clean Home-Grown Fuels Act,” and eliminate the exemption for residential buildings from the Code Repeals of the Kyoto Protocol Act of 1998.

The legislation, along with an identical bill in the House- HB 5234- were never pushed for a vote, but were placed into subcommittees to serve as the centerpieces of ongoing hearings on the issue over the next several months. Environmentalists have pushed hard this session to impose strict greenhouse gas regulations on numerous industries. The Chamber and other impacted business groups have consistently maintained that climate change is an issue better left to the federal government to craft uniform standards.

The House also heard from various experts on the issue of global warming this week. The Environmental Caucus hosted a panel of speakers on Thursday morning to discuss the issue from a scientific perspective. One of the speakers featured, Dr. Roy Spencer, a former NASA scientist and a now a principal research scientist for the University of Alabama at Huntsville, is known for his theories downplaying climate change as a man-made crisis.

Next Week’s Highlights:

Several Major Labor Issues Still Looming

The House and Senate are still sitting on several bills that could have a crippling effect on businesses in Illinois. As reported last week, the House amended HB 2094, reinstating the controversial Structural Work Act, to carve out architects, land surveyors, and structural engineers from third-party lawsuits authorized by the legislation. The House Judiciary I – Civil Law Committee issued partisan approval of the amendment last week, but the legislation has yet to come before the full House for a vote. The House had previously granted a Third Reading Deadline extension to all House bills through May 9th, but that deadline has now been extended through May 23rd.

The Senate is also poised to act on two bills affecting wages in Illinois, forcing Illinois businesses to yet again absorb higher costs. The first of these proposals, HB 773, proposes extending the Prevailing Wage Act to all projects in an enterprise zone or a TIF district. This means that projects that are 100% financed from private sources will be forced to pay prevailing wage. The original law only applies prevailing wage to public works projects.

Although HB 773 is currently only a shell bill, the sponsors have indicated that they will push an amendment that will mirror most of the provisions set forth in the underlying bill. The Chamber opposes this legislation and will continue to fight it in the Senate.

The Chamber is also working to stop another wage bill in the Senate- HB 5141- that seeks to increase a teen’s minimum wage to equal that of an adult. Under the current law, businesses are allowed to pay teenagers under the age of 18 fifty cents less than an adult earning minimum wage. The legislation cleared the House in April by a vote of 62-51-1 and has been scheduled for a hearing in the Senate Labor Committee on May 14th. If the bill becomes law, businesses will be required to pay both teens and adults $7.75 per hour beginning July 1, 2008.

Senate Committee Could Take Up PBM Legislation Next Week

The Illinois Pharmacists’ Association is once again pushing for legislation that would impose strict licensing and regulations on Pharmacy Benefit Managers (PBMs) in Illinois. Both the House and Senate have passed vehicle bills that have been reserved for this regulatory legislation, but ongoing negotiations between the pharmacists, the Departments of Insurance and Financial and Professional Regulation, PBMs, and business groups has resulted in little movement towards compromise.

Despite the lack of agreement between the parties, Senator Cullerton has indicated he will amend HB 5614 with language supported by the pharmacists and potentially call for a vote on the bill in the Senate Licensed Activities Committee next week. The committee is scheduled to meet on May 14th.

The Chamber joins a long list of groups, including WellPoint, the Illinois Retail Merchants Association, the Illinois Manufacturers Association, CVS/Caremark, Walgreens, Pharma, the City of Chicago, and other PBMs in opposing the pharmacists’ proposed language. The opponents of the legislation have attempted to make a good-faith effort to reach common ground on legislation that could address some of the pharmacists’ concerns, but negotiations have stalled due to lack of agreement. The proposal would impose tremendous administrative burdens on PBMs, ultimately translating into higher prescription drug costs.

Senate Bills Finally Scheduled for Hearings in the House

According to the House calendar, the last day Senate bills were to be called in House committees was today; however, the House has only recently posted some Senate bills for a hearing in House committees beginning next week. The House has further granted deadline extensions for hearing these Senate bills in committee through May 23rd. This deadline extension also applies to House and Senate bills on Third Reading.

The following is a quick overview of some of the Senate bills of Chamber-interest that are posted for a committee hearing next week:

House Environment and Energy Committee (May 13th):

SB 2052 (Haine/Beiser): Allows for the creation of a flood prevention district in Madison, Monroe, and St. Clair Counties for the purpose of securing financing to perform emergency levee repair. Chamber Position: Support

SB 2639 (Harmon/Hamos): Grants authority to IEPA to move certain rulemakings on a “fast track” basis, providing businesses less opportunity to impact the final regulations. Businesses originally supported limited fast-track authority, but has reversed that position due to the recent abuses of that authority by the Blagojevich administration. Chamber Position: Oppose.

SB 2640 (Harmon/Verschoore): Limits employers’ appeals of Clean Air Act permit decisions by the IEPA. Chamber Position: Oppose.

House Health Care Availability and Access (May 13th):

SB 2486 (Kotowski/Mathias): This is a Chamber initiative that authorizes health plans to provide incentives to enrollees to engage in programs that promote healthy behaviors. Chamber Position: Support

House Revenue Committee (May 15th):

SB 2015 (Clayborne/Turner): Creates the New Markets Development Program to provide a new state incentive that builds upon a successful federal program promoting investment in businesses in economically disadvantaged areas. Chamber Position: Support.

SB 2148 (Watson/Flider): Creates an income tax deduction for taxpayers who are individuals, corporations, or not-for-profit organizations for income, royalties, or receipts from patents for an invention resulting from a development process conducted in Illinois. Chamber Position: Support.

SB 2301 (Halvorson/Soto): Creates a new $200 per employee income tax credit for employers that establish qualified wellness promotion programs in the workplace. Chamber Position: Support.

Chamber Videos

Throughout the legislative session, the Illinois Chamber's Vice President of Government Affairs, Todd Maisch, will be interviewing legislators on pertinent issues facing the General Assembly. Also included are special presentations from legislative events.

Interview with Treasurer Alexi Giannoulias about the budget and Bright Start program.

May 9, 2008

Interview with Senator Dale Righter regarding redistricting and other Constitutional amendment. May 2, 2008

Highlights of Secretary of Indiana's Family and Social Services Administration Mitch Roob's presentation from the Chamber's Healthcare Reform Symposium. April 11, 2008

Interview with Representative Frank Mautino on pending healthcare reform. April 4, 2008

Interview with House Minority Leader Tom Cross regarding economic stimulus and the need for infrastructure investment.

March 14, 2008

Interview with Comptroller Dan Hynes on the fiscal health for Illinois. February 20, 2008