Thursday, June 26, 2014

Legislative inaction threatens some corporate tax breaks

By Caitlin Rydinsky

After lawmakers were unable to agree on changes to the state’s business tax policies, some Illinois companies could lose a sales tax break set to expire this summer.

The Manufacturer’s Purchase Credit is a tax incentive that businesses can receive when they purchase equipment from companies within the state and use that equipment in Illinois. This benefit is set to expire in August. A rollback would impact about 500 businesses. According to expenditure reports from the Illinois comptroller’s office, the state spent almost $35,000 on the credit in fiscal year 2013. Mark Denzler, president and chief operating officer of the Illinois Manufacturers' Association, said that the expiration could result in employee layoffs and increased prices for some goods.

Lawmakers on a special House committee have been evaluating business tax breaks in the state. But, so far, they have been unable to come to an agreement on what should be done. The spring session ended without the legislature sending a business tax plan to Gov. Pat Quinn’s desk. Speaker Michael Madigan introduced legislation in the last days of session that would have extended the manufacturer’s purchase credit for six months. The plan also would have changed the high profile Economic and Development for a Growing Economy credit. The House passed the bill on the last day of spring session, but it was not brought up for a vote in the Senate. Democratic senators who sponsor the legislation said that they wanted to have more time to consider it.

“We are going to continue to work on things. The reaction is that this is something that needs to be reworked,” Madigan’s spokesman Steve Brown said. Lawmakers are expected to revisit the issue during the fall veto session. If they cannot reach consensus, the state’s Research and Development Tax Credit could be the next casualty. It is set to expire next year.

Arlington Heights Republican Rep. David Harris, who is on the committee, said that he thinks legislators will vote on the manufacturing credit during the veto session. But he said that other issues, such as the EDGE credit, the Franchise Tax and the Research and Development Tax Credit, would likely fall on the next General Assembly to address. Members of the next General Assembly are scheduled to be sworn into office in January.

Denzler is optimistic that legislators will restore the manufacturing credit in the veto session. But he said that their inability to reach agreement on many of the policies considered by the committee creates an unstable situation for businesses. “It just kind of continues the path of uncertainty and unpredictability.”

Tuesday, June 10, 2014

Rep. Derrick Smith convicted on corruption charges

Chicago Democratic Rep. Derrick Smith was convicted of accepting a bribe in exchange for official duties.

Smith was caught on tape as part of a federal sting negotiating a $7,000 bribe in exchange for writing a letter of recommendation for a day care center he believed was seeking a $50,000 state grant. The day care center was not actually seeking the grant — instead federal prosecutors used an informant who had been a campaign worker for Smith to broker the deal and deliver the bribe money. Perhaps some of the most damning evidence against Smith was an audio recording of him counting the cash.

Smith was found guilty on one count of bribery and one count of extortion. Both are felonies.

Smith’s lawyers argued that he was not seeking to commit a crime and would not have taken a bribe if the federal informant had not continued to push him in that direction. According to court documents, the informant discussed the bribe with Smith for three months before moving forward with it. “We gave it a good fight,” Smith told reporters after the verdict was handed down. “It’s God’s will. God knows the truth about it all. The jurors just didn’t see what God saw.” Prosecutors say they received information that Smith would be willing to take bribes and argue that it would have been negligent for them not to investigate the claims.

After Smith was arrested in 2012, the House voted to expel him. But he was re-elected and returned to his seat in 2013. Smith, who was defeated in the Democratic primary this year, automatically loses his seat due to the convictions.

Monday, June 09, 2014

Illinois bans plastic microbeads

By Caitlin Rydinsky 

Illinois is the first state in the nation to ban potentially hazardous plastic beads from common hygiene products.

Gov. Pat Quinn signed Senate Bill 2727 into law over the weekend. The law would phase out the small plastic beads that are used in some exfoliating body scrubs and whitening toothpastes. Manufacturers will have to stop including the beads in products by 2017, and stores can no longer sell products with them after 2018. The use of the beads in prescription medicines, such as toothpastes or acne washes, will be eliminated in 2019. Consumers can identify products containing the plastic pieces by checking for polyethylene or polypropylene in the ingredients list.

The plastic pieces are designed to roll down the drain easily after use. However, the beads, which are about the size of a grain of salt, are too small to be caught by water filtration systems. So, they end up in bodies of water. “Banning microbeads will help ensure clean waters across Illinois and set an example for our nation to follow,” Governor Quinn said in a prepared statement. “Lake Michigan and the many rivers and lakes across our state are among our most important natural resources. We must do everything necessary to safeguard them.”

The issue was brought to the attention of lawmakers after a study of the Great Lakes performed by environmental groups found the plastic beads polluting the water. The study found twice the beads in Lake Erie samples than in some parts of the ocean. Fish are eating the beads, which are brightly colored and small enough to be mistaken as microbes. The other remaining plastic pieces end up floating on top of the water or sinking to the floor after they absorb pollutants within the water. Once the plastic pieces are in the water, it is too difficult to eliminate them all because of their small size.

Big names in the personal hygiene industry, such as Johnson & Johnson and Unilevar, have already acknowledged the dangers of the beads and support replacing them with more natural items, such as ground nut shells, salt, rice, sugar, or silica. Backers of the ban say it is needed to ensure that the companies follow through and to cover any producers that have not signed on to phasing out the beads.

“Lake Michigan is a critically important natural resource for our state, and its health affects recreation, tourism and the flourishing of aquatic plant and animal species,” Sen. Heather Steans, who sponsored the bill, said in a written statement. “I’m proud that Illinois is an environmental leader, taking the first step away from plastic microbeads toward natural exfoliates, and I’m optimistic that we’ve started a nationwide movement to protect not just the Great Lakes, but other bodies of water with high concentrations of microbeads.”

New York and California have similar legislation waiting to be signed into law and other states surrounding the Great Lakes, such as Wisconsin, Ohio, Minnesota and Michigan have introduced bills that would eliminate the products from their states.

Tuesday, June 03, 2014

End-of-session roundup

By Jamey Dunn

The fast pace of the end of the regular legislative session can make things kind of a blur, and much of the focus tends to fall on the budget. But lawmakers considered several other issues in the final days of May.

What passed 
Voters could be asked several questions on the November ballot. In addition to two constitutional amendments approved by lawmakers—and potentially two amendments proposed through citizen initiatives—three advisory referendum questions might also be presented to voters. The questions are not legally binding and only gauge voters’ opinions on policy. (For more on the proposed constitutional amendments, see this month's Illinois Issues.)

House Bill 3816 calls for an advisory question on whether personal income over $1 million should be taxed an additional 3 percent to raise money for schools.

HB 5755 calls for a question asking voters whether insurance plans that cover prescriptions should be required to cover prescription birth control. The requirement has been state law since 2004, but supporters say they want voters to weigh in because the contraception coverage provisions in the Affordable Care Act are currently being challenged in court.

HB 3814 would seek input from voters on the state’s minimum wage. The measure contains a ballot question that asks if the minimum wage should be increased from the current $8.25 per hour to $10 per hour by 2015.

HB 0008 would create protections for expectant mothers in the workplace. The legislation would require employers to make “reasonable accommodations” so women can stay on the job while pregnant without threatening their safety or the safety of their unborn children. Gov. Pat Quinn supports the bill and is expected to sign it into law.

SB 2187 would allow psychologists to prescribe medication when working collaboratively with a doctor. The legislation would require that psychologists apply for a special license to be allowed to prescribe medication.

HB 0105 would make sweeping changes to election rules in Illinois. It would extend in-person early voting hours and remove the requirement that early voters present identification. Voters would also be allowed to register on election day. The legislation would also allow in-person absentee voting on college campuses on election day. Quinn has said he plans to sign the bill.

SB 0352 would allow the state to collect sales taxes from online businesses, such as Groupon, that sell promotional deals and coupons. The move comes after the Illinois Supreme Court struck down the state’s attempt to tax online retailers, such as Amazon, through their connections with Internet marketers based in Illinois.

SB2352 would create an independent ombudsman to oversee the Illinois Department of Juvenile Justice. The department has entered into a legal consent decree that requires it to improve education, mental health treatment and safety for detainees. Experts who created recommendations for the department found that juvenile detention centers were not offering the education required by law and lacked adequate mental health staffing. Fifteen percent of youth in the state’s system reported, as part of a Justice Department survey, that they had been sexually assaulted by other inmates or staff.

What failed
SB 0649 would have cut the Department of Natural Resources out of setting the rules for fracking in the state, but the bill lacked the votes needed to pass. Supporters said that IDNR is taking too long to set the rules for the controversial method of extracting oil and natural gas. Opponents argued that the department needs time to ensure that the rules protect the water supply and Illinois residents.

SB 2694 The Senate voted to reject changes made in the House to a bill that was geared toward protecting adults from online revenge. The proposal would have made it a felony to post online sexual images without the permission of the subject of the photo or video. The lead sponsors from each chamber could not agree on the final language so the legislation fizzled out on the last day of session. According to the National Conference of State Legislatures, eight states have so-called revenge porn laws. Anti-stalking laws in some other states also cover such scenarios.

HB 3836 would have broken the Abraham Lincoln Presidential Library and Museum away from the Illinois Historic Preservation Agency. Under the plan, the Springfield-based museum and library would have become its own state agency. The House approved the bill, but the Senate did not vote on it.

SB 0016 would have changed the way the state gives money to schools. The legislation calls for more of state funding to be distributed based on local need. The Senate approved the plan, but the House did not take it up for a vote.