Bill Summaries

ERA goes down again THE ERA failed in the House June 25 on a 102-71 vote — five votes short of the three-fifths required. It was a stunning setback for the National Organization for Women (NOW), which had predicted that if ERA failed in Illinois in 1980 it would never pass "in this century" in the three states necessary for ratification. NOW is the leader of the pro-ERA lobby nationwide and had mounted the most intensive campaign yet in Illinois' eight-year history of considering the ERA: NOW president Eleanor Smeal personally led the campaign in Illinois against anti-ERA forces led by Alton's Phyllis Schlafley. The forces were poised for the roll call vote in May, but allegations of attempted bribery quashed all hopes for the pro-ERA forces. Legislative sponsors of ERA (House Joint Resolution/Constitutional Amendment 1), were led by Rep. John S. Matijevich (D., North Chicago). On June 25, Matijevich and Smeal thought they had the votes and decided to try again. But their early confidence faded as the tally showed they would fail again. NOW plans to try for ratification during the fall veto session, but chances are slim. NOW member Wanda Brandstetter must stand trial for attempted bribery; she was indicted by a Sangamon County grand jury in June for allegedly offering $1,000 to freshman legislator Rep. Nord Swanstrom (R., Pecatonica) for his vote.

Sales Tax

H.B. 276, sponsored by Rep. Clarence A. Darrow(D., Rock Island), would remove the second penny from the state sales tax on food and nonprescription medicine effective January 1, 1981 (would not affect the local one-cent tax). Presumably this is the bill Thompson will sign since it is identical to his proposal. Passed the House 159-1 April 9 and the Senate 43-14 June 25.

H.B. 2822, sponsored by Rep. Thaddeus S. Lechowicz (D., Chicago), would remove the second penny on food and the entire state tax (3¢) and local tax (1¢) on nonprescription drugs. And it would reimburse local government for the loss of the local tax revenue by increasing the local share of the state income tax from one-twelfth to one-eleventh. Passed the House 93-45 May 23 and Senate 40-16 June 26.

S.B. 1457, sponsored by George E. Sangmeister (D., Mokena), would categorically phase out the state and local sales tax on all medicines, meat, poultry, fish and dairy products on August 1, 1980. It would reinstate the full 5-cent tax on all other food and then phase out the entire tax on fresh vegetables, fresh fruits and baked goods on August 1, 1981; on August 1, 1982, the tax will go off all other food, except that bought in restaurants. It also provides for reimbursement to local government. Thompson probably will not approve this bill, but it would allow him some options via the amendatory veto. Passed the Senate 41-15 May 22 and the House 167-0 June 25.

Circuit Breaker

H.B. 3204, sponsored by Rep. Edmund E. Kornowicz (D., Chicago), would expand circuit breaker tax relief by increasing maximum qualifying income from $10,000 to $12,000 and by increasing the maximum grant from $650 (less 5% of income) to $700 (less 5%). Circuit breaker relief now applies, if property taxes or 30 percent of annual rent exceed 4 percent of annual income; H.B. 3204 would change the percentage to 3.5. It would also provide a new fuel grant to offset 75 percent of the increase in home fuel costs (as certified by the Illinois Commerce Commission), less 5 percent of income or $40, whichever is greater. Passed the House 137-19 May 21 and the Senate 44-9 June 25.

Homestead Exemption

The session's only surviving homestead exemption bill, H.B. 262, was tabled when it failed to receive conference committee approval by deadline. Sponsored by Rep. Daniel M. Pierce (D., Highland Park), it apparently did not pass because the legislature had increased the exemption in January from $1,500 to $3,000 (P.A. 81-1223).

Income Tax

Major action centered on allowing income tax exemptions for interest earned in savings accounts in banks, savings and loans, and credit unions:

H.B. 2847, sponsored by Rep. Roman J. Kosinski (D., Chicago) would cap the exemption at $1,000, effective January 1, 1981. Passed the House 123-13 April 22 and the Senate 43-12 June 25.

H.B. 2860, sponsored by Rep. Ralph C. Capparelli (D., Chicago), would apply only to senior citizens, and it would set a $1,500 limit, effective January 1, 1981. Passed the House 105-37 May 7 and the Senate 32-10 June 25.

H.B. 2892, sponsored by Rep. Mary Lou Sumner (R., Wyoming), would exempt all income earned by investments up to $5,000 annually, effective January 1, 1981. Passed the House 107-35 May 7 and the Senate 32-11 June 25.

S.B. 1239, an income tax deduction bill sponsored by Sen. John D'Arco (D., Chicago), would allow renters to deduct up to 30 percent of rent from gross income before taxes. Passed the Senate 32-21 May 22, 1979, but did not pass in the House; reconsidered this session, passing the House 101-46 April 24.

Farmland Assessment

H.B. 3173, sponsored by Rep. Larry R. Stuffle (D., Charleston), would limit the increase in 1980 farmland assessments to 8 percent over 1979 assessments. Passed the House 146-11 May 22 and the Senate 41-17 June 25.

Ag Sales Exemption

H.B. 2921, sponsored by Rep. Bruce Richmond (D., Murphysboro), would phase out the state sales tax on new or used farm machinery costing $1,000 or more, and on repair or replacement parts, costing $1,000 or more. Half the tax would go off September 1, 1980, and the remainder September 1, 1981. Passed the House 133-17 May 7 and the Senate 52-1 June 25. Designed as an incentive, it is similar to the exemption granted two years ago for manufacturing equipment.

Gasohol Sales Exemption

S.B. 1518, sponsored by Sen. Max E. Coffey (R., Charleston), would exempt gasohol from the four cents per gallon state sales tax, effective immediately, until July 1, 1982, when gasohol will be taxed 1 percent on sales not per gallon; with another percentage point added each year until gasohol sales are taxed at 4 percent. All other gasoline sales are taxed per gallon, although this may be a prelude to switching the Motor Fuel Tax to a percentage of the price rather than a tax per gallon. Passed the Senate 53-4 May 21 and the House 114-35 June 24.

Corporate Personal Property Tax Replacement

H.B. 3140, sponsored by Pierce, would channel collections from the income tax surtax and the other taxes which replaced the corporate personal property tax, into the Personal Property Tax Replacement Fund, effective July 1, 1980. All the funds are earmarked for distribution to local governments and school districts. The bookkeeping switch would prevent artificial increases in the state general revenue funds. The bill would also allow distribution to local governments in eight instead of four payments each year, effective January 1, 1981. Passed the House 157-0 May 20 and the Senate 57-0 June 25; signed into law by governor: P.A. 81-1255.

Inheritance Tax

S.B. 1497, sponsored by Sen. Karl Berning (R., Deerfield), is patterned after federal law, giving inheritors two payment options for the tax — 10 equal installments, or if the taxes represent a high percentage of the estate, a five-year deferral followed by 10 equal payments. It also increases the local government share of the tax by 1 percent, effective January 1, 1981. Berning's bill is designed to protect small family farms and those owned by closely held corporations. Passed the Senate unanimously, 55-0, June 21 and the House 150-9 June 25.

August 1980/Illinois Issues/33