Legislative Action
By DIANE ROSS

What hath Thompson wrought?

THE LEGISLATURE proposeth; the governor disposeth — or is it the other way around? Statistically, that means the Illinois General Assembly sent about 300 bills to Gov. James R. Thompson, typical for an off-year session ostensibly set aside for appropriations. About 100 were appropriation bills; about 200 were so-called "substantive" bills. Of the substantive bills, Thompson has signed 160, vetoed 25 and amendatorily vetoed 22. That's typical for Thompson.

The 1980 session must have been a disappointment of sorts for the governor. Thompson has pined for programs of the "concrete achievement" caliber. But faced with a less-than-sure financial situation once again this year, he responsibly sought only modest initiatives. These included legislation to reduce infant mortality, improve care for the mentally ill, convert state facilities to the use of Illinois coal where feasible, install accident warning systems at nuclear power plants and preserve farmland.

The legislature accommodated him on most of these initiatives. But it was bills on traditional problems which attracted the most attention and headed the list the General Assembly sent to the governor this year. These included such familiar subjects as: tax relief, worker's compensation, unemployment insurance, teacher pensions, arson, state aid to schools, renegotiable mortgages, hazardous waste, state-purchased health care, emergency medical services and habitual criminals.

So much for what Thompson wanted. What he needed more than anything else was tax relief — to help Republicans gain control of the General Assembly in this year's crucial election. Thompson proposed to remove the second penny from the state sales tax on food and nonprescription drugs, expand the circuit breaker, limit property taxes by tying them to personal income and pay income taxpayers a one-time dividend of $10 per dependent. The Democrats gave him plenty of sales tax bills and a single circuit breaker expansion bill tied to a new fuel grant. But they refused to limit property taxes and ignored the dividend, which Thompson quietly dropped in the face of proposed federal budget cuts.

What hath Thompson wrought? An overview of the governor's action on about 50 of the most significant substantive bills to reach his desk follows. Thompson's vetoes and amendatory vetoes, of course, face possible override in the General Assembly's fall veto session in November (see "The state of the State," p. 2). Vetoed bills become law only if the legislature overrides the governor. Amendatorily vetoed bills become law in their original form if the legislature overrides and in their amended form if the legislature concurs. If no action is taken on vetoes or amendatory vetoes, the bills die.

Taxes
Sales tax

Predictably, Thompson signed H.B. 276 (P.A. 81-1378), sponsored by Rep. Clarence A. Darrow (D., Rock Island). This removes the second penny of the state sales tax on food and nonprescription drugs effective January 1, 1981, but does not affect the local one-cent sales tax.

Signing H.B. 276 meant vetoing two bills which would have gone further: H.B. 2822, sponsored by Rep. Thaddeus Lechowicz (D., Chicago), to remove the entire state and local tax on drugs as well as the second penny on food, and S.B. 1457, sponsored by Sen. George E. Sangmeister (D., Mokena), to eliminate the entire state and local tax on both food and drugs by August 1, 1982.

Circuit breaker

As expected, Thompson amendatorily vetoed the sole circuit breaker bill, H.B. 3204, sponsored by Rep. Edmund E. Kornowicz (D., Chicago), to provide costly new fuel grants as well as expanded tax relief. Thompson accepted provisions effective January 1, 1981, which expand relief by (1) reducing the qualifying amount by which property taxes or 30 percent of rent must exceed income; (2) increasing qualifying income from $10,000 to $12,000; (3) increasing the maximum grant from $650 less 5 percent of income to $700 less 5 percent. But Thompson rejected provisions for new fuel grants to offset 75 percent of the annual increase in home fuel costs. Thompson said the grants would be duplicative and "would interject the state into the national energy policy area, a clear federal responsibility."

Homestead exemption

Thompson signed H.B. 2967 (P.A. 81-1446), sponsored by Rep. Samuel M. McGrew (D., Oneida), which expands benefits to taxpayers who lease their residences and pay taxes under the lease but do not own the land on which the residences stand.

Farm taxes

Thompson signed two bills designed to give tax relief to farmers. H.B. 3173 (P.A. 81-1389), sponsored by Rep. Larry R. Stuffle (D., Charleston), limits the increase in 1980 farmland assessments to 8 percent over 1979. However, Thompson warned farmers that the assessment limit will provide minimal relief because districts with their taxes at below maximum rates "will simply raise the rates to produce revenues lost. ..."

H.B. 2921 (P.A. 81-1379), sponsored by Rep. Bruce Richmond (D., Murphysboro), phases out the four cents state sales tax on new or used farm machinery costing $1,000 or more and on replacement parts costing $1,000 or more. Half the tax was eliminated September 1, and the remainder will be phased out September 1, 1981.

Income tax

The governor vetoed all four major income tax proposals to reach his desk, calling them "financially reckless" in the face of the mounting cost of sales tax and circuit breaker tax relief.

H.B. 2847, sponsored by Rep. Roman J. Kosinski (D., Chicago), H.B. 2860, sponsored by Rep. Ralph C. Capparelli (D., Chicago), and H.B. 2892, sponsored by Rep. Mary Lou Sumner (R., Wyoming), propose to exempt interest earned in savings in banks, savings and loans, and credit unions. Thompson said these tax relief measures were "misdirected to the wealthy."

The fourth bill, S.B. 1239, sponsored by Sen. John A. D'Arco Jr. (D., Chicago), proposes a tax break for renters. It would allow a deduction equal to 30 percent of rent from gross income before taxes.

Business taxes

Thompson vetoed H.B. 2723, sponsored by Rep. Lee A. Daniels (R., Elmhurst), which would have provided an investment tax credit against the income tax. The phased-in credit would apply to taxable property used four years or more in manufacturing, agriculture or retailing. Thompson said the bill does not require the investment to result in new jobs; it duplicates sales tax relief which already exempts manufacturing machinery and would mean a "sizeable" loss in revenue to state and local government.

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Legislative Action

Corporate personal property tax replacement

Thompson signed H.B. 3140 (P.A. 81-1255), sponsored by Rep. Daniel M. Pierce (D., Highland Park), which channels collections from the income tax surtax and other taxes which make up the corporate personal property replacement tax into the Personal Property Tax Replacement Fund rather than the general revenue funds. The bookkeeping switch, which became effective July 1, speeds payments to local government and prevents artificial inflation of the general funds balance.

Inheritance tax

Thompson signed S.B. 1497 (P.A. 81-1368), sponsored by Sen. Karl Berning (R., Deerfield). It allows heirs of small, family-owned farms or businesses to defer payments for five years and then to make them in 10 annual installments at 6 percent interest. The law takes effect with estates settled after December 30, 1980.

Gasohol tax

The major gasohol bills this session centered on tax exemptions. In an unusually lengthy explanation, Thompson said he "reluctantly" vetoed S.B. 1518, sponsored by Sen. Max E. Coffey (R., Charleston) to exempt gasohol from the four-cents-per-gallon sales tax for two years. Thompson said the tax exemption would merely encourage increased gasohol use "which is not in fact an efficient use of resources at the moment.

Business/Labor
Worker's comp

Considered by business to be the first step in reforming Illinois worker's compensation law, H.B. 3250 (P.A. 81-1482), sponsored by Rep. Bernard T. Donovan (D., Decatur), was clearly the most significant business/labor bill the General Assembly sent Thompson this year (see "Legislative Action," September, p. 25 and October, p. 28).

Unemployment insurance

In another important action, Thompson signed H.B. 2824 (P.A. 81-1477), sponsored by Lechowicz, which tightens eligibility for unemployment insurance (UI). And he amendatorily vetoed S.B. 1726, a similar bipartisan bill, sponsored by Sen. James H. Donnewald (D., Breese), so that it conforms to the House version.

Business seems to be satisfied that the 1980 UI changes, coupled with the 1979 reforms, have brought the UI aspect of Illinois' business climate back into line with that of other midwestern industrial states.

Under the new UI law, workers who voluntarily quit their jobs (without good cause attributable to the employer) are ineligible for benefits for 12 weeks. The key provision of the law defines "good cause" for the first time. "Good cause" for quitting a job includes: (1) personal or family illness; (2) taking a new job which lasts two weeks or until the wages are twice what UI benefits would have been; (3) avoiding "bumping" another worker with less seniority; (4) avoiding sexual harrassment known to management; (5) avoiding an unsuitable new job — such as strikebreaking.

Other major provisions in the new UI law set UI benefits at not more than 50 percent of the worker's prior average weekly wage but not less than 15 percent of the statewide average weekly wage. And they shift the cost of unemployment insurance from the first employer to the second when a worker quits a second job — provided the worker stays at the second job long enough to earn six times what his weekly UI benefits would have been.

Chrysler loan

Thompson signed the controversial "Chrysler bail-out bill," H.B. 2955 (P.A. 81-1486), sponsored by Rep. E. J. Giorgi (D., Rockford). The new law allows Chrysler Corporation to qualify for a $20 million state loan, but does not guarantee Chrysler will get the loan. It also makes similar loans possible for other ailing firms in Illinois. The loans would be financed by revenue from the state lottery. To qualify, the firm must (1) be eligible for a federal loan guarantee; (2) agree not to reduce its permanent work force by

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more than 40 percent until the loan is repaid; (3) secure the loan with real property used in Illinois, and (4) repay the loan within 10 years.

Public employees
Teachers' pensions

Thompson amendatorily vetoed the only important pension bill to reach his desk. H.B. 1009, sponsored by Rep. Fred J. Schraeder (D., Peoria), would provide an alternative bonus plan to increase post-retirement benefits for teachers. Under the key provision, all teachers (Chicago, downstate and university) who retired before 1975 would receive a one-time bonus equal to $12 for every year taught. To offset the increased cost to the state, contributions to the teacher pension fund would be increased from 8 to 8 1/4 percent.

Thompson rewrote the legislation to allow only those teachers who retired before 1971 to receive the one-time bonus. He said he would have preferred other state pensioners, as well as teachers, to get the bonus, and he would have preferred a graduated formula, with those who retired earlier receiving a larger bonus.

Insurance
Arson

Two sets of bills designed to solve the arson-for-profit problem were clearly the most significant insurance legislation Thompson received this year (see "Fire for hire," p. 4).

'Medigap'

Another major insurance bill signed into law by the governor was H.B. 3435 (P.A. 81-1382), sponsored by Rep. Clyde W. Robbins (R., Fairfield). Effective July 1, 1981, the new law tightens regulation of the so-called "Medigap" or supplemental Medicare insurance by: (1) banning policies in which benefits do not equal or exceed Medicare benefits; (2) allowing purchasers to unconditionally cancel a policy within 10 days of receipt, and (3) requiring both the seller and the purchaser to complete a checklist of what Medicare pays, what the purchaser's existing insurance pays, what the Medigap would pay and what would remain without coverage.

Education
State aid

Thompson signed the 1981 state aid formula bill, H.B. 3114 (P.A. 81-1369), sponsored by Rep. Glenn J. Schneider (D., Wheaton). The formula increases state support from $1,363 to $1,463 per student. However, a key provision allows the accompanying appropriation bill, which funds the formula, to determine the actual dollar amount. Thus, if the appropriation is less than necessary to fully fund the formula, the actual dollar amount will be less. Another provision combines the Strayer-Haig and Resource Equalizer methods of computing state aid into a single formula. (See "State aid to schools," June 1977, p. 4).

Teacher salaries

Thompson vetoed H.B. 3153, sponsored by Stuffle, which would replace flat rates for minimum teacher salaries with a formula that ties increases in the minimum salary to increases in the statewide average teacher salary. Thompson said the bill would limit the authority of local school boards and could force an inequitable distribution of state aid.

Financial Institutions
Mortgages

Thompson signed H.B. 1563 (P.A. 81-1367), sponsored by Rep. Ben Polk (R., Moline). It is an effort to make more mortgages available by allowing lending institutions to offer renegotiable mortgages. The new law brings the state in line with federal law. Interest rates for such mortgages can increase, but no more than 0.5 percent per year and no more than 5 percent during the life of the mortgage.

Car loans

Thompson also signed S.B. 1844 (P.A. 81-1443), sponsored by Sen. Steven G. Nash (D., Chicago). The new law increases the maximum interest rate for dealer-financed car loans. Though this is the second such increase in two years, the law is still considered a stopgap measure. Effective immediately and until January 1, 1982 the maximum interest rate rises from 16.66 percent to 21.45 percent for new cars; from 19.71 percent to 23.18 percent for one-to-two-year-old cars, and remains at 24.90 percent for three-to-four-year-old cars.

Energy/Environment
Nuclear safety

Thompson amendatorily vetoed the nuclear safety bill, H.B. 3614, sponsored by the House Committee on State Government Organization. He accepted those provisions which, like his executive order, would create the nation's first cabinet-level Department of Nuclear Safety. But he rejected a major provision which had been amended into the bill to ban the interstate transportation of spent nuclear fuel into Illinois, which, he said, infringes on interstate commerce and threatens state and federal efforts to establish a uniform nuclear safety policy.

Hazardous wastes

The governor signed H.B. 3365 (P.A. 81-1484), sponsored by Rep. J. Theodore Meyer (R., Chicago), which increases restrictions on hazardous waste disposal sites and seeks to encourage recycling or neutralization of hazardous waste (see "Science," September, p. 19).

High-sulfur coal

The governor signed three identical bills aimed at promoting the use of the state's high-sulfur coal. H.B. 536 (P.A. 81-1372), sponsored by Rep. James Rea (D., Christopher), S.B. 1967 (P.A. 81-1371), sponsored by Rep. James R. Rupp (R., Decatur), and S.B. 673 (P.A. 81-1370), sponsored by Sen. John Knuppel (D., Havana), direct the Illinois Environmental Protection Agency to propose sulfur dioxide standards in compliance with but not stricter than National Ambient Air Quality Standards.

Ag land preservation

Thompson signed H.B. 2893 (P.A. 81-1360), sponsored by Donovan, aimed at preserving the state's prime farmland. The new law authorizes the state to assume part of the cost of county soil surveys (for more on farmland preservation, see "Farmland," p. 18).

Human Resources
State-purchased care

Thompson vetoed a reorganization bill, H.B. 986, sponsored by Rea, to create a formal, purchased-care rate review board, to replace the ad hoc board the governor created two years ago. The new board would set rates for all physical and mental health care purchased by the state's dozen or so human services agencies — with the exception of hospital rates which would continue to be determined by the Health Care Finance Authority. The new nine-member board would have four public members. Thompson said it would be duplicative and costly.

Welfare benefits and nursing homes

The governor amendatorily vetoed S.B. 1978, a "catch-all bill," sponsored by Sen. Donald A. Moore (R., Midlothian). Thompson accepted a welfare provision designed to allow continued cost-of-living increases in welfare benefits but to prevent such increases from being tied to the actual increase in the cost of living. The new law would separate the so-called "standard of need" and "grant level" components used in calculating benefits in Aid to Families with Dependent Children (AFDC) and Aid to the Blind and Disabled (ABD) — administered by the Department of Public Aid. The "standard of need" would become the maximum amount allowed under law, and the "grant level" would become the maximum amount paid. This means that if the department's appropriation is not large enough to fully fund the amount allowed, the amount paid would be less.

Thompson also approved the nursing home provision of S.B. 1978 which would replace the system now used to reimburse nursing homes for state-purchased care by July 1, 1982. However, the task of devising a new system would be left to the Departments of Public Health and Public Aid. He rejected a provision which would have qualified Oak Forest Hospital in Cook County for an additional $15 million in state aid.

Emergency medical services

The governor also amendatorily vetoed H.B. 2227, sponsored by Rep. Jim Reilly (R., Jacksonville), which would create a new Emergency Medical Services (EMS) Act and give the Department of Public Health (IDPH) authority and funds to operate EMS systems. (A few years ago IDPH voluntarily launched a statewide EMS program considered so successful that the federal

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Legislative Action
Continued from page 27

government funded it as a model. However, the federal funding has expired.)

The bill would give IDPH the authority to license ambulances, a regulatory power the agency has sought for 10 years. Thompson rejected a provision that would create a council outside of EMS with final authority over programs and policies. He rewrote the bill to give the council only advisory powers.

Prenatal care

Thompson also amendatorily vetoed S.B. 1747, sponsored by Sen. Richard H. Newhouse Jr. (D., Chicago), which would seek to reduce infant mortality by making women in their first pregnancies eligible for AFDC welfare benefits (half of which are federally funded). The only change Thompson made was to move up the effective date from July 1, 1981 to December 1, 1980.

Foster care

Thompson amendatorily vetoed S.B. 1759, sponsored by Sen. Jeremiah E. Joyce (D., Chicago), which would increase state reimbursement for the foster care of children to counties awarded custody of minors. The present state reimbursement would be raised to about $300 per child per month. However, a key provision bans any further increases until June 30, 1981 when counties must provide foster care which meets standards set by the Department of Children and Family Services. In effect, the measure would limit more costly foster care until that date, since the counties would have to pay for it themselves. The department wants the year-long moratorium on increases to plan long-term foster care policies. Thompson rejected a minor provision which would ban out-of-state foster care.

Criminal Justice
Three-time losers

The most significant criminal justice bill was one the governor himself had backed, S.B. 1524 (P.A. 81-1270), sponsored by Sangmeister. Initially a fetal murder bill, the measure in its final form expands the state's Class X determinant sentencing law by requiring mandatory life sentences for habitual criminals, the so-called "three-time losers." The law would apply to any criminal convicted of a third offense after July 3, 1980.

Not guilty by reason of insanity

Thompson signed H.B. 1010 (P.A. 81-1497), sponsored by the House Judiciary II Committee. The new law increases the court's control over those found not guilty by reason of insanity by creating an alternative to institutionalization. Judges now order institutionalization if the defendant poses a serious threat to himself or others in the near future. Under the new law, the judge can order mental health treatment on an inpatient or outpatient basis if the defendant poses a less serious threat in the more distant future (see Debate, p. 12).

Child abuse

Thompson amendatorily vetoed S.B. 1706, sponsored by Sen. James H. Rupp (R., Decatur), which would toughen child abuse laws. The penalty for aggravated battery of a child under 13 would be increased, and probation would be granted in some cases. The governor accepted provisions which would allow the judge to grant probation to parents who abuse their children and subsequently seek rehabilitation, but he expanded coverage to include grandparents and older brothers and sisters who care for the children. The bill is designed to facilitate guilty pleas. However, Thompson rejected provisions which would allow probation to be granted more than once.

Civil Justice
Child support payments

The governor signed H.B. 24 (P.A. 81-1474), sponsored by Rep. Herbert V. Huskey (R., Oak Lawn), aimed at delinquent child support payments. Under the new law, child support payments are made to the circuit court clerks, and delinquent payments are automatically turned over to the state's attorney.

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