By DIANE ROSS   Legislative Action

Vetoes: refinements, rewrites, rejections

LAWMAKERS are scheduled to hit town Friday, November 5, for the annual veto session, but even they can't predict before the election what this lamest of lame duck sessions will be doing.

Gov. James R. Thompson, however, has sent about 40 substantive bills back to the Illinois General Assembly, only a quarter of the number he vetoed last year. (The governor also returned about 60 appropriations bills to the legislature with about the same number of line item or reduction vetoes as last year.)

The most significant gubernatorial vetoes on substantive bills in the areas of business and labor, elementary education, human resources, criminal judiciary and registration and regulation of the professions are highlighted below. (For action on bills in agriculture, conservation/natural resources/environment/energy and criminal judiciary, see "Science," p. 30.)

Of the bills previously covered (see "Legislative Action," September, p. 34, and October, p. 30), the only cliff-hanger was H.B. 2588, the bill that banned unitary assessment of corporate income, one of the year's two big corporate tax bills. The suspense lasted the full 60 days the governor had to consider the bill; but in the end he amendatorily vetoed it, as he had the other major corporate tax bill, S.B. 2485, which froze the classification of corporate property.

As passed by the legislature, H.B. 2588 would have banned the use of the so-called "unitary" or combined apportionment method of assessing corporate income taxes. If the original bill becomes law, Illinois could not tax multi-national and multi-state conglomerates on the income from their non-Illinois subsidiaries. The cost to the state in lost revenue could be as much as $180 million a year, to local governments as much as $100 million. As amendatorily vetoes by the governor, H.B. 2588 would prohibit Illinois from taxing conglomerates on the income from their foreign subsidiaries, but allow the state to tax them on the income from their domestic subsidiaries. Thompson described his rewrite, an obvious compromise, as "a model for the rest of the states."

Thompson used S.B. 1581, which redefines group life insurance to require only two instead of 10 members, as a vehicle to rewrite another insurance bill he had already signed, H.B. 2520. As passed by the legislature, H.B. 2520 would have required health insurance policies that cover physical exams to include those after rape or sexual assault. Thompson rewrote S.B. 1581 to require all health insurance policies to include coverage for exams after rape or sexual assault.

Thompson also rewrote H.B. 608 on children's car seats to phase in the requirement that children under age 5 be restrained in the seats. Thompson, whose daughter, Samantha, is four years old, also softened the fines for violations, and his version of the bill allows exceptions when "attending to children's personal needs." As amendatorily vetoed by the governor, drivers would be required to restrain children under two in special seats and children two to five in seat belts effective July 1, 1983, and children under three would be required to be in the special seats effective July 1, 1984. The original effective date covering all children up to age 5, was January 1, 1983. Drivers would be warned for the first violation and fined $25 for the second under Thompson's version; the original bill provides for a $25 fine for the first violation and $50 for the second.

The governor signed five other bills already covered here: H.B. 2357, which is designed to eliminate fly-by-night companies selling group health insurance to small businesses (P.A. 82-1005, effective September 17); S.B. 740, which gives Chicago firefighters a 14 percent raise in pension (P.A. 82-971, effective September 8); H.B. 396, which authorizes Illinois prisons to make Illinois license plates (P.A. 82-996, effective January 1, 1983); H.B. 1913, which authorizes the suspension of drivers' licenses when warrants are issued for the arrest of drivers who ignore traffic tickets (P.A. 82-1011, effective September 17), and S.B. 1558, which authorizes surprise inspections of the records of the so-called auto "chop shops" (P.A. 82-984, effective January 1, 1983).

Business & Labor

Enterprise zones: Thompson likes the legislation, minus two tax breaks

The state would designate so-called "enterprise zones" offering businesses that locate there a little regulatory relief and a lot of tax breaks under a bill designed to encourage business development in the state's most economically depressed areas. Thompson amendatorily vetoed S.B. 1299, sponsored by Sen. Donald Totten (R., Schaumburg), eliminating the two most significant tax breaks, but called this year's bill a "vast improvement" over last year's, which he had vetoed outright.

The Illinois Department of Commerce and Community Affairs (DCCA) would administer the new enterprise zone program. A unit of local government (municipality, township, county or special tax district) would petition DCCA to designate it as a zone. DCCA would be authorized to designate up to eight zones a year for six years for a maximum of 48; each could exist for 20 years. The zones would range in size from one-half square mile to 10 square miles.

To be eligible for the incentives the business locating in the zone would have to employ no more than 250 workers or have to have taken a loss in at least one of the three preceding years. To qualify for the incentives the business would have to create new jobs within the zone.

To get regulatory relief, the units of local government in which zones are located

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would have to petition DCCA for it. DCCA would be authorized to grant any relief except that from federal or state environmental regulations or those dealing with human rights or historical preservation.

Thompson eliminated the tax breaks he called "costly and questionable"; they would have abated local municipal utility bills and allowed a $1,000 credit on state corporate income taxes for each new job filled.

Thompson left other tax breaks intact; they would allow:

1. the refund of state sales tax and the abatement of the local sales tax on materials used in the construction of new buildings or the renovation of old ones;
2. a deduction on state corporate income taxes from adjusted gross income, for dividends corporations pay stockholders when the corporations are located solely within the zone;
3. a deduction on state corporate income taxes, again from adjusted gross income, for financial institutions involved in investments for businesses located in zones;
4. a credit on state corporate or personal income taxes on investments in property used in zones;
5. a deduction on state corporate or personal income taxes for contributions to projects conducted by organizations located in a zone that create jobs, improve housing, stimulate the economy or prevent crime.

In addition, local government could abate local property taxes. The state would also authorize the Illinois Industrial Development Authority to sell another $100 million in industrial revenue bonds, with the proceeds earmarked for projects located in zones. And the state would target investment of tax and other state-source revenue in financial institutions doing business in zones.

Local development finance corporation with state-backed bonds — maybe

The state would indirectly provide $10 million in capital to encourage business to develop Illinois' most economically depressed areas under another measure, H.B. 958, sponsored by Rep. Wyvetter Younge (D., East St. Louis). Effective July 1, 1983, the legislation would create a new Illinois Community Development Finance Corporation, which would be authorized to sell $10 million in state-backed revenue bonds, and to make the proceeds available to local, private-sector business. The corporation also would be authorized to sell shares of its own stock to pay the bond debt.

Gov. Thompson, however, rewrote H.B. 958, removing any state backing for the revenue bonds. The corporation could be a "fine tool" for economic development, he said. "It is not, however, in the best interest of the State of Illinois to use its own credit power to support local private industry."

Human Resources

Restricting prescription drugs to cut state welfare budget

In one of the year's three most controversial bills in the human resources area, the General Assembly wants to overturn Thompson's policy on cutting welfare costs, by replacing his "restricted" drug program with their "unrestricted" one. Under H.B. 2303, sponsored by Rep. Elroy Sandquist, Jr. (R., Chicago), the Illinois Department of Public Aid (IDPA) would be barred from limiting the prescription drugs for which it reimburses pharmacists

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under its Medical Assistance program. In effect, H.B. 2303 would require the IDPA to reimburse pharmacists for any prescription drug approved by the U.S. Department of Agriculture's Food and Drug Administration.

IDPA's Medical Assistance program is expected to serve a caseload of one million at cost of $1.5 billion in state fiscal year 1983. Reimbursement for prescription drugs is expected to run $130 million. Thompson's cost-cutting welfare policy took effect in SPY 1982, when the IDPA first restricted reimbursable drugs, implementing a so-called drug "formulary," which Thompson says saved $10 million. In SFY 1983 the IDPA proposes to further restrict reimbursable drugs by implementing a "therapeutically effective" drug formulary, which Thompson says will save another $9 million.

Thompson vetoed H.B. 2303 outright, saying that other states like New York, California and Michigan have restricted reimbursable drugs to cut welfare costs and arguing that IDPA's new therapeutically effective drug formulary is sanctioned by the Illinois Pharmacists Association and the Illinois Medical Society's Committee on Drugs and Therapeutics.

Home care for the elderly receiving Medicaid

The two other controversial human resources bills are both designed to expand the in-home care program for the elderly and the disabled to include those who receive Medicaid. Thompson signed one, vetoed the other.

The trend in the delivery of nonmedical services to the elderly and the disabled is toward in-home care and away from nursing home care. The idea is to avoid unnecessary institutionalization — and save money — since the state can deliver in-home care, from housekeeping to home-making via private sector providers, at a Iower cost than nursing home care.

Illinois has provided in-home care for about three years. The Illinois Department on Aging (DOA) expects to serve a caseload of 11,000 in SFY 1983, of which about 40 percent receive Medicaid. The cost is expected to run about $26 million in SPY 1983; DOA reimburses providers at the rate of $170 per month per client. The Illinois Department of Rehabilitation Services (DORS) should serve 2,500 at a cost of about $8 million.

The U.S. Department of Health and Human Services now grants permission to include in-home care among the services the state departments of public aid deliver to elderly and disabled clients who receive Medicaid. Several states have applied for such permission, but Illinois is not among them. Since the feds reimburse the states for 50 percent of the cost of all services the states deliver for Medicaid clients, that cuts in half the cost of in-home care for the elderly and disabled who receive Medicaid.

Both H.B. 2147, sponsored by Republican House Speaker George Ryan, and H.B. 1120, sponsored by Rep. Lee Preston, a Chicago Democrat, would require IDPA, in conjunction with DOA and DORS, to screen all elderly and disabled clients to see how many are eligible for in-home care. Thompson signed H.B. 2147, which would restrict eligibility and would allow IDPA to base fees — and reimbursement — on the client's ability to pay. It would also authorize Illinois to apply for federal permission to include in-home care among Medicaid services. (P.A. 82-921, effective January 1, 1983.) Thompson vetoed H.B. 1120, which would not affect eligibility, but would require IDPA to limit fees — and reimbursement — to $100 per month per client.

Criminal Law

Lethal injection cannot make death penalty palatable

Illinois won't change its method of execution from electrocution to lethal injection (barbituates and chemical paralytics) unless the legislature restores the key provisions of S.B. 1971, sponsored by Sen. John Grotberg (R., St. Charles). Thompson eliminated the lethal injection provision when he amendatorily vetoed the bill, arguing that making execution more humane is not at issue. "We cannot make the death penalty palatable to those who are opposed to it and that is the goal of this legislation," he said.

Making it a crime to steal cable TV signals

A bill aimed at outlawing devices that decode or intercept scrambled television signals would create new criminal offenses covering the theft of the signals from public utilities, public communications and subscription or "cable" television. H.B. 1387, sponsored by Senate President Philip Rock (D., Oak Park), initially provided that possession of decoder or interception devices presumed intent to steal signals, but that provision was later deleted by amendment. Thompson amendatorily vetoed S.B. 1387, adding the presumption-of-intent provision back into the bill. He argued that prosecution of such cases has proved unsuccessful because of lack of such evidence.

Requesting continuances, appealing bail

When attorneys make continuance motions more than 30 days after arraignment, they would have to do so in writing (with affidavits) under one of two major provisions of H.B. 2116, sponsored by Rep. Roman Kosinski (D., Chicago). The legislation is designed to enforce the legal guarantees of the right to a speedy trial. Thompson amendatorily vetoed H.B. 2116 to close what he saw as a loophole in the continuance provision. He did not change the other major provision of the bill, which authorizes state's attorneys to appeal the amount and/or conditions set for bail in criminal cases.

Pay raise vetoed for Prisoner Review Board

Pay raises were vetoed for the 10-member Illinois Prisoner Review Board, which rules on prisoners' requests for parole. To be phased in over three years under H.B. 1241, sponsored by Rep. Michael McClain (D., Quincy), the salary for the chairman would go from $35,000 to $45,000 a year and for members from $30,000 to $40,000.

Thompson vetoed H.B. 1241 outright. He argued that the 33 percent pay raise is more than other state officers got, although he had already signed S.B. 1242, which phases in a 30 percent pay raise for the state's 800 judges over two years, eventually costing the state $14 million a year.

Education

Chicago schools and the tax deal flop

Remember the big deal cut in the waning hours of the regular session this year? Thompson got the authority to transfer enough money from special accounts to the general accounts to defuse the state's cash flow crisis until after the gubernatorial election. Chicago Mayor Jane Byrne got the authority to hike property taxes to raise enough money for pension benefits to keep Chicago teachers from striking until after the mayoral election next spring. (Lawmakers also bailed out the financially beleaguered Regional Transportation Authority via additional bonding power. See "Legislative Action," August, p. 37.)

Chicago Democrats, however, don't need

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the money for pension benefits as much as they thought they did — at least that's the governor's explanation for amendatorily vetoing S.B. 1180, which, in effect, cancels the hike in property taxes. "Since the passage of the bill. . . it is clear that the people's representatives in Chicago will not support any tax increase. It was not the intention of the General Assembly under these circumstances to force a tax increase on the people of Chicago and, as their representative at this stage of the legislative process, I will not allow it," Thompson said. Whatever the reason, Chicago teachers didn't strike.

As passed, S.B. 1180 would have authorized the Chicago school board, actually the Chicago City Council, to raise the rate for the pension contribution liability tax from 5 to 48 cents per $100 equalized assessed valuation. The 43 cents hike would have generated an estimated $57 million more in property taxes during academic 1982-83, a move designed to allow the school board to continue its practice of paying the teachers' share of contributions to their pension fund. As amendatorily vetoed, S.B. 1180 still allows the school board to increase the rate for the pension tax, but only if the board reduces the rates for other taxes by the same amount. The authorization is good only for academic 1982-83.

Students on military bases: charge'em tuition!

Schools would be authorized to charge tuition for students who live on military bases — if federal aid and state aid together were lower than costs — under the key provision of H.B. 2234, sponsored by Rep. John Matijevich (D., Waukegan). Thompson, however, eliminated the tuition provision when he amendatorily vetoed the bill. He argued that charging tuition is not the best way to offset decreases in federal and state aid, especially since Illinois law guarantees free elementary and secondary education.

School nurses' pay scale

Schools would be required to pay certificated nurses according to the same scale they pay certificated teachers under S.B. 647, sponsored by Sen. William Marovitz (D., Chicago). Thompson vetoed the bill, which would affect an estimated 150-200 of the state's 1,000-plus districts at an estimated cost of $400,000 in academic 1982-83. Most of the 750-800 nurses who now work in schools are already paid according to the same scale as teachers. Thompson vetoed S.B. 647 outright, saying there was no companion appropriations bill to cover the additional cost. Presumably he is arguing that the state cannot violate its statute by mandating this requirement without providing the funds to the local districts.

Registration & Regulation

Getting tough with medical professionals' license to practice

Insurance companies would be required to report settlements of malpractice suits under a bill designed to toughen laws regulating doctors, nurses, dentists and others. S.B. 1614, sponsored by Sen. Prescott Bloom (R., Peoria), requires the Illinois Department of Registration and Education, which regulates more than 30 professions, to set standards for revocation of licenses to practice medicine, effective January 1, 1983. The department would write rules governing misconduct in general and specific rules on immoral, unethical, dishonorable and unprofessional conduct.

The tough regulatory law would also require institutions such as hospitals, clinics and nursing homes; professional associations such as medical societies; insurance companies; clerks of courts; and state agencies to report within 60 days when doctors, nurses, dentists and others are denied or yield clinical privileges, are charged with unprofessional conduct in connection with patient care, or become physically or mentally disabled. Failure to report would be a Class A misdemeanor.

The new legislation would give the department's seven-member Medical Disciplinary Board, which constitutes a jury of professional peers, four years, not three, to act in negligence cases in which the patient has already won a civil suit. Also the bill would add two nonvoting public members to the board.

Thompson amendatorily vetoed S.B. 1614, implying that tougher regulatory laws require the department to hire additional investigators, an expense the department's budget cannot now afford.

Thompson also rewrote the bill to: (1) require hospitals and others to make final reports before the board acts; (2) stagger the terms of the two new public members; (3) require the board to report disciplinary action every other month instead of every month; and (4) extend confidentiality requirements to the board's staff.

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