Legislative Action

Decisions on banking, insurance and utility 'bills'

By NORA NEWMAN JURGENS

EVEN though the fall veto session stalled for nine days past the agreed October 31 deadline, the session was productive during its first nine days of "regulation" time.

For the record, the General Assembly dealt with 273 pieces of vetoed legislation on its calendar: 80 appropriation bills and 193 substantive bills. Overall, there was little debate on the appropriation vetoes. Of the $72 million in general revenue funds cut by Gov. James R. Thompson, $4 million was restored by the General Assembly. The veto variations on substantive bills included 107 totally vetoed and 86 amendatorialy vetoed. Most (77) of Thompson's amendatory vetoes were accepted by the legislature, including a few changes in the bill granting relief to low-income families facing utility shut-offs during the winter. The legislature did override six amendatory vetoes, restoring the bills to their original language. The other three bills amended by the governor died when the legislature neither accepted nor rejected the governor's amendments. That was the fate of one voter registration reform bill (see "Big Jim: my way or no way," December 1985, p. 3).

Of the governor's total vetoes of substantive bills, only 17 were overriden by the legislature. Some of the fiercest pressure to override came from business interests on a formula change in the base for computing corporate income tax and potential service fees charged businesses by banks on bad checks. The heat was also on lawmakers to accept a proposal to allow businesses to prepay part of the state's unemployment insurance debt with the feds.

"Veto" is a misnomer for the fall session since the legislature always manages to use the extra session days to consider new bills and some left over from the regular spring session. The 1985 veto session was no exception.

Highlights of nonvetoed bills approved in the fall were ones dealing with the looming insurance crisis and with interstate banking. The banking bill, S.B. 525, was a leftover from the spring session and got caught up in the November stall over McCormick Place and other issues, but it did pass with a July 1, 1986, effective date. (See "The October logjam," December 1985, p. 27.)

The insurance issue has been building for months, and pressure to do something before the spring resulted in passage of S.B. 907. Lawmakers were convinced of the increasing difficulties faced by businesses and local governments in their ability to obtain and pay for liability insurance. Gov. Thompson signed the bill (P.A. 84-1005) almosy immediately to prohibit insurance companies from canceling policies in mid-term "without proper justification." Seen as beneficial for business and local government, but by no means the solution to the insurance issue, conditions for cancellation include: non-payment of premiums, misrepresentation, violations of terms, certification of loss of reinsurance by the insurer or substantial risk increase. The bill was sponsored by Sen. Charles Chew (D-16, Chicago), Sen. James Rupp (R-15, Decatur) and Rep. James DeLeo (D-16, Chicago). (For details on the insurance issue facing the nation see Linda M. Wagner's article on pp. 9-12.)

The program to help poor families with utility bills is now in effect with the revisions added by the governor (S.B. 486; P.A. 84-1034). Known as the "Low-income Affordable Payment Plan," the program is open to those families who are eligible for the state's Home Energy Assistance Program (IHEAP). Thompson added that eligibility standard.

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Under this program, monthly payments of utility bills will be limited to 12 percent of the family's income. The governor's amendments also provide that participating low-income families must pay for any energy usage above "average." The governor also added a three-year sunset provision in order to assess the cost of the program to the utilities. He added another provision to set aside any money Illinois receives from oil overcharge refunds to reimburse utility companies for shortfalls they may have incurred under the program.

The plan will be administered by the Department of Commerce and Community Affairs through local IHEAP offices and applies to utility bills issued between December 1 and April 30 for the next three years. In nonwinter months, participating families will be required to continue paying 12 percent, or the actual bill, whichever is higher. The original bill was sponsored by Sens. John D'Arco (D-10, Chicago), Dawn Clark Netsch (D-4, Chicago) and Margaret Smith (D-12, Chicago).

The vetoed bill favored by some business interests to change the way corporations are taxed was not overridden by the legislature. H.B. 2384 would have changed the current three-factor formula to a "double-weighting" system. The change would have been to the advantage of those multistate companies based in Illinois by taxing on overall sales rather than income. With a revenue loss projected at $22 million for the state, there was not enough legislative support to override.

Business interests tried but failed to convince the legislature to approve a new measure allowing employers to prepay some $80 million in state unemployment insurance taxes by the end of December 1985. Labor was opposed.

More than a bookkeeping change, such a prepayment would have violated the business-labor agreement of 1983, according to labor interests. Labor argued that it had given up certain benefits and that the business concession to pay more to retire the UI debt has not cost businesses as much as projected in 1983. Illinois employers could have saved $217 million in federal penalties by the prepayment.

There was one hassle between bankers and business over a bill vetoed totally by the governor, and the bankers lost. The legislature overrode the veto of a bill prohibiting banks from charging fees to businesses for bad checks. S.B. 957 (P.A. 84-1002) limits banks to obtaining any service charges for overdrafts from the holder of the account. Sponsored by Sen. Jeremiah Joyce (D-14, Chicago), the new law does not ban banks from dunning merchants for the amount of the bad check.

Utility reform in effect

The reform of the state's 60-year-old Public Utility Act goes into effect January 1. Approved in the spring and signed by the governor, S.B. 1021 (P.A. 84-617) affects utility regulation and the regulator, the Illinois Commerce Commission. Sponsored by Sens. D'Arco and Netsch, major provisions of the act include:

• Establishment of an Office of Public Counsel to act as a consumer advocate in regulatory and judicial utility proceedings. The counsel, who must be an attorney, will be appointed by the governor and confirmed by the Senate.

• Direction to the commission to develop a "least-cost, reliable energy plan" to serve as the basis for issuing construction certificates to utilities.

• Requirements that commission meetings comply with the state's Open Meetings Act. Any closed meetings must be transcribed "word for word."

• Establishment of the new position of executive director for the commission. The appointment of the executive director must be approved Dy the commissioners, not just the chairman.

• Provisions that appeals of commission orders will go directly to the Appellate Court.

The new law also gives the commission authority to deny utility companies return on excess capacity for plants constructed after January 1, 1986. The commission, following the former law, has been at the center of controversy for allowing such returns. (See details of the court challenges to the most recent rate increase for Commonwealth Edison on p. 20.)

The General Assembly is set to return to Springfield on January 8. As of December 20, the Governor's Office had not set a date for the State of the State address, but said it would be February 6 or 10. By law, the governor is obliged to present his budget to the legislators by March 5.

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