Week in Review for 8/25/14 - 8/30/14

Energy – Fracking
After long delay, fracking rules get closer to filing. The General Assembly enacted legislation in 2013 to add Illinois to the list of U.S. states that utilize horizontal hydraulic shale drilling, including techniques known as “fracking,” to increase production of crude oil and natural gas. Similar technology has led to sharp increases in fossil fuel production in North Dakota, Pennsylvania, Texas, and other states.

The 2013 legislation included provisions, intended to be the toughest in the nation from an environmental standpoint, to minimize chemical spills and maximize the public safety of Illinois horizontal hydraulic shale drilling. Despite these provisions some advocates, including advocates based in states outside Illinois, launched a lengthy program of objections and protests against the new law. They concentrated their fire on the administrative rules required to be drafted by the Illinois Department of Natural Resources (IDNR) to implement the new law. More than 35,000 comments in favor of, and opposed to, the proposed new rules were submitted to IDNR.

The Department has told interested parties that they have now read and responded to these comments, and the new rules are expected to be publicly filed on Friday, August 29. This filing, which goes by the technical name of “Second Notice,” physically transfers scrutiny of the new rules from IDNR to a panel of the Illinois General Assembly, the Joint Committee on Administrative Rules (JCAR).

The focus of JCAR’s work is to confirm that the new Department of Natural Resources rules matches the intent of the General Assembly when it enacted the 2013 fracking law. JCAR’s limited and specialized focus will speed up the time frame for this second period of rules scrutiny. Should the new rules be seen as erecting substantial barriers to fracking activity in Illinois, JCAR could come under pressure to block the new rules on the ground that it was the intent of the lawmakers to allow fracking rather than prohibit it.

Anti-fracking advocates and proponents of increased Illinois energy production and new Downstate jobs can be expected to maintain their positions. U.S. fracking technology, as applied in other states such as North Dakota, has played a key role in the restoration of the United States to a No. 1 position among nations that report their annual production of crude oil.

An extensive shale bed ripe for fracking technology lies underneath a wide swatch of counties located in southeastern Illinois. Representative David Reis, who represents many of these counties, has listened as many of his constituents continue to call for jobs and economic enterprise in their home towns. A Chicago Tribune article on the current state of Illinois fracking law and policy can be found here.

Bill Action
2014 session action completed; 500 General Assembly bills signed. In the 2014 spring session, 511 bills were passed by both houses of the General Assembly – 268 House bills and 243 Senate bills. Five hundred of these bills were signed by the Governor as provided by the Constitution, and will become law on their respective effective dates. The General Assembly’s website contains information on these new laws, which have become Public Acts of the 98th General Assembly. They are Public Acts 98-626 through 98-1125. The final bill signing took place on Tuesday, August 26.

In addition to these five hundred bills, the General Assembly may take further action on eleven bills that were vetoed in various ways by the Governor. Six of these bills were totally vetoed; the chief executive exercised his right to amendatorily veto four bills and impose a line-item reduction on an eleventh bill. In all of these cases, the lead sponsor of the bill in its house of origin can move to have the bill reconsidered when the legislature reconvenes in Veto Session, which is scheduled to begin on November 19, 2014.

Economy – Illinois Jobs
Report this week says 5,400 Baxter International jobs under threat. The maker and distributor of pharmaceuticals and medical devices, historically located in Deerfield within Lake County, is planning to separate into two global health care firms. An unnamed major pharmaceutical company, identified on Thursday, August 28 as Baxter, is making inquiries about the acquisition of suitable headquarters-level office and laboratory space in the Boston area. A Boston-based news story on this development can be found here.

The implication is that the split-up, expected to be completed in mid-2015, would free one of the two firms to relocate. This freedom, in turn, could incentivize Baxter or the successor firm to get the Illinois Department of Commerce and Economic Opportunity to enter a bidding war with the Massachusetts Alliance for Economic Development for the headquarters status.

Baxter’s $15.3 billion in 2013 revenues and 61,500-employee worldwide headcount make the current, pre-split-up firm #16 among firms headquartered in the greater Chicago area. The specialized, professional work carried out by Baxter’s highly-trained executives and research professionals would make the firm’s departure a new, harsh blow to the economic prospects of greater Chicago.

Taxicab firms express concern after Uber bill vetoed. HB 4075 had been supported by established firms that provide taxicab and motor vehicle rental services throughout Illinois, and was opposed by “ride-sharing” startup firms such as UberX, Lyft, and Sidecar.

The bill would have imposed, or pushed towards, regulatory controls upon both ride-sharing firms and their customers. These controls would have included strict, enforceable requirements that ride-sharing vehicles and their drivers be fully insured at all times, and would have imposed extensive vehicle safety inspections upon ride-sharing vehicles.

Advocates for ride-sharing companies expressed the belief that imposition of these mandates would have effectively prohibited innovative transportation options in Illinois. Advocates for taxicab and other transportation trade groups pointed to the mandates already imposed upon these existing firms as a condition of doing business and called for what they consider to be parallel mandates to be imposed upon the emerging ride-sharing industry.

HB 4075 was a controversial measure with many supporters and opponents in both chambers. The House vote to pass the bill was 80-26-0. Gov. Pat Quinn vetoed HB 4075 on Monday, August 25, thereby sending the measure back to the General Assembly for a possible override vote. Supporters of the measure expressed dismay and concern at the veto move and may continue to push for the measure. A three-fifths majority of both houses would be required to override the Governor’s veto of HB 4075, including 71 ‘yes’ votes in the Illinois House.

CGFA report shows heavy Illinois tax burden. The 2014 report from the Commission on Government Forecasting and Accountability (CGFA) shows that Illinois taxpayers face a comparatively heavier tax burden than the residents of many other states. For example, a comparison of Illinois income tax revenues, measured on a per-capita basis, with the revenues of other states with income taxes shows that among the 50 states Illinois ranks 10th highest.

Forty states have a lower per capita income tax burden than the Illinois figure of $1,284 for every man, woman, and child, either because their rates are lower or because they are among the seven states with no state income tax at all. States with a lower per capita income tax burden include the neighboring states of Indiana, Iowa, Kentucky, Missouri, and Wisconsin.

The CGFA report also details the burdens faced by Illinois payers of sales taxes, property taxes, motor fuel taxes, and excise taxes on commodities such as tobacco and alcohol. A summary of the report by the Chicago Sun-Times, published on Sunday, August 24, can be found here.

Tollway speed limit bill vetoed. The speed limits facing drivers on Illinois toll roads will remain at 65 miles per hour for now after Gov. Pat Quinn vetoed a bill to increase the speed limit to 70 miles per hour. The vetoed bill was SB 2015 and the veto message was signed on Tuesday, August 26.

The veto affects all of the mileage operated by the Illinois Toll Highway Authority, including rural mileage. Examples of tolled rural mileage include northern Illinois’ Interstate 88 between Aurora and Sterling-Rock Falls. A separate measure enacted last year by the General Assembly, SB 2356, increased the speed limit on most Illinois rural limited-access highway mileage from 65 mph to 70 mph. However, a loophole in the 2013 law excluded Illinois toll highways from the new speed limit, which applies only to rural freeways. In addition, limited-access Illinois highways in densely-populated urban areas will continue to have speed limits below 70 mph.

SB 2015, the vetoed tollway speed limit bill, may be taken up by the General Assembly in the November 2014 veto session. Re-approval of the measure by three-fifths majorities in both houses will be necessary to override the Governor’s veto. The spring 2014 vote tallies on SB 2015 were 111-4-0 in the Illinois House and 48-6-0 in the Senate.

Baseball – Little League
Chicago’s Jackie Robinson West team wins United States pennant in Little League World Series. The champion team from Chicago’s South Side had been selected to represent Illinois in the Little League World Series in South Williamsport, Pennsylvania. After advancing through five championship games, the Illinois squad faced and defeated a team from Nevada on Saturday, August 23. In a 7-5 win, pitcher Joshua Houston was credited with the win and Trey Hondras notched two home runs.

This victory made JRW the United States Little League champions and gave them a berth in the final, where they faced a national team from South Korea. The Korean nine became the global Little League champions on Sunday, August 24.

A video celebration of the JRW pennant winners’ parade through Chicago on Wednesday, August 27, was posted by Chicago’s WGN-TV Channel 9 and can be found here.

Downstate – Industrial Hemp
Industrial hemp bill signed. HB 5085 authorizes the Department of Agriculture and State institutions of higher education to develop affiliate relationships to begin a program of research into the growing of industrial hemp in Illinois. It provides that an institution of higher education or the Department of Agriculture may grow or cultivate industrial hemp if the industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research. If industrial hemp is grown by a university, the site used to grow the hemp must be certified by the Department of Agriculture.

Hemp is the fibrous product of the cannabis plant. Plants bred to produce durable fiber are not likely to produce the psychoactive chemicals often associated with cannabis. Hempen fiber has been used extensively for centuries in spinning, weaving, and papermaking. Rope, canvas, durable cloth, and durable paper products may all contain hempen fibers. Fibrous hemp is cultivated extensively in Canada.

Under HB 5085, any hemp research program must include notifications and annual reports to the Department of Agriculture. Local law enforcement must also be notified, and the police are given the right to randomly inspect any industrial hemp research cultivation ground at any time.

HB 5085, sponsored by Rep. David Leitch, was signed into law on Tuesday, August 26 as Public Act 98-1072.

Environment – Chicago 
Progress on Chicago Riverwalk. Visitors to the south bank of the Chicago River have seen major construction work this summer as progress continues on constructing a concreate landfill and podium over a strip of the river’s historic bed. After use of the river for industrial shipping ended in the 1980s, a door opened for adaptive-reuse of the river as a parkland amenity and feature of Chicago’s international reputation.

On Monday, August 25, the Chicago Tribune reported that more than $100 million will be spent on this project by 2016. Completion of the Riverwalk extension will make it possible for pedestrians to stroll along the river from the lakefront to Lake Street utilizing a 1¼-mile-long pedestrian pathway.

Environment – Wildlife
Cougars, gray wolves, and black bears added to State’s Wildlife Code. The addition will add to protections for these three top carnivores, which are re-introducing themselves to Illinois. At the same time, the provisions of SB 3049 will allow the owner or tenant of property that is threatened by a cougar, gray wolf, or black bear to take steps to eliminate the threat. If the threat is imminent, the property occupant will have the right to shoot the animal; and if the threat is not imminent, the property occupant will have the right to apply to the Department of Natural Resources (DNR) for a nuisance permit.

Large carnivores, searching for living space, are spreading out from their breeding populations into many Midwestern states, including Illinois. In the case of black bears and gray wolves, the closest large breeding space is in the northern woods surrounding Lake Superior; in the case of cougars, genetic tests done on animals found in Illinois in recent years indicate that the big cats have wandered from as far away as South Dakota’s Black Hills.

Although SB 3049 gives property occupants the right to protect themselves, their families, and their property, the bill also adds these three species to the list of protected species under the Wildlife Code, a parallel status to mammals already familiar in Illinois such as the squirrel and opossum. This bill was signed on Monday, August 25 as Public Act 98-1033.

Health Care – Medical Cannabis
Medical cannabis patient applications to be accepted starting next week. Starting on September 2, the Department of Public Health will begin accepting applications for the use of medical cannabis. Only those with a last name starting with the letter A-L may begin applying for a medical cannabis registry card, and may continue to do so until October 31, 2014. Those whose last names begin with M-Z, may apply November 1, 2014 through December 31, 2014. Beginning January 1, 2015, registration will be on a continual rolling basis for all applicants.

Homeland Security
Warning issued in wake of data breaches. A steadily increasing number of news stories have warned in recent months of breaches in the “firewalls” used by computer servers to protect confidential data submitted by users and customers. Breaches of this type include a “backdoor” recently inserted into the cash-register systems of a major retailer to extract credit card numbers from shoppers.

These warnings hit home in Illinois this week when the state Attorney General issued an alert on Tuesday, August 26. Following a disclosure by the U.S. Department of Homeland Security that more than 1,000 U.S. business firms have experienced an actual or suspected loss of database security in a recent 12-month period, Attorney General Lisa Madigan called for the private sector to increase the strength of their software and passwords.

Current law requires the Illinois private sector to promptly notify customers that their personal data may have been comprised. A typical notification of this type will contain advice for the customer, such as a request or demand that the customer change the password that he or she uses to reestablish contact with the company for various day-to-day purposes such as online bill payment.

A summary of this story by Chicago’s Channel 7 news team (ABC-TV) can be found here.

Labor Day – Gas Prices
Motor fuel prices drop well below $4.00 in Downstate Illinois. With the price of crude oil falling below $95/barrel in the United States, motor fuel prices have fallen slightly. Experts were predicting continued price moderation through the high-demand Labor Day driving weekend. The AAA expects that more than 35 million Americans will embark on a long-distance auto trip during the 2014 Labor Day holiday period.

Motor fuel prices are typically higher in the Chicago area, where specialty gasoline-formulation mandates from the federal Environmental Protection Agency, additional taxes charged by the Regional Transportation Authority, and additional taxes charged by counties and home-rule units swell pump prices. For example, Cook County charges an additional 6 cents on every gallon of motor fuel sold within the county, and the City of Chicago charges a supplemental 5 cents.

Information on the Labor Day motor fuel price and supply situation in the Chicago area can be found in the Chicago Sun-Times.

Week in Review
Get the “Week in Review” emailed directly to your inbox! Sign up today to get a first-hand look at the continuing legislative and fiscal challenges facing policymakers in Springfield. With the Public Acts of the 98th General Assembly finalized, many Illinois laws will require administrative rulemakings for implementation. “Week in Review” will continue to follow major Illinois issues, questions, and trends.