IAAP Focused on Fund Diversion as Legislature Returns

Sat April 24, 2004 - Midwest Edition

The Illinois Association of Aggregate Producers (IAAP) will be focusing on key legislative initiatives, including the suppression of road fund diversions, as well as studying the impact of the off-road motor fuel tax, when the General Assembly gavels to order in April.

SB 2682 – Reducing Road Fund Diversions

SB 2682 passed the Senate and was picked up in the House by Rep. Marlow Colvin (D-33, Chicago). This bill prohibits State Budget Director Filan from diverting 5 percent of the Road Fund to the General Revenue Fund each year. According to IAAP, by limiting Filan’s “administrative transfer” powers in this manner, SB 2682 will stop the diversion of approximately $140 million in highway funds.

SB 2682 was scheduled for hearing before the House State Government Administration Committee on April 21, 2004.

HB 5095 – Rolling Back NPDES Fees

HB 5095 passed the House and was picked up in the Senate by Sen. Carol Ronen (D-7, Chicago). Among other reforms, this bill reduces the annual NPDES permit fees for aggregate mine from $5,000 to $500. Although HB 5095 reduces a number of IEPA permit fees, this bill fully funds our State’s environmental programs while putting Illinois businesses on a more even playing field with competitors in bordering states, according to IAAP.

HB 5095 was scheduled for hearing before the Senate Energy and Environment Committee on April 21, 2004.

Off-Road Motor Fuel Tax

Governor Blagojevich is proposing an expansion of the Motor Fuel Tax to include fuel used by non-farm, off-road vehicles and equipment.

According to the Governor’s FY 2005 Budget Book, this new tax is projected to raise approximately $74 million each year. According to IAAP, if enacted, this proposal will cost the aggregates industry over $6 million annually and thereby add roughly 6 cents a ton to the costs of producing the crushed stone, sand and gravel sold in Illinois.

The IAAP is working with a broad-based coalition of businesses impacted by this new tax. Its initial strategy has been to meet with Democratic and Republican leaders, in both the House and Senate, regarding the impact of this new tax. According to the organization, IAAP is raising an effort to take this new tax “off the table” during the upcoming budget negotiations.

The Illinois Railroad Association, described by IAAP as a key coalition member, has retained the services of Wilhelm & Conlon, Public Strategies, to assist in challenging the Governor’s proposal to expand the motor fuel tax base to off-highway users.

The coalition’s first press conference is scheduled for the week of April 26 in Springfield, at which time it hopes to talk about the Governor’s proposal and how it will impact the various members represented in the coalition, including labor organizations, businesses and trade associations.

Federal Highway Update

As the dust settles on the 800-plus pages of the $275-billion House transportation reauthorization bill, it appears that Illinois highways may emerge a big winner. Under this bill, Illinois receives $7.1 billion over six years, a 28.1 percent increase over its allocation under TEA-21. That compares with a national average gain of 12.3 percent.

Added to this allocation are dozens of “high-priority” projects inserted by House Speaker Dennis Hastert, R-Yorkville, and Rep. William O. Lipinski, D-Chicago, ranking Democrat on the highways and transit subcommittee. In total, over $565 million in additional projects were specifically earmarked by the Illinois delegation, representing about 5.95 percent of the High Priority Projects nationwide.

The House bill will now go to “conference” in order to reconcile differences between this piece of legislation and the highway bill approved by the Senate earlier this year. Although this process could begin immediately, conferees have not been appointed and Democrats in the Senate are threatening to stall the process unless a “pre-conference agreement” is reached.

On the House side, Speaker Hastert has indicated that he will instruct conferees to include the Administration in all conference discussions. According to IAAP, the Speaker is attempting to make sure that the final conference report on the reauthorization is one that the President can support. He has stated on several occasions that he will not send the White House a bill that will be vetoed.

In the meantime, current TEA-21 programs are funded through a short-term extension that expires April 30. According to IAAP, insiders expect Congress to pass another short term extension that would run through June 30 after they return from Easter break. This would provide some additional time for compromises to be worked out on a multi-year bill.

For more information, call 217/241-1641.