The Governor’s amendatory veto of House Bill 3412—What it could mean for units of local government

As discussed elsewhere in this newsletter, Governor Rod Blagojevich recently filed an amendatory veto of House Bill 3412. House Bill 3412 (“HB 3412”), among other things, creates the State Officials and Employees Ethics Act. The bill’s sponsor was House Republican Leader Tom Cross of the 84th District.

In his veto message, dated September 17, 2003, the Governor stated that: “The ethics bill passed in May needs substantial improvement…” Most people would consider this to be an understatement of mammoth proportion given that the Governor’s amendatory veto is 10 pages long and contains radical changes to House Bill 3412 and to Illinois law.

HB 3412, as passed by the General Assembly, had no impact on the State Gift Ban Act (5 ILCS 425/1 et seq.). However, with one sentence, buried on page 9 of his amendatory veto, Governor Blagojevich proposes repealing the Gift Ban Act in its entirety. The relevant language in the Governor’s message simply states: “The State Gift Ban Act is repealed upon the effective date of the State Officials and Employees Ethics Act.”

If the Governor’s amendatory veto is accepted by the General Assembly, the only statutory ethical provision left standing applicable to local governmental entities (other than those provisions otherwise contained in specific legislation) will be section 70-5 of the new State Officials and Employees Ethics Act. That section requires “government entities,” a term defined to include “a unit of local government or a school district but not a State agency,” to adopt, within six months of the effective date of the new Act, an ordinance or resolution that regulates, in a manner no less restrictive than section 5-15 of the State Officials and Employees Ethics Act, the political activities of officers and employees of the governmental entity. To that end, the amendatory veto requires the Attorney General to develop model ordinances and resolutions and to advise governmental entities on their contents and adoption.

At first blush, local governmental entities, many of which were never big fans of the controversial State Gift Ban Act in the first place, may not mourn its death. This is particularly true for counties and municipalities that will not be affected by the lion’s share of the new State Officials and Employees Ethics Act. But life is never that simple.

Section 83 of the State Gift Ban Act (5 ILCS 425/83) requires all units of local government, including home rule units and school districts, to adopt enforcement provisions for the prohibition and solicitation of gifts in a manner no less restrictive than provided for in that Act. Such ordinances were to be in place by July 1, 1999. In response, some municipalities passed ordinances that simply made the Gift Ban Act applicable to all municipal employees and salaried officials. Others hedged their bets and added qualifying language to the effect that if the State Gift Ban Act was ever legislatively amended, the amendments would be automatically incorporated by reference, and that if the State Gift Ban Act was held unconstitutional by the Illinois Supreme Court, the ordinance adopting the Gift Ban Act would be automatically repealed as of the date of the court’s decision.

However, if the Gift Ban Act is repealed by the legislature, the safety-valve qualifiers built into many local governmental entities’ ordinances regarding legislative amendments and the potential finding by the Illinois Supreme Court of unconstitutionality would not appear to apply (unless one takes the position that legislative repeal is the ultimate form of amendment). That being said, aside from political and public relation considerations, there would be nothing to stop local governments from repealing their Gift Ban ordinances and, if they so choose, passing some other ethics ordinance that they believe is clearer and fairer.

It is extremely doubtful, however, that the Gift Ban Act will actually end up on the cutting room floor, so to speak. The Governor and the members of the General Assembly are engaged in serious bi-partisan discussions regarding a compromise position on HB 3412 that will be considered during the veto session in November. In all probability, legal counsel for local governmental entities will find that the Gift Ban Act survives, but with some amendments, such as the elimination of the more popular, but infamous exceptions enumerated in the Gift Ban Act (e.g. the exception for “golf and tennis” (5 ILCS 425/15 (21)).

It is interesting to note that there are serious questions regarding whether Governor Blagojevich’s amendatory veto of HB 3412 exceeds the scope of his authority. When addressing the scope of a Governor’s authority with respect to an amendatory veto, the Illinois Supreme Court has consistently held that:

While the exact boundaries of the Governor’s power under this section [Illinois Constitution 1970, article IV, Section 9(e)] have not been totally defined, a Governor may not substitute a completely new bill (People ex rel Klinger v. Howlett (1972), 50 Ill.2d 242, 249) or change the fundamental purpose of the legislation. (Continental Illinois National Bank & Trust Co. v. Zagel (1979), 78 Ill.2d 387, 398). The Governor’s amendatory veto power may make changes that constitute minor enhancements which relate to clarity, fairness or the practical requirements of the legislation. People ex rel. City of Canton v. Crouch (1980), 79 Ill.2d 356, 376.

Department of Central Management Services v. Illinois State Labor Relations Board, 619 N.E. 2d 239, 243 (4th Dist 1993).

Clearly, Governor Blagojevich’s amendatory veto goes beyond simply clarifying HB 3412, or making “minor enhancements” to it, and would therefore be vulnerable to a constitutional attack.

The propriety of Governor Blagojevich’s amendatory veto of HB 3412 will become a non-issue if a compromise on the bill is achieved, as appears likely. In a story that ran in the Chicago Tribune on Friday, October 17, 2003, Representative John Fritchey (11th District), a House sponsor of HB 3412 who has been involved in negotiations on the amendatory veto, has indicated that the Governor is willing to negotiate regarding his demand for creation of the position of Executive Inspector General. Instead there may be “inspectors general” working for each statewide officer.

No matter what, it appears that significant legislative changes are on the horizon regarding ethics in Illinois, though mainly for state officers and employees. As for the exact fate of the State Gift Ban Act, we will have to wait and see what the fall veto session brings. This newsletter will continue to monitor this subject.