Illinois House Floor Debate — July 26, 2007

"We will now convene our regular Session. And with leave of the Body, we will adopt the Quorum Roll Call for Special Session #1 to be the Roll Call for the regular Session. Leave is granted and a quorum is present for Special Session #… for regular Session and we will now proceed with the business of the regular Session. On page 8 of the Calendar there's Senate Bill 1167. Read the Bill, Mr. Clerk."

"The Gentleman from Cook, Representative Lang."

"Thank you, Mr. Speaker, Ladies and Gentlemen. As you know, on the issue of predatory lending, we had been working for some time on this and a year ago we passed a Bill that became law dealing with predatory lending and a database, et cetera. It was a contentious Bill; it passed. And subsequent to its passing, the Governor, through some rule-making, basically knocked out the enforcement mechanism forcing us to come back here again this spring and earlier this spring on a very close vote, with the opposition of mortgage brokers we passed a Bill to the Senate. That Bill stalled in the Senate and through a lot of negotiations came this work product, Senate Bill 1167 which as amended is an agreed Bill. The Mortgage Brokers Association is for the Bill and signed in for the Bill in committee. Some of us have been maybe hearing from a few individual mortgage brokers who don't want to be told anything about what to do, and I understand that. But I just want to make it clear to… at the outset, that the Association of Mortgage Brokers worked 09500101.doc 1  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 with the Sponsors and the advocates, helped draft the Bill and in fact, do support the Bill. The differences between this Bill and the Bill we passed earlier this spring, Senate Bill 1674, are several. Let me try to give ya the highlights. First, it removes a three hundred dollar ($300) fee imposed on mortgage brokers to help create the predatory lending database. It removes the financial fee rollbacks… the financial institution fee rollbacks, clarifies the… a provision which would require brokers to verify a borrower's ability to repay by using language used in the federal guidance adhered to by federal and state banks, clarifies a provision creating an agency relationship between the broker and the borrower which, of course, is critical to make sure that the broker is in a position to actually be an advocate for the borrower. This agency cri… relationship is critical. Adds a provision permitting a licensee to request written interpretation of the Residential Mortgage License Act from the department and amends several provisions of the predatory lending database program including changing the triggers that require counseling. This is, again, as I say is an agreed Bill among all the participants of the negotiations. No one was left out of the negotiations. I would ask for your support."

"The Lady from Lake, Representative Osmond."

"He indicates he will."

"If… Representative, this is based on the loan product only not the person's credit score, if you're referring to the database."

"The credit score is not a factor in this Bill."

"Well, there are two separate portions to this Bill, Representative. One deals with the predatory lending database which is Cook County only."

"The other refers to the triggers for counseling and yes, regardless of credit score, if a person meets one of those triggers, they would be required to have the counseling."

"I would suggest to you, Representative, that credit score should not be the criteria. A person could have a high credit score and yet, not be understanding or educated in the kinds of different loan products there are or why one would be better than another or why one payoff program would be better than another or about how one affects, not their credit score, but their financial future." 09500101.doc 3  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"This would be after the loan is originated and approved."

"You would then, if… if you meet the triggers, not every loan… not every loan would be triggered by this Bill. If you meet one of those triggers and you must get counseling, then after the loan were approved, you would get the counseling."

"All right. Representative, so, first, this is only for first-time home buyers."

"And… or… or if there's refinancing involved. And then, what… these five triggers… one of these five triggers have to kick in. And I'll be glad to read them to you. It would be a loan that permits interest-only payments, a loan that may result in negative amortization, a loan where total points and fees payable to the borrower would exceed 5 percent, a loan that would include a prepayment penalty or a loan which is an adjustable rate, closed-end mortgage, that allows for interest to adjust during the first 3 years."

"The Lady from Cook, Representative Mulligan, for what reason do you rise?"

"Indicates he will."

"Are you talking about the counseling?"

"Then the answer is 'yes' unless there's a refinance involved."

"Well, first, Representative, not every loan would involve count re… counseling unless it met the triggers that are in the Bill, the triggers that I just read to you. Secondly, if that were the case and one of the triggers was met, the counseling wouldn't take too long."

"Well, the rate, generally speaking…" 09500101.doc 5  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Yes, but… but Representative, when you go to your broker and you sign the papers and the loan originates, you've locked in the rate and so the counseling, even if it took place three or four weeks after that, wouldn't affect the rate."

"Representative, three or four weeks would be the extreme case. We anticipate, especially if this Bill passes because we're going to be expanding on this counseling industry, that most counseling can take place within two weeks very easily. Additionally, when a person would go to the broker to get their mortgage, these brokers are going to start to create relationships with these counselors and it mi… if somebody was in a hurry, they might prevail upon the broker to get them their counseling a little more quickly. Seems to me this issue that you're raising is a red herring."

"These would be HUD-certified agencies, Representative, so the Federal Government certifies them. And the other part 09500101.doc 6  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 of your question is, the broker would be responsible for the three hundred dollar ($300) fee or what we estimate as a three hundred dollar ($300) fee. Some of the brokers will pass that on to their clients, some will not."

"Well, firstly, Representative, it doesn't sound like the loan you're describing would meet one of the triggers. Secondly, I would say to you, that…"

"It'd still has to meet one of the five triggers. It's not every refinance. So, the second… the second part of your comment relate… related to these brokers and you hear some of them on the radio who talk about never pay a nickel out of your pocket, come to us every three weeks, we'll refinance your loan, et cetera, et cetera. Those folks will still be in business, in fact, the guy I hear mostly on the radio talking about this is a guy who says, 'we make plenty of money; we don't need to charge you costs.' I assume he'll still make plenty of money." 09500101.doc 7  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Want to bring your remarks to a close."

"The Lady from Lake, Representative May, for what reason do you rise?"

"A question of the Sponsor."

"Indicates he'll yield."

"Yes. Thank you. I understand that you very clearly said that the Illinois Association for Mortgage Brokers are now in favor of this, but I'm hearing from constituents and I need to answer, are the 5-, 7-, and 10-year ARMs included or are they exempt from these restrictions of counseling?"

"They're exempt from counseling. Only the 3-year ARM. Anything under 5 years… anything under 3 years, sorry. Anything under 3 years meets the triggers; anything over 3 years does not meet the triggers."

"So, because these… I mean, it's not just one person. There are quite a few people. They're telling me that the 5-, 7-, 10-year ARM are really very simple products. How did we arrive at 3 years versus 5 or 7 years?"

"Typically, oh, for the last years that we've been studying it, is the… it is the… the ARM that's under 3 years 09500101.doc 8  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 that has created the problem with predatory lending. These… Where… where people keep flipping loans and flipping loans and… and making fees and putting people in and out of products that are not suitable for the… for the individual customer."

"Do…"

"And so, you… you can imagine that the longer the… the longer the ARM is, the less likely it is that the broker is doing it to abuse the customer."

"So, do you know what percentage of the foreclosures are for say 3 years? I mean, you're saying the majority, but it seems to me 3 and 5 and 7 they're… they're very similar. They're… ya know, just 2 years and if… if the product is simple, why wouldn't we include the 5 or 7, make them exempt also?"

"Well…"

"I mean, is it that there's a… a cliff that you drop off. What sort of percentages are we talking about?"

"I'm… I'm not sure we have those. Bear with me. All right. We… we don't have those specific numbers, but the answer to your question is, 'yes' it's a significant difference. But… but if you take a look at what this is all about and certainly this doesn't involve every mortgage broker, in fact, it's a very small sliver. But we're aware that there's abuse in this system which is why we’ve tried to make this Bill our law, why we passed the Bill last year and it's… it would seem just, on its face, clear to me that the… the lower number of years gives more opportunity for abuse if anybody wants to abuse the system or wants to abuse 09500101.doc 9  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 their own customer because then they'd have to come back to 'em in 2 years or 1 year. The 1-year ARM, you can imagine, would create more abuse than the 10-year ARM."

"Mmm mmm. And the 30-year fixed, the same thing? It's… it's excluded or included for counseling?"

"That is not included."

"Okay. That is not. Okay. Well, I guess my concern is that and I appreciate the fact that you're saying that there is some difference from… from the study. How long has this study gone on where we've seen this? What… How many years of data?"

"There wasn't a specific study, Representative, but… but the mortgage brokers and those who have been studying this for a while have looked at the facts and figures. They've looked at predatory lending as a whole and tried to determine where to draw some lines to be protective of the customers, of those folks who are goin' to mortgage brokers to make sure that we can take as much abuse out of the system as possible and again, 'cause there are mortgage brokers listening, I'm not condemning any of them. We have a very small sliver of people in this industry who have not played the game fairly and that's what we're trying to accomplish here."

"Okay. Thank you. Do you think… do think there's any chance that in the future that 5 or 7 years could be included in the law or is anyone open to that?"

"My thought is that we should pass this as it is, take a look at it for a while, and if it turns out that anything we 09500101.doc 10  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 do here needs to be expanded or contracted, we can always take a look at that and do that."

"Okay. Ya know, I… I'm still listening to the…"

"Bring your remarks to a close."

"Thank you. I'm listening to the debates, but I am concerned that this… that the cost of this will be passed on to… to people and someone who could get the advantage of, ya know, a different product, a fairly simple product. That's my concern. I'll continue to listen to the debate."

"Let me… let me just say to that, Representative, that where brokers will be in competition with each other and brokers that want to advertise, were not passing this cost on, will probably get more business than those who do pass the cost on. So, I think in time brokers will be paying all of these costs."

"…you."

"The Gentleman from Cook, Representative Riley, for what reason do you rise?"

"Will the Gentleman please yield?"

"Indicates he will."

"Representative Lang, just have a few questions for you. First of all, was there any study about the impact from a community development standpoint, the impact of foreclosure on neighborhoods and communities, based on these and other kinds of predatory lending practices?"

"I be… I believe the answer to that question is 'yes', but I don't think, ya know, it's necessarily a formal study. You'll recall in the Bill we passed some time ago, you weren't here Representative, but the Bill we passed some 09500101.doc 11  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 time ago specified certain zip codes where the record was very clear that there was more and more abuse going on within those zip codes. This is a little broader, not dealing with the issue of specific zip codes but certainly creates a situation where we can protect all neighborhoods. And, of course, the database is for the City of Chicago only."

"Okay. So, to that extent, if these communities or towns were in the process of trying to attract business or trying to develop new homes, that foreclosures would be an impediment frankly to that, if there were a string of foreclosures along a block or… or something of that nature."

"Can you ask the question again. I'm sorry."

"I said, so, if there were plans for a community to do some community development to develop retail or commercial or build other homes to the extent that, ya know, those areas were subject to a lot of foreclosures and a lot of other housing problems, frankly, ya know, that would be a problem. That would be a problem or an impediment to that development."

"It… it's clear that if housing developers or people that want to develop commercial or retail sites within a community see a lot of foreclosure going on that would be something that would make those people say maybe this isn't the right community for us. So… so, I think the logical extension of your question and my answer is the kind of Bill we're talking about here can help forestall that and in the end help community development." 09500101.doc 12  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"What would you say to maybe someone in the profession that… that would look at a Bill like this and say that somehow it is that restraint of trade, restraining their ability to do business?"

"Well, I would disagree with that strongly. This is a Bill to protect consumers. No one in any industry likes any Bill we ever passed here that tells them to do anything or asks anything of them. Well, this is a very fair piece of legislation. The most interesting part of this for me is crea… the creation of the agency relationship. As an attorney, I understand what that means. It means that it has put certain duties on the broker in this situation. And it's a duty to say to that borrower, we are going to make sure we put you in the best possible product for you, Mr. Borrower, not for me, the broker because that's been happening clearly. We're going to put you in the best possible product for you and I, the broker, will be accountable if I don't do that well, if I don't do that right and you will have the opportunity to come back to me, legally or otherwise, if I have put you in the wrong product. I think brokers ought to be doing that. I think to say to brokers you can put anybody in any product you want, maybe you put 'em in the wrong product, but you do it 'cause you get the highest commission or maybe you put 'em in the wrong product because you'll get a second and a third and a fourth commission as you continue to turn this loan over, over and over again. That's what we're trying to avoid here. I don't think that's a restraint of trade and I don't think that's a heavy burden." 09500101.doc 13  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Thank you, Mr. Representative."

"Thank you."

"To the Bill, Mr. Speaker. Ya know, I remember, especially such as a young planner in Chicago back in the '70s, I remember the Contract Buyers League controversy. I remember dis-investment in South Shore. I remember all of those… all of those things that really were an impediments to the city in different neighborhoods in the city developing. I think that this Bill is a good Bill. I think that there was a consensus in the crafting of this Bill. And I ask for its support. Thank you."

"The Gentleman from Cook, Representative Durkin, for what reason do you rise?"

"Indicates he will."

"I will in one moment."

"The Attorney General is given the power to enforce violations of the legislation."

"Well, the first layer would be the departments that are involved by this, state agencies… under this Bill, it would be the Attorney General that has the power beyond the agencies." 09500101.doc 14  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Beyond the power of the state agencies…"

"…the… the prosecutorial end of this would be the state… the Attorney General."

"The Lady from Cook, Representative Monique Davis." Davis, M.: "Thank you so much, Mr. Speaker. Representative Lang, you may be and you may not be, but I just wonder, are you familiar with the reason this Bill became needed in Springfield?"

"Certainly." Davis, M.: "Would you address that, please?"

"We have had over a long period of time in Illinois a sit… and probably other states as well, I'm certain other states as well… situations where a small sliver of mortgage brokers have taken advantage of their customers in a way that has cost those customers thousands of dollars in fees and/or worse put them in a situation where they were in the wrong product or a product they could not afford which caused massive foreclosures and this is designed to protect the customer in these situations." Davis, M.: "Representative, as you promote this legislation and you know that I strongly support it, what do you think will be the end result in the State of Illinois in reference to 09500101.doc 15  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 bankruptcy, home foreclosures, homelessness? What would you say will be the final result after this Bill is implemented and when is the implementation date, what is the date?"

"It is… Well, firstly, this is effective July 1, '08. That's to give everybody time to gear up to do this properly. Secondly, Representative, I would anticipate that the result of this Bill, if given time, and if it works as we hope it will, that it would lessen bankruptcies and foreclosures. It would put people in products they could afford. It would put mortgage brokers in a position where they were doing right for their customers and thereby, their customers would probably bring them more business and I think would dramatically impact the stability of our communities all across our region." Davis, M.: "Thank you. To the Bill, Mr. Speaker."

"Yes." Davis, M.: "As a Legislator in the State of Illinois, a few years ago, I, along with others, attended basement and church meetings filled with people who were losing or had lost their homes. They brought in mortgage papers that showed in tiny, tiny writing that they were subject to an increase in their interest in 4, 5 years. They had no idea that this huge increase in their interest would increase their mortgage payments beyond their income or their ability to continue the ownership of that property. In a America, one of the greatest things we all have, the ability to own a home, many times when people start saving and go to work, the first interest they have is providing a home and shelter for their little ones and their family. And to have 09500101.doc 16  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 someone, someone with greater knowledge in reference to loopholes in the laws or ability to skim over this or skim over that, to take advantage of these Americans, of these Illinois citizens, is not what we can afford to let continue. In the State of Illinois we have some laws that are geared toward the protection of our citizens."

"Bring your remarks to a close." Davis, M.: "I will bring it to a close, Mr. Speaker, after I say this. It took a great deal of negotiating, a great deal of arm twisting, a great deal of providing information to get all of those interested parties onboard and they all support this legislation. I commend you, Representative, and this should be a unanimous 'yes' vote. Thank you."

Speaker Turner: "The Gentleman from Cook, Representative Fritchey, for what reason do you rise?"

"Thank you, Speaker. Will the Sponsor yield?"

"He indicates he will."

"Representative, I have a question and if the answer is it was covered while I was downstairs, I'll suffice that. I don't want the chamber to go through it again. But was there a discussion as to covering these lenders without covering banks and other financial institutions and if they're not, a justification against for the disparate treatment. Let me, if I may, let me… let me just clarify where that's coming to me from is actual communications that I’ve had from constituents that say we're not the ones that foreclose people and I understand part of the argument may be, well, you don't foreclose them, but you may put them in the product that was inappropriate and they can't handle. 09500101.doc 17  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 But I'm just wondering, obviously, what we don't want to do is try in good faith, to regulate a portion of a global industry only to drive the problem to another sector. So, my question would be, I guess, I know you well enough, you know me well enough, has there been thought or discussion over the rationale between not having all lenders equally covered under these types of regulations?"

"That would be an interesting thing to do, Representative, but banks are not covered because they're covered under specific Federal Law and federal guidelines while as brokers are not. Brokers are governed under State Law."

"But the Federal Laws and guidelines, to my understanding, are not and perhaps they well should be, but are not as stringent as what we are trying to do here. Is there a concern, again, that we are creating an uneven playing field and perhaps simply driving people… ya know, perhaps hurting one industry, in the interest of consumer protection, but driving those consumers simply to another portion of the industry where they will be potentially, I don't want to say victimized, but potentially led astray again?"

"So, first, it would be important to note that these provisions for the mortgage brokers mirror the federal guidelines for the banks. So, they're very… they're very similar. Second, we don't… we rarely see, although it probably has happened, any kind of predatory lending from our banks and our federally chartered financial institutions where we do see it from a small sliver of brokers."

"And where would that leave state-chartered banks?" 09500101.doc 18  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"State-chartered banks, if they're FDIC insured and all of them are, have to follow the federal guidelines as well."

"So, you're saying that if this legislation were to become law that it would take the mortgage brokers and hold them to the same standards that banks are held to today?"

"That's my understanding."

"I appreciate it. Thank you."

"The Lady from DuPage, Representative Bellock, for what reason do you rise?"

"Indicates he will."

"The information that goes into the database is shared with the department, but the department has created rules to deal with encryption and safe storage of the data."

"The answer to your question is 'yes', but please…"

"…recall what I just said about the rules. This data has to be encrypted; it cannot be accessed by just anybody in the department or anybody in State Government."

"The Gentleman from Cook, Representative Ford, for what reason do you rise?"

"I rise in support of the legislation. Will the Sponsor yield?"

"Indicates he will."

"Representative Lang, my question, number 1) is: is the intent of this Bill to put mortgage brokers at a competitive disadvantage?"

"Thank you for the question, Representative. It is not the intent of this legislation to create a competitive disadvantage for residential mortgage licensees in the area of stated income loans. The language has changed so that mortgage brokers can still originate stated income loans to qualified consumers, as long as they adhere to the language in the Bill about relying on mitigating factors as mentioned in the recently announced federal guidance."

"Thank you. Also, Representative Lang, is it true that people fresh out of college, no experience with credit, could possibly benefit from high credit scores without any knowledge about the credit?"

"That's correct, Representative. That's the point I was trying to raise earlier to a previous Legislator who asked about credit score. A person could have a very high credit score but have no knowledge about financial instruments: mortgages, loans, ARMS, points and any of the other terms of art that are used in the mortgage business."

"Thank you. Also, if a person's buying a house, they have to use their income taxes. Is that correct?"

"Generally speaking, income tax returns would be used." 09500101.doc 20  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"And… and those are the ones that when a person uses their income taxes, aren't those filed with the state and with the Federal Government? Income taxes are filed with the state."

"We certainly have state income tax returns…"

"Right."

"…and federal income tax returns."

"So, we file those… those income benefits with the state anyway, so it's already record with the state. Is that correct?"

"Certainly, the income tax returns would be, yes."

"And that… that reveals the person's income."

"That is correct."

"Also, the fact that we have a problem in the State of Illinois with foreclosures, would you think that it would be wise of us to ignore this problem or deal with the problem?"

"Certainly, those of us who are concerned about foreclosure and bankruptcy and those of us who believe that some of us… some of this has come, certainly it's been proven in certain areas of the City of Chicago and elsewhere in the state, some of this has come clearly from a predatory lenders who have taken advantage of customers and homeowners and taxpayers of our state. Surely, we should be taking some note of this. In fact, this chamber has now twice passed a similar Bill to this and this Bill is only a better Bill because it has been agreed to by all sides. This is certainly something we ought to address."

"Thank you. And to the Bill. House Bill 4050 was a Bill that I was totally against. Senate Bill 1167 is a Bill that I think was crafted and had a lot of work put into it. And 09500101.doc 21  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 I think about laws that we have today in the State of Illinois a simple law like driving down the street when… in the middle of the night and no one's on the street and a stop sign is there, should we have to stop? Everyone has to abide by the law. Some people just… it doesn't seem like ya have to abide by the law because it doesn't seem applicable at the time. So, for people that feel that people with high credit scores, people that… that have a lot of money that they shouldn't have to worry about counseling. Sometimes in a society, we all have to live with what's beneficial to other people and in this instance, I believe that counseling is good for many people. Document review is good for many people and those that may not need it I think we have to look out for what's good for the majority and how we could save those people in need in Illinois. And for that I support Senate Bill 1167. Thank you."

"The Lady from Cook, Representative Bassi, for what reason do you rise?"

"Indicates he will."

"No."

"Right."

"I'm sorry. I'm sorry. One second. All right, let me go back, Representative. If it's an interest only loan, it triggers counseling."

"Correct."

"I suppose you're, on the surface, correct, Representative. But we don't see the predatory lending practices coming out of our banks. We do see it coming out of a small sliver of mortgage brokers who have taken advantage of people."

"Assuming they qualify, yes, they could."

"Well, it's not going to stop foreclosures of people that lose their jobs and can't pay back or become ill and can't 09500101.doc 23  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 work or some of those other things you mentioned, but Representative…"

"Well, even if I accept that from you and I haven't seen the statistics, but even if I accept that as true, we still have a very significant sliver of people who are losing their homes because they've been put into inappropriate mortgage products by brokers who have not had the best interest of their customer at heart but only the best interest of their own pocketbook. And again, this isn't to criticize certainly every mortgage broker in Illinois as a vast, vast, vast majority of them are appropriate, legitimate businessmen and businesswomen doing the right thing, but we have a number who are not and we… because of that number who are not, we've had people lose their homes, who’ve foreclosures and bankruptcies and the… the practices of predatory lending in the state or clear and stark and cannot be ignored."

Speaker Turner: "The Lady from Cook, the final speaker, Representative Currie."

"Thank you, Speaker and Members of the House. I think this is a measure that is carefully crafted to deal with a very real, a very severe and a very growing problem across 09500101.doc 24  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 our urban and suburban landscape. There were articles in the paper just the other day about problems of foreclosure even in affluent areas like Highland Park. There's no question that bankruptcies, that problems in health care, problems of employment, problems of divorce, often trigger crises with the family home. But the issue here is that the people who are most likely to end up losing their home, when those crises hit, are those who had been enticed into inappropriate financial arrangements to try to buy a home. There's much made of the distinction between bankers who are federally regulated and mortgage brokers who today are not federally regulated. All we're trying to do here is to make sure that there is some regulation of the brokers so that we can protect consumers who out of naiveté, out of lack of linguistic ability, for whatever reason find themselves well in over their heads. Now, it's my understanding that all that happens here for triggering counseling are exactly the kinds of things that should trigger counseling. If someone is offered the opportunity to do a 10-year interest only mortgage, that's someone who oughta go to counseling to make sure that that individual knows that at the end of that 10 years they have no equity in the home, not one penny. It seems to me interest-only mortgages may be okay for people in some circumstances, but I think we should be suspicious when people are encouraged to enter into an arrangement that means that they will have nothing in that house should they face a financial crisis on the job or through a divorce or through a health care problem. If the fees are excessive, if the total points and fees are going to be over 5 percent, 09500101.doc 25  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 that should trigger counseling as well. If, in fact, this community cannot offer competitive opportunities, then maybe someone should be going and looking someplace else for help. While it is true that any interest-only payment will trigger counseling, only the adjustable rate mortgages of more… of less than 3 years, 3 years or less, will trigger counseling as well. So, there's been some discussion about whether 5- year ARMs or 7- or 10-year ARMs would trigger counseling, the answer is they don't. Finally, Speaker and Members of the Assembly, let me just point this out. Nothing in this Bill says the broker or the bank may not offer a 10-year interest-only mortgage, nothing says that the points can't be more than 5 percent, all this does is to say that when the financial arrangement offered meets these criteria, the consumer oughta have a chance to talk to somebody, a credit counselor, who can give them some guidance about whether this mortgage makes sense for them. That's all this measure is trying to do. And if it turns out banks are cheerfully offering… federally-chartered banks are cheerfully offering 10- or 15-year interest-only mortgages, my guess is from reading the newspaper, my guess is that the feds themselves will decide to crack down because that is not in the interest of most of the consumers, most of those people who are trying, as Representative Monique Davis said, trying to achieve the American dream, trying to own their own home. This is a good Bill. It's a reasonable Bill. It's a responsible Bill. It will protect consumers without saying 'no', without prohibiting loans that… that are at stake so people can go out and continue making their sales. We just 09500101.doc 26  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 want to make sure that vulnerable consumers are not left holding the bag at the end of the day. I urge your 'aye' vote."

"The Gentleman from Vermilion, Representative Black, for what reason do you rise?"

"He indicates he will."

"Mr. Black, we're going to make sure as best we can that the department and JCAR work together to create rules that are the most stringent we can possibly come up with to protect this data. Let me also point out to you, as Representative Ford did, that people already file their income tax returns with the state. So, everyone files an income tax return that will have less stringent restrictions upon that data than we are going to put on this database."

"We do and we should have a little more talk about what that tax…"

"…is, don't you think, Sir?"

"I don't know. There are many lawyers on the floor who could help you, Sir."

"Representative, this Bill as written will weed out those bad apples and make the system better. So, the most interesting parts of this Bill, as I see it as one person, are creating the agency relationship which is an important term of art, as I know you understand it. It creates certain responsibilities for the broker with the borrower and this would be whether it's a… a loan that is trigger… triggering counseling or is not a loan that's triggering counseling. Every… every broker should be in a position where they are an agent, where they are responsible to find the best and safest product for every customer that they have. Secondly, this Bill requires that the broker determine up-front with all available data whether the loan that they're procuring for their customers is one the customer can pay back. There is no such law today, no such regulation today for brokers and thereby, we will weed out the bad apples because the bad apples will not want to do this agency relationship and they will not definitely, for sure, want to be people who insure that the customer can pay back the loan. That's never been their interest before."

"Bring your remarks to a close."

"This would force them, Mr. Black, to deal with that very important issue and thereby, eliminate many of the foreclosures that they cause."

"Your request will be honored." 09500101.doc 29  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"No, it does not say that, Sir."

"The counseling is only triggered… you don't even get to the triggers unless you’re a first-time homebuyer or you're refinancing."

"So, but in your case…" 09500101.doc 30  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"…it would not apply."

"It is my understanding, Mr. Black, that all of those programs are with banks and other financial institutions not with brokers."

"Seeing no further questions, Representative Lang to close."

"Thank you. We've had an interesting conversation and I wouldn't consider it a debate. I think the questions have been good and I appreciate them, but I hope you will all really give some thought to what this Bill is about. This Bill is about protecting consumers of mortgages who buy them or who get them from sources who are sometimes not treating them as good and loyal customers. We have a small sliver of mortgage brokers who have abused the system who have flipped people in and out of loans who have determined that their pocketbook is more important than the protection of their customer, who have determined that it's all right to give someone a loan and fudge the numbers so that they can get someone a loan who can't afford to pay it back. This is obviously true because if it were not true then why would there be a dozen or more zip codes in the City of Chicago 09500101.doc 31  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 that have much higher foreclosure rates than the others. Clearly there are predators in the system, clearly there are people taking advantage. This Bill does nothing more than to protect the customers at no expense to the broker. If you're, Ladies and Gentlemen, a mortgage broker yourself, would you in good conscience give someone a mortgage that was inappropriate for them? Would you in good conscience give someone a mortgage they could not afford to pay back? would you in good conscience give someone a mortgage knowing that all you really wanted to do was call 'em a year later and sell 'em another one to put more money in your pocket? You would not do that and while some of us like to protect business folks around here and that's a good thing to do, none of us think these are appropriate business practices. But yet these business practices have led to foreclosures, these business practices have led to decaying communities, these business practices have led to an unfair treatment of consumers. The Bill says that the broker has to act as the agent for the customer. That's a simple notion. It says that you have to treat the customer as if you care about them, as if the result of the loan you give them is a positive one, not one that's for you but for them. The Bill says you have to determine they can pay back the loan before you help them get it. What's so difficult about that, a completely reasonable thing to do. And so, Ladies and Gentlemen, this is a fair Bill; it is not a huge burden on brokers evidenced by the fact that the Association of Mortgage Brokers, who was opposed to the Bill we passed last year, who was opposed to the Bill we passed earlier this 09500101.doc 32  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 spring, is not only neutral on this Bill but signed in in committee for the Bill. They are for the Bill. So, they feel the protections for brokers are adequate and now we need to add some protections for the little guy out there. This is a very important piece of legislation. Please vote 'aye'."

"So, the question is, 'Shall Senate Bill 1167 pass?' All those in favor should vote 'aye'; all those opposed vote 'no'. The voting is now open. Have all voted who wish? Have all voted who wish? The Clerk shall take the record. On this question, there's 70 voting 'aye', 43 voting 'no', 1 voting 'present'. And this Bill, having received the Constitutional Majority, is hereby declared passed. Page 13, under the Order of Concurrences, Representative Collins, we have House Bill 1517. The Lady from Cook, Representative Collins."

"Thank you, Mr. Speaker. We're going to ask for concurrence on House Bill 1517 which raises the age of juveniles from 17 to 18 for misdemeanor only charges and a misdemeanor is a nonviolent offense. We'll ask for your 'aye' vote."

"The Lady from DuPage, Representative Bellock, for what reason do you rise?"

"To the Bill."

Speaker Turner: "The Gentleman from DuPage, Representative Reboletti, for what reason do you rise?"

"Indicates he will."

"Just all the correct information."

"This Bill doesn't address that. This Bill only addresses misdemeanor cases, nonviolent offenses, all misdemeanor cases."

"Well, even… even now, Representative Reboletti, if that… if that happened right now today and the kid was 15 or 16 and they were charged with an adult offense that was a felony, that kid would still have a right to be prosecuted as an adult or as a juvenile and so the same thing would happen. All the other things that are in place today would stay in place and that would happen. The law would still protect them to say, if this case warranted, this child going back to juvenile court, staying in juvenile court he would or if they wanted him to go to adult court he would."

"Well, first of all, it's not going to ha… this Bill goes into effect six months later. This… it wasn't… won't even go into effect until next year at this time. So, we won't even be dealin' with those 17-year-olds and it's not retroactive. And… and this is only misdemeanor cases; it has nothing to do with felonies. Today, if a kid was 14-, 15-, 16-years-old and they did something that would warrant them going to adult court, they will still be charged as an adult. This has nothing to do with that. These are nonviolent offenses and these kids normally would get probation anyway."

"The Gentleman from Vermilion, Representative Black, for what reason do you rise?"

Speaker Turner: "The Gentleman from DeKalb, Representative Pritchard, for what reason do you rise?"

"Indicates she will."

"Yes, I do. First of all, these are misdemeanor cases; they're not going to jail. They're not going to be in the 09500101.doc 38  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 detention center, the kids go home and it's not going to cost any money."

"I don't… I don't have an answer right now as to that, but I'll get back with you on how many kids it might affect."

"Yes."

"It's because of the language in the Bill and it's because that most misdemeanor cases get probation and they go home. They don't stay in the juvenile detention center."

"Even today."

"I don't know. This is to me it's just about doing the right thing to do. It raises the age… Connecticut just raised their age from 16 to 18. What happens is, we have juveniles who are 17 years old that are still in high school. Those kids get a petty offense… say, they stole something for the very first time, never been in trouble… had they been 17… if they were 16, then they'd go on to the juvenile court, at 17 we just had a couple cases… I brought a girl down who was a perfect A student in high school, she was 17… actually had just turned 17 a month before… she was 09500101.doc 39  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 affected by this. She went into a… she wanted a blouse; she stole it. Went into Macy's, stole the blouse, got caught and now, she'll have a felony conviction. Why… but had she been a day earlier or a day before, she would have been tried as an adult. She's still in high school. Her scholarship was at risk. A lot of good kids get caught up in this legislation and a lot of times we're so concerned about catching the bad kids, or those kids are going to get caught if they're going to continue to be in trouble, but this is for the kids who are good kids who make a mistake. All the psychologists show that studies that kids cannot make long-term decisions at the age of 17; we're giving them that next age. As a matter of fact, you can't do… you can't vote at 17, you can't buy liquor at 17. We’ll even moved the age of buying cigarettes to what, 19 years old. You can't go to Army; you can't get married; can't enter a contract. All those things we say that kids can't do, but at 17 we’re saying they know right from wrong. Of course, they know it's right or wrong, but they don't know the long- term consequences and that's why we're protecting them. But we can protect them on every other end, but when it comes to something so simple we can't protect them. Most of these kids are drug offenses or petty thefts or anything that they didn't get in trouble before and the law also protects that. If they were a real criminal, that those laws that they still can bump them up to adult court and be charged as a felon."

"Yes."

"Because we’re going to pay for it on the front end…"

"…because we pay right now if you send a kid to jail it costs a minimum seventy-seven thousand dollars ($77,000) a year for one kid in jail."

"But if their… if they come to the Department of the Juvenile Justice is handled by the state. If they were sent to the Department of Juvenile Justice, we pay seventy-seven thousand dollars ($77,000) and now, where we have Redeploy Illinois which is coming to Cook, if we put the money on the front end then it's less money than if we put the money on the back end. And then we can redirect some of that money that we spent to the Department of Juvenile Justice or the Department of Corrections where we spend millions of dollars every year, all of the money goes there. But if you put it on the front end, then you save money."

"The Gentleman from Cook, Representative Lang, for what reason do you rise?"

"Well, thank you, Mr. Speaker, Ladies and Gentlemen. I hope you’ll listen to me carefully. We're here on a concurrence Motion on a Senate Amendment. Some of you folks want to debate this Bill from scratch and I suppose if you want to you can do that, but we're here on concurrence on Senate Amendment #1. All Senate Amendment #1 did was change the effective date to July '08 instead of an immediate effective date. So those of you who are now speaking against this, you're really speaking against the concurrence Motion and if you were to prevail, this would go back to the Senate. All they would do is strip that effective date change off and it would go to the Governor with an immediate effective date. So, we can stand here all day and debate and we have nothing else to do I suppose, but we could stand here all day and debate the guts of the Bill whether you thought the original Bill which already passed this House is an appropriate Bill, but the fact is that you won't accomplish that. What you're going to accomplish is forcing these people to make these changes immediately instead of giving them time to do it properly in July of '08. So, if that's what you want to do, go ahead and do it, but this is 09500101.doc 42  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 a Bill that already passed this House. This Amendment is only about the effective date. So, it'd be nice if someone had something to say about the effective date. Watch this. Mr. Speaker, I support the Senate Amendment because I think the effective date oughta be changed. And I think Representative Collins also thinks the effective date oughta be changed. Anybody think the effective date oughta be changed? I guess just me. All right. So, that's all this concurrence Motion is about. So, all the rest of this, Mr. Speaker, is irrelevant. I support the Lady's Motion."

Speaker Turner: "Thank you, Representative Lang for your explanation. We now have had two people speak in favor of the Bill, two against the Bill and we will entertain one from each side and then we will move to close. Representative Molaro, the Gentleman from Cook, for what reason do you rise?"

"Thank you. Mr. Speaker, to the Bill."

"To the Bill."

"First of all, Representative Lang is obviously correct. We're just talking about the effective date. But I just want to point out we talked about… some of the people talked… were you… some people talked about who was against it and let's… probation, Cook County, board president, Sheriffs’ Association. When you talk to these people, the first thing they will tell you is they agree with the idea. Remember, there's a lot of states that have that age for all juveniles. So, they agree with the idea. If there is any opposition to the Bill, it's not because of the concept of the public policy, that these 17-year-olds that have a 09500101.doc 43  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 misdemeanor should be treated as adul… as juveniles, that makes a world of sense. They're a little bit worried about that if they gotta put 'em in a different place or if they gotta take 'em to a different court, how much it will cost them. I talked to the Cook County board people and they're not against the concept; they love the idea. They're just worried about that it might cost a few more dollars. They're… Everybody will find the money and we are talking very, very minimal dollars and we're putting children at risk that shouldn't be put at risk. This Bill passed. It's a great Bill. It's a terrific Bill to vote for; there really is no opposition, none whatsoever except for dollar amounts which are minimal dollars compared to what we're doin' in this state. We don't have the problem with the misdemeanor, felonies and one goes to this court, one goes to the other. We're in the process of fixing all of that. This is a great start and a great Bill. You're going to feel good voting 'yes' on this Bill. We're just concurring to the change in the effective date. Let's… let's vote for this Bill and move on to… to other things that we have to do. Again, a great Bill and the Sponsor again was a great… another great job. Thank you."

"The Gentleman from Champaign, Representative Rose, for what reason do you rise?"

"Okay, okay."

"Representative Collins to close."

"Thank you, Mr. Speaker. What this Bill does is it amends the Juvenile Court Act of 1987, it raises the age from 17 to 18 for misdemeanor offenses only. That's what it does. And this Bill also develops a task force to… to plan to see if we should raise the age for felonies. There is no requirement that these plans will ever implemented. Any change will require further legislation. Violence offenses are not covered in this Bill. Nothing in the Bill changes current law regarding transfers to adult court. There is no physical (sic-fiscal) impact to the state by this Bill and a minimal impact to local jurisdictions is very minimum. Connecticut and 30 oth… 38 other states and now Connecticut has just changed their age in July 12, 2007 from age 16 to 18. Though this Bill has already passed the House, as the Representative said, and the Senate and now we're just concurring. And to answer the other Representative's question, this will affect about two to three thousand (2,000 to 3,000) kids in the state alone that would save them from having felony convictions in this state. Right 09500101.doc 45  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 now, we spend tons of money on kids for felonies because they can't get a job, they can't go to school, they can't get anything and they're going to live another 70 years. So, let's try and correct the problem as juvenile… as to for our juveniles today so that they won't have to be adult criminals for the rest of their lives. So, I'm asking for you to concur with the Motion of Senate Amendment #1 and vote 'aye'. Thank you."

"The question is, 'Shall the House concur in Senate Amendment #1 to House Bill 1517?' All those in favor should vote 'aye'; all those opposed vote 'no'. The voting is now open. Have all voted who wish? Have all voted who wish? Have all voted who wish? Hernandez. Eddy. The Clerk shall take the roll. On this question, there are 56 voting 'aye', 57 voting 'no', 0 'presents'. And the Motion fails. On the Order of Concurrences, we have House Bill 1519. Representative Dugan."

"Thank you, Speaker, Members of the House. House Bill 1519, I would like concurrence of Senate Amendment #1, #2, and #3. This was for a TIF district in my… in my district that passed the House, it went to the Senate. And there's a few more communities that also needed the extension of their TIF districts and so, that's all this is. All the paperwork has been brought in and so, I'd ask for concurrence."

"No questions. The question is, 'Shall the House concur in Senate Amendments 1, 2, and 3 to House Bill 1519?' All those in favor should vote 'aye'; all those opposed vote 'no'. The voting is now open. Have all voted who wish? Have all voted who wish? The Clerk shall take 09500101.doc 46  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 the record. On this question, there are 109 voting 'aye', 3 voting 'no', 2 voting 'present'. And this Bill, having received the Constitutional Majority, is hereby declared passed. The House does concur in Senate Amendments 1, 2, and 3 to House Bill 1519. On page 9 of the Calendar, under the Order of Senate Bills-Second Reading, we have Senate Bill 509. Representative Franks. Read the Bill, Mr. Clerk."

"Representative Franks."

"Mr. Speaker, I move for the passage of Amendments 6, 7, and 8. So, we can… we can discuss it now or we can discuss it on Third Reading, whatever you'd like."

"Representative Franks moves for the adoption of Amendment #6. All those in favor say 'aye'; all those opposed say 'no'. In the opinion of the Chair, the 'ayes' have it. And Amendment #6 is adopted. Further Amendments?"

"Representative Bradley moves for the adoption of Amendment #7 to House Bill (sic-Senate Bill) 509. All those in favor say 'aye'; all those opposed say 'no'. In the opinion of the Chair, the 'ayes' have it. And Amendment #7 is adopted. Further Amendments?" 09500101.doc 47  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Representative Bradley moves for the adoption of Senate Amendment #… Floor Amendment #8 to Senate Bill 509. All those in favor say 'aye'; all those opposed say 'no'. In the opinion of the Chair, the 'ayes' have it. And Amendment #8 is adopted. Further Amendments?"

"Third Reading. …Bill, Mr. Clerk."

Speaker Turner: "The Gentleman from McHenry, Representative Franks."

"Thank you, Mr. Speaker. This is a Bill that's taken a long time coming together. I had first filed a similar Bill in the 93rd General Assembly so we could try to root out counterfeiting prescription drugs and it would require pedigree papers. This is now been an agreed Bill. There's a lot of work that's been gone… gone into it. Representative Coulson has taken a lead on this as has Representative Bradley. Senators Link and Dillard carried this in the Senate. And what it basically does is it's a rewrite of the Wholesale Drug Distributors Licensing Act. The last time we did this was 20 years ago. Many folks were involved… and it is an entirely agreed Bill now. I'd be glad to answer any questions."

"Seeing no questions, the question is, 'Shall the House pass Senate Bill 509?' All those in favor should vote 'aye'; all those opposed vote 'no'. The voting is now 09500101.doc 48  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 open. Have all voted who wish? Have all voted who wish? The Clerk shall take the record. On this question, there are 114 voting 'aye', 0 'noes', 0 'presents'. And this Bill, having received the Constitutional Majority, is hereby declared passed. On page 15 of the Calendar, we have House Joint Resolution 13. Representative Tryon."

"Mr. Tryon. Mr. Tryon."

Speaker Turner: "I think there are Amendments on this Resolution."

"Mr. Clerk, read…"

"Representative Tryon on Amendment #1."

"The Gentleman asks leave…"

"…to withdraw #1. All those in favor say 'aye'; all those opposed say 'no'. In the opinion of the Chair, the 'ayes' have it. And Amendment #1 is withdrawn. Amendments?"

"Representative Tryon on Amendment #2." 09500101.doc 49  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"The Gentleman from Crawford, Representative Eddy, for what reason do you rise?"

"Indicates he will."

"Seeing no further questions, the question is, 'Shall the House pass House Joint Resolution 13?' All those in favor should vote 'aye'; all those… The question is, 'Shall… The question is, 'Shall Amendment #2 be adopted to House Joint Resolution 13?' All those in favor say 'aye'; all those opposed say 'no'. In the opinion of the Chair, the 'ayes' have it. And Amendment #2 is adopted. Representative Tryon."

"The question is, 'Shall the House pass House Joint Resolution 13?' All those in favor should vote 'aye'; all those opposed vote 'no'. The voting is now open. Have all voted who wish? Have all voted who wish? The Clerk shall take the record. On this question, there are 114 voting 'aye', 0 'noes', 0 'presents'. And this Bill, having received the Cons… Constitutional Majority, is hereby declared passed. Page 11 of the Calendar, we have Senate Bill 1592. Read the Bill, Mr. Clerk."

Speaker Turner: "The Gentleman from McLean, Representative Brady, for what reason do you rise?"

"And approximately how much time do you think you'll need, Representative Brady?"

"Representative Brady, we're going to give you an hour. Hopefully, the Special Session will end at that time also. But Republicans will go to Room 1… 118 immediately; Democrats will go to lunch. House stands in recess until the hour of 1:00."

"The House will be in order and Members please be in their seats. Representative Fortner, for what reason do you rise?"

"We're going to go to page 11 of the Calendar, under Senate Bills-Second Reading. Mr. Clerk, read the Bill, 1592."

Speaker Hannig: "So, Amendment… there's a Motion to Table Amendment #2. Is there leave to use the Attendance Roll Call? Leave is granted. The Attendance Roll Call will be used and Amendment #2 is tabled. Any further Amendments, Mr. Clerk?"

"Representative Scully asked that that Amendment be withdrawn. Any further Amendments?"

"Representative Scully also asked that that Amendment be withdrawn. Any further Amendments?"

"The Gentleman from Cook, Representative Scully on the Amendment."

"Thank you, Mr. Speaker. Ladies and Gentlemen, I'd like to present to the House Amendment #5 to Senate Bill 1592 which is best described as the comprehensive rate relief legislation for this issue that's been looming before the State of Illinois for the past two and a half years. This is a very comprehensive piece of legislation. The passage of this Bill into law will be a great day for the pa… people of the State of Illinois. It is a comprehensive settlement with the electric utility companies and their generating parents and other generating companies following negotiations with the General Assembly and the Attorney General's Office. House Amendment #5 provides for a rate relief package of over one billion dollars ($1,000,000,000) for residential and small commercial customers of electricity. A new state agency, the Illinois Power Agency Authority, will oversee a new process for purchasing electricity in Illinois, replacing the old reverse clock uniform price auction. This new state agency will also have the ability to facilitate construction of power plants in the State of Illinois if it is decided that that is in the best interests of the state. Let me begin by talking about the package of customer relief. It will impact residential and small business customers. The one billion dollars 09500101.doc 55  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 ($1,000,000,000) goes to rate relief for customers. One- half of this fund will go to the customers of Ameren, one- half of the fund will go to the customers of Commonwealth Edison. The one billion dollar ($1,000,000,000) pool is created through funding. Eight hundred million dollars ($8,000,000) is being provided by Exelon and Commonwealth Edison. Ameren companies are providing another one hundred and fifty million dollars ($150,000,000). Dynegy and Midwest Generation are each providing fifty million dollars ($50,000,000). MidAmerican Generating Company is providing a million dollars ($1,000,000). In addition to this direct rate relief, Ameren has agreed to waive all late charges. The estimated value of that component is ten million dollars ($10,000,000). That is the composition of the one… one billion, ten million dollar ($1,010,000,000) pool of funds. The rate relief packages for the two large utility companies are very similar. I will talk, first of all, about the primary difference. Excuse me. Let me talk about the best way to simply describe the rate relief. The most accurate way to accurately describe, make a generalized statement of this rate relief, is that whatever the customer's increase was on January 1 of this year, approximately 45 percent of that increase will be stopped and reimbursed to the customer. So, for a customer who had an increase in their bill of approximately a hundred dollars ($100), that customer’s going to get forty-five dollars ($45) per month of rate relief. The relief is going to be directly proportional to the manner in which the customer was hit by a higher incre… higher energy prices. Those customers who 09500101.doc 56  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 had the most severe impact will be receiving more dollars of relief. Those customers who did not experience a high increase are going to be receiving less dollars of relief. The relief is going to be directly proportional to the impact that those… that customer received with the increases of January of 2007. For the Ameren customers, all of the… excuse me, for both Ameren and Commonwealth Edison customers, the rate relief is retroactive to January 1 of 2007. We anticipate that the relief will be the lower price… that the credits will be implemented on the September 1 billings. For the preceding months, for the months of January through July, possibly August, the customers will be receiving a credit for those months. For the Ameren customers, that credit is going to be delivered in the form of a check. We anticipate, because the Ameren customers were hit much more harshly than the Commonwealth Edison customers that the dollar amount of that relief is going to be much greater. Again, the relief is directly proportional to the increases that those customers received. If those customers of Ameren are more than 60 days delinquent on their bills, they will not receive a check; instead they will receive the credit towards their delinquent balance. For the Commonwealth Edison customers who experienced much less increases than the Ameren customers, again, they will be receiving relief in the form of approximately 45 percent of the increase that they experienced from January 1. Forty-five percent of that increase is going to be dropped and eliminated. Commonwealth Edison customers will not be receiving checks. Commonwealth Edison customers will be 09500101.doc 57  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 receiving credits on their bills. For the Commonwealth Edison customers, in discussing this with the utility companies, Commonwealth Edison estimated that the cost to do checks as opposed to credits on the billing… the estimated cost was two million dollars ($2,000,000). The bulk of that cost was simply postage. They said that they can deliver two million dollars ($2,000,000) more of relief if we are willing to accept the delivery device of a credit on the bill as opposed to a check. The credit is also a much safer way to deliver the relief. We can be certain that the person who paid the bills in the first place is the person who is receiving the relief. It's much easier to trace; we also don't have to worry about the security issues of sending out so many checks in the mail and the risk the checks will be lost or stolen. In addition to the actual dollars of relief, there are targeted programs… oh, excuse me. Let me back up to the allocation of the relief. For the Ameren customers, that allocation will be for the year 2007, two hundred and thirteen million dollars ($213,000,000); for 2008, it will be one hundred and nine million dollars ($109,000,000); for 2009, seventy-eight million dollars ($78,000,000). The decision was made and the agreement was reached to allocate the majority of that relief to the front end which is where we had the problem, the huge cliff that our constituents, their customers, experienced on January 1 of 2007. In addition to those actual dollars of relief for the Ameren customers, there will be a variety of targeted programs. A cooling assistance program of approximately two million dollars 09500101.doc 58  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 ($2,000,000) donated to the Low en… Income Home Energy Assistance Program, LIHEAP. A bill payment assistance program of approximately two million dollars ($2,000,000), a residential special hardship program of two million dollars ($2,000,000), nonresidential special hardship program of two million dollars ($2,000,000), a percentage of income payment relief pilot program for the all-electric space heating customers of about two point five million dollars ($2,500,000), a weatherization assistance program to make these all-electric space heating homes more energy efficient, bringing long-term relief. That program will receive approximately a million dollars ($1,000,000). Energy efficient lightbulbs, the compact fluorescent lightbulbs, there'll be a million dollars ($1,000,000) for that program and a million dollars ($1,000,000) for a municipal light… municipal street lighting conversion programs. Again, the majority of these programs are specifically targeted for the people who are most in need and programs to make the user of electricity more efficient. I'd like to move on now to the Commonwealth Edison rate relief program. As I stated earlier, the best way to make a generalization about this relief is that it will be approximately five hundred million dollars ($500,000,000) of relief distributed over 3 years, resulting in customers seeing an immediate 45 percent drop in the increase they experienced in January of 2007. The allocation of the general rate relief will be in 2007, two hundred and fifty million dollars ($250,000,000); 2008, one hundred and twenty-five point five million dollars ($125,500,000) and 09500101.doc 59  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 2009, thirty-six million dollars ($36,000,000). There is no deferral of any of the increase that is being abated by the utility companies. Back in January, we were presented with a… a Bill that the utility companies presented to provide for a phase-in of the increases. What came clear in the committee is that all of the increase… for example, the Commonwealth Edison increase of 24 percent. All of the increase that was not paid by the customers during year one was deferred out to years four and five. All the increase that was not paid by the customer in year two was deferred out to years four and five. Anyone who described that phase-in program as a 3-year phase-in was making a false statement. It was not a phase… 3-year phase-in, it was a 5- year phase-in, with the utility companies collecting every nickel of their increase. This program provides for no deferral. The rate relief is not being provided by the utility companies. The money for this rate relief is being delivered by the generating companies. If during this phase-in period, this rate relief period, if some of these residential customers migrate to another electric supply company, their rate relief will follow the customer. The customers of Commonwealth Edison do not have to stay with Commonwealth Edison to enjoy this relief. They will receive these benefits whether they stay with Commonwealth Edison or not. That is another major difference from the bills that we were presented with back in January. The Commonwealth Edison customers will enjoy similar targeted relief programs in different dollar amounts: an the electric space heating customer relief program of approximately eight million 09500101.doc 60  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 dollars ($8,000,000); summer assistance programs of approximately ten million dollars ($10,000,000) for working families and low-income customers, including low-income seniors; a residential rate relief program of five point five million dollars ($5,500,000) for working families, including low-income seniors with higher than average rate increases; a residential special hardship program of approximately five million dollars ($5,000,000); a nonresidential special hardship program of one point five million dollars ($1,500,000). For the condominium common areas, those condominium customers who experienced severe shock when their building common areas were priced in a different manner, those customers will receive four point five million dollars ($4,500,000) relief through this Bill as well as through some tariffs pending before the Illinois Commerce Commission at this time. There will also be five point five… three point nine million dollars ($3,900,000) of weatherization assistance programs and five million dollars ($5,000,000) of energy efficient environmental and education assistance programs. Again, most of this targeted program money is specifically aimed at people who are suffering the greatest hardship and for making the users more energy efficient. That concludes my presentation on the rate relief components of this Bill. I'd now like to move on to the issue of the creation of a new state agency called the Illinois Power Agency. The primary function of this agency will be to oversee a new procurement process that is set forward within this statute. This process, this new agency, will replace the reverse New Jersey-style auction which 09500101.doc 61  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 provided for a uniform price for all bidders at the sale. Instead, it will go to a pay-as-bid process whereby we, the users of energy, will be able to take advantage of the fact that many of these bidders are willing to continue bidding down below the price that was achieved at the reverse New Jersey-style auction. It dispenses with the concept of a uniform price for all bidders. All bidders will still have the option of deciding how low they want to bid, but a bidder who wishes to bid lower is not going to be able to take advantage of the higher prices artificially set by the reverse New Jersey-style auction. This will be a conventional state agency with a director appointed by the Governor with the advise and consent of the Senate. The Power Authority… the Power Agency will not be funded by GRF funds except for an initial GRF loan for years 2005 and 2009 which must be repaid by the Illinois Power Authority (sic- Agency) in subsequent years. The IPA will be funded with a twenty-five million dollar ($25,000,000) fund from this settlement, the billion dollar ($1,000,000,000) settlement. The… there are specific standards set forth in the statute… in the Bill for the qualifications for the director of this agency. We intend that this will assure that the agency head is a person who has not only the support of the Governor and the Senate but also certain essential qualifications for office. The procurement process will remain subject to the approval of the ICC. The ICC will retain final approval of this procurement price. But as opposed to the New Jersey-style auction where we… which was presented by the utility companies and then approved by the 09500101.doc 62  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 ICC, the new procurement process is set forth in statute to be supervised by a state agency with the advisin… with the final approval of the ICC. The new state agency will also have the power to review and plan the process of building generators within the State of Illinois. The Resource Development Bureau of the IPA will allow the IPA to build power plants that use clean-coal technology that burn Illinois coal and they used other renewable resources. The IPA will have the ability to issue bonds through the Illinois Finance Authority to finance the construction of public power, either by the IPA or with municipalities or municipality… municipal aggregates. The IPA will not have the independent authority to issue bonds. The bonds that would be issued through the Illinois Finance Authority will be revenue bonds. They must be supported by the independent judgment of the market that the transaction is viable. They will be not be backed by the full faith and credit authority of the State of Illinois and will not be a financial burden on the State of Illinois. We anticipate that this reform will encourage aggregation by one or more units of local government, both in the function of purchasing power or in terms of building power plants. This past Monday I had the opportunity to visit with the mayor of Quincy, Illinois, who's looking at the feasibility of building hydroelectric power plants on the Mississippi River. It's a very exciting opportunity. This fits in very well with the FutureGen project of… of… future power plants built in the State of Illinois burning Illinois coal with the cleanest burning technology and new capacities for the retention of the… the 09500101.doc 63  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 carbon sequestration. Those are the primary points of the Bill. It is a very comprehensive piece of legislation. I want to thank all the Members of the Electric Utility Oversight Committee for their very diligent work over the past two and a half years. I want to specifically thank Representative Krause for her attention and for her advice and counsel on these issues over the past two and a half years. It has been a very long, painful road to get to where we are today. I also want to thank all the Members of this General Assembly for the attention that they have each given to this problem that has drawn so much attention from the people of the State of Illinois. I also want to thank the people of the State of Illinois who didn't lay down, who didn't just take this one on the chin, who didn't allow these electric utility companies and their parents to get away with these huge profits and these huge increases in prices. Without the cooperation of all of those people, I would not be here today with the opportunity and the privilege to present this Bill to you today. One of the most important components of this Bill is that it is an agreement; it is a settlement that the utility companies have agreed to. The utility companies have voluntarily agreed… excuse me the generating companies have voluntarily agreed to fund this relief package. A critical component of this… this settlement was what the Attorney General's Office… which has been diligently pursuing several legal actions on this project. The Illinois Attorney General's Office, as part of the settlement, is agreeing to dismiss those lawsuits. Without those dismissals, the generating 09500101.doc 64  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 companies had no incentive whatsoever to provide the funding for this relief package. The diligent pursuit by the Attorney General's Office and the willingness of that office to drop those lawsuits made this settlement possible. Thank you very much for your attention and I look forward to answering your questions."

"The Gentleman has moved for the adoption of the Amendment. And on that question, the Lady from Brown, Representative Tracy. Representative Tracy, did you wish to speak? Representative Black."

"We got a couple people that'd like to speak on the issue, Representative, and far from me…"

"…would I want to cut 'em off."

"Okay. So, Representative Black, the Members have taken your suggestions and turned off their lights and so we have no other… we have no other speakers wishing to address the Body. Representative Scully, would you like to close?"

"I appreciate your support on this Amendment." 09500101.doc 65  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Okay. All in favor of the Amendment say 'aye'; opposed 'nay'. The 'ayes' have it and the Amendment is adopted. Clerk, let's be at ease for a moment."

"Mr. Clerk, read the Committee Report."

"So, let us resume debate on Senate Bill 1592. And Mr. Clerk, what is the status of the Bill?"

"Representative Miller."

"Thank you, Mr. Speaker, Ladies and Gentlemen of the House. Amendment #6 is a provision directing the Illinois Power Authority to report the number of minority and female dis… and disabled businesses that apply for professional service contracts, the number that receive them and the number that are lost and the… and they're trying to work with those companies to increase diversity of participation. And the second significant change in it… or addition in this Amendment is a technical change that clarifies electric utilities that are required to implement energy efficiency 09500101.doc 66  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 measures are only those electrical utilities defined under Public Utilities Act."

"The Gentleman has moved for the adoption of Floor Amendment #6. Is there any discussion? The Gentleman from Vermilion, Representative Black."

"He indicates he'll yield."

"That's correct."

"Professional services… service… professional service agency that may be hired by the Illinois Power Authority, such as bond council, financing. There's a list that's included in the Amendment, accounting and others."

"No."

"Any further discussion? Then all those in favor of the Amendment say 'aye'; opposed 'nay'. The 'ayes' have it and the Amendment is adopted. Any further Amendments?"

"Third Reading. Mr. Clerk, read the Bill."

Speaker Hannig: "The Gentleman from Cook, Representative Scully."

"Thank you, Mr. Speaker. I appreciate the attention of the Members of the House. I think during my presentation of House Amendment #5 I gave a comprehensive description of the… the Bill as amended and I ask for your support for this very comprehensive piece of legislation to bring real rate relief to the people of the State of Illinois as well as a better process into the future for purchasing electricity. I'd be happy to answer your questions."

"The Gentleman has moved for the passage of Senate Bill 1562 (sic-1592). And on that question, the Gentleman from Morgan, Representative Watson."

"Indicates he'll yield."

"The… as with other state agencies."

"The direct… the director is appointed by the Governor with the advise and consent of the Senate."

"Mr. Watson, there was consideration at the outset that this would be an independent, separately-elected board."

"And through the process of… of the negotiated process, we came to the agreement that the Illinois… it would not be a separate authority with an elected board. It would be a conventional state agency with its director appointed by the Governor and… appointed by the Governor and with the advise and consent of the Senate."

"Let me respond to that. First of all, this will not be a board. This will be an agency with an ag… a director of that agency. Second, a procurement process is set forth in this… in the statute. The… this agency will not have the authority to come up with a… to create an auction process of 09500101.doc 69  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 its own out of… off of clean paper, as was the case 4 years ago when the energy companies came forward with the reverse New Jersey-style auction. We do have to be concerned about who is running this state agency in the same manner that… possibly more so than the people who are running other state agencies. We could not… it is not possible for us to simply pass a piece of legislation and then say we've done our job, we no longer have to monitor what's happening. We do have to be vigilant. We have to be vigilant. We have to keep an eye on how this new agency evolves. This new agency will probably need our oversight and value our input. But we cannot simply pass this piece of legislation and wash our hands of the project. We do have to keep an eye on who is appointed by the Governor. We have to keep an eye on that approval pro… that consent process in the Senate. And as a state agency, we are going to have to keep a very close eye on how they conduct this new procurement process."

"But a primary benefit in this legislation is a procurement process set forth in statute, which is very similar to the procurement process that was recommended by Dr. Ronald Laffer who made presentations to the Electric Utility Oversight Committee approximately 18 months ago. Dr. Laffer was an economist with the Reagan administration. He is the author of the Laffer Curve."

"He made a fabulous presentation to our committee. It was hotly contested. This no… new procurement process is 09500101.doc 70  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 very consistent with the recommendations of Dr. Laffer that day."

"Representative, could you bring your remarks to a close?"

"Just for clarification, we're going to have unlimited debate but we will run the five minute clock just to give everybody a chance. So Representative Krause, you're recognized for five minutes."

"The Gentleman from Vermilion, Representative Black."

"Repre… Representative, could you bring your remarks to a close, please?"

"The Gentleman from Winnebago, Representative Winters."

"Representative Scully indicates he'll yield."

"Yes. Could you give me that cite again?"

"It's on page 169. The answer to your question is 'yes'."

Speaker Hannig: "The Gentleman from Bond, Representative Stephens."

"Representative Eddy."

"He indicates he'll yield."

"Is there a question, Mr. Eddy?"

"Representative McCarthy." 09500101.doc 85  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Thank you, Mr. Speaker. Will Sponsor yield?"

"Indicates he'll yield."

"Representative Scully, I just have a question about the stability of the market going into the next couple years. It's my understanding that, ya know, all the power's already been bought for the current cycle which runs from January 1st of this year to, like, May of 2008. Is it also true that, like, two-thirds of the power from May of 2008 to 2009 has already been purchased under the reverse auction scenario?"

"A third of the load will be up for another auction in January of 2008."

"For the 2008… May 2008 to May 2009. And at that point, is the plan to buy a third of… the remaining third that we need for that year and then one-third of the next year, that would make it two-thirds that would then be in the… basically negotiated for?"

"I’m sorry, could you restate your question?"

"I'm saying, we already have two-thirds purchased from May 2008 to May 2009. So in January of 2008, we will purchase the third of that year, so we complete the year there for that cycle. Will we also be, at that time, purchasing one-third for the following year…"

"Yes."

"…so we're always…"

"Yes."

"So, we're always on a 3-year cycle when we're purchasing one-third, one-third, one-third." 09500101.doc 86  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Right. Each year, one-third of the contracts will lapse."

"Correct."

"And those contracts that have lapsed will be resubmitted for bid."

"So that was under the original proposal and we kept it that way, so that will give us stability in pricing into the next 2 or 3 years for sure."

"Yes. Now, that is the current structure. We're not confined to that structure. In the short term, we're… we're confined because we don't have an alternative structure for laddering those contracts. Several people who testified before the Electric Utility Oversight Committee stated that merely laddering those contracts as one-third, one-third, one-third was… is not a sufficient distribution of the risk, that a much more even and fluid distribution would be a more appropriate way and also to avoid… also that they should be repriced more frequently than once a year."

"Okay. But… but under Senate Bill 1592, the contracts that were entered into to purchase that power through May of 2010 are going to be held and they will not be… try to be negated in any way."

"Right. Those con…"

"Okay."

"Those contracts are staying in place. We are not interfering with anybody's contractual rights, which is a critical component of this legislation to make sure that the legislation does not run afoul of unconstitutionally impairing someone's contractual rights." 09500101.doc 87  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Okay. Well, I just end by saying I appreciate the fact that we negotiated this instead of litigated this. My position from the beginning was that going to the courts was not a solution for anybody. So, I compliment you on that. I do think that even though in the final solution Representative Krause may not have been involved I, think that her input throughout the process was valuable and I hope that the negotiating team did… did include that. I also would be remiss if I didn't say that Senate President Jones, in refusing to put rate freeze negotiations forward, I think that a wise move and served the people of the state very well by… by keeping this as a negotiation and not a litigation. Thank you."

"Representative Bost."

"Representative Tracy."

"Indicates he'll yield."

"Rep… Representative, those schools might be eligible to participate in the targeted relief program for the nonresidential hardship programs. There's been two million dollars ($2,000,000) set aside for that program. Excuse me. The nonresidential special hardship program."

"There's also twenty six million dollars ($26,000,000) of targeted special credits for nonresidential customers, in addition to the two million dollars ($2,000,000). So, your schools might be eligible for that relief." 09500101.doc 91  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"They would have to get in touch with Ameren."

"That’s correct."

"Is that a question or a statement?"

"No. My… I told you that they can call Ameren to see if they are eligible for that program. I did not tell you to have them call Ameren regarding the planning of their budget."

"That was your question."

"That means that, that as I stand here before you today, I… I don’t have the knowledge to tell you whether they’re eligible for the program or not. I don’t have that knowledge."

"I don’t know." 09500101.doc 92  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"I don’t have that information available."

"I don't recall him… I don't recall him mentioning that to me."

"Excuse me, Representative. Could you bring your remarks to a close?"

"It's my understanding that's a program that is going to be administered by Ameren for the conversion of street lights to a more efficient structure. Representative, I also wanted to go back to your initial comm… your questions 09500101.doc 93  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 regarding my discussions with the mayor. I've had several discussions with mayors within the past week and certainly within the past several months about the cost of them providing electrical lighting for their municipalities. I may have had that conversation with the mayor of Quincy. I don't specifically recall that, because he was… he was not telling me information that I was prev… that I was previously unaware of other than he may have been telling me information specific to Quincy. From what he described, if there was such a description, the problem that he is experiencing in Quincy is… was no different than the… described by many other mayors in my district and mayors from other parts of the state. That burden is shared throughout the state. In the decision… the composition of this legislation is, number one, creating a pool of relief. That pool is one billion dollars ($1,000,000,000). To the best of my knowledge, this is the biggest pool of relief in the history of the State of Illinois on a consumer protection action. Number two, the second question, how is that relief distributed? In the negotiations, the decision was made that for presentation to this House the relief would be structured primarily as I have presented it, with the primary relief being sent to the consumers of electricity, the residential consumers of electricity, based upon the… their proportionate impact. In direct proportion to the impact, we made the decision and I… certainly, many people will second guess this decision, that that was the most equitable way to distribute the relief package. I'm very proud of the conclusions that we've reached. And other 09500101.doc 94  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 people will second guess those decisions, they're free to do so. If they want more money to go to the municipalities, sobeit. Take that money away from the residential consumers. Those were the decisions that had to be made and I'm proud of the way they were made."

"Okay. So, Rep… we've got 13 additional people wishing to speak. So, Representative Reis, you're next."

"Indicates he'll yield."

"Well, I disagree that it is… with your statement that it's not firmly engrained. The Attorney General's Office has the authority to enforce these agreements. And I think… and a commitment, a contractual commitment, a legislative commitment that someone will do something. I do not see the legal difference between 'will' and 'shall' in that context. And I just…"

"Representative, you had stated to me earlier that you thought that there was a financial difference. I am… other than the statements that you made to me, I am not aware of any difference."

Speaker Hannig: "Could you bring your remarks to a close, please?"

"Representative Leitch."

"He indicates he'll yield."

"This pl… this legislation does not prohibit an increase in electric utility rates. That increase would have to go through the procurement process."

"The utility companies have the right to request to the ICC to adjust their delivery charges."

"Yes."

"Representative Lang."

"Thank you, Mr. Speaker, Ladies and Gentlemen. I rise in support of the Gentleman's Bill. First, let me say that Representative Scully and others who were involved in the negotiations on this put in substantial number of hours in negotiating this, perhaps more hours than on most things that we do around here, and they should receive our plaudits and our thanks for all the hard work. Second, I'm saddened that after we've spent a lot of time around here kinda working together on a number of issues, kind of having one caucus, if you were… as you… if you will, working forward, that today we've devolved into partisan rhetoric. The utilities… the rates that people pay should not be a partisan issue, and some on the other side of the aisle, who have spoken today have tried to turn it into a partisan issue. Some who have spoken against the Bill, saying it isn't enough, actually voted against, against, the rate freeze when it was on this floor, and we've had it on the floor three or four times, So to speak today and to say this isn’t enough and we should have a freeze and we should have a rollback, those are pretty much crocodile tears because the record shows that some of you who have spoken today voted against the very freeze, three times, that you suggest today we should have. So the partisan rhetoric, forget about it. Let's start talking about the facts, and the facts are we passed the freeze, without the help of many 09500101.doc 100  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 of you, three times on the floor of this House. It went over to the Senate and it wasn't going anywhere. What should we do? Should we continue to insist on something we cannot make happen or should we move forward to try to do something to benefit the ratepayers of the State of Illinois? I voted for the freeze each time. All of you can't say that. I voted for the freeze each time, many on this side of the aisle voted for the freeze each time, freezes, rollbacks, return of payments made. We sent it over to the Senate three times, Ladies and Gentlemen. It isn't going to pass the Senate. It isn't going to happen over there. Many of you joined many of us in our disappointment that we could not get it passed in the Senate. That our… the cooperation we were looking for over there for our way of doing this and to provide better and deeper and stronger relief, you joined us in that and it didn't happen. And so, here we are in an overtime Session working on a budget, trying to make something happen for the people of Illinois. And what would any of you have us do? Reopen negotiations that aren't going anywhere or would it be better to do something for the people of Illinois? And I would submit to you that while you can take each individual person's bill and talk about a small amount of money that you can identify that that person might get back, I would submit to you that a billion dollars ($1,000,000,000) is no small item. A billion dollars ($1,000,000,000) is not a small item. If it were, the budget would have been done long ago. So, a billion dollars ($1,000,000,000) is not a small item. I would prefer, as many on this side of the 09500101.doc 101  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 aisle and apparently now most of you on that side of the aisle, to have a freeze, to have a rollback, to really smack Ameren and ComEd around, but the facts are it isn't going to happen. The facts are this is all we can do. And so, since this is all we can do we ought to support this legislation, not because it's the best possible product, not because it's what we would have preferred, not because every ratepayer in Illinois is going to come to our offices and thank us, not because of any other reason other than it is time to act, it is time to accomplish something for the citizens of Illinois on their rates and if we do not pass this today there will be no relief for ratepayers. Those are the facts. So, make it partisan rhetoric all you want, but the facts are the facts. We must pass some rate relief. You can make all the speeches you want about how the Majority Party has abused the process and hasn't included you, make all those speeches, talk about freezes that you didn't vote for, but it's time to act. This Bill does that. Those who negotiated ought to be thanked rather than vilified and I would strongly suggest your 'aye' votes."

"Representative Tryon."

"Indicates he'll yield."

"Representative Fortner."

"Indicates he'll yield."

"Representative, the… the answer to your question is this. Certainly there are a variety of different possibilities under which a utility company, such as Commonwealth Edison, would have to go into the spot market for a… quite simply, if one of the suppliers defaults on a contract, if a power plant breaks down. Now…"

"Representative, the… the… the market price has to be justified with the RPO. So, there are safeguards within the federal regulatory scheme to establish that those prices are fair. And quite frankly, the… the power market is… is not quite as fluid as the stock market, but it is quite fluid that at any given point in time you or I could probably get access to people within this room and they could tell us what the price of power on the spot market was an hour ago."

"Yes."

"Yes."

"The mechanism is… the primary mechanism of the entire process is a very open process and those approvals would have to be obtained through the… from the ICC."

"In order to proceed with the either acquisition or construction of a power plant, the utility would have to demonstrate that that is the least cost method."

"Representative, your time has expired. Could you finish answering the question and then we'll let the Gentleman conclude his remarks. So, Representative Scully, please."

"Now, if the utility company makes a decision to proceed with becoming a generator of electricity, they would have to demonstrate upfront that by all foreseeable standards it is probably going to be the least cost procurement. But there is definitely a possibility that it is going to be economically disadvantageous in the future to be a generator. I'll tell ya, last September I wish I was a generator. I've been saying for a long time that one of the things… when I grow up, I want to be a regulated public utility. Even better, is if I could be a nuclear power plant. I'd make a ton of dough if I could do that. But if the price of uranium goes through the ceiling, that's not going to be so much fun. If I own a nuclear power plant and I have contracts that I have to commit to… that I have committed to, that I have to perform on and suddenly something goes wrong with my reactor and I gotta shut down, I, as the generator, have to go out into the market… to buy on the spot market to fulfill my contracts. What we have to do is make sure that these entities are reasonably and rationally controlling the risk. We want to give the power 09500101.doc 107  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 companies the legal ability through this legislation to take those actions, if that is a reasonable and prudent business solution to the least cost procurement of power."

Speaker Hannig: "Can you bring your remarks to a close, Representative?"

"Representative Washington, you have 5 minutes." 09500101.doc 108  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Thank you, Mr. Speaker. Mr. Speaker, to the Bill. Mr. Speaker, I want to go on record to say that I wasn't any… I wasn't in any backroom making deals, but I was in Room 114 when we talked about this. And I know those individuals who were there with me were there for good intentions, because all of us pay bills. There's not a Legislator in here that doesn't pay a bill, at least none that I know of. I'm a ComEd consumer and my mother's an Ameren consumer and listening to some of the words, for whatever the intentions or motivations are… you know, speaking for myself, I'm very grateful for the work that went into this, for the many people who labored to come up with something not just for Republicans or Democrats, but for the people of the State of Illinois. I thank the utility companies for being flexible. And I'm glad we avoided… I think it's a wise choice that we avoided a court battle, because nine out of ten… myself not being a lawyer, but I'm sure many of those who are lawyers in here would know that we would have not prevailed. And as we and see everyday the amount of money flashed on the screens about how much money it is to keep us in Session, look at the amount of money that we would have paid the taxpayers at the cost of trying to fight utility rates. And number one, I wanted to make it clear that, of course, this is an imperfect 95th General Assembly in an imperfect world. This is one of many imperfect Bills coming out of this chamber, but I believe it is fair and it's the best that we could come up with. And at the same time, I think that it will help those, myself, other people in the State of Illinois be 09500101.doc 109  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 able to get some management control. We don't control the market prices, so there's no way this Bill would be implemented thinking we could dictate to a business in a capitalist society on rates and what the market will bear. I think any of us who know markets know that they are unpredictable. And as we talk about cost increases, I would wish that we would apply that same ethic of cost increase to the war. I think that we should end the war right now. I don't think money should be put out there to continue something where we losing a loss life and money that could be going to solve problems here in America are going abroad for a civil war. But yet, that's reality in an imperfect world. So, I want to say to the Bill, I'm glad to be associated with this particular legislation. I know it doesn't come easy and I know there's going to parts of it that won't please everybody. But we know that for the sake of personal ego, this Bill should not be sacrificed. On one hand, being hypocritical talking about the people of the State of Illinois and the relief we want to bring and what we want to do; yet, most of us are crying about we want to get out of here; yet now, we want to belabor the point, to play politics. I think it's wrong, it's immoral, and it's something that we shouldn't do, and I urge favorable passage for legislation to Senate Bill 1592. Thank you."

"Representative Durkin."

"He indicates he'll yield."

"No."

"We did not an… I did not anticipate that that would become a problem. I would hope that the Governor would act… move expeditiously to exercise his authority to appoint the right person. Obviously, we have to find the right person. The right person for this job is not going to be easy to find. It's a person that has to have credentials. It's a person that has to have the willingness, the ability, and the willingness…"

"…to comply with the limitations on prior employment as well as post employment."

"I wish you did, too."

"May I respond to that?"

"This legislation does rely upon the Governor to do his job to appoint an appropriate person. It relies upon the Senate to properly advise and consent. It relies upon… this legislation relies upon us to continue to be vigilant of the manner in which this director, this agency, carries out the functions that we have assigned to it."

"So we… as I stated earlier, we cannot simply pass this legislation then wash our hands of the project and say that we have now created an agency. We have people responsible. We, as the elected Representatives, have to continue to be vigilant…”

“…and we must also rely on the other branches of government to do their job."

"Thank you."

"I thought we had ample opportunity to discuss that last night…"

"…after the committee meeting."

"And I greatly appreciate your input and your thoughts on that."

"Correct."

"That's correct." 09500101.doc 113  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"All three of those companies are generating companies. They are not utility companies and they did not send… send bills to anyone other than the power companies for the power that they sold. Those…"

"That's correct. Neither did Exelon."

"Representative, I don't consider this a penalty. It's a voluntary payment on their part. They had the right to say 'no'. They chose not to. They chose to participate in this resolution."

"Representative, your 5 minutes have expired. Could you bring your remarks to a close?"

"I've never suggested that they did commit a public crime. I don't why you would…" 09500101.doc 114  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"For the betterment of the electric utility market in the State of Illinois, the answer is 'yes'. They apparently made that decision. And I want to emphasize that we'll use a very simple word, 'peace'. Another simple word would be 'stability'. The people of the State of Illinois are better off with stability. The generators are better off with stability. Dynegy and MidWest Generation are better off with a stable market. They were also beneficiaries of those auction prices achieved at the reverse New Jersey-style auction, which was so harshly criticized, producing those higher prices. They received those higher prices. As part of the resolution of this matter, they've agreed to make this contribution to the fund."

"No, I… no, I never said it was the product of the Commerce Commission. I actually think it was the product of a… working groups headed up by the utility companies and generating companies during year 2000… the spring of 2004…"

"…through 2000… through 2005 that issued a report in 2000… excuse me, in January of 2005."

Speaker Hannig: "Representative, you… we've got seven more people that would like to speak."

"It was approved by the Commerce Commission."

"Yes."

"The ICC has the approval authority… the final approval authority of a procurement process that is going to be administered by this new agency. In the process of… the original proposals for the Illinois Power Authority would be that that… that procurement process would not be submitted to the ICC for final approval. In the negotiating process it was agreed by the parties at the table that the ICC would 09500101.doc 116  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 retain final approval authority. I stand… I support that resolution."

"So, Representative, could I just ask that maybe we could go through the other seven and then somebody else might yield you some more time? So, Representative May, you're recognized for 5 minutes. Representative May, you're up for 5 minutes."

"Yes, thank you. I stand in support of this legislation as relief for our electric ratepayers. I, in committee, said 'no' to five hundred million (500,000,000) in relief, but a billion (1,000,000,000) is a sizable sum and we are putting in place a new procurement process. However, I do have a Sponsor for the ques… a question for the Sponsor, here."

"He indicates he'll yield."

"I think that sort of one the other hidden… sort of the frosting on the cake is a very strong, renewable portfolio standard for our state, something that many of us who care about the environment have been wanting to do for a long time. So this puts in statute provisions similar to Senate Bill 1184 for a renewable portfolio standard; renewable energy like wind and solar and biomass, that so many of these things that are… that are good for the environment, but they're also good for the agriculture in our state. So many… a group of us went down to visit the wind farm near Bloomington with thousands of acres of wind farms, which is not only, again, good for the environment but good for farmers to rent. So this talks about environmentally preferable energy. And my question for the Sponsor for legislative intent is that on page 7, line 5, it lists as 09500101.doc 117  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 renewable energy, trees and tree trimmings. So for legislative intent, you don't intend that we would cut down forests for trees. That isn't the intent of this, is it?"

"That's correct."

"So, no intent to take out whole trees from forests, just that if there are trees that are taken down or trimmings, that they could be used. That is very important. Again, I think that this is a national precedent-setting renewable portfolio standard that also suggesting that the renewable energy must be purchased in our state, which is… if it's possible. So this is further good for developing the renewable energy business in our state. So thank you for answering that question. And, again, for those of us who care about the environment as well as consumer rate relief, this is one part of it, a very, perhaps, not well-known part, that I think that is strong for the environment and is frosting on the cake as the reason to vote for this Bill."

"The Gentleman from McDonough, Representative Myers. Representative Myers, you're next on the list and you have 5 minutes."

"Representative Flider, you have 5 minutes."

"Thank you, Mr. Speaker. To the Bill. I know we've had a lot of political rhetoric and a lot of finger-pointing and all kinds of, you know, political gamesmanship that typically occurs on major issues like this, but I guess the approach I'd like to take is to thank the other side of the aisle for getting us to where we are today. You may recall a year and a half ago there was legislation that I and others cosponsored that would have eliminated the reverse auction, but really couldn't get much attention to that effort. And through the course of the year and even leading up to last January, the utilities were pretty successful in getting many Legislators to vote against a rate freeze and against eliminating the reverse auction, even to the point where they convinced many Legislators on the other side of the aisle to support legislation that would allow them to get the full effect of the rate increases, recover them over a 3-year period, and then eventually charge customers interest on their bill to get that money back. So not only did they get every bit of their rate increase back, but they also had a rate mitigation bonds that they would sell, that the ICC would not even have a say in authorizing, that the utilities would be able to put on their bill. So you talk about bookends, that's kind of what we're talking about. But then the rates really kicked in and I think many of the folks on the other side of the aisle recognized what the 09500101.doc 120  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 issues were and the problems were and we were successful in passing rate freeze legislation and… but that was only after we had the fear put into us by what happened with the all- electric rate which, because of this legislation, the agreement is the utilities will go to the ICC and restore that rate to a normal level after rate proceedings. But you may recall the utilities sat up here and offered twenty million dollars ($20,000,000) in relief, like that was really going to be something, after our Committee of the Whole. And the fact of the matter is that that twenty million dollars ($20,000,000) was a starting point for something that was going to result in what today we have a billion dollars ($1,000,000,000). And because of the changes in the law that we are seeing, because of the changes in procurement, we could very well see more than a billion dollars ($1,000,000,000) in value to customers down the road. We would not have those changes; we would not have a new procurement process were it not for the negotiations. And I have to say that no matter when you were here during the Spring Session, the representatives of the Attorney General, David Ellis, others, anybody who wanted to be part of those negotiations could be in those negotiations. And I was surprised to see during holidays, nights, weekends, many times when people might be having their evening cocktails, they were negotiating, they were working hard coming up with a deal. So here we are with a one billion dollar ($1,000,000,000) relief package that suddenly isn't enough. And I have to say that we've had many hours of discussion, negotiation, hearings here in the 09500101.doc 121  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 General Assembly, and among those hearings we hear criticism of the Illinois power agency but… you know, this Legislature many years ago created an agency called the Illinois Municipal Electric Agency. That agency is charged with buying power for consumers in 41 cities in Illinois. And the executive director of the IMEA came to testify before our committee… one of our committees this year that they were able to buy power on the open market through long-term contracts, through generation, of a variety of means for 20 percent cheaper than the prices that came out of the reverse auction. So the fact of the matter is there is a good model there. I would hasten to add that as part of the procurement process there will be proceedings. There will be open hearings and public comment will be provided. So we do have a start of a new process in Illinois for procuring power at the least cost manner. At the same time, we have true rate relief for consumers, rate relief that they will receive, not just the hope and dream of something down the road, not something that will be held up in the courts for many months possibly due to lawsuits, long before many of us will… will still be here. So I would encourage an 'aye' vote for this legislation. Many people worked very, very hard. They were very diligent and…"

"Your time has expired, Representative Flider. So, Representative Rose, you're recognized for 5 minutes."

"Representative Bradley." Bradley, J.: "Will the Sponsor yield?"

"He indicates he'll yield." Bradley, J.: "Representative Scully, Repre… can we have some order in here, please?"

"You got it." Bradley, J.: "Representative Scully, is AARP for this Bill?"

"Yes." Bradley, J.: "Representative Scully, is the Citizens Utility Board for this Bill?"

"Yes." Bradley, J.: "Representative Scully, are DSTs or transmissions, are they regulated currently or will be regulated under this Bill?"

"Yes." Bradley, J.: "Representative Scully, are averages with regards to what refund checks are going to be, is that misleading?"

"Grossly misleading." Bradley, J.: "In other words, the more money that somebody paid the more money they would get back in the form of rebates. Is that correct?"

"Yes, Representative. And a lot of the examples that people have been using here on the floor are examples of the rebate checks that might be received by people who didn't have substantial increases in comparing those rebate checks to the people who had huge increases. As we stated at the 09500101.doc 125  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 outset, the amount of the rebate is going to be proportional to the amount of the increases. So…" Bradley, J.: "Are… are all… I’m sorry, are all-electric customers going to get more money under this in form of rebates?"

"The all-electric customers are going to get much more out of these rebates in several different manners. The first and most basic form is that the all-electric customers sustained the largest increases. They're also relatively the highest users. The people who are highest users and the people who had the highest increase are going to be the people receiving the highest dollar amounts of rebates. All customers statewide will be receiving rebates that are approximately equal to 45 percent of the increase." Bradley, J.: "Let me ask…"

"We're functionally getting the increase in half." Bradley, J.: "Representative Scully, the value of a rate freeze for between 6 months and a year, a billion dollars ($1,000,000,000) would provide a whole rate freeze for somewhere between 6 months and a year?"

"I would estimate that it would provide… a billion dollars ($1,000,000,000) of relief would have provided a rate freeze for approximately… approximately a year and a half." Bradley, J.: "Representative Scully, as time goes on, the value of the increase for the utility companies goes down because whenever…"

"Excuse me. Excuse me, let me rephrase that. No, I was mistaken. The… the… a one billion dollar ($1,000,000,000) 09500101.doc 126  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 relief package would fund a rate freeze for approximately 4 months." Bradley, J.: "Representative Scully, as a result of the negotiations that have taken place and as a result of these changes, there were several lawsuits that were filed by the Attorney General's Office. Those were civil suits?"

"Yes, those were civil suits brought by the Attorney General's Office." Bradley, J.: "And if she would have prevailed in those suits, what would have been the remedy asked for by the Attorney General on behalf of the people in the State of Illinois?"

"The remedies that could have been…" Bradley, J.: "Money?"

"They're dollar… dollars…" Bradley, J.: "Money?"

"…and injunctive relief." Bradley, J.: "Money?"

"Dollars. Dollars. Money." Bradley, J.: "And what is the value of the settlement of those suits through this? Money?"

"Basically, a billion dollars ($1,000,000,000)." Bradley, J.: "Is there anything that would prevent a private citizen from going out and instituting their own lawsuit at this time for fraud…"

"No, all the citizens of the State of Illinois who think that they have been defrauded have the right to pursue a private civil lawsuit, either on their own behalf or as a class action." 09500101.doc 127  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 Bradley, J.: "Does the creation of the Illinois Power Agency give incentives to build Illinois usage coal… coal-fire power plants?"

"Yes." Bradley, J.: "Does the creation of the Illinois Power Authority and Illinois Power Agency break the collusion and monopoly that was taking place between the utility companies, the generation companies, and their parents?"

"Yes, and it breaks the…" Bradley, J.: "Does it get rid of the reverse auction?"

"Yes." Bradley, J.: "Is the reverse auction a thing of the past?"

"It is now a thing of the past." Bradley, J.: "Does this electric rate agreement reinstate the all-electric discount beginning January 1st?"

"Yes. Through the…" Bradley, J.: "So, if I’m…"

"…this legislation and through the ICC." Bradley, J.: "So if I'm to understand this, if you vote against this Bill, it's a vote against the AARP, it's a vote against the Citizens Utility Board, it's a vote against a billion dollars ($1,000,000,000). It's a vote against using Illinois coal and building Illinois coal-fired power plants, it's a vote against reinstating the all-electric discount, it's a vote against breaking the monopolies, it's a vote against fixing the system so there's not collusion, and it's a vote against the people of the State of Illinois."

"Representative Cultra."

"He indicates he'll yield."

"Thank you."

"Representative, they will be receiving the same rate relief credit that all the other customers are receiving. That is, in the first… in 2007… let me step up from there. In 2007, they will be receiving a 40 percent decrease in their… in the price that they are paying for electricity, a forty (40)… excuse me, a 40 percent decrease from the amount they were increased in January. They'll also be… will be receiving specific relief… the… all… they'll be receiving a credit for high winter usage, their rate relief… excuse me, the all-electric discount is presently being reinstated through the ICC. At some point in time in the future, the all-electric discount may be discontinued. We can't stop that forever. We cannot regulate beyond the term of our… terms of office. But the major impact that they got hit with in January of this year is being reversed."

"It… actually, for all-electric customers, it's going to be more in the range of 70… a 70 percent drop. Most of that increase is going to be removed."

"Thank you."

"Representative Coladipietro."

"Indicates he'll yield."

"Yes."

"The signatories are the… excuse me, one second. Let me see if I can retrieve it. Representative, I have a copy of the Letter of Understanding in my hand right now. The signatories will be John Rowe, as Chairman of Commonwea… of Exelon, Frank Clark, as Chairman CEO of Commonwealth Edison, Todd Raba President of Mid America Gen (MidAmerican Energy Company), Gary Rainwater, the Chairman of Ameren Corporations on behalf of its subsidiaries, Scott Cisel, the Chairman of the Illinois Utilities, Ameren Utilities. Excuse me, one second. Representative, the… those are the signatories. The letter is addressed to Speaker Madigan, 09500101.doc 130  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 Minority Leader Cross, Attorney General Madigan, President of the Senate, Emil Jones, and Minority… Minority Leader Watson. So, these… I described who the signatories are, those are the people who have drafted this letter and signed this letter to the four Legislative Leaders and the Attorney General."

"The… the relief package that we have described as I presented the Amend… House Amendment #5. That rate relief package is contained within the Amend… within the Letter of Intent. It is a contractual statement by the utility companies of the relief they provide. One of the provisions of the agreement is that these are their commitments, provided that the General Assembly does not pass any rate freeze legislation. Now, you and I as Members of the General… this General Assembly cannot tie the hands contractually of a future General Assembly. We can pass legislation, but the future General Assemblies can reverse our legislation. If a future General Assembly chose to pass rate freeze legislation, the utility companies would no longer be bound by their commitments to make these payments into the relief program."

"Representative, the relief package goes beyond our term of office, and that was the intent of the parties. So the question becomes, how do we create an enforceable agreement beyond the term of office? We cannot bind future General Assemblies to this agreement. The vehicle that was chosen was functionally a contract that the utility companies agreed to make these payments. They agreed to this relief package. If a future General… now, excuse me. The Attorney General has the authority to enforce this agreement. If a future General Assembly were to pass rate freeze legislation, these utility companies would then be relieved of any obligations they have under this Letter of Intent. So, the use of the Letter of Intent was primarily to address the issue that this agreement was intended to extend it beyond our terms of office."

"It was drafted by all the parties at the table. It was… as with many Letters of Intent, counselor, it is usually a negotiated document. And this was."

"It was a…"

"Representative, your time has expired. Could you bring your remarks to a close, please?"

"So… Representative…" 09500101.doc 132  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"The drafting was a collective effort. If your question is whose word processor was it on, I'll get you an answer to that question. I don't know that."

"Yes."

"Right."

"And certainly the Senate and the House was represented, the Attorney General was represented, and the signatories certainly were represented at the table when it was being drafted."

"Representative Kosel, you're recognized for 5 minutes."

"Representative Durkin, you have the balance of the 5 minutes."

"Could you restate your question?"

"No. And I would also…"

"…add that no legislation is capable of doing that."

"No.

"The public is receiving a one billion dollar ($1,000,000,000) relief package that is being delivered in exchange for stability. As with any settlement of any civil lawsuit, the party paying the money is only going to pay the money in exchange for a dismissal of those actions. Now, the Attorney General has agreed to dismiss the actions at that office. Local prosecutors are free to pursue criminal prosecution if they see fit. Private individuals, private citizens are free to pursue a legal action under the Illinois Consumer Fraud and Deceptive Business Practice Act. A class action attorney is free to work with private litigants to pursue those issues. But as part… the goal of those cases was… the relief being sought was monetary and injunctive. We are accomplishing those goals with this legislation."

"You're asking for my opinion?"

"My opinion is that this settlement is a superior resolution."

"I… I…"

"I share your opinion."

Speaker Hannig: "Representative Meyer. Representative Jim Meyer. So, he doesn't wish to speak. Representative… Representative Verschoore."

"Thank you, Mr. Speaker. Will the Sponsor yield?"

"Indicates he'll yield."

"Yeah. Representative Scully, according to my analysis, this Bill permits Ameren to consolidate under a common parent. Is that correct?"

"It creates that possibility, yes."

"Okay. Also, Mr. Scully, if Ameren is able to merge or consolidate then if the legislation's intent that the consolidation cannot impair reliability or safety of the service?"

"That's… yes."

"And then the most important question I have. It also would give the General Assembly intent that in considering Ameren consolidation or merger, that the commission investigates and ensures that Ameren has the necessary amount of employees to avoid… to supply reliable and safety service. Is that correct?"

"Yes, that's correct."

"Thank you very much."

"Representative Scully to close."

"Thank you, Ladies and Gentlemen, for your… for the spirited debate. This is an issue that has been before the General Assembly certainly for the past eight months. It has been an issue that I have been studying for two and half years. This is a good resolution of the problem. People will second guess this resolution. Some people will say 09500101.doc 136  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 that it doesn't have enough money. Some people will say it's too harsh on the utility companies. Some people will say there's too much money coming from the Commonwealth Edison territory and going to downstate Illinois. Yet, the downstate customers will say that there's not enough money. This is a good resolution of the problem. I ask for your support. Thank you."

"The question is, ‘Shall this Bill pass?’ All in favor vote ‘aye’; opposed ‘nay’. The voting is open. This requires 71 votes. Have all voted who wish? Have all voted who wish? Have all voted who wish? Representative Patterson, do you wish to be recorded? Mr. Clerk, take the record. On this question, there are 80 voting ‘yes’ and 33 voting ‘no’. And this Bill, having received a Three-fifths Constitutional Majority, is hereby declared passed."

"On page 7 of the Calendar, under the Order of Senate Bills-Third Reading, is Senate Bill 849. Representative Younge, this is your Bill. And Mr. Clerk, read the Bill."

"Representative Younge."

"Thank you, Mr. Speaker. Senate Bill 849 is an initiative of the O'Fallon Township High School District 203. It allows the district to proceed with their voter approved bond issue. The purpose of this Bill is to correct an error that occurred in reference to the publication of the bond referendum. It was published over a period of 09500101.doc 137  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 seven days rather than ten as required by statute. And I move for the passage of the Bill."

"The Lady has moved for the passage of Senate Bill 849. And on that question, the Gentleman from Bond, Representative Stephens."

Speaker Hannig: "Is there any further discussion? Representative Sullivan."

"Representative Washington."

"Mr. Speaker, I rise in strong opposition to this Bill. I'm sure I sound like Mr. Stephens and I'm just teasing. Thank you."

"Representative Younge to close."

"I ask for your support in reference to this Bill."

"The question is, 'Shall this Bill pass?' All in favor vote 'aye'; opposed 'nay'. The voting is open. Mr. Clerk, the voting is open. This requires 71 votes. Have all voted who wish? Have all voted who wish? Have all voted who wish? Representative Beiser. Saviano. Sommer. Do you wish to be recorded? Last call. Mr. Clerk, take the record. On this question, there are 101 voting 'yes' and 12 voting 'no'. And this Bill, having received a Three-fifths Constitutional Majority, is hereby declared passed. On page 14 of the Calendar, under the Order of Concurrence, is House Joint Resolution 24. Representative Pihos."

"The Lady moves for the adoption of the Joint Resolution. The Lady moves that the House concur in the Senate Amendment to the Joint Resolution. Is there any 09500101.doc 139  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007 discussion? Then the question is, 'Shall the House concur in the Senate Amendment and shall House Joint Resolution be adopted?' All in favor vote 'aye'; opposed 'nay'. The voting is open. Have all voted who wish? Have all voted who wish? Have all voted who wish? Representative Tracy, Patterson, Lindner, Kosel, do you wish to be recorded? Mr. Clerk, take the record. On this question, there are 113 voting 'yes' and 0 voting 'no'. And the Reso… and the House concurs in the Senate Resolution (sic-Amendment) and the Resolution is adopted. Mr. Clerk, would you read the Agreed Resolutions."

"Representative Durkin moves for the adoption of the Agreed Resolution. All in favor say 'aye'; opposed 'nay'. The 'ayes' have it. And the Resolution is adopted. Representative Eddy, for what reason do you rise?"

"State your inquiry."

"Representative, I wish I could answer that question, but we know that we'll be here tomorrow at 9 a.m., but I don't… I think the… the schedule for the weekend is uncertain at this point."

"And we'll advise you as soon as we… we have more certainty to the situation."

"I think we… I think we understand the situation with check-out times, but we're uncertain as to whether we'll be here Saturday or Sunday, at this moment. And so, I simply have no answer."

"Yeah."

"State your point."

"Well, Representative, I guess the two options that are available to the Body and to the chamber would be that: 1) we could pass a 12-month budget that would have the numbers or we could pass a additional 1-month budget. And I suppose…"

"I am not aware of any, Representative."

Speaker Hannig: "There certainly we're not none today, Representative."

"I don't… I'm…"

"I'm not certain, Representative."

"I have personally not, but I've been advised that he's in Springfield and in the Capitol." 09500101.doc 142  STATE OF ILLINOIS 95th GENERAL ASSEMBLY HOUSE OF REPRESENTATIVES TRANSCRIPTION DEBATE 101st Legislative Day 7/26/2007

"Are there any announcements? Then allowing perfunctory time for the Clerk, Representative Currie moves that the House adjourn until tomorrow, Friday, July 27, at the hour of 9 a.m. All in favor say 'aye'; opposed 'nay'. The Resol… the Motion is adopted. And the House stands adjourned."