121 Report – CRMA – May 2017

In This Issue

Council Initiatives

CHICAGO CITY COUNCIL

ORDINANCES AND RESOLUTIONS

 

INTRODUCTIONS

HEAD TAX
Sponsors: Ald. Carlos Ramirez Rosa (35th Ward), Ald. Ariel Reboyras (30th Ward), Ald. Proco Joe Moreno (1st Ward) and 11 additional co-sponsors
Committee: Committee on Finance –

 

After filing a notice that he would motion to discharge his proposal to re-implement the Employer’s Expense Tax (Head Tax) from the Committee on Committees, Rules, and Ethics, Alderman Ramirez Rosa expected to take the matter up at last week’s City Council meeting. Instead, the committee scheduled a meeting to discharge the item to the Committee on Finance where it now sits.This proposal would assess a new tax on any business that has at least 50 full-time employees, commission merchants or any combination of the two. Full-time employees are defined as anyone who accrues at least $1000 in wages in any calendar quarter of a year from the same employer.The tax would be in the amount of $16/month for each commission merchant or full-time employee that works at least 50% of their time in the city of Chicago. The tax cannot be passed on to employees. It must be paid by the employer. The revenue from the tax will be transferred to support Chicago Public School operations.CRMA members will note that Mayor Rahm Emanuel repealed this tax back in 2013 after the industry advocated for years against the tax first implemented under former Mayor Richard M. Daley. The repeal, championed vigorously by Ald. Tom Tunney (44th Ward) and Ald. Brendan Reilly (42nd Ward), was a huge win for employers and was a signal that the Mayor put a high priority on removing barriers to hiring and encouraged businesses to grow in the city. This proposal is anti-growth, anti-hiring and anti-consumer. CRMA is OPPOSED.

 

MOBILE PHONE PRIVACY AWARENESS ACT
Sponsors: Ald. Edward M. Burke (14th Ward) and Ald. Leslie Hairston (5th Ward)
Joint Committee: Economic, Capital and Technology Development and FinanceCiting the inefficiency of pop-up consent advisories and notifications included in privacy policies, this proposal seeks to inform purchasers of mobile phones of the possibility that location services on the phone may be enabled and that data obtained through the use of those services may be retained, used and/or shared with 3rd parties. Retailers of mobile phones must include a notice to this effect at the point of sale/lease. The notice, which appears in the proposal, must also tell consumers to read agreements, privacy notices, user manuals and the phone’s instructions to learn about location services and how they can be disabled. Retailers would be subject to fines of between $150-$250 per violation. CRMA opposes any effort to clutter our POS areas with more notices that customers don’t read.

 

RENEWAL FEES FOR REGISTERED, VACANT BUILDINGS
Sponsor: Ald. George Cardenas (12th Ward) 
Committee: Finance
Owners of vacant buildings must currently register the building with the Department of Buildings within 30 days of the building becoming vacant and must renew the registration every 6 months. This proposal would change the renewal fee from the current $250 to an increased fee based on the amount of time the property has been vacant according to the following schedule:* $500 for properties that are vacant for at least one year but less than 2 years
* $1,000 for properties that are vacant for at least 2 years but less than 3 years
* $2,000 for properties that are vacant for at least 3 years but less than 5 years
* $3,500 for properties that are vacant for at least 5 years but less than 10 years
* $5,000 for properties that are vacant for at least 10 years, plus an additional $500 for each yearIf the owner is found to be in violation of the building or fire codes at the time of renewal, all fines have been increased. In the case that the owner defaults on the mortgage and the building becomes vacant and unregistered, the mortgagee is already required to register and renew if applicable. The renewal fee, which is either $400 or $700 annually, depending on the reason for the initial registration, will increase according to the following schedule:* $1,000 for properties that are vacant for at least one year but less than 2 years
* $1,500 for properties that are vacant for at least 2 years but less than 3 years
* $2,500 for properties that are vacant for at least 3 years but less than 5 years
* $4,500 for properties that are vacant for at least 5 years but less than 10 years
* $6,000 for properties that are vacant for at least 10 years, plus an additional $500 for each year in excess of 10 yearsCRMA is currently considering its position.

LICENSING OF MASSAGE ESTABLISHMENTS
Sponsors: Ald. Matt O’Shea (19th Ward), Ald. Michelle Harris (8th Ward), Ald. Michael Scott, Jr. (24th Ward) and 5 additional co-sponsors
Committee: License and Consumer Protection

This proposal would require businesses that offer massage services to obtain a regulated business license. Currently, such establishments are only required to obtain a general, limited business license. The  Department of Business Affairs and Consumer Protection would approve the license which would require each applicant to submit information on the types of massages offered, proof that employees are at least 18 years old, employment history of each applicant for the 3 years preceding the application, the previous experience of each applicant in the massage business, evidence of any previous business licenses for massage establishments revoked in any other jurisdiction, history of criminal violations and any lease information (if applicable). Licenses will be denied to any person found to have violated certain enumerated sections of the Municipal Code, and state offenses involving sexual misconduct with children, trafficking of persons, other sexual offenses or any other felony not excused by the Commissioner.

As a condition of the license, licensees must keep the premises clean and sanitized, display prices in a written price list, require employees to wear nontransparent clothing of all sensitive areas, require clients to cover sensitive areas, launder sheets and towels after each use, refrain from touching any client in a sexual/genital area, keep physical facilities in good repair, keep a year’s worth of records of services rendered, have clear glass entrances to the establishment, separate entrances/exits from residences, post a sign identifying the name of the establishment, post an advisory notice for the benefit of customers, disinfect all massage tables, lavatories and floors, provide a toilet facility and provide closed cabinets for storage for towels and linens.

Massage therapists must be licensed in order to work in the establishment, and licensees must keep a list of all employed massage therapists along with a copy of their license and state-issued photo ID. The license must be displayed in the establishment and any advertisements must also show the city license number. Licenses cannot be transferred. CRMA is currently considering its position.

PUBLIC COMMENTS AT COUNCIL MEETINGS
Sponsors: Ald. Edward M. Burke (14th Ward), Ald. Michelle Harris (8th Ward), Ald. Patrick O’Connor (40th Ward) and 3 additional co-sponsors
Committee: Committees, Rules and Ethics

The city is amending its Rules of Order and Procedure to allow for the public to comment on any matter being considered at the meeting. Comments will occur at the beginning of the meeting after the roll call and invocation. Remarks will be limited to 3 minutes after a formal request is submitted to the Sergeant-at-Arms. The public comment period will last for 30 total minutes. This comment period will be in addition to the public comments period already in place for committee meetings. Written comments can also be submitted to the full Council through the Sergeant-at-Arms.

The next City Council meeting is scheduled for Wednesday, June 28, 2017.

Contact Information
Tanya Triche Dawood
Vice President & General Counsel

312/726-4600

ttrichedawood@irma.org

This Week in Springfield – 100-14

IN THIS ISSUE

SENATE “GRAND BARGAIN”
HOUSE TAX PROPOSAL
RETAIL DISCOUNT
DATA PRIVACY
FIREARM DEALER LICENSING
FOOD ALLERGIES

This Week in Springfield both chambers continued to consider legislation from the opposite chamber while the Senate “Grand Bargain” negotiations continued and intensified. A much-needed budget appears to be far from reality. After midnight on May 31st, passage of any legislation requires a super-majority which will make reaching agreement substantially more difficult.

SENATE ‘GRAND BARGAIN’

Months of attempts to reach a bi-partisan agreement in the Senate on a ‘grand bargain’ designed to establish a framework for an ultimate agreement on a state budget, including tax increases and reforms, continued this week but tensions increased as patience wore thin.

The Senate concluded action on a number of bills containing the various pieces of the ‘grand bargain’ despite the fact agreement between the Senate Democrat and Republican negotiators was never reached on all the pieces. Most importantly, while the proposed stop-gap budget passed as contained in SB 6, the language needed to implement the stop-gap budget contained in SB 42 failed.

As a result, the Senate did not call the bill containing revenues (SB 9) for a vote despite threats from the Senate Democrats that they are willing to go it alone if they have to. The Senate Democrats had filed Senate Amendment #4 which included provisions they believe the Senate Republicans had agreed to or presented during negotiations.

The most significant revenues are an increase in the state income tax for individuals to 4.95% from the current 3.75% that would roll-back to 3.75% in seven years. For corporations, the income tax rate would increase to 7% from the current 5.25%. The sales tax base would be expanded to include a variety of services. The services to be included in the sales tax base would be: repair and maintenance of personal property, landscaping services, laundry and dry-cleaning, storage (cars, boats, and property), cable/satellite/streaming services, pest control, private detective, alarm and security services, and personal care. Individuals who earn more than $250,000 and joint filers earning more than $500,000, would not be eligible for the personal exemption under the income tax. The same means test would be applied to the education expense credit.

As for cuts, Senate Amendment #4 proposed over $3.7 billion in cuts. The cuts included but were not limited to pension reform, the state employee health insurance program, $405 million in Medicaid reductions in addition to granting the Governor the authority to reduce Medicaid expenditures up to another 5 percent, additional borrowing, and refinancing of existing debt.

In addition to the passage of the stop-gap budget in SB 6, the Senate passed several of the ‘grand bargain’ related bills. Those bills passed were: education reform (SB 1), $7 billion bond authorization to pay-off back bills (SB 4), a stop-gap budget (SB 6), casino expansion (SB 7), procurement reform (SB 8), and pension reform for Chicago (SB 16). With the exception of casino expansion, procurement reform, and pension reform for Chicago, the legislation was approved on party-line votes. Passage of the various pieces was made possible, in part, by the stripping out of linking language that stated if any one bill did not become law, none of them could become law. The education reform bill was passed over Republican objections that discussions are on-going.

Property tax reform and workers’ compensation reform, two of the key reforms being sought by Governor Bruce Rauner, have yet to be considered. While agreement appears to be near-at-hand in the workers’ compensation arena, the parties remain relatively far apart on property tax reform. In particular, what elements, if any should be exempt from any property tax freeze that may be agreed to.

IRMA spent most of the week beating back a proposal to reduce the retail discount/vendor collection allowance. It appeared to be driven by the fact they were several hundred million short despite the aforementioned revenue increases noted above. See related story below.

The pieces of the Senate ‘grand bargain’ that passed have already been assigned to substantive committees in the House and could be heard next week. On those that have yet to be considered by the Senate – largely workers’ compensation and a property tax freeze – discussions continue. TWIS readers must remember that these have been discussions in the Senate and have not included the House in any meaningful way so even if the Senate can managed to come to some agreement on all the various pieces, it remains to be seen how they will be received in the House.

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HOUSE TAX PROPOSAL

The House Revenue and Finance Committee acted on a tax proposal as prepared by the House Democrats and contained in House Amendment #1 to HB 160 (Rep. Mike Zalewski, D- Chicago). The proposal included decreasing the corporate income tax from 5.25% to 2.625%. Further, it proposed eliminating the franchise tax and reducing LLC filing fees from $750 to $59 and the filing fees of articles of incorporation from $500 to $39. Under this plan, the estate tax would be altered to allow assets to be inherited if a direct descendant or spouse continued to directly manage the assets for a period of not less than 10 years.

In terms of economic development reforms, the proposal seeks to further reform the EDGE credit program. It would limit the credit to 50% of the incremental income tax attributable to the project plus 10% of the training costs of new employees or 100% of the incremental income tax attributable to the project, whichever is less. There was also an enhanced credit (75%) if the project is in an underserved area. An area is considered underserved if it has poverty rate of 20%, 50% of the children are in the federal free lunch program, 20% of the households are SNAP recipients, or the unemployment rate is more than 120% of the national average for at least two consecutive quarters. The credit would also be expanded so that the only economic sectors not eligible for EDGE would be retail and retail food.

The proposal also contains a proposal to require corporations to pay a minimum tax of $5,000 regardless of their actual tax liability. For 2018 and beyond, the $5,000 would be increased by the consumer price index and rounded to the nearest $50. If a corporation’s liability was less than $5,000 but greater than $0, they would be the difference.

Importantly for retail, the House proposal did not proposed changes to the Retail Discount recognizing that it is a partial reimbursement for services rendered to the state and not a tax credit/deduction. Additionally, the House proposed closing a tax loophole that allows local governments to tax individual items by weight, and it exempted from tax shipping and delivery costs. IRMA would like to thank the House for recognizing the fact that the Retail Discount is a service to the state as well as the challenges raised by taxing shipping and delivery and allowing local governments to tax consumer goods by weight in addition to imposing a sales tax.

The proposal contained a number of other items including, but not limited to, allowing the carry-forward of credits, increasing the Earned Income Tax Credit to 15% over three years, awarding a child tax credit equal to 20% of the federal child tax credit, and incenting the hiring of interns and apprentices.

The House Revenue & Finance Committee approved HB 160 as amended and it now awaits additional consideration by the full House.

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RETAIL DISCOUNT

In the Senate ‘grand bargain’ discussions, some parties attempted to force retailers to underwrite more of the state’s sales tax collection functions than they already do. IRMA responded by reminding all the parties involved that state statute specifically calls the allowance a ‘reimbursement’ as well as the fact that unlike other business sectors, retailers do not benefit from retail-specific credits in the income tax code. Additionally, retailers are subsidizing the collection of sales tax and administering what is universally recognized as the most complicated sales tax scheme in the nation.

At one time or another, ideas on the Retail Discount were exchanged by both sides. As TWIS goes to press, IRMA was informed that any reduction or cap of the Retail Discount has been removed from consideration. While IRMA is disappointed that reduction or elimination of a reimbursement was even considered, IRMA sincerely appreciates the deliberative approach both sides took to re-considering and removing the Retail Discount from further consideration. Nevertheless, IRMA will continue to closely monitor the situation.

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PAID SICK LEAVE

Senate Amendment #1 to HB 2771  (Rep. Christian Mitchell, D-Chicago/Sen. Toi Hutchinson, D-Chicago Heights) is very similar to the ordinances scheduled to take effect in Chicago and Cook County on July 1st except it does not tie in FMLA benefits.

The bill will require each employer to implement a system that would allow employees to accrue one hour of paid leave for every 40 hours the employee works.  The employee would be eligible to take up to 5 paid sick days in one 12-month period.  Employees would have to work for at least 180 days in order to be eligible and can take leave due to their own sickness or the illness of anyone that they know who is like family.  Leave can also be taken for school closures and for needs related to incidences of domestic violence.  Instead of offering accrual, the employer can choose to give the paid leave to the employee up-front at the beginning of each 12-month period.  Paid sick days can carry over although an employer is not required to provide more than 5 paid days in a 12-month period.  An employer with a paid time off policy can use that policy in compliance with this mandate as long as the employer offers the minimum requirements of the bill.  Paid sick days do not need to be paid out upon separation.

This week, the amendment was voted out of the Senate Labor Committee with a promise by the sponsor that an additional amendment will be brought back to committee next week that will address some outstanding issues.  In particular, the sponsor has indicated a willingness to allow employers to choose the date that benefits roll over instead of having to tie the date to the date that the employee starts or January 1st.

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DATA PRIVACY

Senate Amendment #1 to HB 3449  (Rep. Ann Williams, D-Chicago/Sen. Thomas Cullerton, D-Villa Park) would require companies that use geolocation services through an app to provide a way for users to affirmatively consent to the use of those services if the company is collecting, disclosing or otherwise using the precise location of the customer for any purpose.  The consent must be through a hyperlink or other action that will require the consumer to actively agree to the specific use.  Therefore, mentioning in the company’s privacy policy that geolocation services are used is not enough to satisfy the requirement in the bill.

It is widely understood that the power to control geolocation services is already literally in the user’s hand.  Such services can be turned off on a person’s device either through the app or through the phone or tablet.  This bill is an unnecessary burden to businesses that have already given the user the choice to use geolocation services.  It will require that the user give his/her consent upon first time use of the app, and also give consent whenever there is a material change to the specific purposes for which the information is collected, used or disclosed.

The bill does not apply to entities subject to HIPAA, financial institutions and affiliates subject to Gramm-Leach-Bliley, internet, wireless and telecommunications service providers, cable and video service providers, certain governmental entities, persons licensed under the Private Detective, Private Alarm, Private Security, Fingerprint Vendor, and Locksmith Act of 2004, and persons licensed under the Land Surveyor Act or the Professional Engineering Services Act.  No reason has been given as to why there would be a legitimate business reason for any of these exemptions.

After testimony in the Senate Judiciary Committee, the sponsor agreed that he would review any alternative language given to him by the opposition before moving the bill to the floor.  IRMA testified in opposition and is a part of a coalition of businesses that have given the sponsor alternative language to consider before moving the bill.  The bill passed out of the Senate Judiciary Committee with a vote of 7-3-0.

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FIREARM DEALER LICENSING

SB 1657 (Sen. Don Harmon, D-Oak Park/Rep. Kathleen Willis, D-Northlake) would require sellers of firearms and ammunition to apply for a state license to sell.  Firearm dealers are currently licensed and inspected by the federal government.  An Illinois-specific license would allow the state to separately inspect locations and possibly take licenses away for violations of the Act.  IRMA was a part of the negotiations last legislative session to discuss the licensing effort and this amendment reflects the previous and current agreement which exempts from the licensing requirements any retailer that has less than 20% of its sales in firearms and ammunition.  Since retailers that sell a small percentage of firearms are not the focus of the legislation, nor have they been shown to have critically engaged in the sale of firearms to straw purchasers, it makes sense to narrow the focus of the bill to address the real concern.  The exemption would certainly be revisited if it is later found that such retailers have not been acting as good stewards of the privilege of selling firearms in Illinois.  IRMA would like to thanks Senator Harmon for his consideration when SB 1657 was formulated in the Senate.

The House Judiciary Criminal Committee engaged in a lengthy debate on the bill and it passed with a vote of 7-6-0.  It will now be considered on the House floor.

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FOOD ALLERGIES

Per an agreement between IRMA and the Illinois Restaurant Association who is seeking the legislation, Illinois joins Virginia, Massachusetts, Michigan and Maine as the only states that require additional food allergen training for restaurant workers. The current food safety sanitation manager certificate (FSSMC) training already contains a 90-minute segment that includes training on allergens.  HB 2510 (Rep. Sarah Feigenholtz, D-Chicago) would require an individual receiving a FSSMC to receive and pay for a separate allergen training course.  The requirement only applies to local Illinois restaurants. Multi-state restaurants and franchisees are exempt if they have an internal food handling program on file with the Department of Public Health by August 1, 2017; if they have an internal food allergen training program that meets the requirements of the statute; or if they have a food allergen training program approved in another state.  The legislation passed the House with a 77-32 vote. IRMA would like to thank Rep. Feigenholtz for her leadership in bringing the two parties to agreement.

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This Week in Springfield – 100-13

COMPENSATION HISTORY
PROMPT PAYMENT
CARRYOUT BAG FEES
CATFISH
FOOD HANDLING

This Week In Springfield negotiations in the Senate over a “grand bargain” continued while non-budget proposals continued to be debated.

COMPENSATION HISTORY

 

The Senate Labor Committee passed HB 2462 (Rep. Anna Moeller, D-Elgin/Sen. Daniel Biss, D-Skokie) by a partisan vote of 10-5 that would prohibit a business from viewing, asking about or requesting the previous salary, wage, benefits or other compensation of any applicant for employment.  This is intended to address the concern that gender discrimination is continuously perpetuated by businesses based on salary history. The initiative was drafted and introduced by Women Employed and the Sargent Shriver National Center on Poverty Law.  The Illinois Department of Labor demonstrated that while unequal pay claims do occur they are not as prevalent as the proponents claim.  The proponents blame the lack of claims on current business “loopholes” in the current unequal pay statute. These “loopholes” are completely non-discriminatory factors in determining possible reasonable differences in wages such as merit or seniority that are used and shared in every state.  In order to address these alleged loopholes, the legislation includes a vague two prong ‘differential’ test and alternative employment practice standard—meaning if an employee can show an alternative practice exits anywhere in the United States for a similar job an employer may not use factors such as seniority or merit system to apply a wage offer defense. These are only a few of the many issues presented in the legislation.

HB 2094 (Rep. Norine Hammod, R-Macomb) and SB 1039 (Sen. Mike Connelly, R-Naperville) are supported by the business community and prohibits an employer from asking about previous wage and salary, unless the salary is public knowledge, the prospective employee is a current employee of the hiring employer, and the prospective employee voluntary provides his/her salary. The legislation also incentives employers to review all of their hiring practices and make reasonable progress towards eliminating pay differentials. Despite addressing the core concern of the proponents of HB 2462 and including reasonable exceptions and incentivizing elimination pay differentials, both HB 2094 and SB 1039 have been disregarded.

Regardless, there are some outstanding legal questions regarding the issues surrounding prohibiting an employer from asking a prospective employee about previous wage and salary.  The City of Philadelphia passed an ordinance with similar language that prohibits an employer from asking a prospective employee about their previous wage and salary. Subsequent to passage, a lawsuit was filed in federal court on the grounds that the ordinance violates the First Amendment and the Commerce Clause of the United States Constitution.  If adopted, the Illinois statue would face the same deficiencies.  The statute prohibits a business from asking a simple question which in of itself does not discriminate or harm an individual so would not rise to the time, place, manner analysis which must be content-neutral, be narrowly drawn, serve a significant government interest, and leave open alternative channels of communication.  Additionally, the statute impacts commerce that takes place outside of Illinois boundaries. For instance, if a Missouri resident is interviewed in Missouri for a job in Illinois, does the statue apply? Or vice-versa, if an Illinois resident is interviewed in Illinois for a job in Missouri does the statute apply? If the answer is yes, then the statute arguably attempts to control activity outside of Illinois’ border and is subject to a federal Commerce Clause analysis. Additionally, this week the 9th U.S. Circuit Court of Appeals in California cited a 1982 ruling by the court that said employers could use previous salary information as long as they applied it reasonably and had a business policy that justified it.

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PROMPT PAYMENT

Ideally, entities providing services to the state (e.g. Medicaid providers, medical providers serving state employees under the state health insurance program, etc.) would be paid in 30-days or less. It is not unreasonable for a vendor to be paid promptly for the services they render. As this is written, the State of Illinois owes its vendors nearly $13 billion and that total is growing at over $8,000 per minute.

When the State of Illinois fails to pay its vendors ‘promptly’ (i.e. within 90-days), the state begins to incur interest at the rate of 1% per month or 12% a year if debt reaches that maturity. The State Prompt Payment Act is designed to ensure the state’s vendors are not abused. The Act is supposed to provide a serious financial incentive to the state to be a good partner.

SB 2202 (Sen. Dan McConchie, R-Lake Zurich) proposes to reduce the current prompt payment interest by two-thirds. While it would not take effect until July 1, 2018, it would have the perverse effect of encouraging the state to abuse their vendors through non-payment and encourage additional fiscal mismanagement.

IRMA testified in opposition to the proposal which was narrowly held in the Senate Executive Committee.

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CARRYOUT BAG FEES

About 5 years ago, after months of discussions with the sponsor, Senator Terry Link (D-Gurnee) and the environmental community, IRMA and our industry partners agreed to support a bill that would have implemented a statewide plastic bags recycling mandate.  The bill would have required the plastic bag manufacturers to develop a recycling program throughout the most populous areas of the state that would have afforded customers easily accessible ways to recycle plastic carryout bags as well as plastic wrap instead of throwing these items into landfills or allowing them to become a nuisance.  The bill was passed by both chambers, but was vetoed by then Governor Pat Quinn.  At the time, the Governor, encouraged by a 10 year old student from the northern suburbs of Chicago, argued that the recycling mandate didn’t go far enough to address the waste and litter issue.  A later attempt to override the veto failed.

Last year, the parties were called together by the Senator Link to try again.  Considering the changing landscape of the price of oil, it was determined that a recycling mandate would be too expensive to run and would place an undue financial burden on the business community.  Moreover, the environmental community decided that plastic bag bans were actually not effective.  So, the business community placed another offer on the table.  This time, at the behest of the environmental community which was now in favor of fees for all non-reusable carryout bags,  business suggested that a fee be placed on plastic and paper bags with the fee split between the retailer and the local jurisdiction. The caveat was that the local jurisdiction would have to use their portion of the fee to support a household hazardous waste program (HHW).  The HHW would have a significant positive environmental impact in that it would allow communities to collect other hard to recycle products like latex paint, carpet and even mattresses.  The environmental community went silent on the proposal.

In the interim, the city of Chicago passed a 7-cent tax on all non-reusable bags which has now been in effect for almost 4 months.  Preliminary results from the tax have shown a significant reduction in the use of carryout bags by about 40%.  Now, Senator Link has asked the parties to talk again to see what can be agreed to this legislative session. After some brief discussion, he introduced SB 1597 Amendment #2 (Sen. Terry Link, D-Gurnee).  The bill creates a model ordinance that local jurisdictions can opt to adopt.  The ordinance would place a 5 cent fee on all non-reusable bags, prohibit local jurisdictions from further regulating auxiliary containers, allow a split of the fee with 3 cents going to the local jurisdiction to be used to fund the HHW and with 2 cents to go to the retailer.  It would not be a mandate as a local jurisdiction would have to pass an ordinance to adopt the fee, but it would create one standard way to address bags and other containers.  The environmental community testified against the measure as they like the concept but are concerned about the preemption on the further regulation of auxiliary containers.  Such a preemption can be found in a number of other states that have laws on bags.  The Senator agreed to keep working with both sides on an amendment to bring back to the committee for further consideration.

IRMA testified in support of the bill.  With the agreement to come to the committee with an additional amendment, the bill passed out of the Senate Environment and Conservation with a vote of 6-1-0.

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CATFISH

SB 312 Amendment #2 (Sen. Emil Jones, III, D-Chicago) will give the state Department of Public Health and local departments of public health the authority to check restaurant invoices to ensure that if catfish is featured on the restaurant’s menu, the restaurant can prove that it received catfish from a federally regulated processor or manufacturer.  The sponsor has concerns that catfish served in some fried fish restaurants and soul food restaurants around the state are selling Vietnamese catfish, which must be labeled “Swai” according to federal law, but are labeling it “Catfish” on the restaurant menu.  If a consumer complaint is filed with the Department of Public Health, the inspector will check the invoices of the restaurant to see if it can prove that it indeed purchased catfish.  If proof can’t be produced, then the restaurant will be given time to correct the menu.  If the restaurant fails a second inspection, then a fine will be issued.  Further violations could result in suspension of the restaurant’s license.

Since it is already federal law to label catfish products correctly, IRMA was able to negotiate the details of the bill with Sen. Jones.  The bill passed out of the Senate Agriculture Committee with a vote of 10-0-0.  It will now move to the Senate floor for further consideration.

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FOOD HANDLING

 

HB 3684 (Rep. Kelly Burke, D-Oak Lawn/Sen. David Koehler, D-Peoria) removes an obsolete fee paid by restaurant and grocery retail workers. It passed the Senate Public Health Committee by a vote of 6-0.  Illinois is one of only a few states that require a separate food handling certificate and fee in addition to the national food handling certificate. Currently, under Illinois law, an individual must complete an Illinois Department of Public Health (IPDH) approved training program and then pass an exam provided by an accredited exam provider. Once the individual pays for and passes the exam and receives the national certificate, he/she is required to electronically send the national certificate to the state and pay an additional $35 for a redundant Illinois-specific certificate. When the Food Handling Regulation Enforcement Act was initially implemented, Illinois drafted, maintained, amended, mailed and graded their own examination. As such, an administrative justification existed for an additional fee. This Illinois specific exam no longer exists, therefore the administrative expenses no longer exist.

The legislation now moves to the Senate floor for consideration.

IRMA would like to thank Sen. David Koehler and all the members of the Senate Public Health for supporting this initiative.

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This Week in Springfield – 100-12

FINANCIAL INFORMATION
THE CONSUMER’S RIGHT TO KNOW

This Week in Springfield, the Senate was in session while the House spend the week back in their districts.

FINANCIAL INFORMATION

 

Efforts by a for-profit company to gain access to the confidential tax information of businesses was discussed again this week at a joint subject-matter hearing of the House Cities and Villages and Revenue and Finance committees. IRMA testified in opposition along with the Taxpayers Federation of Illinois, CPA Society, Illinois Department of Revenue (IDOR), and Illinoi State Chamber of Commerce.

Currently, municipalities operating under a signed agreement with IDOR, can obtain from IDOR a list of employers in their jurisdiction with the following information: business name, business address, the amount of sales tax distributed to the municipality from sales at that business as part of the municipalities 1% share of the 6.25% State sales tax; the amount of sales tax distributed to the municipality from sales at that business as the result of any locally imposed sales tax administered by the Department; and a listing of all registered businesses located within the municipality by account ID number and address. The financial information is protected by strict confidentiality agreements imposed by IDOR. This is necessary because tax information is highly sensitive.

Last year, legislation was twice defeated in the Senate that sought to allow municipalities to share this information with third-parties. This year, House Amendment #1 and Amendment #2 to HB 2717 seek to not only allow municipalities to share this information with third-parties but allow the third-parties to access complete financials as well as potentially share the information with other third-parties. Just as it did last year during the testimony of the proponents, it became abundantly clear that the only information they need is the address which is currently available free-of-charge from IDOR. The municipalities can obtain this information from IDOR as often as they would like to receive it and it can be compared to other free resources (e.g. property tax rolls) to ensure the taxes businesses collect and remit are being returned by IDOR to the proper municipality.

It was noted that every professional national tax administrators group condemns the practice of contingency-fee type-audits as they pollute the process. The current practice ensures fairness as an audit process can just as easily come out in favor of the taxpayer as the goal of IDOR is the correct payment of tax. Contingency-fees incent reckless estimates and remove the incentive to find or report items that favor the business (e.g. over-payment, missed credits or deductions). If the concern is that IDOR is not properly administering something, the appropriate response is oversight of IDOR, not to disclose confidential taxpayer information.

IRMA appreciated the opportunity to testify and provide answers to the various committee members.

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THE CONSUMER’S RIGHT TO KNOW

 

After a long session of meetings in both the House and Senate regarding an unnecessarily broad, cumbersome and ultimately, costly bill to require businesses that sell or share “personal information” about consumers to third-parties, SB 1502 Amendment #4 (Sen. Michael Hastings, D-Frankfort) was passed this week.  This bill will require any company with an online presence that collects data from consumers, to identity the categories of information collected and provide a description of the customer’s rights if such information is shared or sold to 3rd parties.  In addition, the bill requires that companies who share or sell information to third-parties, unless it fits into an exemption, to disclose what information was shared and with whom.  The bill sets out 26 categories of personal information.

We should note that “personal information” doesn’t mean that the information is actually “personally identifiable.”  These are really two different concepts.  Personal information could be a person’s name, or a person’s age or a person’s educational background, etc.  There is no requirement that any of the information be tied to an actual person that could be identified.  For example, if a retailer shares the ages of purchasers of a certain washing machine with its manufacturer, but it doesn’t share the customer’s names or any other information that could identify that person, that information is considered “personal information” in the bill.  Such information would have to be disclosed to the customer, upon customer request, even though the third -party has no idea who the actual customers were that purchased the washing machine.  This is unnecessary time, money and resources spent on providing information that does nothing to further data privacy.

This bill presents a major challenge for companies that have various ends of their business that collect and share data.  For instance, companies that have their own credit cards, loyalty programs, apps, and/or website may collect and share different kinds of data at different times.  Data is also shared in order to conduct surveys with third-party manufacturers of products sold in stores.  All of the data is not kept in one neat box to pull from upon customer inquiry.  Businesses will have to build out a mechanism to search and find data that has been shared regardless of whether that data can actually be used to identify a person.

SB 1502 is loosely based on the state of California’s “Shine the Light” law which is much more narrowly focused in scope.  That law requires disclosure to persons that have an established business relationship if information is shared for direct marketing purposes.  SB 1502 has no such qualifiers.  In fact, instead of using the definition of personal information as defined by the Personal Information Protection Act (PIPA), which requires that personal information actually be personally identifiable, this bill creates a completely new definition by making any piece of information whether tied to a person or offered in the aggregate “personal.”  We would also note that information must be disclosed, even if a person shares the information themselves.  For instance, if a person has a LinkedIn account and they post their picture, name, educational background, etc. for the entire LinkedIn universe to see, a company must disclose if they have also shared the same information that can be found by a simple Google search.  How can information be considered private if a person has publicly shared it about themselves?

Resources that are much better spent actually protecting information that has been collected will now be diverted to building out software programs to respond to Right to Know requests.  Just so readers have an idea of how fired up consumers really are about taking advantage of their right to know, we asked a few large retailers doing business in California to tell us how many people have requested the information in the past year.  The first retailer told us that two people had requested the information, and the second retailer told us that three people had requested the information.  California has just over 34 million residents.

The bill passed out of the Senate with a vote of 31-21-1.  It will now move over to the House for additional consideration.

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121 Report – CRMA – April 2017

In This Issue

Legislative Initiatives

CHICAGO CITY COUNCIL   

ORDINANCES AND RESOLUTIONS

INTRODUCTIONS

HEAD TAX
Sponsors: Ald. Carlos Ramirez Rosa (35th Ward), Ald. Gilbert Villegas (36th Ward), Ald. Proco Joe Moreno (1st Ward) and 15 other co-sponsors
Committee: Committees, Rules and Ethics

This proposal would implement the Employers’ Expense Tax (Head Tax) and funnel the revenue to the Chicago Public School system to support their operations. The tax would be placed on any business that has at least 50 full-time employees or commission merchants. Full-time employees are defined as anyone who accrues at least $1000 in wages in any calendar quarter of a year from the same employer.

The tax, which would be back-dated to April 1, 2017, would be in the amount of $33/month for each commission merchant or full-time employee employed by the employer. The tax cannot be passed on to employees. It must be paid by the employer. In calculating the tax, the employer shall not include any employees that are permanent residents of a City of Chicago Community Area listed in the top 20 for incidences of violent crime in the previous calendar year as listed in the hardship index created by the UIC Great Cities Institute.

The tax is temporary. It would sunset after two years with the final payment due on July 1, 2019.

IRMA is OPPOSED.

 

ALDERMANIC RECOMMENDATIONS FOR BUSINESS LICENSES

Sponsors:  Ald. Greg Mitchell (7th Ward), Ald. Michelle Harris (8th Ward), Ald. Willie Cochran (20th Ward) and 14 additional co-sponsors

Committee:  License and Consumer Protection

This proposal would give Aldermen an opportunity to give their recommendation on whether a business should be granted a license by the Department of Business Affairs and Consumer Protection. Currently, once an applicant submits their information to the department, that information is shared with other relevant departments or boards for investigation and inspection. The proposal calls for that information to then be passed along to the local Alderman who will then have 20 days to submit a recommendation on whether the license should be approved. If an Alderman does not recommend approval, the Alderman must submit the reasons for the negative recommendation in writing to the Commissioner.

It is our understanding that the Alderman is concerned about businesses that have their license taken away for various ordinance violations and/or illegal activity and those same businesses are re-opened within a week under a different LLC, but with the same management and employees. The same issues that caused the former business owner to lose their license continue to occur.  We have had initial discussions with the Alderman and expect to continue to work together along with the Mayor’s office to find a workable resolution.

In its current form, IRMA is OPPOSED.

 

EMERGENCY RESTROOM USE
Sponsors: Ald. David Moore (17th Ward), Ald. Ariel Reboyras (30th Ward), Ald. Ricardo Munoz (22nd Ward) and 25 other co-sponsors
Committee: License and Consumer Protection

This proposal would require businesses that have restrooms available for customer use to allow non-patrons to use those facilities in cases of emergency. The proposal does not define qualifying emergencies, nor does it dictate which party determines the emergency.

IRMA is OPPOSED.

 

BAN ON THE SALE AND USE OF COAL TAR SEALANTS
Sponsors: Ald. Scott Waguespack (32nd Ward) and Ald. John Arena (45th Ward)
Committee: Health and Environmental Protection

This proposal would ban the sale and use of coal tar sealants. These sealants are most commonly used in commercial and residential parking lots and driveways. Most retail locations no longer sell sealants with these chemicals. The environmental community has been trying to get a similar bill (HB 2958 Amendment #2) passed in the state legislature, but has been unsuccessful to date.

IRMA is currently determining its position.
PASSED LEGISLATION

 

TOBACCO DEALER ORDINANCE REVISION

Sponsor: Mayor Rahm Emanuel

Periodically, the Mayor’s office takes a look at existing city Code and attempts to modernize various sections to update terms, bring sections up to date with changes in state law, revise definitions to reflect current industry terms, etc. The changes are generally non-substantive in nature, and more an attempt to help re-order things so that it is easier for the affected industry to both understand and comply. The city has decided to re-work the tobacco ordinance, as there have been many changes to the tobacco law in the last few years. As we have been very sensitive to these changes, I reviewed and did not see any substantive changes, but members should review to ensure that they understand what is required of them as tobacco sellers.

EFFECTIVE DATE: July 1, 2017

 

HOURS FOR DOWNTOWN OUTDOOR PATIOS
Sponsor: Alderman Brendan Reilly (42nd Ward)

As in past years, the Code has been temporarily adjusted to allow operators of outdoor patios in the Central Business District to sell and serve alcoholic beverages until midnight for the duration of the outdoor patio season.

EFFECTIVE DATE: May 23, 2017

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The next City Council meeting is scheduled for Wednesday, May 24, 2017.

Tanya TricheTanya Triche Dawood
Vice President Government Affairs/General Counsel
ttrichedawood@irma.org
217-544-1003