This Week in Springfield – 100-31

In This Issue:

RETAIL DISCOUNT & BUDGET
TOBACCO 21
DRONE
WORKERS’ COMPENSATION
HUMAN RIGHTS EXPANSION
BUSINESS DAY THANK YOU

This Week in Springfield both chambers met to discuss legislation from the opposite chamber while lawmakers continued to discuss the budget in working groups.

RETAIL DISCOUNT & BUDGET

There are 13 scheduled days of regular legislative session remaining on the calendar. If the Assembly has not adjourned by midnight on May 31st, a super-majority in each chamber is required to pass anything. At the very least, that would give Republicans in the House serious leverage.

A bi-partisan, and relatively large, Budget Working Group has been meeting for several weeks. They have shared ideas on how to close the gap between revenue and spending and discussed estimating how much revenue there is to spend for Fiscal Year 2019.

Last year, a $5 billion income tax increase was utilized to help pay down approximately half of the bill backlog which had grown as high as $16 billion, as well as to get monies flowing again to agencies and the myriad programs they operate. While another tax increase is unlikely in an election year, policymakers are casting about for other pots of money. That means the Retail Discount is once again being discussed.

A few years ago, IRMA prepared this overview of the Discount. We have updated it and are once again sharing it with members of the Budget Working Group, legislative leaders, staff, and the Governor’s Office. One of the options that was discussed was a Kentucky-style approach to reducing the discount. In short, retailers would receive 1.75% of the first $1,000 in sales taxes collected and 1.5% of any amount over $1,000 but the total received would be capped at $50 per reporting period (i.e. per month). IRMA has prepared and shared an overview of the annual sales a business would reach before being capped under a Kentucky-style methodology.

This issue was raised in meetings directly with three of the four legislative leaders and the Governor last week during Business Day 2018. IRMA will continue to advocate to protect the partial reimbursement that is the Retail Discount in Illinois.

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TOBACCO 21

SB 2332 (Sen. Julie Morrison, D-Deerfield/Rep. Camille Lilly, D-Chicago) prohibits anyone below the age of 21 from purchasing tobacco from a licensed Illinois retailer while removing any penalties for the underage possession or consumption of tobacco.  The initiative passed the Senate with a vote of 35-20-0 and passed the House Health & Healthcare Disparities Committee by a 3-1 vote.

As currently drafted SB 2332 makes it legal for a person under the age of 21 to: (1) possess tobacco, (2) consume tobacco, (3) sell tobacco, (4) buy tobacco from an unlicensed Illinois retailer or individual, or (5) buy tobacco from a licensed out-of-state retailer or online.  Additionally, the bill protects unlicensed, unregulated, and, untaxed individuals selling tobacco to minors while prohibiting licensed retailers from selling tobacco products to anyone below the age of 21.

Advocates argue that the brain is still developing until the age of 21 and a person under that age cannot be expected to fully understand the decision they are making when choosing to use tobacco products. This makes an interesting argument since persons under age 21, among other things, are allowed to vote, join the military, enter into legally binding contracts, drive, serve on a jury, sue someone, get a tattoo or piercing, become a blood or organ donor, adopt a child, etc.

Raising the age from 18 to 21 may not make as big of a difference as lawmakers hope, given that most smokers — nine out of 10 according to the Surgeon General— have already begun smoking by the age of 18. Additionally, the vast majority obtain their tobacco products from older family and friends. Three out of four minor smokers will become adult smokers.  Ironically, SB 2332 may actually encourage this behavior by removing the current statutory penalties for underage use and consumption of tobacco.  And if it is a good idea to remove underage penalties for tobacco products should the state also remove underage use and consumption penalties for other age restricted products such as alcohol?

IRMA is opposed to the bill which will drive sales away from licensed retailers to illegal sellers and to out-of-state retailers.

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DRONES

 SB 3291 (Sen. James Clayborne, D-East St. Louis/ Rep. Marcus Evans, D-Chicago) would preempt home rule municipalities from passing regulations on the use of drones or unmanned aerial systems (UAS).  The Federal Aviation Authority (FAA) retains the authority to regulate private and commercial drone use. Despite this authority local municipalities have been introducing ordinances that regulate drones.

The Federal Aviation Authority (FAA) has created rules for both commercial and private drone use and has made it clear that the FAA’s rules preempt local and state jurisdiction regarding the regulation of drones. Additionally, in 2015, Illinois created the Illinois Unmanned Aerial System Oversight Taskforce, which IRMA was appointed, to provide oversight and input in creating comprehensive laws and rules for the operation and use of drone technology within Illinois. The taskforce’s final report indicated that the state should be provide guidance within the FAA guidelines and however well-intentioned, overly burdensome local regulations that discourage or unnecessarily obstruct the otherwise safe and lawful use of UAS should be avoided.

SB 3291 passed the Senate by a 52-0 vote and the Transportation: Regulation, Roads & Bridges Committee by a 11-0 vote. IRMA supports SB 3291.

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WORKERS’ COMPENSATION

The State Medical Society is introducing legislation that will increase workers’ compensation rates for Illinois employers. SB 904 House Amendment #1 (Sen. Michael E. Hastings, D-Frankfurt/Rep. Jay Hoffman, D-Belleville) will result in increased interest rates of 24 percent per year on medical claims for businesses and insurance companies.  Additionally, employers and insurers will also face penalties of up to $1,000 per claim for failure to comply with the electronic billing requirements under the proposal.  The amendment will be heard next week in the House Labor Committee.  IRMA is opposed.

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HUMAN RIGHTS EXPANSION

Currently, the Illinois Human Rights Act only applies to businesses with 15 or more employees. HB 4572 (Rep. Will Guzzardi, D-Chicago/ Sen. Cristina Castro, D-Elgin) expands the coverage of the Act to apply to any business with one or more employees. The legislation passed the House with a 64-37 vote and the Senate with a 33-13 vote. It now goes to the Governor for his consideration.

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THANK YOU

IRMA would like to publicly thank those who helped make Business Day 2018 a tremendous success again this year. On behalf of all the members of IRMA, thank you for your generous support!

This Week in Springfield – 100-29

In This Issue:

PLASTIC BAGS
PROMPT PAYMENT
ENERGY
BUSINESS DAY

PLASTIC BAGS

In 2012, under the sponsorship of Sen. Terry Link, D- Gurnee and former Rep. Mike Tryon, R- Crystal Lake, the General Assembly approved legislation that would have imposed a uniform statewide recycling program for plastic bags and plastic wrap. Plastic wrap makes up 85% of plastic in the waste stream. The fees collected would have been used to fund household hazardous waste operations statewide and the definition of household hazardous waste was expanded to allow for the collection of many more items, including polystyrene. The legislation passed both chambers. However, at the last moment, environmental groups switched their position, convinced then-Governor Pat Quinn to switch his, and he ultimately vetoed the bill. Illinois missed a golden opportunity to divert hundreds of tons of plastic each year from landfills.

 

Two weeks ago, Sen. Link filed Senate Amendment #3 to SB 1597. Under the proposal, a $0.05 fee would be collected by the retailer for every plastic or paper bag used by the consumer. The fee would not apply to reusable bags which are bags with handles, specifically designed for reuse with a minimum lifetime capability of 125 or more uses, carrying 22 or more pounds over a distance of at least 175 feet, and capable of being washed so as to be cleaned and disinfected at least 100 times. Two-cents of the fee would be retained by the retailer as a partial reimbursement for their carrying and administrative costs. One-cent would flow into the state’s General Revenue Fund. The remaining $0.02 would go into a new fund called the Carryout Bag Fee Fund to the county where the original $0.05 was paid. That county could use their funds to implement a county or municipal join action agency solid waste management plan. SB 1597 was reported out of the Senate Environment and Conservation Committee.

 

This week, the sponsor held a meeting to try and bring the sides together. The environmental groups are once again the obstacle as they want to impose a statewide fee but want to allow local governments to continue to impose additional fees on myriad items. Additional discussions are expected in the coming weeks.

 
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PROMPT PAYMENT

 

This week, Senate Amendment #1 to SB 44  (Sen. Laura Murphy, D-Des Plaines) was filed and originally scheduled to be heard in the Senate State Government Committee. As filed, Senate Amendment #1 would allow the state to lower the interest rate the state owes vendors for the state’s failure to pay its vendors on a timely basis. Under the proposal, the Comptroller would have been given the authority to determine the interest rate on late payments from July 1st using the following formula: the greater of (a) 0.25% per month/3% annually; or (b) an annual rate of 2 times the percentage increase, if any, in the Consumer Price Index during the 12-months immediately preceding July 1st. This would remove the incentive for the state to pay its vendors on time while turning vendors into unwilling banks thereby encouraging the state to continue fiscal mismanagement. Currently, vendors who are owed money don’t start earning interest until at least 90-days.

 

In short, should something like this be adopted, the state will have fiscally abused its vendors and escaped responsibility for the mismanagement. The floor amendment was not heard in the Senate’s State Government Committee but we expect further consideration at some point.

 
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ENERGY

Project Next Grid is a study launched by the Illinois Commerce Commission. Its purpose is to proactively address issue Illinois’ electric utilities will confront in the future. The focus will be on technological advancements, contributions to economic development, and environmental impacts. The stated goal is not to provide specific recommendations but layout concepts that could be used by policy makers in future decisions. IRMA is involved with Project Next Grid.
Eight working groups have been formed to help facilitate effective discussion.

 

The first study update will be held on Jun 14th from 1:00 – 3:30 p.m. at the ICC’s offices in Chicago (160 N. LaSalle, Room C-800) or via teleconference at the ICC’s Springfield offices (527 East Capitol). The agenda for the update can be found here. A public comment session will be included. Interested participants need to register in advance. Those wishing to testify must also register in advance. IRMA members can also provide feedback to IRMA who will be happy to submit it.
 
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BUSINESS DAY SOLD OUT

We look forward to seeing everyone next Wednesday, May 9th, for another sold out Business Day 2018 hosted by IRMA and the Illinois Manufacturers’ Association. Business Day 2018 is the largest annual gathering of Illinois employers and gives you the opportunity to network with fellow business leaders, meet directly with your legislators, and directly share the impact policies they are considering have had or will have on your investment, employees, and customers. The day will start with the opening luncheon keynoted by Jim VandeHei, the founder and CEO of Axios and the founder of POLITICO.

 
We would like to thank our sponsors for their support!
 
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This Week in Springfield – 100-30

BUSINESS DAY 2018

Over 350 employers converged on Springfield Wednesday for Business Day 2018 co-hosted by IRMA and the Illinois Manufacturers’ Association. These employers from throughout Illinois were eager to share their concerns over the direction of the state and the future of employment in Illinois directly with policymakers on both sides of the aisle.

 

This year, the opening luncheon featured Jim VandeHei, the founder and CEO of Axios and the founder of POLITICO. Mr. VandeHei argued that with the exception of the bluster and seemingly perpetual crisis that pervades the White House, the accomplishments of the Trump Administration to-date are not small and not outside what would be expected from a more traditional Republican nominee. VandeHei particularly focused on the way President Trump uses social media to end-run main-line media and actually control their narrative. He also noted that voters on both sides of the political divide are getting the politics they desire as everyone consistently isolates themselves and seek only opinions that affirm their opinions. He noted that of the 20 top stores shared on Facebook last year, 19 were fake and 60% forwarded stories without even reading them. The way Facebook is designed, it reinforces how we use it meaning Facebook users wound up with even more content that simply reinforced opinions.

 

Mr. VandeHei does not believe President Trump acts without thinking. In fact Mr. VandeHei explains that Trump is quite adept at manipulating the media. He explained that Trump uses a very specific formula for manipulating the media and hijacking the Twitter/cable/conventional media industrial complex. Trump sets this formulaic trap increasingly often and news organizations keep falling for it. In the end, they are talking about him and keeping his base active as reflected consistently in polling.

 

After the luncheon, attendees made their way to an afternoon at the Statehouse to share insights on specific issues with legislators. Members of IRMA’s Board met with three of the legislative leaders and Governor Bruce Rauner. Each shared their insight into the ongoing budget and reform impasse in addition to hearing concerns of attendees. IRMA would like to thank Governor Bruce Rauner, Senate President John Cullerton, Senate Republican Leader Bill Brady and House Republican Leader Jim Durkin for their time and insights.

 

The day ended with the themed Party Under the Tent where policy makers, staff, and employers mixed in a casual atmosphere enjoying the many food and drink offerings provided by IRMA members and the outstanding live band covering an array of 80’s and 90’s hit songs.
IRMA would like to thank the co-hosts, sponsors, and reception caterers who made Business Day 2018 possible and an outstanding success.

 
 

 
 

 RESTRICTIVE SCHEDULING

A second subject matter hearing on the restrictive scheduling mandate was held this week in a joint House and Senate Labor and Commerce Committee. A subject matter hearing was already held in the House in April. As introduced, HB 5046 (Rep. Chris Welch, D-Westchester) and SB 202 Floor Amendment #1 (Sen. Cristina Castro, D-Elgin) would, among other provisions, require a 72-hour notice of an employee’s weekly schedule and would impose statutory penalties if any part of the employee’s schedule is reduced or canceled after the notice. It applies to part time, full time, non-salaried, and salaried employees. Over 40 different employer sectors which include but are not limited to, retail, agriculture, accounting, manufacturing, energy, security, education, automotive, distribution, construction, hospitality, law enforcement, et., all oppose a restrictive scheduling mandate that negatively impacts employers and employees.

 

Restrictive scheduling assumes that every employer can schedule or operate in the exact same manner and that every employee wants the same schedule. Different employers have unique business, employee, and regulatory variables to consider when providing schedules that promote and support their employees while still allowing the business providing the jobs to operate effectively and efficiently. These proposals undermine the ability of each employer to properly manage their business and support the various flexibility preferences of employees.
The issue will certainly re-emerge in November or next year.

 

This Week in Springfield – 100-28


IN THIS ISSUE:

SALES TAX INFORMATION
PHARMACY BENEFIT MANAGERS
WAGE LIEN
PLASTIC BAGS
TOBACCO 21
LIQUOR
WORKERS’ COMPENSATION

This Week In Springfield (TWIS), both chambers of the Illinois General Assembly reached their first Third Reading Deadline. Unless a bill has its final consideration deadline specifically extended, the legislation will be considered ‘held’. However, any idea could emerge later in the session as an amendment to another bill.
 

SALES TAX INFORMATION

The latest chapter in a multi-year debate over whether or not to grant a private company access to the confidential financial information of businesses was closed this week when the House decisively defeated HB 2717 (Rep. Chris Welch, D- Westchester). The vote was 42-61-3.

When the debate began just over two years ago, a private company, Azavar, was advocating for the bill. Within the last six months, the company faded into the background and was replaced by a new organization called the Illinois Coalition of Local Governments. The primary rationale behind HB 2717 was that the Illinois Department of Revenue is making mistakes in the locating of businesses within the proper municipality. As a result, the municipality in which the business is actually located goes without the sales tax collected and remitted by that business. However, those problems are solved by simply providing the municipalities with the business name and address. They can share that information with anyone. Access to financial information is simply not needed. Three compromises offered by the opponents, led by IRMA, to help local governments address this problem were rejected by the proponents.

Last Monday, a coalition of groups, including IRMA, revealed the results of a request for documents under the Freedom of Information Act (FOIA) from a limited number of municipalities. This request uncovered incidents of municipalities breaking current law by providing the financial information of businesses to third parties as well as Azavar directing municipalities on how to break the law and evade detection.

 

This is the third time this issue has been addressed and subsequently defeated by the Assembly. The Senate twice rejected a similar proposal last year. IRMA would like to thank the members of the House who took the time to thoroughly understand a very complicated issue and voted “no” or “present”. IRMA would also like to thank our members, and those of the very broad coalition of opponents, who took the time to contact their elected officials and express their opposition.

While this was a substantial accomplishment, we remain vigilant for its return.

 
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PHARMACY BENEFIT MANAGERS

A confluence of developments has ignited a debate over the treatment of retail pharmacies by PBM’s and the fair reimbursement of pharmacies independently as well as within the confines of Illinois’s recent move to Managed Care Organizations (MCO) for Medicaid. HB 3479 (Rep. Sara Feigenholtz, D- Chicago) would require MCOs to have fair and reasonable reimbursement rates for prescriptions as well as patient care services. The reimbursement rates could not be below the acquisition cost of the pharmacy and the current reimbursement rate utilized for fee-for-services under Medicaid. HB 3479 was approved by the House 87-16-1 and now moves to the Senate for additional consideration.

 

On a directly related front, a Medicaid Working Group has been formed comprised of legislators from both chambers. This group has indicated PBMs, reimbursement, and MCOs will be considered. IRMA has already begun discussions with the members of this group.

WAGE LIEN

An agreement was reached to address wage theft. As introduced, HB 4324 (Rep. Chris Welch, (D-Westchester) would have allowed any employee to file a lien against an employer’s current and future acquired real and personal property based on a wage dispute—not an administrative or judicial finding of guilt. The wage lien would also take priority over any other financial obligation, debt, or mortgage. It is meant to address the situation where unscrupulous companies, usually temporary businesses, dissolve and reorganize before a wage claim is brought or adjudicated.

 

A business and banking coalition led by IRMA worked with Rep. Chris Welch and Rep. Jay Hoffman, (D-Belleville) to reach an agreement adopted in Floor Amendment #2 that addresses the issues presented by the advocates. Currently, the Illinois Department of Labor (DOL) is taking 18 months to adjudicate a claim. The agreed upon language requires the DOL to adjudicate wage claims within 30 days of receiving the claim. This would address the issue of companies dissolving, reorganizing, or disappearing before a claim is adjudicated. If the company is found guilty, exhausts its appeals, and still does not pay, a lien will be placed on it assets according to current lien practices. Finally, if a claim is verified an employer will be required to submit an escrow of 10% of the claim for the duration of the 30 day adjudication. If, after the 30 days the employer is found innocent, the funds will be returned to the employer. This agreement passed the House by a vote of 88-3. IRMA would like to thank Representative Chris Welch and Representative Jay Hoffman for their efforts in reaching this agreement.

 
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PLASTIC BAGS

 

In 2012, under the sponsorship of Sen. Terry Link (D- Gurnee) and former Rep. Mike Tryon, (R- Crystal Lake), the General Assembly approved legislation that would have imposed a uniform statewide recycling program for plastic bags and plastic wrap. Plastic wrap makes up 85% of plastic in the waste stream. The fees collected would have been used to fund household hazardous waste operations statewide and the definition of household hazardous waste was expanded to allow for the collection of many more items including polystyrene. The legislation passed both chambers. However, at the last moment, environmental groups switched their position, convinced then-Governor Pat Quinn to switch his, and he ultimately vetoed the bill. Illinois missed a golden opportunity to divert hundreds of tons of plastic each year from landfills.

 

This week, Sen. Link filed Senate Amendment #3 to SB 1597. Under the proposal, a $0.05 fee would be collected by the retailer for every plastic or paper bag used by the consumer. The fee would not apply to reusable bags which are bags with handles, specifically designed for reuse with a minimum lifetime capability of 125 or more uses, carrying 22 or more pounds over a distance of at least 175 feet, and capable of being washed so as to be cleaned and disinfected at least 100 times. Two-cents of the fee would be retained by the retailer as a partial reimbursement for their carrying and administrative costs. One-cent would flow into the state’s General Revenue Fund. The remaining $0.02 would go into a new fund called the Carryout Bag Fee Fund to the county where the original $0.05 was paid. That county could use their funds to implement a county or municipal join action agency solid waste management plan. SB 1597 was reported out of the Senate Environment and Conservation Committee.

 

The sponsor told IRMA he intends to hold additional discussions in the coming weeks.

 
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TOBACCO 21

SB 2332 (Sen. Julie Morrison, D-Deerfield) prohibits anyone below the age of 21 from purchasing tobacco from a licensed Illinois retailer while removing any penalties for the underage possession or consumption of tobacco. The initiative passed the Senate with a vote of 35-20-0 and moves to the House for further consideration.
As currently drafted SB 2332 makes it legal, subject to no penalties, for a person under the age of 21 to: (1) possess tobacco, (2) consume tobacco, (3) sell tobacco, (4) buy tobacco from an unlicensed Illinois retailer or individual, or (5) buy tobacco from a licensed out-of-state retailer or online. Additionally, the bill protects unlicensed, unregulated, and, untaxed individuals selling tobacco to minors while prohibiting licensed retailers from selling tobacco products to anyone below the age of 21.

 

Advocates argue that the brain is still developing until the age of 21 and a person under that age cannot be expected to fully understand the decision they are making when choosing to use tobacco products. This makes an interesting argument since persons under age 21, among other things, are allowed to vote, join the military, enter into legally binding contracts, drive, serve on a jury, sue someone, get a tattoo or piercing, become a blood or organ donor, adopt a child, etc.
Raising the age from 18 to 21 may not make as big of a difference as lawmakers hope, given that most smokers — nine out of 10 according to the Surgeon General— have already begun smoking by the age of 18. Additionally, the vast majority obtain their tobacco products from older family and friends. Three out of four minor smokers will become adult smokers. Ironically, SB 2332 may actually encourage this behavior by removing the current statutory penalties for underage use and consumption of tobacco. And if it is a good idea to remove underage penalties for tobacco products should the state also remove underage use and consumption penalties for other age restricted products such as alcohol?
IRMA is opposed to the bill which will drive sales away from licensed retailers to illegal sellers and to out-of-state retailers.

 
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LIQUOR

Senate Amendment #1 to SB 3022 (Sen. Tony Munoz, D- Chicago) seeks to undo a reform made by former Governor Rod Blagojevich who undertook a reorganization of several agencies that included moving the Illinois Lottery, Gaming Commission, and Liquor Control Commission (ILCC) under the Illinois Department of Revenue (IDOR). Today, only the ILCC remains under IDOR. Retailer and others long-chaffed under an ‘independent’ ILCC believing it was strongly tilted toward the interests of the wholesale tier of the three-tier system. There is a belief that by having ILCC under the auspices of IDOR has restored some semblance of balance which is appropriate as the ILCC is supposed to be a neutral arbiter and regulator.

 

Senate Amendment #1 to SB 3022 was adopted and passed 43-2-3 by the full Senate and now heads to the House for additional consideration.

 
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WORKERS’ COMPENSATION

Lawmakers passed HB 4595 (Rep. Laura Fine, D-Glenview) out of the House Chamber by a vote of 62-43 that would take $10 million from the Workers’ Compensation Commission Operations Fund to create a state-run Illinois Employers Mutual Insurance Company to compete with the over 300 private insurance companies already competing in Illinois. Illinois has the most competitive workers’ compensation insurance market in the nation.

 

Illinois changed its workers’ compensation system in 2011 by limiting payments for carpal tunnel syndrome and for employees who can still work but whose injuries force them into lower-paying jobs. There was also a 30 percent cut to payments for doctors, hospitals and pharmacies treating those injured on the job. As a result, Illinois experienced a 13 percent decline in workers’ compensation medical costs between 2010 and 2014. Despite these changes, Illinois insurers’ companies paid an estimated $2.75 billion in workers’ compensation benefits in 2014, according to the National Academy of Social Insurance. Additionally, Illinois is tied for having the eighth-most expensive premiums in the nation. The experience of the commercial companies was mirrored by the reports from the self-insured companies indicating the insurance companies experience is real.
 
Supporters of HB 4595 argue that workers’ compensation costs are still high for companies because insurance companies have not passed on the savings realized from the 2011 changes. They argue that in 2015, 332 insurance companies underwrote workers’ compensation policies in Illinois, more than in any other state, collecting $2.83 billion in premiums. In 2010, insurers reported losses of nearly 11 percent; four years later, they reported the same in profits. The insurance companies contend that while the 2011 changes likely decreased the insurers’ losses, insurers in Illinois only averaged 6.1 percent profit annually between 2011 and 2014.

 

An identical bill passed last year that was vetoed by the Governor. HB 4595 now goes to the Senate for consideration.

 
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This Week in Springfield – 100-27

In This Issue:

RETAIL THEFT
RESTRICTIVE SCHEDULING
BIPA
REBATE CARDS
TELECOMMUNICATIONS

This Week in Springfield, the Assembly reached its first committee deadline. Any legislation that does not have its final consideration deadline extended will be considered ‘held’ for the year. However, the same idea could make its way back into consideration as an amendment on another bill.  This is always a very active week in the Assembly and this time was no exception. 

RETAIL THEFT

 HB 3337 (Rep. Justin Slaughter, D-Chicago)/ SB 3257 (Sen. Elgie Sims, D-Chicago) seeks to increase the retail theft felony threshold from $300 to $2000—which would give Illinois the second highest felony threshold in the nation.  Currently, Chicago alone accounts for more property theft related offenses than 20 individual states and Illinois ranks 7th as a whole.  As a consequence to theft issues, a group of Chicago retailers recently hired private security to patrol the neighborhood around their stores. HB 3337 also allows criminals with prior felony robbery, armed robbery, burglary and residential burglary convictions to repeatedly steal $1,999 of property from a private individual and only be charged with a misdemeanor.

The advocates argue that increasing the retail theft threshold will keep people out of state prisons but admit it will shift costs to counties and municipalities. This cost shift was borne out by the experience of the State of California who increased their retail felony threshold to $950 – less than half of what is being proposed in Illinois.  A year after the increase, the California Assembly had to appropriate $270 million more to local governments to partially offset the cost-shift. But it is not just the cost-shift that hits local governments, it is also the loss of tax revenue from theft. For instance, reports estimate that U.S. retailers lose $60 billion worth of goods due to retail theft annually.  Illinois accounts for at least 3.4% (based on population) of that total which is over $2 billion worth of goods a year. This costs the state a minimum of $100 million in lost sales tax revenue and local governments a minimum of $25 million in lost sales tax revenue just based on their local share of the state sales tax. The loss is higher for local governments that impose their own sales tax. These numbers are extraordinarily conservative as they only take into account people actually apprehended and do not take into account the documented fact that shoplifters steal dozens of times before getting caught.

Proponents have claimed that ‘larceny’ has not increased in states where the felony retail theft threshold is increased. Larceny is a bucket of a number of criminal offenses. When the correct comparison is made – retail theft – the FBI’s numbers tell a different story. FBI statistics show that retail theft in the U.S. has increased 10% since 2010 and the value of the items stolen has increased 25% over that same time period as states have increased the retail theft threshold.  Lawmakers need look no further than the changes California made just three years ago. According to FBI statistics, property crimes in California increased 8% while theft related crimes increased 11%. Locally, of the 66 California cities that the FBI number included, 49 experienced an overall increase in property theft with 24 experiencing double-digit increases. Moreover, at the end of the year, five California cities were ranked in the top 10 for the largest property theft increases in the U.S. Additionally, the Los Angeles Police Department reported retail theft increased 25%.

There is an additional myth that retail thieves are harmless. The Illinois Sentencing Policy Advisory Council’s (SPAC) own statistics conclude that the average retail offender has seven previous felony convictions and 13 previous misdemeanor convictions. Any suggestion that retail theft is committed solely by first time offenders or harmless individuals is simply incorrect. Nevertheless, IRMA was the first business group to support legislation that allowed for expungement and sealing of criminal records and has consistently done so since. IRMA also worked with Cook County Sherriff Tom Dart’s office to pass the Accelerated Resolution Court Act or ‘Rocket Docket’ in 2015 which requires that persons charged with misdemeanor retail theft be released without having to pay bail while they await trial. Therefore, if anyone is sitting in prison, it is not because of retail theft.

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RESTRICTIVE SCHEDULING

 A subject matter hearing on the restrictive scheduling mandate was held this week in the House Labor and Commerce Committee at which IRMA testified in opposition. As introduced, HB 5046 (Rep. Chris Welch, D-Westchester) would, among other provisions, require a 72-hour notice of an employee’s weekly schedule and would impose statutory penalties if any part of the employee’s schedule is reduced or canceled after the notice. It applies to part time, full time, non-salaried, and salaried employees who make $50,000 or less. Over 40 different industry partners which include but are not limited to, retail, agriculture, accounting, manufacturing, energy, security, education, automotive, distribution, construction, hospitality, law enforcement, et., all oppose a restrictive scheduling mandate that negatively impacts employers and employees.

HB 5046 assumes that every restaurant, bar, grocery store, movie theatre, fitness center, pharmacy, hardware store, bank branch, school system, farm, manufacturer, construction project, municipality, daycare, park etc. can schedule or operate in the exact same manner.  Different employers have unique business, employee, and regulatory variables to consider when providing schedules that promote and support their employees while still allowing the business providing the jobs to operate effectively and efficiently. HB 5046 undermines the ability of each employer to properly manage their business and support the various flexibility requests of their employees.

HB 5046 eliminates scheduling flexibility, forces employers to deny last minute requests, and creates confusion. A “one-size-fits-all” mandate fails to recognize the negative impact that the regulations will impose on employees. Once a regulation is in place, employers are less able to respond to employee preferences and emergencies.  Restrictive scheduling constraints on flexible scheduling reduce the ability of employers to respond to changes in employee circumstances—this reduces the opportunities for employees. These mandates (1) prohibit the flexible schedules they value (picking up shifts and dropping them as needed); (2) result in fewer work opportunities; (3) result in fewer benefits that are offered as perks by many establishments; and (4) create an unnecessary environment of stress between employers and employees.

A flexible scheduling model is used in various industries in order to attract and retain employees. High school, college, and post-secondary students are drawn to retail because of the opportunity to work and design a flexible schedule around their classes.  Many workers are attracted to retail positions on a seasonal basis because they can pick up a few hours in order to supplement income or pay for holiday shopping. Additionally, retailers provide flexible employment for defined populations such as youth at risk, people with disabilities, or senior citizens.

While considering the requests and preferences of employees, businesses must consider those through the framework of needs of the business.  A variety of data points that may be used include: employee requests, sales forecasts, productivity of the store, historic payroll and hour reports, workload, marketing or other in-store events, transportation (truck, train, barge, delivery, etc.), civic events, and guest traffic patterns. Despite a business’ best efforts to predict scheduling needs accurately in each location, the need for employees in any given location is subject to these external factors, and others, that may change frequently, unpredictably, and with little or no notice.

As introduced, HB 5046 takes away the flexibility employees specifically seek and makes it far more difficult for employers to ensure they are properly staffed.

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BIPA

SB 3053 SA#2 (Sen. Bill Cunningham, D-Chicago) seeks to modernize Illinois’s excessively restrictive BIPA to reflect technological changes and a modern understanding of privacy that did not exist when BIPA was initially enacted. When BIPA was drafted in 2008, biometrics were just beginning to emerge and there was little understanding of a balance between privacy versus constructive uses. However, significant advancements in how to use such technology constructively necessitates a modernization of Illinois’ SB 3053 common sense changes will continue the protections that BIPA was intended to provide, while also unlocking new and valuable technological developments that do not implicate BIPA’s core purposes of prohibiting using such information for marketing and selling.

Current Illinois law endangers Illinois citizens by inhibiting the ability of places utilized by the public to use the latest technology to protect their customers, employees, and goods. Illinois law only allows the use of biometric screening technology if the individual gives their consent in advance.  Domestic violence abusers, human traffickers, kidnappers, thieves, etc. will not consent to the use of their biometrics.  Missing children, senior citizens, and trafficking victims cannot consent to the use of their biometrics.

SA#2 to SB 3053 also allows employer to use biometrics for internal purposes such as timekeeping, payroll, entry/exit, cash register security, Rx counseling compliance, etc. Under current law if employers utilize biometric data to comply with laws or employment policies they cannot do so unless every employee consents. This means if a single employee withholds consent, the employer must either scrap the more efficient and secure system, utilize multiple systems based on each individual employee’s preference. This endangers compliance which puts the employer, and in some settings consumers, at risk.  While enhancing protection, compliance, and efficiency, private entities would still be prohibited from selling, leasing, or trading biometric information.

SA#2 to SB 3053 maintains the prohibition on the use of biometrics for a commercial purpose.  This proposal would not gut the privacy protections under the Act for commercial purposes, nor does it remove the private right of action or damages that may be awarded.  This proposal simply exempts private entities from the Act for internal employment/compliance and security purposes as long as the private entity is not using the information for commercial purposes.  SB 3053 maintains the prohibition on the use of biometrics for a commercial purpose.

SB 3053 was not heard this week while education and discussions continue.

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 REBATE CARDS

 The Illinois Treasurer’s Office has introduced SB 3102 (Sen. Cristina Castro, D-Elgin)/HB 4922 (Rep. Theresa Mah, D-Chicago) which is intended to prohibit the issuance of rebate cards that charge dormancy or other post-issuance fees.  The initiative only applies to rebate cards that can be used at multiple merchants. It exempts those closed-looped merchant cards that are distributed and used at one retailer. Senate Amendment #1 was adopted in committee providing clear guidance that SB 3102 would only apply to multi-store cards utilized for rebates. IRMA is neutral and appreciates the cooperation of Treasurer Frerichs, Senator Castro, and Representative Mah.

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TELECOMMUNICTIONS

Governor Rauner signed into law SB 1451 (Sen. Terry Link, D-Gurnee /Rep. Kelly Burke, D- Oak Lawn) paving the way for modernization of Illinois’s telecommunications infrastructure. This legislation positions Illinois to catch-up with twelve other states in terms of full-deployment of 5G and other telecommunications system/features. Given the fact retailers are 100% consumer facing and consumers expect and demand highly customized offerings with rapid delivery, a comprehensive and responsive telecommunications infrastructure is essential. As an early and avid supporter of SB 1451, IRMA would like to thank Sen. Link and Rep. Burke for their sponsorship, the members of the Assembly who voted in favor, and Governor Bruce Rauner for signing the bill into law.