Illinois This Week in Springfield – 99-06

IN THIS ISSUE:

INDOOR PLAY AREAS
WORKERS’ COMPENSATION REFORM
PHARMACY TAKE-BAKE
BUSINESS DAY
SOCIAL MEDIA

This Week In Springfield, the committee work in both chambers hastened considerably as the committee deadline of March 27th looms.

INDOOR PLAY AREAS

Legislation imposing impossible standards on entities with indoor play areas (e.g. restaurants, bowling alleys, YMCA’s, something as simple as a Lego table, etc.) that stores or serves food in any way, including through vending machines, was approved by the House Consumer Protection Committee 9-7 on a partisan vote.

Identical to legislation that has been repeatedly introduced for several years, HB 1372 (Rep. Michelle Mussman, D-Schaumburg) requires surfaces to be free from dust, dirt, foreign or infectious contamination, sets up an impossible standard of cleanliness for business owners to uphold. Someone can clean a room completely. The moment a human or animal enters the room and walks on or in any way touches items in the room, that room is no longer free of contaminants. The same is true the moment HVAC comes on or a window/door is opened.

The answer to the problem is simple: wash your hands. No one should eat or otherwise put their hands in their mouths before washing their hands after touching anything (e.g. toy, door knob, stair rail, etc.). Any public health expert will tell you there is no substitute for hand-washing.

IRMA would like to thank the members of the House Consumer Protection Committee who voted against HB 1372. They are: Representatives Norine Hammond (R-Macomb), Thomas Bennett (R-Watseka), Avery Bourne (R-Litchfield), Peter Breen (R-Lombard), Randy Frese (R-Quincy), David McSweeney (R-Cary), Grant Wehrli (R-Naperville).

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WORKERS’ COMPENSATION REFORM

 

The House Labor & Commerce Committee held a subject matter hearing Wednesday afternoon reviewing the outcome of the 2011 reform of Illinois’ workers’ compensation system. A representative of the National Council on Compensation Insurance (NCCI) opened the testimony with a review of their annual advertised rates and loss costs since 2011. Briefly, their advertised rates have decreased 18.1% and their loss costs have decreased 19.3%. It is important to note that NCCI only advices insurance companies as to what their rates could be. The individual companies take into account other factors. NCCI noted that the recommended rate decreases were primarily driven by the 30% reduction in the medical fee schedule accomplished by the 2011 reforms. They also noted that utilizing CPI-U contributes to on-going savings by limiting growth in the fees to the rate of inflation. It is important to note that even after a 30% reduction in the medical fee schedule, Illinois’ fee schedule dropped from the third highest in the nation to the fourth highest.

In their role as the point group for the Illinois employer community on workers’ compensation issues, representatives of the Illinois Manufacturers’ Association (IMA) testified as to the importance of the 2011 reforms as they related to arbitrators, utilization of American Medical Association standards, strengthening the utilization review process, and Preferred Provider Networks. The IMA also correctly noted that the AMA standards were not fully implemented and the PPN’s were substantially delayed by the Illinois Department of Insurance under the Quinn Administration.

Opponents of the 2011 reform, primarily contingency fee attorneys and medical providers, argued that the 2011 reforms have succeeded, have not been fully implemented, and nothing further should be done. Representatives of the medical community argued that the reforms went too far causing hospitals and doctors’ offices to close.

The entire debate has been re-ignited as Governor Bruce Rauner has consistently made workers’ compensation reform one of his primary goals. The employer community wants to see Illinois return to being average amongst the states in terms of workers’ compensation costs. According to the nationally recognized annual Worker’s Compensation Premium State Ranking Summary, for 2014 Illinois ranks 7th while comparable states like Michigan (34th), Ohio (33rd), Pennsylvania (17th), and Massachusetts (48th) all have significantly better rankings. The rankings of Illinois’ border states are ranked as follows: Missouri (21st), Wisconsin (23rd), Iowa (24th), Kentucky (40th), and Indiana (50th). Illinois employers would be pleased, and Illinois would be far more competitive, if Illinois was consistently ranked in the middle of the pack.

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PHARMACY TAKE-BACK

 

The first of at least two subject-matter hearings on HB 1 commenced this week before the Special Committee on Substance Abuse. House Amendment #1 to HB 1 seeks to impose a wide-array of regulations and other mandates designed to inhibit access to controlled substances including an aggressive and onerous unfunded pharmacy take-back. Several substance abuse experts have testified that abuse of pharmaceutical medicines is the most common gateway to heroin and other illicit drugs.

One of the many witnesses this week was, Randy Malan, Director of the Bureau of Pharmacy & Clinical Support Services in the Illinois Department of Human Services. Mr. Malan testified regarding Illinois’ nationally-recognized Prescription Monitoring Program (PMP). Every prescription for controlled substances that is written and dispensed in Illinois is recorded in the PMP. The PMP also has triggers and produces reports notifying prescribers and pharmacies if an individual has reached thresholds indicating they may be pill shopping – that is going from prescriber to prescriber trying to access pain medications. The Illinois PMP is highly regarded and an important tool. Mr. Malan testified that Illinois ranks 43rd overall for prescribing of opioid pain relievers, 50th (least prescriptions per population) regarding long acting/extended release opioid pain medications, 50th (the best) in terms of prescribing of high dose opioid pain medications, and 50th in the rate of prescribing Oxycodone.

While there are certainly improvements that can and should be made, and IRMA will be a part of those discussion, Illinois is already a leader nationally in restricting access to opioids.

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BUSINESS DAY

If you are a retailer in Illinois, you need to plan now to be in Springfield on Business Day Registration. It is your opportunity to explain to policy makers face-to-face that additional mandates on employers continues to erode the ability of Illinois to recover.

SOCIAL MEDIA

You can follow IRMA on your favorite social media outlets. Follow IRMA on:

Twitter: @ILRetail
Instagram: ilretail
Facebook: Illinois Retail Merchants Association

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Illinois This Week in Springfield – 99-05

IN THIS ISSUE:

HEROIN TASK FORCE UNVEILS LEGISLATION
SEA FOOD
SOCIAL MEDIA

This week in Springfield, both the House and Senate were in Session Tuesday, Wednesday and Thursday.  Floor action was limited as both Chambers focused primarily on progressing bills through committees before the looming committee deadline at the end of March.

Heroin Task Force Unveils Legislation to Address the Heroin Addiction,

Abuse and Overdose Epidemic in Illinois

A 39 member House Bipartisan Task Force was formed in response to the growing heroin epidemic among teens and young adults throughout the state of Illinois. The task force convened hearings throughout Illinois to better understand the problems and solutions of heroine abuse.  The task force heard testimony from treatment centers, addicts, law enforcement, doctors, and coroners on heroin abuse and its correlation to prescription drug abuse.

Subsequent to these hearings, a select few members of the committee developed, drafted and filed HB 1, which is being touted as a “comprehensive” solution to the heroin abuse epidemic in Illinois.  The comprehensive solution includes but is not limited to significant and costly pharmacy mandates; prescription mandates resulting in potential Medicaid costs; insurance mandates; coroner reporting requirements; dispensation of an opioid antagonists to first responders, family members of addicts, and school officials; heroin conviction and sentencing guidelines; and the development of an opiate drug prevention program for schools.  At the press conference announcing the proposal, Rep. Lou Lang (D-Chicago), Chairman of the Task Force, estimated the cost of the legislation will be approximately $25 million.

Of most importance to retail is the unfunded drug collection mandate upon pharmacies. This mandate requires all pharmacies in Illinois to serve as a take-back location for controlled substances and prescription and over-the-counter medicines.  This would require every pharmacy to abide by recent cost prohibitive U.S. Drug Enforcement Administration (“DEA”) regulations that impose various registration, receptacle, security, and recordkeeping requirements on a pharmacy that chooses to be a drug take-back location. It is important to emphasize the DEA only changed their rules to allow pharmacies to serve as drug take-back locations. The DEA did not mandate that they do so. HB 1, however, does require all pharmacies to be drug take-back locations subject to DEA rules. In drafting its rules, the DEA acknowledged there is a cost to entities that choose to provide these methods of collection and destruction. The DEA acknowledged that some of the costs could be offset by funding and support from States, local governments, and private companies that are involved with pharmaceuticals.  Unfortunately, HB 1 does not contain a funding mechanism and requires pharmacies, and only pharmacies, to bear the burden of all costs associated with the program including but not limited to receptacles, collection,

disposal, transportation, sorting, logging, DEA liability, fines and security measures associated with the program. There are additional requirements that affect numerous industries and state and local agencies. The sponsors have indicated a willingness to dialogue on the proposal. IRMA shares the concerns of the sponsors regarding the heroin problem in Illinois and realizes that this problem may only be solved through a shared responsibility approach that includes all industries, State and local agencies that are involved with pharmaceuticals, drug rehabilitation and substance abuse. IRMA looks forward to working with the sponsors to ensure an equitable solution is developed.

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Seafood Labeling

This week the House Committee on Consumer Protection considered testimony on the seafood labeling bill, HB 133 Amendment #1 (Rep. Andre Thapedi, D-Chicago).  The bill, which essentially duplicates the federal Country of Origin Labeling (COOL) law, was originally held in committee, in part, because it referred to the common name of the fish instead of the market name as is noted in federal law.  It also included processed fish which is not included in the COOL regulations.  In the interim, IRMA spoke with the sponsor regarding our specific concern about the inclusion of processed fish and our overall concern that such matters of interstate commerce are already being appropriately addressed by the federal government.  Determined to move the issue forward, the sponsor substituted some permanent members of the committee with temporary members in order to put the votes together to pass the bill.  The bill was then voted out of committee on a partisan vote and it will be sent to the House floor for additional consideration.  The bill could be heard by the full House as early as next week.  IRMA is working with the Illinois Manufacturers’ Association and the Illinois Farm Bureau to defeat this bill which is at best redundant and at worst a confusing, duplicative effort that would cause Illinois businesses to have two different labels for fresh and frozen seafood when the federal government makes changes to its labeling regulations. Duplicate labels will lead to confusion for consumers, higher compliance costs for businesses, and, as Illinois is a state with a large number of distribution centers, significantly increase the cost and complexity of distribution. IRMA would like to thank Representatives Norrine Hammond (R-Macomb), Thomas Bennett (R-Watseka), Avery Bourne (R-Litchfield), Peter Breen, (R-Lombard), Randy Frese (R-Quincy), David McSweeney (R-Lombard), and Grant Wehrli (R-Naperville) who voted against the proposal in committee.

SOCIAL MEDIA

Follow IRMA on the following social media outlets!
Twitter: @ILRetail
Facebook: Illinois Retail Merchants Association
Instagram: ILRetail

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CONTACT INFORMATION:

robtanyaalec

Illinois This Week in Springfield, – 99-04

IN THIS ISSUE:

ENERGY DEBATE BEGINS
LEGISLATIVE INTRODUCTIONS
SOCIAL MEDIA

 

The House was in Session Wednesday and Thursday of this week, while the Senate members spent the week in their districts. The deadline for Senate bill introductions concluded last Friday and the House deadline for bill introductions concluded this Friday.  These deadlines are for stand-alone introductions.  At any time, introduced bills may be amended. Committee hearings for both the Senate and the House will begin in earnest next week. The next substantive deadline is Friday, March 27th which is the House and Senate committee deadline for bills to be passed out of standing committees.

ENERGY DEBATE BEGINS

Two energy proposals were introduced recently in Springfield that purport to expand Illinois’ reliable and diverse energy grid. The Illinois Clean Jobs Coalition, which is comprised of environmental groups, renewable energy companies, and some unions have touted a renewable energy initiative in the Illinois Clean Jobs Bill (HB 2607).  Meanwhile, Exelon, which owns and operates six nuclear plants in Illinois, has introduced a low-carbon emissions initiative in the Low Carbon Portfolio Standard (HB 3293).  Both initiatives have attracted bipartisan support.

The Illinois Clean Jobs Coalition believes the Illinois Clean Jobs Bill will create 32,000 new clean energy jobs per year.  This will be accomplished by removing cost caps and increasing the share of power coming from renewable sources, like wind and solar, to 35 percent by 2030; mandating energy efficiency standards to reduce electricity use in Illinois by 20 percent by 2025; and initiating a market based Cap and Trade system to redistribute carbon emissions.

Meanwhile, Exelon introduced a Low Carbon Portfolio Standard initiative that would bring Illinois in compliance with the federally mandated rules that require all states to reduce carbon emissions from existing power plants. Exelon argues that the legislation would also would help ensure the continued operation of their nuclear power plants in Illinois.  Specifically, the Low Carbon Portfolio Standard would require Ameren and ComEd to purchase low carbon energy credits to match 70 percent of electricity used from qualified sources such as solar, wind, hydro, nuclear and clean coal. Ameren and ComEd would be allowed to recover through rates all of the costs associated with the purchase of these credits. The annual customer increases would be capped at 2.015 percent compared to 2009 rates.

IRMA is in the process of reviewing both initiatives. Obviously, utility costs and reliability are of utmost importance to the Illinois retail sector. Therefore, IRMA will be heavily involved in the discussions regarding these proposals and looks forward to working with the advocates and sponsors of both proposals.

 
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LEGISLATIVE INTRODUCTIONS

 

As TWIS readers are aware, a great many bills touch the retail sector. In order to avoid inundating the readers with a flood of introductions, the following bills are a highlight of introductions that are of greater interest to retail.

BUSINESS LIABILITY

SB 1833 (Sen. Daniel Biss, D-Skokie) and HB 3188 (Rep. Ann Williams, D-Chicago) expands the scope of information to be protected to include medical, health insurance, biometric, consumer marketing, and geolocation information. It requires notice of breaches of security to be provided to the Attorney General. Requires privacy policies to be posted.

 ENVIRONMENT AND UTILITIES

SB 1433 (Sen. Melinda Bush, D-Grayslake) creates the Carpet Stewardship Act. It requires consumers to pay a 3.33 cents tax per square foot of carpet purchased in order to fund the collection, transportation and recycling of carpet in Illinois. It requires manufacturers—and some retailers—to join a representative organization and create a plan to implement and finance the program through Carpet America Recover Effort (CARE). CARE may raise or lower the tax with very little oversight from the State. Finally, it provides that the Illinois Environmental Protection Agency must approve each carpet stewardship plan for the plan to be valid. It requires retailers to list the tax separately on the receipt, remit the tax to the representative organization; and allows retailers to be voluntary collections points.

SB 1485 (Sen. Don Harmon, D-Oak Park) requires the Planning and Procurement Bureau to establish a long-term renewable resources procurement plan that includes all renewable energy credits necessary to meet specified goals (replacing the current renewable portfolio standards). It makes changes concerning nondiscrimination, energy efficiency and demand-response measures, natural gas efficiency programs, real-time pricing, infrastructure investment and modernization, the Illinois Smart Grid test bed, and on-bill financing programs for electric and gas utilities. It also provides that upon promulgation by the U.S. Environmental Protection Agency of a final rule regulating carbon dioxide emissions from existing electric generating units, the Illinois Environmental Protection Agency shall be authorized to implement a cap and trade program or similar market mechanism to regulate carbon dioxide emissions.

HB 3293 (Rep. Larry Walsh, D-Joliet) requires the Planning and Procurement Bureau to include in procurement plans and competitive procurement processes the procurement of low carbon energy credits (LCE credits) for all of the utilities’ retail customers. The procurement plans shall include cost-effective low carbon energy credits from low carbon energy resources in an amount equal to 70% of each electric utility’s annual retail sales of electricity to retail customers in the State during the planning year immediately prior to the development of the procurement plan. Renewable energy credit, carbon emission credit, or LCE credit can only be used once to comply with a single portfolio standard and cannot be used to satisfy the requirements of more than one portfolio standard. It allows the electric utility to recover through tariffed charges all of the costs associated with the purchase of low carbon energy credits from low carbon energy resources. It requires electric utilities to procure low carbon energy credits from low carbon energy resources for all retail customers in its service area in accordance with provisions concerning the low carbon energy portfolio. It requires electric utilities and alternative retail electric suppliers to provide to its customers on a quarterly basis a pie-chart that graphically depicts the quantity of low carbon energy credits from low carbon energy resources procured as a percentage of the actual load of retail customers within its service area.

TELECOMMUNICATIONS

HB 3570 (Rep. John Bradley, D-Marion) requires providers of prepaid calling services to permit customers to transfer any telephone number used by that customer to any other telephone used by the customer.

HB 3571 (Rep. Marcus Evans, D-Chicago) states that a provider of wireless telephone service may not use or permit the use of perma-cookies to monitor the viewing habits of its data plan users.

HB 3584 (Rep. Silvana Tabares, D-Chicago) provides that a cable or video providers shall cease charging customers for internet modems rented to the customer when the customer has paid to the provider the cost of the modem and the customer requests that the rental charges be discontinued. Cable and video providers shall provide notice regarding the discontinuance of rental charges to customers in each billing statement. The notice shall include a disclosure of rights and responsibilities relating to the maintenance of the modem.

HB 3651 (Rep. Carol Ammons, D-Chicago) provides that restrictions concerning the sending of unsolicited or misleading electronic mail messages apply also to text messages.

 FOOD

HB 3495 (Rep. Robyn Gabel, D-Evanston) requires restaurants to be aware of food allergy recalls from the U.S. Food and Drug Administration. It also requires restaurants to indicate on a placard, poster, or menu that consumers with food allergies to inform a waiter or waitress of the restaurant of their allergy.

LIQUOR

HB 3237 (Rep. Sarah Feigenholtz, D-Chicago) requires in provisions that prohibit liquor distributors and manufacturers from giving, and retail licensees from receiving, anything of value, provides that a manufacturer, distributor or importing distributor may furnish free social media advertising to a person having a retail license if the social media advertisement does not contain the retail price of any alcoholic liquor.

LABOR

SB 1836 (Sen. Toi Hutchinson, D-Chicago) creates the Healthy Workplace Act and requires employers to provide 7 paid sick days to part-time and full-time employees each year they are employed with the employer. Paid sick leave shall accrue at the rate of one (1) hour of leave for every thirty hours (30) of work up to the maximum of 56 hours of paid sick leave per year.

HB 3554 (Rep. Will Guzzardi, D-Chicago) provides that employees must be given notice of the shifts to be worked 2 weeks in advance of the scheduled shift. And establishes requirements for minimum pay for working shifts outside of scheduled shifts.

HB 3619 (Rep. Cynthia Soto, D-Chicago) expands the Equal Pay Act of 2003 to include all employers rather any employer with 4 or more employees. Also, it increases the maximum civil penalty for all violations of the Act or a rule from $2,500 to $5,000.

PHARMACY

SB 1611 (Sen. Antonio Munoz, D-Chicago) provides that a pharmacist may substitute a prescription biological product for a prescribed biological product only if specified criteria are met. It requires that, within a reasonable time following the dispensing of a biological product, the dispensing pharmacist or the pharmacist’s designee shall communicate to the prescriber the specific product provided to the patient, including the name of the product and the manufacturer. Additionally, it requires the pharmacy to retain a record of the biological product dispensed for a period of 5 years. Finally, the legislation requires the State Board of Pharmacy to maintain a link on the Department’s Internet web site to the current list of all biological products determined by the United States Food and Drug Administration to be interchangeable with a specific biological product.

HB 3321 (Rep. Kelly Cassidy, D-Chicago) stipulates that health care providers shall not, as a result of their acts or omissions, be liable for civil damages under the Department of Human Services’ Drug Prevention Program who, acting in good faith, directly or by standing order, prescribes or dispenses an opioid antidote to a patient who, in the judgment of the health care professional, is capable of administering the drug in an emergency.

SB 1811 (Sen. Iris Martinez, D-Chicago) provides that any pharmacy with more than one retail location operating in this State shall collect and discard unused prescription medications, including, but not limited to, controlled substances, from residential sources in accordance with State and federal laws, including the federal Controlled Substances Act and any regulations issued pursuant thereto.

SB 1466 (Sen. Donne Trotter, D-Chicago) allows a licensed pharmacist to dispense an opioid antagonist in accordance with written, standardized procedures or protocols developed by the Department of Financial and Professional Regulation, in consultation with the Department of Public Health, if such procedures or protocols are filed at the pharmacist’s place of practice and with the Board of Pharmacy before implementation. If a pharmacist want to dispense an opioid antagonist, the pharmacist to complete a training program approved by the Department of Human Services under the Drug Overdose Prevention Program authorized under Alcoholism and Other Drug Abuse and Dependency Act.

HB 3219 (Rep. Michael Zalewski, D-Chicago) creates a pilot program beginning January 1, 2016, requiring that every new or refilled prescription for a Schedule II controlled substance containing hydrocodone shall only be dispensed in a non-reusable medicine locking closure package. It provides that medicine locking closure package must be dispensed by the pharmacy with instructions for patient use. Additionally, it provides that the manufacturer of the medicine locking closure package must make available assistance online or through a toll-free number for patient use.

HB 3519 (Rep. David Harris, R-Mount Prospect) provides that a pharmacist may substitute a prescription biosimilar product for a prescribed biological product under certain circumstances.

HB 3627 (Rep. Marcus Evans, D-Chicago) allows pharmacists to administrate vaccinations to patients ages 10 through 13 pursuant to a valid prescription or standing order (was, limited to Influenza (inactivated influenza vaccine and live attenuated influenza intranasal vaccine) and Tdap (defined as tetanus, diphtheria, acellular pertussis) vaccines).

HB 3774 (Rep. Monique Davis, D-Chicago) states that before mailing or shipping a prescription medication to a patient’s residence, a pharmacy or nonresident pharmacy must telephone the patient, informing the patient of the type of prescription medication and its purpose and giving the patient the option to cancel delivery of the prescription medication.

REGULATION AND LICENSING

SB 1755 (Sen. Daniel Biss, D-Sokie) creates the Call Center Worker and Consumer Protection Act and provides that an employer that intends to relocate a call center or portions of a call center to a foreign country must provide notice to the State Treasurer at least 120 days before the relocation. It requires the Treasurer to compile and post on the Treasurer’s website a list of employers that have relocated call centers. Additionally, it requires employers that relocate call centers to foreign countries to repay grants, loans, and tax benefits that may have been received. Finally, it authorizes a civil penalty not to exceed $10,000 for violations of the Act.

HB 3462 (Rep. Elizabeth Hernandez), D-Cicero provides that no person or business shall sell or offer to sell any cleaning product that contains triclosan and is used by consumers for sanitizing or hand or body cleansing. This prohibition does not apply to individual products for which specific United States Food and Drug Administration approval for consumer use has been secured. Each violation of this prohibition is a business offense with a fine of $10,000.

HB 3773 (Rep. Silvana Tabares, D-Chicago) requires the Department of Agriculture to create and maintain an Animal Abuse Registry that is funded by an Animal Abuse Registry Fund. Any person 18 years of age or older that has been convicted of cruel treatment, aggravated cruelty, or animal torture shall register with the Department of Agriculture within 30 calendar days after the date of conviction to be placed on the Animal Abuse Registry. The registry will be publicly accessible. The bill also prohibits a registered person from owning a companion animal or being employed at an animal shelter, pound, pet shop, zoo, or other business where companion animals are present.

TAXES

HB 3121 (Rep. Tom Demmer, R-Rochelle) provides that certain information that may be disclosed to municipalities may also be disclosed to counties.

HB 3168 (Rep. David Leitch, R-Peoria) provides that the Department of Revenue may furnish certain financial information to municipalities and counties (now, only municipalities) if the municipality or county agrees in writing to the Act’s confidentiality provisions. The Department of Revenue is authorized to provide the information to municipalities or counties by electronic means.

TOBACCO

SB 1675 (Sen. Toi Hutchinson, D-Chicago Heights) would permit the state to issue an RFP for digital cigarette tax stamps in IL and  Would allow a stamp to be considered “affixed” if it’s at least 90% affixed to the package

HB 2513 (Rep. Marcus Evans), D-Chicago and SB 1919 (Sen. Julie Morrison, D-Deerfield) provides that a person who is both a licensed distributor and a licensed retailer shall be issued a single license number by the Department of Revenue. It also provides that records may be kept electronically and may be kept at an out-of-state location so long as those records are made available upon reasonable notice for the purpose of investigation and control by the Department of Revenue. In provisions that provide for increased penalties for retailers that do not have training programs, provides that those training programs may be conducted electronically. If a retailer has a training program in place prior to the effective date of the amendatory Act, has a training program approved by another state, or follows the guidelines set forth by the federal Food and Drug Administration, then that training program shall be deemed to meet the minimum standards in this State.

HB 3362 (Rep. Kathleen Willis, D-Northlake) creates the offense of unlawful sale of flavored electronic cigarettes or flavored cigarette liquids. It provides that a person commits unlawful sale of flavored electronic cigarettes or flavored cigarette liquids when he or she knowingly sells flavored electronic cigarettes or flavored cigarette liquids, or causes, permits, or procures flavored electronic cigarettes or flavored cigarette liquids to be sold from his or her premises or establishment.

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SOCIAL MEDIA

Follow IRMA on the following social media outlets!

Twitter: @ILRetail
Facebook: Illinois Retail Merchants Association
Instagram: ILRetail

CONTACT INFORMATION:

robtanyaalec

 

 

Illinois This Week in Springfield – 99-03

IN THIS ISSUE:

BUDGET ADDRESS
BUDGET ADDRESS REACTION
BILL INTRODUCTIONS

This Week In Springfield, legislative committees began their work while the week was dominated by Governor Bruce Rauner’s first budget address.

BUDGET ADDRESS

 

Wednesday, Governor Bruce Rauner delivered his first budget address. The much-anticipated proposal attempts to close the deficit in the current budget, balance the Fiscal Year 2016 budget while attempting to restore Illinois’ fiscal health in the long-term. He laid the blame for the current condition on “years of bad decisions, sleight-of-hand budgeting and giveaways we couldn’t afford.”

Stating that Illinois has “been living beyond our means-spending money that Illinois taxpayers could not afford”, Governor Rauner’s proposed budget cuts over $1.6 billion in spending to close the deficit in the current budget. He then proposed an additional $6.1 billion in spending reductions to bring Illinois’ spending in line with anticipated revenues while leaving room to pay off an additional $500 million in unpaid bills.

The Governor’s proposal did not include tax increases. He stated that “asking for more of the taxpayers’ hard-earned money without fundamentally reforming the structure of state government would further erode public confidence and accelerate our decline.”

Illinois’ largest-in-the-nation pension obligation backlog of over $110 billion is the Governor’s first target.  While he plans to protect benefits that have been earned to date, Governor Rauner desires to ensure that future workers are pushed to a 401K-type of retirement plan.  He made note that because of the dangerous nature of police and fire who put their lives on the line every day for our safety, he would exempt those groups from the proposed changes.  He also would allow employees hired before 2011 a buyout option which would include a payment and defined contribution plan in exchange for a reduction in COLA. The Governor estimates these reforms would save over $2 billion. However, it is a virtual certainty that even if such reforms were to pass the Assembly, they would be immediately challenged in court by unions representing state employees.

Governor Rauner then turned his attention to local governments.  Claiming that some had cash reserves and that payment to local governments in general had been increasing over the years, Gov. Rauner noted that they would experience a reduction equal to 3% of their revenue.  Local governments could then consolidate and restructure compensation packages and employment in order to adjust to the cut.  Cuts are also on the horizon for transportation agencies and Medicaid although the details here will be forthcoming in a separate package set to be introduced on Monday.  For now, we know that he proposes to save $75 million by conducting an aggressive eligibility review campaign and re-instituting SMART Act reforms that could save an additional $320 million.

The entire speech was not about spending reductions, however. Governor Rauner is proposing additional funds for early education and K-12 education in the neighborhood of $300 million. While universities were included in the budget cuts, community colleges and vocational schools were not.

Of immediate concern to Illinois’ pharmacy community, the Governor’s budget proposes $1.5 billion in cuts to the Medicaid program. Of this cut, approximately $42 million will fall on Illinois pharmacies through a reduction in the dispensing fee. This is particularly hurtful to Illinois pharmacies who experienced a 9% cut during the last round of Medicaid reform in 2011 while other providers only realized a 3% reduction. IRMA released the following statement in response to the budget address in general and the proposed pharmacy reimbursement cuts in particular:

“Governor Rauner inherited an enormous budget crisis and pension obligation that presents many fiscal challenges to our state. IRMA applauds his desire to balance the budget and help turn the state’s economy around. Our members – which include retail and mom and pop pharmacy providers- are more than a little concerned with the cuts to Medicaid. We hope to work closely with Administration and the legislature on issues impacting Medicaid in general and pharmacies in particular. Pharmacists, one of the nation’s most trusted professions, have seen two rounds of cuts and three times more than any other provider is asking more than a fair share of pharmacy providers,” said Rob Karr, President/CEO, Illinois Retail Merchants Association.

In an effort to push economic growth, the Governor has plans to achieve additional reforms to workers compensation, tort reform, pensions and taxes.  In an additional nod to the high costs of doing business Illinois, he wishes to freeze property taxes as well.

By making the government run more efficiently, cut where he is able and invest where it is necessary, Governor Rauner stated that he hopes his budget will ignite the spirit of President Abraham Lincoln who called for everyone to “think anew and act anew” and  will put Illinois on the path “…to a more prosperous future.”

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BUDGET ADDRESS REACTION

 

Reaction to the Governor’s first budget address fell along party lines. Senate President John Cullerton (D- Chicago) immediately noted that predicating the budget on the proposed pension reform was not realistic and declared that immediately put a $2 billion-plus hole in the Governor’s proposed budget.

The normally reserved and understated Speaker of the Illinois House Michael J. Madigan (D- Chicago) also stated his disagreement with the pension reform proposal and stated that he disagrees with the belief that Illinois can simply cut services and resolve the problem. “I think that the elimination of the deficits will require a blend of service cuts plus new revenue,” stated Madigan.

Senate Republican Leader Christine Radogno and House Republican Leader Jim Durkinboth cautioned that the budget address is just the start of a long processs. Leader Radogno noted that “we absolutely have to change the way we do things” while Leader Durking noted that ‘everything in that speech is subject to negotiation”.

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BILL INTRODUCTIONS

 

CONSUMER FRAUD

SB 1259 (Sen. James F. Clayborne, Jr., D-East St. Louis) and HB 2450 (Rep. Dan Burke, D-Chicago) provides that it is an unlawful practice for a manufacturer or distributor of prescription contact lenses to prevent a retailer from selling or advertising contact lenses below any specified price.

CREDIT AND FINANCE

HB 2541 (Rep. Monique Davis, D-Chicago) provides that a credit card issuer may not automatically renew a credit card that has not been used to perform a credit card transaction within the 12 months immediately preceding the renewal.

ENVIRONMENT AND UTILITIES

SB 1261 (Sen. Linda Holmes, D-Aurora) mandates that manufacturers add an extra fee on all architectural paint sold in Illinois and pass it down the line. Retailers are required to pass the tax on to consumers. Retailers are also encouraged to become voluntary collection sites. This tax is mandated, assessed, and retained by PaintCare, which is a non-governmental entity comprised of paint manufacturers for the collection, transportation, and recycling of paint. PaintCare may increase the tax and products that are taxed may be expanded at any time.

SB 1300 (Sen. Toi Hutchinson, D-Chicago) creates the Smart Phone Kill Switch Act. It requires that any smart phone manufactured on or after July 1, 2016 that is sold or purchased in Illinois must be equipped with preloaded anti-theft functionality or be capable of downloading that functionality and requires the functionality to be available to purchasers at no cost. Additionally, it requires wireless communications device dealers to maintain a written record of every purchase or acquisition of a used wireless communications device for resale. And further requires the installation of video security cameras at a dealer’s physical location. Finally it provides exemptions from the application of the Act, including wireless telephone providers who acquire devices for trade-in or for repair and refurbishment programs.

HB 2607 (Rep. Elaine Nekritz, D-Buffalo Grove) requires the Planning and Procurement Bureau to establish a long-term renewable resources procurement plan that includes all renewable energy credits necessary to meet specified goals (replacing the current renewable portfolio standards). It sets forth guidelines for what shall be included in the procurement plan. It makes changes concerning nondiscrimination, energy efficiency and demand-response measures, natural gas efficiency programs, real-time pricing, infrastructure investment and modernization, the Illinois Smart Grid test bed, and on-bill financing programs for electric and gas utilities and Adds provisions related to renewable energy credit procurement. Amends the Environmental Protection Act. Finally, it provides that upon promulgation by the U.S. Environmental Protection Agency of a final rule regulating carbon dioxide emissions from existing electric generating units, the Illinois Environmental Protection Agency shall be authorized to implement a cap and invest program or similar market mechanism to regulate carbon dioxide emissions.

 LABOR

SB 1363 (Sen. Ira Silverstein, D-Chicago) creates the Workplace Bullying Prohibition Act and provides that bullying is prohibited in the workplace. The legislation applies to employers that employ 3 or more individuals but excludes the State, State agencies, and units of local government. It requires an employer to establish a policy regarding workplace bullying and file the policy electronically with the Department of Labor. Additionally, it provides that a violation of the Act by an employer constitutes a business offense subject to a fine of not less than $1,000 and not more than $2,000.

HB 2549 (Rep. Esther Golar, D-Chicago) creates the Best Candidate for the Job Act that provides that private employers shall properly consider for employment persons previously convicted of one or more criminal offenses. It prohibits discrimination against such persons unless there is a direct relationship between the offense and the specific employment sought. It also establishes criteria for evaluating convictions. Provides that an employer that demonstrates that it has hired an individual pursuant to the Act, except for a willful or wanton act in hiring an individual, shall not be liable for acts or omissions by the employee. Exempts law enforcement agencies.

LOSS PREVENTION

HB 2496 (Rep. Will Guzzardi, D-Chicago) changes the additional amount of damages that may be recovered by the merchant from an amount not less than $100 nor more than $1,000 to an amount equal to the lesser of $500 or 3 times the full retail value of the merchandise.  It also provides that a merchant may recover civil damages for retail theft by bringing suit in a circuit court or by executing a settlement agreement. It specifies form of settlement agreement. It requires the settlement agreement to include a statement that nothing in the agreement shall constitute an admission of guilt for purposes of criminal law and that if the agreement is signed and payment is made in full within 60 days, no police report or criminal complaint will be filed by the merchant relative to the incident. Nothing in the agreement can or will bar the State from instituting the criminal prosecutions as it deems necessary.

PHARMACY

SB 1359 (Sen. Linda Holmes, D-Aurora) provides that a health plan that provides coverage for prescription drugs shall ensure that any required copayment or coinsurance applicable to drugs on a specialty tier does not exceed $100 per month for up to a 30-day supply of any single drug and a beneficiary’s annual out-of-pocket expenditures for prescription drugs are limited to no more than fifty percent of the dollar amounts in effect under specified provisions of the federal Patient Protection Affordable Care Act. It also provides that a health plan that provides coverage for prescription drugs and uses a tiered formulary shall implement an exceptions process that allows enrollees to request an exception to the tiered cost-sharing structure. Finally, it provides that a health plan that provides coverage for prescription drugs shall not place all drugs in a given class on a specialty tier.

HB 2507 (Rep. Robert Martwick, D-Chicago) provides that smoking cessation products shall not be subject to prior approval as a result of the 4-prescription limit.

HB 2525 (Rep. Mike Tryon, R-Crystal Lake) provides that over-the-counter medications that are prescribed to a recipient of medical assistance by a physician, a physician’s assistant, a nurse practitioner, or any other medical care provider qualified to prescribe medications shall be covered under the State’s medical assistance program.  It also provides that pharmacies providing prescribed over-the-counter medications shall be reimbursed at the same rate determined by the Department of Healthcare and Family Services for prescription medications covered under the State’s medical assistance program. Additionally, it requires the Department to establish guidelines and standards by administrative rule on the documentation, if any, a medical care provider must submit when prescribing an over-the-counter medication to a recipient of medical assistance. Effective immediately.

REGULATION AND LICENSING

HB 2513 (Rep. Marcus Evans, D-Chicago) provides that a person who is both a licensed distributor and a licensed retailer shall be issued a single license number by the Department of Revenue. It also provides that records may be kept electronically and may be kept at an out-of-state location so long as those records are made available upon reasonable notice for the purpose of investigation and control by the Department of Revenue. Amends the Prevention of Tobacco Use by Minors and Sale and Distribution of Tobacco Products Act. In provisions that provide for increased penalties for retailers that do not have training programs, provides that those training programs may be conducted electronically. If a retailer has a training program in place prior to the effective date of the amendatory Act, has a training program approved by another state, or follows the guidelines set forth by the federal Food and Drug Administration, then that training program shall be deemed to meet the minimum standards in this State.

HB 2589 (Rep. Silvana Tabares, D-Chicago)provides that a person over the age of 18 found guilty of certain animal abuse offenses shall register with the national Do Not Adopt Registry within 10 days after the conviction and shall register annually for 10 years after the conviction. Further it provides that failure to properly register as required under the Act shall be a business offense with a fine of $100 for the first offense, $500 for the second offense, and $1,000 for the third or subsequent offense. Additionally, it provides that any animal shelter, pet store, animal breeder, or person shall conduct a search of the national Do Not Adopt Registry prior to selling, transferring, delivering, or placing for adoption a companion animal to another person.

HB 2667 (Rep. Robyn Gabel, D-Evanston) creates the Healthy Eating Active Living (HEAL) Act and imposes a tax on distributors of bottled sugar-sweetened beverages, syrups, or powders at the rate of $0.01 per ounce of bottled sugar-sweetened beverages sold or offered for sale to a retailer for sale in the State to a consumer. It requires those distributors to obtain permits. Additionally, it provides that 2% of the moneys shall be deposited into the Tax Compliance and Administration Fund for the administrative costs of the Department of Revenue, and 98% of the moneys shall be deposited into the Illinois Wellness Fund to be used for wellness programs and for expanded obesity prevention and treatment services for Medicaid beneficiaries. Finally, it creates an Advisory Council to govern the distribution of Illinois Wellness Fund moneys.

INSURANCE

SB 1333 (Sen. Linda Holmes, D-Aurora) provides that neither a group health plan nor an accident and health insurer offering group or individual health insurance coverage shall discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law.

HB 2711 (Rep. Dan Brady, R-Normal) provides that insurers may not set reimbursement rates in a manner that discriminates against a class of eye care providers. It also provides that eye care coverage insurers may not preclude obtaining eye care directly from a licensed provider on a health care panel or promote a class of providers to the detriment of another class of providers. It requires that all providers on a provider panel be included in any publicly accessible list and requires the inclusion of ophthalmologists and optometrists in provider panels.

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Illinois This Week in Springfield 99-02

In This Issue:

STATE OF THE STATE STATE
MINIMUM WAGE
INFRASTRUCTURE TAX
BAD DEBT

 

The General Assembly convened this week and much of the attention centered on Governor Rauner’s State of the State address.  After he delivered his speech, which included an outline to increase the minimum wage, the Senate passed their own minimum wage increase.

STATE OF THE STATE

This week, Gov. Rauner delivered his first State of the State address to the General Assembly.  The much anticipated speech laid out the issues that Gov. Rauner wants to tackle during his term.  He will focus on growing the economy and attracting jobs, ensuring that children in all income levels receive a quality education, reform the way taxes are used and structured, and change the way government operates and interacts with citizens.  But he cautioned listeners that returning Illinois to its rightful place as one of the best places to live and work in the country is a long-term goal.  Gov. Rauner stated that his focus will not be on the next election, but on doing what’s best for the state.  Citing competitiveness as his watchword and opportunity and compassion as his goals, Gov. Rauner laid out a tough and ambitious agenda.

Of particular interest to the retail community, he laid out a specific plan for the minimum wage by supporting an increase of 25 cents per year for the next 7 years.  He tied his support for a minimum wage increase to reforms in the workers’ compensation and unemployment insurance systems.

As he did during the campaign, the Governor will make Worker’s Compensation reform a priority.  He claimed Attorney General Lisa Madigan as an ally based on her past expressions of support for addressing how causation is interpreted.  Additionally, he also expressed a desire to make the unemployment insurance system work better for both employers and employees.  It remains to be seen how potential reforms to the unemployment system will be addressed. The system is currently under an ‘agreed bill’ process which was negotiated by representatives of employers and labor. The current agreement has returned Illinois Unemployment Insurance Trust Fund to solvency ahead of schedule. However, it also contains ‘speed bumps’ (aka benefit cuts for laid off workers and tax increases for employers). These ‘speed bumps’ are designed to force both parties back to the negotiating table to review the agreement and ensure it is having its desired effect. These speed bumps must be addressed this year or the aforementioned benefit cuts and tax increases will take effect.

Governor Rauner put a good deal of emphasis on education reform – a topic that is near and dear to his heart and a subject area in which he has long been involved. In order to have a highly trained and educated workforce, his administration will focus on ensuring that each child in Illinois has access to a quality education form an early age.  Since not every child will want or have the means to attend a four-year university, Gov. Rauner stressed that community colleges should be better equipped with technical and vocational training so that everyone has a real shot at the middle-class.  Gov. Rauner mentioned that he wanted to eliminate unnecessary testing so that teachers have more time to teach, and he wants to create incentives to attract the best and brightest teachers to Illinois.

As part of the reforms he wants to achieve, the Governor suggested giving local citizens greater power over the collective bargaining processes of their local governments and school districts including the right to create by referendum local empowerment zones. As described by the Governor, employees in these zones would have the right to decide whether or not to join a union. Additionally, the Governor stated that Lt. Gov. Evelyn Sanguinetti would be directly involved in finding ways to consolidate government and rid itself of unfunded mandates.

During his speech, the Governor made passing reference to the need to reform ‘our out-of-date tax code’ pointing out that the ‘base it too narrow, and that makes us uncompetitive.’ While the speech itself contained no other details, his staff distributed additional details after the speech. As it relates to taxes, those details included:

    • Modernizing the sales tax to include service taxes;
    • Increasing the Earned Income Tax Credit;
    • Make income taxes low and competitive with other states;
    • Restructure the motor fuel tax to appropriately invest in infrastructure.

 

Those interested in viewing the additional details can find them here. You can read the speech here and watch the video of the speech here.

Governor Rauner has laid out an ambitious plan for the state. As always, IRMA will engage with all parties in the days to come on those issues of interest to retail. Everyone now awaits the Governor’s budget address on February 18th.

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MINIMUM WAGE

The first bill heard in the Senate Executive Committee of the 99th General Assembly was a proposal by Sen. Kimberly Lightford (D-Westchester) to increase the minimum wage.  Sen. Lightford, who has been the champion for this issue, introduced a bill that addresses minimum wage in light of recent changes in Chicago and concerns about how a mandated increase would affect small businesses.  SB 11 proposes to raise the current minimum wage from $8.25 to $11.00 over a four-year period – a 25% increase in employers largest or second largest expense item.  In addition, it would preempt home rule units from imposing their own minimum wage with the exception of the recently enacted ordinance in the City of Chicago. In the case of Chicago, they would be allowed to increase their minimum wage to the $13 per hour called for in their ordinance but would be preempted from raising it beyond $13.  Lastly, in recognition of the fact an increase would have negative financial implications on employers, this proposal would establish a limited tax credit for businesses with 50 employees or less.  This is a significant development as it is an admission that minimum wage increases negatively impact employers and discourage employment – something the proponents have long denied.

IRMA President & CEO Rob Karr testified in opposition noting that no employer can afford a 25% increase in costs as no employer, certainly in the retail space, is experiencing sales and profit increases of 25%. Moreover, these increases are just on labor and do not include or take into account the ever-increasing costs of inputs, property taxes, etc. IRMA noted that the day before a noted and popular bookstore in San Francisco, CA, whose owner was among the leading advocates when San Francisco enacted their minimum wage which currently stands at $11.05, is closing this year citing the unsustainable minimum wage.

SB 11 does nothing to change the economic perception of Illinois. It does nothing to create jobs and grow the economy – something every economist agrees is the only prescription for significantly lowering unemployment and raising wages. Further, it continues to economically disenfranchise young workers who are experiencing unemployment over 50% in Illinois and over 90% in large portions of the City of Chicago.

After a short debate, the measure passed out of committee on a party-line vote of 11-5-0 and was sent to the Senate floor for additional consideration.  Wednesday, Senate Bill 11 passed the full Senate by a vote of 36-18-0.


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POTENTIAL INFRASTRUCTURE TAX?

The Transportation for Illinois Coalition (TFIC), a coalition co-chaired by the Illinois Chamber of Commerce and the Illinois AFL-CIO, has been trying for several years to garner support for additional taxes to fund a new capital infrastructure campaign. The State’s largest infrastructure program in history of $30 billion expired two years ago and was plugged last year by a $1.1 billion program.

The coalition is trying to raise at least $1.8 billion in annual revenues – $1.5 billion would be used for a Pay-As-You-Go (PAYGo) program and another $300 million to finance $3 billion in bonds.

Presently, the TFIC is laying out four funding scenarios. TWIS readers can view those scenarios here. The current centerpieces of their tax proposals are:

  1. Increase the Motor Fuel Tax by 13-cents. This would give Illinois the fourth highest state imposed motor fuel tax in the nation. (estimated to raise $780 million)
  2. Increase the state sales tax by .1%. (estimated to raise $154-$198 million)
  3. Double the sales tax on food from the current 1% to 2%. (estimated to raise $329 million)

Other proposed revenue sources to be paired with one or more of the above include increases in vehicle registrations, certificates of titles, driver’s licenses, and various fund transfers.

It is important to note that Governor Rauner’s administration, via Capitol Fax, a highly-read political blog focused on Illinois government and politics, is denying any connection stating: “The administration has not launched behind-the-scenes talks with legislators to raise the gas tax, or any other taxes or fees to fund a capital program. What’s being circulated by some advocacy groups is not the governor’s plan and does not have his blessing.”

IRMA will continue to monitor the discussion.

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BAD DEBT

Last year, an IRMA initiative to return fairness to the refunding of sales tax on bad debt passed both chamber of the Assembly unanimously. Former Governor Pat Quinn decided to use the bill as a vehicle for meaningless political posturing in literally his final moments in office effectively killing the bill. The initiative has been reintroduced in the form of HB 498 (Rep. Anthony DeLuca, D- Chicago Heights) and has already attracted 13 co-sponsors. The proposal has no known opponents. As a refresher, if a consumer does not pay for the merchandise they purchase on credit, and efforts to collect fail, a bad debt is declared and sales tax is refunded to the retailer. This happens because in the eyes of the law, a sale is deemed not to have occurred.

Several years ago, the Illinois Department of Revenue (IDOR) issued a controversial opinion that this did not apply to private label credit cards (PLCC’S). PLCC’s are cards emblazoned with the logo of a store and can only be used at that store unlike multipurpose cards (e.g. cards that may carry a logo but can be used anywhere) or general use cards (e.g. VISA, MasterCard, etc.). Over the course of last year, IRMA worked with IDOR to address their procedural concerns to ensure proper documentation would be available and lines of accountability would be clear.

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