Illinois This Week in Springfield – 99-13

TORT REFORM COMMITTEE OF THE WHOLE
RIGHT TO WORK
PROPERTY TAX
FOOD HANDLING
BAD DEBT
CRIMINAL BACKGROUND RECORDS IN HIRING
DATA SECURITY

 

This Week In Springfield, the House continued what it started the week before by bringing to the floor for debate, a vote, or both, pieces of Governor Bruce Rauner’s Turnaround Agenda.

TORT REFORM COMMITTEE OF THE WHOLE

TWIS readers will recall that last week, Speaker Michael Madigan convened a Committee of the Whole in the Illinois House. This week, the House once again met as a Committee of the Whole, this time to debate tort reform. This tool is being used by the House Democrats to publicly debate and attempt to frame reform components in Governor Rauner’s Turnaround Agenda.

According to the Turnaround Agenda, the Rauner Administration would like to limit venue shopping, restore jury composition to 12, limit joint and several liability, and limit damage awards as a result of medical expenses to those expenses that are actually paid. According to the Turnaround Agenda, these reforms would end abusive lawsuits “that have made Illinois uncompetitive as a result of the increased premiums required to practice in Illinois and improve the litigious nature within Illinois’ boundaries”.

Very similar to last week’s workers compensation hearing, the panels were dominated by witnesses that suffered from a variety of injuries from negligent or other tortious actions. The witnesses suffered from medical malpractice, product deficiencies or other accidents. These included witnesses from Illinois, Indiana, and Missouri. The witnesses cautioned against adopting reform measures, particularly caps, as they would never be fully compensated for the injuries they sustained and such measures are ultimately unfair to victims.

Republicans questioned why no employers, insurance companies, or related witness were invited to offer testimony on the detrimental effect that malpractice premiums and liability have on Illinois’ ability to attract businesses and doctors.  Democrats answered that these groups are heard from regularly at the Capitol and this was an opportunity to hear from individuals directly affected by tortious actions and the civil justice process.

Governor Rauner’s office did not comment on the specifics of the testimony but did say that he is pleased that lawmakers are opening discussions that could lead to reforming one of the worst lawsuit climates in the country.

No votes were taken during the committee as no bill was being considered.  Subsequent to the hearing, House Speaker Madigan announced his intent to put before the House a vote on both workers’ compensation and tort reform next week.

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RIGHT TO WORK

As reported in TWIS, last week Speaker Madigan announced his intent to put before the House for a vote Right to Work legislation that mirrors Governor Rauner’s proposal in his Turnaround Agenda. Governor Rauner’s Turnaround Agenda prominently features the creation of ‘empowerment zones’. These zones would allow local units of government that choose to do so to become right to work zones. This week, Speaker Madigan followed through by filing and sending directly to the floor House Amendment 2 to HB 1286.

House Republican Leader Jim Durkin referred to the process as a ‘sham’. As a result, the House Republicans voted ‘present’. The only exception was Representative Raymond Poe (R-Springfield) who voted ‘no’. Every Democrat voted ‘no’ meaning the proposal did not receive a single ‘yes’ vote. This was the same strategy employed last week by the House Republicans when the Democrats sent to the floor the Governor’s proposed $2 billion in cuts in Medicaid and Human Services as well as other amendments restoring the cuts.

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PROPERTY TAX

In a move to debate and vote on another portion of Governor Rauner’s Turnaround Agenda, HB 695 Amendment #1 (Rep. Jack Franks, D-Woodstock) was called on the House floor for a vote Friday morning.  The amendment would freeze automatic property tax extension increases for local governments that are currently guaranteed regardless of whether the value of the property has decreased.  The freeze would be in effect for two years and then local voters would have to approve subsequent increases. While property tax extension limitations (PTELL) are generally a protection for property owners when the value of their property rises, opponents of PTELLs warn of the cost to property owners when property values are decreasing.  PTELLs are a guarantee that local governments will continue to receive revenue regardless of the status of home values in the area.  This bill, along with bills on right to work and budget cuts, were called to the floor with similar language to the points contained in the Governor’s Turnaround Agenda.  After much debate, the House was split on whether the amendment was a fully developed attempt at real reform, but it passed with a vote of 37-23-38. It only takes a simple majority of those voting to adopt an amendment. It remains to be seen whether or not it will be called for a final vote in the House where 60 votes would be required for passage.

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FOOD HANDLING

Last legislative session, after a couple of years of negotiations, changes were made to the Food Code to ensure that every person who is preparing food in Illinois has training in food handling and safety procedures.  As part of that initiative, persons seeking Food Service Sanitation Managers Certifications (FSSMC) have to take a nationally accredited exam with a passing score of at least 75%.  SB 46 (Sen. Iris Martinez, D-Chicago/Rep. Kelly Burke, D-Oak Lawn) changes that language to allow FSSMC exam takers to receive a passing score allowed at the national level.  This change preserves the integrity of the certification while giving FSSMC seekers the flexibility that they need to get certified.  In addition, the bill allows more restaurants that have food handling programs certified in other states to transfer those programs to Illinois.

SB 46 passed unanimously out of the Consumer Protection Committee and will now be sent to the House floor.  It is a common sense bill that removes hurdles to receiving the FSSMC certification in Illinois.

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BAD DEBT

TWIS readers are already aware that last year, the Assembly unanimously approved an initiative to return fairness to the refunding of sales tax on bad debt. 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 House Amendments 1 and 2 to SB 507 (Sen. Daniel Biss, D-Skokie/Rep. Anthony DeLuca, D-Chicago Heights) and have 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.

Private Label Credit Card’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.). In the past, using an in-house credit model, the retailer itself approved the credit line, issued the card and administered the financing, billing, and payment functions as well as collections. When a customer pays for a purchase using that store’s PLCC, the amount of the purchase, including merchandise and sales tax, is added to the cardholder’s outstanding account balance, to be paid off over time. The retailer remits the entire amount of sales tax on its monthly return, directly to the State, even though the purchaser has not yet made any payment to the retailer for the purchase. Under current law, when a sales transaction is completed using a PLCC and the customer subsequently defaults on the payment, the retailer is allowed a refund on the sales tax it paid to the State on the purchase. This is because no sales is deemed to have occurred.

As modern retailing has evolved and become more complex, the desire for consumer credit has increased exponentially and has required merchants to partner with third-party lenders to administer their PLCC programs. However, several years ago the Illinois Department of Revenue (IDOR) issued a controversial opinion that a bad debt refund did not apply to PLCC’s administered by a third party. SB 507 takes into consideration this modernization and then benefits that accrue to consumers and the state, and corrects this inequity by specifically allowing a refund of sales tax on the bad debt created by consumer using a store branded PLCC. Over the course of the last year and again this year, IRMA worked with IDOR to address additional procedural concerns that arose. These concerns centered on ensuring proper documentation would be available; further limiting the transactions that are available for a bad debt refund; and providing a clear line of accountability.

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CRIMINAL BACKGROUND RECORDS IN HIRING

SB 567 (Sen. James Clayborne, Jr., D-Belleville/Rep. Esther Golar, D-Chicago) seeks to regulate the use of criminal backgrounds in employment decisions.  In 2012, the Equal Employment Opportunity Commission (EEOC) issued guidance for both employers and employees/applicants on how a person’s criminal background can be considered in making employment decisions without running afoul of Title VII of the Civil Rights Act of 1964.  The guidance is meant to highlight best practices, explain relevant court rulings and help all interested parties skillfully navigate the often complicated hiring process.  SB 567 proposes to allow an employer to make an adverse employment decision based on an applicant’s or an employee’s criminal background as long as the background was job-related and consistent with business necessity. These factors are consistent with how the EEOC determines whether an employer has violated Title VII.

In addition, the bill addresses forum shopping by plaintiffs with the Department of Human Rights by prohibiting plaintiffs from filing cases in multiple jurisdictions.  After the bill passed the Senate it was amended in the House to allow plaintiffs to file in multiple jurisdictions until a jurisdiction decides to allow the case to proceed to the litigation phase.  IRMA is opposed to this amendment which would allow plaintiffs to essentially shop their case for the same proposed violation.

While IRMA is supportive of the right to seek remedies for alleged unlawful employment practices, the plaintiff should choose where to bring the case and commit to follow that case to its favorable or unfavorable conclusion.  The bill, without the House amendment, affords them this right while protecting employers from answering to the same charges with the department, with a local jurisdiction and with the EEOC.  It is possible that the bill will be further amended and return to the House Judiciary Civil Committee for further debate.

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DATA SECURITY

SB 1833 House Amendment #1 (Sen. Daniel Biss, D-Skokie/Rep. Ann Williams, D-Chicago) passed out of the Judiciary Civil Committee this week.  The amendment changed the definitions of two of the most controversial parts of the bill which are consumer marketing and geolocation information.  The definitions were narrowed in an attempt to more accurately address the concerns of the Attorney General and without unduly burdening businesses that are not engaged in the targeted activity.  The amendment also addresses notification required by units of government and limits notification requirements for consumer marketing and geolocation information to the Attorney General’s office.

Another amendment to the bill, House Amendment #2, was released today which addresses more concerns voice by IRMA.  With the passage of that amendment, IRMA will remove its opposition to the bill and take a neutral position.  IRMA would like to thank the Attorney General Lisa Madigan, Senator Biss and Representative Williams for their patience in working through the many issues surrounding this complicated issue.

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