BUSINESS GROUPS LABEL 2017 SESSION “ONE OF THE WORST FOR EMPLOYERS”

FOR IMMEDIATE RELEASE

May 31, 2017

CONTACT:

Ryan McLaughlin, 312-969-0255 | ryan@macstrategiesgroup.com

Rachel Peabody, 217-753-1761 | rachel@macstrategiesgroup.com

BUSINESS GROUPS LABEL 2017 SESSION “ONE OF THE WORST FOR EMPLOYERS”

Litany of anti-employer, job-killing measures rock employers

 

SPRINGFIELD – The state’s premier business groups have labeled the spring legislative session as “one of the worst for employers”, citing lawmaker’s apparent “race to the bottom” and litany of anti-employer, anti-job growth measures considered this year.

At a press conference on the final day of session, the Illinois Manufacturers’ Association, Illinois Retail Merchants Association, Chicagoland Chamber of Commerce, Illinois Chamber of Commerce and NFIB joined together lamenting the continuous effort to tax, over-regulate, mandate and constrict employers at every turn by lawmakers in both chambers which has created one of the most crushing business climates in the nation. While this is not a new phenomenon in Springfield, the massive uptick in these anti-employer measures coupled with the accompanying rhetoric has exasperated an already hostile business climate.

Ironically, many of these measures – in theory – are aimed at increasing pay, hiring more employees or giving workers more certainty, yet they achieve quite the opposite. While the intention of our business community is to provide jobs with competitive pay and generate revenue to fix the state’s problems, the anti-employer narrative is having a chilling effect.

“My Democrat friends like to say we are in a race to the bottom. Unfortunately, I’m here to tell you we are winning but that means Illinois businesses and families are losing. The high cost of workers’ compensation is one of the biggest issues facing manufacturers but lawmakers fail to act because they continually side with wealthy trial lawyers. Their failure to act and create an attractive economic climate means that Illinois will continue to bleed jobs and remain a laughingstock of the nation,” said Greg Baise, president and CEO, Illinois Manufacturers’ Association.

“Every day seems to bring another report of another round of retail store closings. Instead of talking restraint and recovery for the retail community, the narrative out of Springfield, like the actual actions in Chicago and Cook County, is higher taxes, labor and regulatory burdens, and, in the case of Cook County, incentivizing theft. This ‘campaign against Main Street retailers’ will only hasten the continued job loss and store closings that have become all too familiar. Retailers have limited responses; reduce employee hours, lay people off, increase automation, or close. Passing legislation to mandate artificially higher wages when the jobs don’t exist doesn’t help anyone,” said Rob Karr, president and CEO, Illinois Retail Merchants Association.

“The ping pong of anti-employer policies coming from both Chicago and Springfield is unsustainable. At every corner, Chicagoland businesses are being asked to pay higher property taxes, soda taxes, and sales taxes while also being forced to implement countless mandates that do not grow the economy. Chicago has so much to offer but this economic death by 1,000 paper cuts does not create the jobs, quality of life and revenue Springfield should be seeking,” said Michael Reever, Vice President of Government Affairs, Chicagoland Chamber of Commerce.

“Time and again lawmakers have suggested policies that shift greater financial burdens to employers statewide. Whether it is during the budget impasse or after it is resolved, standing up against job-crushing legislation is crucial for our economy. Increasing minimum wage, passing “fake” workers’ compensation reform and proposing a significant arbitrary tax increase is far from the progress Illinois deserves. We need pro-growth economic policies to prevent the steady decline of Illinois’ economic competitiveness. And we need them now, that is, if we want to continue to attract the best and the brightest individuals to Illinois,” said Todd Maisch, President and CEO, Illinois Chamber of Commerce

“Our members aren’t surprised by the legislature’s anti-business antics this session, but they are disappointed and fed up. Illinois is broke and we haven’t had a budget in two years. We need leaders who are less focused on scoring easy political points and more on enacting good policies that benefit all Illinoisans. We need legislators who will act like adults, set aside their political differences, and make the difficult decisions that would make things better for working families and allow businesses to grow and create jobs,” said Mark Grant, Illinois State Director, NFIB

Springfield’s Dirty Dozen

  1. SB 81: Legislation that raises the minimum wage to $15
  2. HB 2771: A costly government mandate forcing employers regardless of size to provide paid leave to every employee regardless of hours worked.
  3. HB 160: A $5,000 fee on every employer for the “privilege” of doing business in Illinois
  4. HB 156: Massive property tax shift onto commercial and industrial taxpayers
  5. SB 1502: Trial lawyer supported legislation that burdens every e-commerce business, and every company with a credit card, loyalty program app or website, without providing any consumer protections
  6. HB 3449: Trial lawyer supported legislation that unfairly targets companies that share or store location data and requires ecommerce businesses to ask for permission before collecting location data from your device
  7. HB 3538: Penalizes business that move even one job out of state while discouraging future investment
  8. HB 2802: Government mandate forcing businesses to pay the transportation costs of their workers
  9. HB 2525: This bill codifies “a cause” workers’ compensation standard that mandates insurance rate review without providing any meaningful reform
  10. HB 2622: Legislation that would disrupt the private workers’ compensation insurance market without having a strong reason to exist
  11. HB 3337: A bill that allows someone to steal $2,000 of merchandise from a retailer
  12. SB 9: Imposes $5.4 billion in new taxes on Illinois businesses and families – *revenue without reforms

Ignored Reforms of the 2017 Legislative Session

  • Pension reform
  • Workers’ compensation reform
  • Tax reform
  • Restraint of local government
  • Property tax relief
  • Education and workforce development

 

About the Illinois Manufacturers’ Association (IMA)

The Illinois Manufacturers’ Association is the only statewide association dedicated exclusively to advocating, promoting and strengthening the manufacturing sector in Illinois.  The IMA is the oldest and largest state manufacturing trade association in the United States, representing nearly 4,000 companies and facilities.

About The Illinois Retail Merchants Association (IRMA)

One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 23,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.

About the Chicagoland Chamber of Commerce

The Chicagoland Chamber of Commerce represents over 1,000 member companies, their 400,000 employees, and over $24 billion in revenue. We combine the power of our membership with our legacy of leadership and business advocacy to drive a dynamic economy. We focus on delivering value for our members, making Chicagoland a world-class place to live and work. Visit ChicagolandChamber.org

About the Illinois Chamber of Commerce

The Illinois Chamber of Commerce has been the unifying voice for Illinois business since 1919. The Chamber advocates prosperity and a pro-business climate in Illinois. www.ILChamber.org

About the National Federation of Independent Business (NFIB) Illinois

The National Federation of Independent Business (NFIB) Illinois is a chapter of America’s leading small business association, promoting and protecting the right of our members to own, operate and grow their businesses. NFIB represents 325,000 small businesses in all 50 states and Washington, D.C., and is dedicated to leveling the playing field with Big Business, Big Government, and Big Labor in every key area – taxes, healthcare, regulations, and more.

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IRMA Responds to House Passage of the Minimum Wage Bill

May 30, 2017

  CONTACT

Rachel Peabody, 217-753-1761 | rachel@macstrategiesgroup.com

Ryan McLaughlin, 312-969-0255 | ryan@macstrategiesgroup.com

IRMA Responds to House Passage of the Minimum Wage Bill  

SPRINGFIELD – The Illinois Retail Merchants Association (IRMA) issued the following statement regarding the passing of the minimum wage bill out of the Illinois House that seeks to increase the minimum wage in Illinois to $15.00 per hour by 2022.
“The political campaign to raise the minimum wage to $15 per hour has already resulted in reduced hours and eliminated positions in major cities where this has been enacted, including the City of Chicago. In fact, we have seen automation and self-service alternatives replace jobs due to continued efforts to artificially increase wages through government actions instead of working with employers. Quite simply, the state cannot bear another proposal that eliminates what little opportunity exists in Illinois. We urge lawmakers to show more restraint when making decisions that significantly impacts a businesses’ bottom line.”

Facts about the minimum wage:

  • Illinois’ minimum wage is already the highest in the Midwest. Illinois is poised to add another anti-competitive burden to retailers’ ability to compete with retailers in border states.
  • Raising the minimum wage will continue to keep people, especially teens, out of jobs. According to a January 2016 report from the University of Illinois at Chicago’s Great Cities Institute, only 12.4 percent of African Americans, 15 percent of Hispanic or Latinos and 24.4 percent of Whites (non-Hispanic or Latinos), ages 16 to 19 years old, are employed in Chicago. This destroys what little opportunity exists.
  • Minimum wage salaries are a floor, not a ceiling. Workers are not locked into minimum wage jobs, they have the ability to garner the necessary skills to advance and earn higher wages. Retail ranks are filled with those who started in minimum wage jobs.
  • Penalizes brick-and-mortar retailers over internet retailers. The minimum wage hike will not impact internet retailers, but penalize those retailers that invest in a physical property, workforce, pay property and sales taxes, etc.

 

About The Illinois Retail Merchants Association (IRMA)
One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957, IRMA represents more than 23,000 stores of all sizes and merchandise lines. From the nation’s largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.

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This Week in Springfield 100-15

SENATE DEMOCRATIC BUDGET
$15 MINIMUM WAGE
WORKERS’ COMPENSATION
PAID SICK LEAVE
GEOLOCATION
RIGHT TO KNOW
CATFISH LABELING
PRESCRIPTION SYNCHRONIZATION
FOOD HANDLING

This week in Springfield, attempts at a ‘grand bargain’ on a variety of issues in the Senate came to an end with the Senate Democrats adopting a go-it-alone approach while both chambers prepare to put politically sensitive wedge issues on the floor for votes during the waning days of session.

SENATE DEMOCRATIC BUDGET

 

After discussions between the Senate Democrat and Senate Republican negotiators broke down, the Senate Democrats passed a ‘go it alone’ approach that would provide $5.4 billion in new revenues (SB 9 Sen. Toi Hutchinson, D- Chicago Heights) intended to fund state spending of approximately $37.3 billion in a proposed budget (SB 6, Sen. Heather Steans, D- Chicago).

SB 9 provided that if revenues are expected to generate more than 2.4% of what was realized in the previous fiscal year, then the Governor must include in his budget monies to reduce the unpaid bills by the lesser of: (1) 50% of the revenues that exceed 2.4%, or (2) the revenues needed to reduce the unpaid bill backlog to $1 billion.  Additionally the individual income tax would be increased from 3.75% to 4.95%. The income tax on corporations would be permanently increased from 5.25% to 7.0%.  SB 9 also imposes a “means test” on the property tax credit, education expense tax credit, and the standard exemption. It creates a new $250 tax credit for instructional materials and supplies and increases the Earned Income Tax Credit (EITC) from 10% to 15%. The Research & Development (R&D) tax credit is permanently extended and modernized while the Manufacturers Purchase Credit and Graphic Arts exemption are merged into the Manufacturers Machinery & Equipment exemption and made permanent. Additionally, the Outer continental shelf exclusion, Non-combination rule, and Decouples from the Qualified Production Deduction were repealed.

The 6.25% sales tax on tangible personal property sold at retail would be expanded to include some services to consumers. The services included are: storage, landscaping, personal care (this does not include massage therapy, such services provided as part of medical care, or the styling, cutting, or coloring of hair), pest control, dry cleaning/laundry, and services provided by private alarm, private detective, or private security services. Business-to-business transactions are exempt as are legal, medical care, and accounting. Home rule cities and Cook County, that impose their own local sales tax, are allowed to tax services at the same rate they tax sales. As an example, if a municipality has a 2% sales tax, in addition to the state’s 6.25%, that municipality can apply their sales tax to the same services the state taxes. Satellite television would be taxed at 5% and video streaming services (e.g. Netflix, Amazon, Hulu, etc.) would be taxed at 1%.

SB 9 would reduce filing fees from $500 to $39 for filing organization (foreign), articles of incorporation (domestic) and from $750 to $59 for the same for limited liability companies. A loophole is closed that would allow local units of government to tax items by weight or volume. Additionally, the False Claims Act is amended to exclude from its provisions all taxes administered by the Illinois Department of Revenue.

The Senate Democrats did include some cuts in their proposed budget including a 10 percent cut for higher education, a 5% cut for state agencies, and a 15% reduction in the budgets of the offices of Governor and Lt. Governor. The budgets of the offices of Attorney General, Secretary of State, State Comptroller, and State Treasurer, all held by Democrats, were not reduced. Elementary and secondary education would receive an increase of $330 million.

Senate Bills 6 and 9 passed the Senate on partisan roll-calls and now advance to the House. SB 9 was picked up by Republican State Representative Jeannie Ives (R- Wheaton) so it is not expected to move as Rep. Ives is strictly anti-tax. SB 6 was picked up by State Representative Greg Harris (D- Chicago). However, it is expected that the House will make substantial changes to SB 6. What, if any, revenue bill the House produces remains to be seen.

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$15 MINIMUM WAGE

A $15 dollar minimum wage amendment was filed Friday and a vote is expected Monday.  House Amendment #1 proposes increasing the Illinois minimum wage on the following schedule:

  • January 1, 2018 – $9.00 per hour
  • January 1, 2019 – $10.00 per hour
  • January 1, 2020 – $11.25 per hour
  • January 1, 2021 – $13.00 per hour
  • January 1, 2022- $15.00 per hour

The aforementioned scheduled increases will apply to:

  • Employees 18 years of age or older; or
  • Employees under 18 years of age who work more than 650 hours for the employer during any calendar year.

Employees under 18 years of age who work less than 650 hours in any calendar year are to be paid as follows:

  • January 1, 2018 – $8.00 per hour
  • January 1, 2019 – $8.50 per hour
  • January 1, 2020 – $9.25 per hour
  • January 1, 2021 – $10.50 per hour
  • January 1, 2022 – $12.00 per hour

An income tax credit is proposed for any employer who employs fewer than 50 employees. The credit is equal to the maximum credit multiplied by the number of hours the employee worked during the year. The credit can be taken for reporting periods that begin on or after January 1, 2018 and end on or before (1) December 31, 2025 for employers that employ more than 5 employees during the applicable period; and (2) December 31, 2027 for employers that employ no more than 5 employees during the period. The credit cannot be claimed for an employee who works less than 90 consecutive days immediately preceding the reporting period. However, the credits can be accrued during that period and be claimed for future reporting periods after the employee has worked 90 consecutive days. However, the employer is not eligible for the credit for a reporting period unless the average wage paid by the employer per employee for all employees making less than $55,000 during the reporting period is greater than the average wage paid by the employer per employee for all employees making less than $55,000 during the same reporting period of the prior year. In other words, if an employer is forced to reduce hours or employees in order to afford the wage increases, the employer cannot claim the credit.

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WORKERS’ COMPENSATION

Democratic lawmakers in the Senate passed two bills related to workers compensation that move Illinois farther from needed reform. HB 2525 (Rep. Jay Hoffman, D-Belleville/Sen. Kwame Raoul, D-Chicago) codifies current case law of “in the course of employment” & “arising out of the employment” maintaining the “any” cause standard established by the Sisbro Inc. v. Illinois Industrial Commission that has helped increase the cost of workers’ compensation.  It also codifies Venture-Newberg Prini Stone & Webster v. Illinois Workers’ Compensation Commission by establishing factors for determining traveling employee status and expands liability by also establishing a traveling employee through a reasonable and foreseeable standard.  It resolves the Will County Forest Preserve District v. Illinois Workers’ Compensation Commission that separated the shoulder from the arm when determining awards after one hundred years of precedence. Additionally, the legislation mandates insurance rate regulation increases fraud penalties, and adds new electronic billing penalty and new penalties for delay of authorization of medical care.  The legislation passed on a partisan Senate vote of 35-19.  It failed to address the medical fee schedule, AMA standards, permanent partial disability, or temporary total disability.

The second bill, HB 2622 (Rep. Laura Fine, D- Glenview/Sen. Daniel Biss, D- Chicago) creates a new state-run workers’ compensation insurance program designed to compete with private insurance companies despite the fact Illinois has one of the most competitive insurance sectors in the nation. The Fund would be created using $10 million in employers monies, the same employers paying the 8th highest workers compensation costs in the nation.

HB 2525 passed 35-19-1 and returns to the House for additional consideration. HB 2622 passed 32-20-1 and moves to the Governor’s Desk for his consideration. Both bills passed with only Democratic votes.

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PAID SICK LEAVE

HB 2771 SA #1 and SA #2 (Rep. Christian Mitchell, D-Chicago/Sen. Toi Hutchinson, D-Chicago Heights) will require each employer to provide employees with up to 40 hours of paid sick leave in a 12-month period.  While the advocates claim that employers with more generous paid leave policies will not need to change those policies in order to conform to the requirements in the bill, that will only be true if the employer follows the minimum requirements laid out in the bill.  One of those requirements mandates that benefits start and roll over either on the start date of the employee or at the beginning of the calendar year.  There are many employers who tie benefits to their fiscal year or some other date set by the company.  If that is the case, then those employers will have to change their policies so that benefits are tied to the dates outlined in the bill.  From the very beginning, IRMA has asked for this section to be changed so as not to completely disrupt the way benefits are given by companies that are already giving employees more than 40 hours of paid sick leave.  In fact, no other paid leave policy has such a mandate.

It has never been explained why there is hesitancy to make this very simple change that would save employers time and money and would be seamless to employees without diminishing their benefits.  If there is going to be a mandate on employers at this difficult time in our economy, more steps should be taken to ensure that employers are not unnecessarily saddled with arbitrary and unnecessary additional costs and operational burdens.

The Senate Labor Committee voted 12-4-0 to pass an amendment that exempts rail companies and clarifies the definition of healthcare providers, but that does not address our substantive issue.  The bill will now be considered on the Senate floor.

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GEOLOCATION

HB 3449 SA #4 and SA #5 (Rep. Ann Williams, D-Chicago/Sen. Thomas Cullerton, D-Villa Park) would require companies that use geolocation services to provide a way for persons to affirmatively consent to the use of those services if the company is collecting, disclosing or otherwise using the precise location of the customer for any purpose even though the power to opt-out is already at each person’s finger-tips.  But this mandate doesn’t apply to everyone.  In fact, the list of persons exempt from the bill is almost as long as the bill itself.  Yet, no viable reason was given as to why such exemptions should exist.  Among those excluded from the mandate include, banks and candidates for public office, political parties and campaigns.  Altogether, the bill DOES NOT apply to the following entities:

  • covered entities subject to HIPAA,
  • financial institutions and affiliates subject to Gramm-Leach-Bliley,
  • internet, wireless and telecommunications service providers,
  • cable and video service providers,
  • certain governmental entities,
  • persons licensed under the Private Detective, Private Alarm, Private Security, Fingerprint Vendor, and Locksmith Act of 2004,
  • persons licensed under the Land Surveyor Act
  • persons licensed under the Professional Engineering Services Act,
  • public utilities
  • candidate political committees,
  • political party committees,
  • political action committees,
  • ballot initiative committees; and
  • independent expenditure committees

All of the above entities can collect, use and disclose a person’s geolocation information without first obtaining their consent.

For everyone else, the consent must be obtained through a hyperlink or other action that will require the consumer to actively agree to the specific use.  Therefore, mentioning in the company’s privacy policy that geolocation services are used is not enough to satisfy the requirement in the bill.

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

IRMA was a part of a coalition of groups opposed to the bill that offered language to narrow the bill to geolocation services that were employed outside of the ordinary course of business, but the language was rejected.  The bill passed out of the Senate Judiciary Committee with a vote of 8-3-0 was moved to the Senate floor and passed with a vote of 33-22-0.  It has now moved to the House for a concurrence vote.

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RIGHT TO KNOW

SB 1502 HA #1 (Sen. Michael Hastings, D-Frankfort/Rep. Art Turner, D-Chicago) is now known as the Illinois Right to Know Data Transparency and Privacy Protection Act.  This bill will require any company with an online presence that collects data from consumers to identify the categories of information collected.  Companies will also have to provide a description of the customer’s rights if such information is shared or sold to 3rd parties.  In addition, the bill requires that companies who share or sell information to 3rd parties, unless it fits into an exemption, disclose what information was shared and with whom.  The bill sets out 26 categories of personal information that must, if shared, be highlighted.

It is important to note that “personal information” doesn’t mean that the information is “personally identifiable”.  These are really two different concepts.  Personal information could be a person’s name, or a person’s age or a person’s educational background, etc.  There is no requirement that any of the information be tied to an actual person that could be identified.  For example, if a retailer shares the ages of purchasers of a certain washing machine with its manufacturer, but it doesn’t share the customer’s names or any other information that could identify that person, that information is still considered “personal information” in the bill and would need to be disclosed.  It doesn’t matter that the third party has no idea who the actual customers were that purchased the washing machine.  SB 1502 requires that unnecessary time, money and resources be spent on providing information that does nothing to protect a person’s privacy.

After many rounds of negotiations, the bill will now allow the company to choose to either respond directly to customer requests or generally list all categories of personal information that the company shares or sells about any customer and list all of the third parties that receive such information unless they qualify under an exemption.  This way, a company will not have to respond to each individual request and can make the choice to provide all of the information up front either in its privacy policy or elsewhere in its agreement with the customer.

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

The latest amendment also addresses an issue raised repeatedly by IRMA which would have required companies to enforce prohibitions on 3rd parties sharing information.  It deletes this requirement.  Lastly, it inserts a cure period of 15 days and exempts hospitals.

Information should be able to be tied to an actual person if it is to be protected and considered personal.  IRMA maintains that this bill is an overreach that could and should be narrowed in scope.  The bill passed out of the House Consumer Protection Committee by a vote of 3-2-0 and will now be sent to the floor for further consideration.

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CATFISH LABELING

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

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PRESCRIPTION SYNCHRONIZATION

 

HB 2957 (Rep. Laura Fine, D-Glenview/Sen. John Mulroe, D-Chicago) creates prescription synchronization for patients who have multiple prescriptions. This adherence is extremely important for patients on multiple maintenance prescriptions for chronic conditions (e.g. diabetes, blood pressure, cholesterol, etc.). Having different refill dates can make adherence challenging. SB 1546 allows for the coordination of refill dates (a.k.a. med sync) to increase adherence. SB 1546 requires insurers to allow patients who are on 2 or more maintenance prescriptions for a chronic condition to allow synchronization at least once per year. Med sync is not available for controlled substances. This is initiative passed the Senate unanimously with a 57-0-0 vote and will be sent to the Governor for his consideration. IRMA would like to thank both Rep. Laura Fine and Sen. John Mulroe for their work in providing safety and adherence protocols to individuals with chronic conditions.

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FOOD HANDLING

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

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121 Report – CRMA – May 2017

In This Issue

Council Initiatives

CHICAGO CITY COUNCIL

ORDINANCES AND RESOLUTIONS

 

INTRODUCTIONS

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

 

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

 

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

 

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

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

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

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

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

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

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

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

Contact Information
Tanya Triche Dawood
Vice President & General Counsel

312/726-4600

ttrichedawood@irma.org

This Week in Springfield – 100-14

IN THIS ISSUE

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

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

SENATE ‘GRAND BARGAIN’

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

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

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

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

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

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

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

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

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

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HOUSE TAX PROPOSAL

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

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

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

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

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

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

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RETAIL DISCOUNT

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

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

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PAID SICK LEAVE

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

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

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

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DATA PRIVACY

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

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

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

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

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FIREARM DEALER LICENSING

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

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

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FOOD ALLERGIES

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

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