A Path to Reforming Our Broken Sales Tax System

by Daniel L. Goodwin

 June 2, 2015

By Daniel L. Goodwin

The ingenuity of the American entrepreneur has created an accommodating and diverse consumer marketplace over the past two decades. Through the rise of the Internet and emerging payment-processing innovations, countless businesses have been able to supplement their brick-and-mortar storefronts with an online sales presence. Unfortunately, our country’s sales tax system has not adapted to the convergence of digital and physical commerce. This has resulted in harsh consequences that have lingered on for nearly 20 years in the form of the unfair tax collection advantage that online-only retailers — such as eBay and Overstock — hold over millions of stores on Main Street.

Thankfully, this wrong can still be righted. With renewed bipartisan momentum now in the Senate, it is time for all of our elected officials in Congress to work toward expeditiously passing the Marketplace Fairness Act of 2015. This bill is a path to reforming our broken sales tax system.

To illustrate the anti-competitive elements of today’s marketplace, think about your own shopping experience. When you pay for a new pair of shoes, it is considered a sale — regardless of whether you make that purchase in-person at a local shopping center or online through a boutique’s website.

But unlike your local stores, online-only retailers do not collect sales tax at the moment of purchase. Believe it or not, the onus is on you to report and pay any necessary tax to your state’s department of revenue. It is easy to see why you and the brick-and-mortar stores  in your neighborhood — which are legally required to collect sales tax if the state imposes one — bear the brunt of an unfair system.

As someone who has spent close to 40 years in the commercial real-estate sector, I am increasingly concerned about the inequities in our marketplace. This sentiment is fortunately shared by the group of senators — Michael B. Enzi, R-Wyo.; Richard J. Durbin, D-Ill.; Lamar Alexander, R-Tenn.; and Heidi Heitkamp, D-N.D., as well as others — that introduced the latest Marketplace Fairness Act. They know, much like the rest of us on Main Street, that we cannot accept a sales tax system that hinders American shoppers, businesses and local communities.

For consumers, maintaining the current system prolongs an archaic legal burden and a major shopping inconvenience. Shoppers will remain responsible for tracking purchases made online and then calculating the proper sum owed to their respective states. A failure to follow this process translates to breaking the law under our current system. Additionally, consumers stand to lose over the long-term when local businesses — which offer necessaries, specialty goods and custom items — cannot carry as much inventory or are ultimately forced to close due to the uncompetitive climate.

For brick-and-mortar businesses, the continuation of today’s system is akin to a death sentence. Local stores that must collect a sales tax increasingly function as showrooms for shoppers, who want to examine items and then order the same products online to save 5 percent to 10 percent in taxes. If this trend continues, we will see more businesses closing in our neighborhood shopping centers and town squares; our teenagers will be unable to find traditional part-time work; our neighbors will be unable to find that second job; and our communities will lose time-honored traditions such as Santa Claus sitting in the local department store every December.

For our communities and states, congressional inaction will bring additional economic and social impact. When brick-and-mortar businesses downsize or shutdown due to the marketplace, existing employees face both reduced job security and stagnant wages — plus the community endures weak job growth and an across-the-board reduction in tax revenue. This loss of tax revenue forces communities to make painful decisions, the most common being raising property taxes or cutting back on popular educational, recreational and public works services.

Last but not least, let us not forget the social downside that also comes when businesses can no longer sponsor little league teams, and organizations like the Salvation Army have no stores to stand in front of when advocating for society’s most needy. These are voids that online-only retailers will never be able to fill.

In the coming months, Congress will have ample time to debate the clear merits of the Marketplace Fairness Act and then pass a suitable version of the bill. Our responsibility during this time is to remind elected officials on Capitol Hill just how crucial this legislation is to American shoppers, businesses and communities. This action can go a long way to supplementing the current efforts of the International Council of Shopping Centers, Marketplace Fairness Coalition, NAREIT and hundreds of other local and national trade associations.

With deep experience purchasing and managing large retail shopping centers, I know the central role that commerce plays in supporting our shared American dream. Restoring fairness to our marketplace is an important step toward making that dream a reality for more of us in 2015 and beyond.

 

Daniel L. Goodwin is Chairman and CEO of The Inland Real Estate Group of Companies, Inc.

The 114th: CQ Roll Call’s Guide to the New Congress

Get breaking news alerts and more from Roll Call in your inboxor on youriPhone.

 

ABOUT BELTWAY INSIDERS

 

Follow Roll Call’s top experts on the Washington scene as they offer inside analysis on politics, procedure, ethics, money and lobbying.

DonWolfensbergeris a resident scholar at the Bipartisan Policy Center, a senior scholar at the Woodrow Wilson Center and former staff director of the House Rules Committee.

C.Simon Davidsonis an attorney with the law firm McGuireWoods.

ElizaNewlin Carneyis a senior writer covering political money and election law for CQ Roll Call.

@ElizaRules

 

Kate Ackleyis a staff reporter for CQ Roll Call covering lobbying and finance. @kackleyZ

Illinois This Week in Springfield – 99-15

SESSION CONTINUES
PRIVATE LABEL CREDIT CARDS
HEROIN
BIOSIMILARS
LOCKING MECHANISM FOR PRESCRIPTIONS
DATA SECURITY
RETAIL THEFT – ACCELERATED RESOLUTION COURT
SNAP ELIGIBILITY
LIQUOR CONTROL ACT AMENDMENTS
TOBACCO
TELECOM MODERNIZATION
DIRECT SALES
FOOD ESTABLISHMENT SELF-INSPECTIONS
CONCEAL CARRY

This Week In Springfield, both chambers of the Illinois General Assembly adjourned but only temporarily. With no deal in place on a Fiscal Year 2016 budget, and an escalating war of words between Democrats and Republicans, both chambers will meet in regular session throughout the summer or until a budget agreement is reached. As such, the House is scheduled to return June 4th and the Senate June 9th. It is important to note that since the May 31st deadline has been reached, a 3/5ths super-majority is required to pass any legislation.

What follows is an overview of where legislative session stands as well as a review of issues of immediate concern to retail over the last week.

SESSION CONTINUES…TENSIONS RISE

As noted above, an FY 16 budget for the State of Illinois has not been approved. The Governor proposed a budget of just over $32 billion in February that was out-of-balance by $2.2 billion due to a pension reform program most considered to be unrealistic. In return, the House and Senate developed and passed a $36 billion budget that is $3-$4 billion out-of-balance. A parliamentary motion was utilized to hold the passed budget in the Assembly. That motion can be removed at any time by the filer and, once removed, the budget is then transmitted to the Governor. It is widely anticipated that this will not occur until very close to July 1st – the start of the next fiscal year. The effect of the holding motion is two-fold. First, it does give all parties time to negotiate further. Second, if nothing is agreed to by the deadline, it gives the Governor very little time to act. His choices are to either Reduction Veto the budget or apply a Total Veto. However, the Governor has already stated he intends to exercise a Total Veto immediately upon receiving the Democratic budget.

TWIS readers know that the Governor submitted a Turnaround Agenda and has publicly stated that he is willing to consider additional tax revenues for the state so long as portions of his Turnaround Agenda are approved. For example, the Governor is seeking reforms in Illinois’ workers’ compensation and tort systems as well as a property tax freeze, redistricting reform, and term limits. However, the Democratic-majorities in the House and Senate put significant pieces of the Governor’s proposals (i.e. workers’ comp, tort, and property tax freeze) to votes where, predictably, they failed to receive majorities necessary for passage. In the case of the House, the Republicans voted “present” to signify their displeasure with what they perceived as a contrived process and the fact they did not consider the proposals ‘real’ as they had not actually been introduced on behalf of, or written by, the Governor. Additionally, the House voted down the Governor’s human service cuts included in his budget proposal. In the Senate, Republican Leader Christine Radogno introduced significant portions of the Turnaround Agenda which were written by the Governor’s Office. These proposals were heard in long and often contentious hearings in the Senate Judiciary Committee and then voted down along party.

At this writing, the prospects of agreement in the near future appear dim. Earlier this week, the Governor promised a $20-$40 million full-scale campaign to attack Democrats, particularly Speaker of the House Michael Madigan and Senate President John Cullerton, for what the Governor believes are their unwillingness to compromise, failing to protect the middle-class and ominous statements that the two leaders have enriched themselves. For their part, Speaker Madigan and Senate President Cullerton claim to have been preparing for this all spring and have promised to respond in-kind painting the Governor as unreasonable, a threat to the middle-class, and bringing Washington D.C.-style politics to Illinois. Some of this has already started to emerge as they have described Governor Bruce Rauner as a Republican-version of Rod Blagojevich and have adopted a mantra that they are willing to discuss reforms they believe would help the middle class (e.g. minimum wage, paid sick leave).

Deadlines are what often help bring issues to a conclusion. In terms of deadlines, the first state paychecks will be due the second week of July. If there is not budget at that point, state workers will start to miss paychecks. The first General State Aid payment for schools is due approximately August 10th. Some schools will not be able to open if these payments are not received. Over-shadowing this entire situation are the contract negotiations with AFSCME – the union representing the vast majority of state employees. These negotiations have been widely reported to be very contentious and the word ‘strike’ has been bandied about. However, late in session, the Assembly, voting on party-lines, sent to the Govenor SB 1229 (Sen. Don Harmon, D-Chicago/Rep. Mike Smiddy, D- Port Byron). This legislation would prohibit workers from striking, would keep the current contract in place until such time as a new agreement is reached, and would allow either party to invoke mediation. If a mediator is unable to bring agreement, either party can initiate impasse mediation.

It remains to be seen how this will all play out. If, indeed, both sides carry through with their threats, it is going to be a very long, hot summer in Illinois.

Return to Top

PRIVATE LABEL CREDIT CARDS

As TWIS readers may recall, the Assembly unanimously passed an IRMA-initiative last year that allowed for a refund on bad debt established through a Private Label Credit Card (PLCC) administered by a third party. Former Governor Pat Quinn decided to use the bill, and a few others, as a vehicle for unrelated amendatory vetoes in his final moments in office effectively killing the bill. The initiative was reintroduced in the form of SB 507 (Sen. Daniel Biss, D-Skokie/Rep. Anthony DeLuca, D-Chicago Heights).

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 the sales tax is refunded to the retailer. This happens because in the eyes of the law, a sale is deemed not to have occurred. 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 corrects this inequity by allowing a refund of sales tax on the bad debt created by consumer using a store branded PLCC. Over the course of last year and again this year, IRMA worked with IDOR to address their procedural concerns to ensure proper documentation would be available; limited the transactions that are available for a bad debt refund; and provided a clear line of accountability. As a result of this continued negotiation SB 507 passed both Chambers and has been sent to the Governor for his signature.

IRMA would like to thank Sen. Daniel Biss and Sen. Anthony DeLuca for their sponsorship as well as the Illinois Department of Revenue for working diligently with IRMA and other parties to obtain a workable compromise.

Return to Top

HEROIN

Illinois will soon have the nation’s most comprehensive approach to combating heroin and prescription drug abuse. HB 1 (Rep. Lou Lang, D- Chicago/Sen. Dan Kotowski (D- Park Ridge) passed both chambers this week and now proceeds to the Governor.

HB 1 includes, but is not limited to, the following provisions: allows pharmacists to dispense opioid antagonists to someone claiming a heroin overdose pursuant to policies and procedures developed by the Illinois Department of Public Health; expands authority of the Illinois EPA to distribute grants for drug take-back programs; provides training for law enforcement, school officials, fire fighters, and others to administer opioid antagonists; IEPA shall establish a statewide medicine take-back program; the Department shall develop a poster and brochures for display and distribution in pharmacies regarding take-back information/events; expands utilization of the Prescription Monitoring Program (PMP); creates a peer review committee for prescribers and dispensers; and lowers the threshold where someone is potentially considered to be shopping for medicine from six prescribers or six pharmacies in one month to three prescribers or three pharmacies in one month.

IRMA would like to thank Rep. Lang, Rep. John Anthony,Rep. Patti Bellock, Sen. Kotowski, Sen. Iris Martinez, and Sen. William Delgado all of whom contributed significantly to one or more of the issues contained in HB 1. We would especially thank Rep. Lang for his approach that led to the final version of HB 1.

Return to Top

BIOSIMILARS

In a very simplistic definition, biologics are medicines derived from living organisms. Early versions include vaccines and blood components (e.g. blood platelets). Second generation are chemically synthesized. Biosimilars are, as the name implies, similar to biologics in that they function the same way in the body. They are the generic version of biologics. The US FDA recently opened a pathway for biologics to be approved for use in the United States. Some have sought to inhibit the substitution of biologics with biosimilars despite the financial benefits that accrue to patients and government programs. A battle has been raging in states around the nation between those who want to inhibit such substitution and those that don’t want artificial barriers. Illinois was a part of that debate.

This week, agreement was reached on SB 455 (Sen. Tony Munoz, D- Chicago/Rep. Edward Acevedo, D- Chicago) regulating how and when biosimilars are substituted and notification provided to prescribers and patients.

In short, a biologic can only be substituted with a biosimilar if the FDA has given approval, the prescriber has not indicated “do not substitute’, and the patient is informed of the substitution. Additionally, within five business days of dispensing a prescribed biologic, the pharmacy must input the information into an interoperable electronic medical records system, an electronic prescribing technology, a pharmacy benefit management system, or a pharmacy record that can be electronically accessed by a prescriber. Entry into one of these systems is presumed to be notice to the prescriber. If the prescriber does not have electronic access, he/she must notify the pharmacy. The agreement on SB 455 ends a multi-year debate in Illinois.

IRMA would like to thank Sen. Tony Munoz for his leadership on this issue over the past three years. Additionally, IRMA would thank Rep. David Harris for his leadership and participation as well as Rep. Acevedo for his sponsorship in the House.

Return to Top

LOCKING MECHANISM FOR PRESCRIPTIONS

As introduced earlier this Session, HB 3219 (Rep. Mike Zalewski, D-Riverside) would have created a pilot project mandating every pharmacy to participate and requiring every new or refilled Schedule II prescription that contains hydrocodone to be dispensed in a non-reusable locking device. This package is defined as having an alphanumeric combination lock. The bill had been introduced at the behest of the only company to manufacturer such a product. IRMA pointed out that this mandate would cost pharmacies at least $39 million dollars. Moreover these costs are not recoverable because pharmacies are prohibited from charging the patient for the bottle under their existing contracts with private insurers and government benefit programs (e.g. Medicare Part D, Medicaid, and prescriptions for individuals in nursing homes) would be exempt from the legislation. Additionally, this legislation would provide an advantage for mail order prescription providers because the mandate could not be enforced on out of state mail-order pharmacies. Finally, pharmacies were not provided protection from liability if the product failed. As a result of some of these concerns, Rep. Zalewski amended the legislation to create a pilot project for which pharmacy participation is completely voluntary. Moreover, the pilot project is limited to $150,000 that is provided from the Department of Human Services. IRMA would like to thank Rep. Zalewski and Rep. Robert Martwick for addressing the concerns of the retail community.

Return to Top

DATA SECURITY

SB 1833 (Sen. Daniel Biss, D-Skokie/Rep. Ann Williams, D-Chicago) changes what is currently considered “personal information” for the purposes of requiring notification to the consumer and/or the Attorney General if the information is breached.  Specifically, the bill charts new territory by requiring notification for breaches of “consumer marketing” and “geolocation” information.  After months of discussions with the Attorney General’s office, IRMA was able to negotiate several changes to the bill which, in total, removed our opposition and allowed IRMA to take a neutral position.  Some of the more important changes include:  narrowing the definitions of consumer marketing and geolocation information to more closely target specific behavior of concern to the Attorney General, removing the requirement to notify the individual when geolocation and consumer marketing information is breached, raising the threshold that triggers notification requirements and expanding the time allowed for businesses to notify individuals and/or the Attorney General when information is breached.  There were a number of other changes made in a good faith effort by the Attorney General’s office to address IRMA’s concerns.  SB 1833 passed both chambers and now awaits action by Governor Rauner. IRMA would like to thank Attorney General Lisa Madigan, Senator Biss, and Rep. Williams.

Return to Top

RETAIL THEFT – ACCELERATED RESOLUTION COURT

SB 202 (Sen. Bill Cunningham, D-Chicago/Rep. Michael Zalewski, D-Riverside) would establish a pilot program for Cook County which would provide an accelerated route to adjudication for persons accused of misdemeanor retail theft or criminal trespass.  This measure comes out of concerns raised by Cook County Sheriff Tom Dart about jails overcrowded with non-violent offenders who remain in jail for long periods of time awaiting trial because they cannot afford to bond out.  This bill will permit qualifying persons accused of the aforementioned crimes to either have a final adjudication of their case within 30 days of arrest or be allowed to bond out of jail on their own recognizance until their hearing date.  IRMA supports this bill because it addresses the crime of retail theft in a way that is fair to the victim without undermining the severity of retail theft.  We also support this bill because it substantively addresses the concerns of taxpayers and criminal justice reform advocates who want to ensure that persons sitting in jail awaiting trial are there because they are a potential threat to society and not simply because they are poor.


Return to Top

SNAP ELIGIBILITY

SB 1847 (Sen. Daniel Biss, D-Skokie/Rep. Robyn Gabel, D-Evanston) will allow more people in Illinois to qualify for SNAP benefits.  It is estimated that the bill will add 40,000 more SNAP cases (cases include individuals and families) to the program.  IRMA opposed the bill because it adds more cases to a SNAP distribution system that is not spread throughout the month and creates substantial difficulties for grocers, employees, and customers.

Prior to 2013, Illinois had one of the most favorable SNAP distribution schedules in the country because it distributed benefits throughout the month.  After making some software changes in 2013 that were allegedly necessitated by the Affordable Care Act (ACA), the Department of Human Services (Department) elected to change SNAP distribution to the first 10 days of the month.  This change was particularly baffling because it was made after the USDA (the federal Department that issues SNAP benefits to the states) wrote a letter to all of the states encouraging them to distribute benefits throughout the month.  In response to the letter, a number of states began expanding their distribution beyond the first few days of the month.  Illinois was the only state to move in the opposite direction.

Amidst IRMA’s strong objection, the Department moved forward with the distribution change.  A few months later, IRMA submitted evidence that changing the distribution caused job loss, a reduction of employee hours, and store traffic that was severely diminished in the latter half of the month.  Presented with that data, the previous administration agreed to temporarily add additional dates beyond the 10th of the month to relieve the pressure on the independent grocers that largely serve communities in need and to put their employees back to work.  As this was a temporary compromise, a resolution was passed that required everyone to come back to the table in 2015 and hammer out a permanent fix to SNAP distribution that was fair to everyone involved in the program.  Before the group reconvened, SB 1847 was introduced to add more people to the SNAP program and further exacerbate the existing distribution problem.

The grocers that IRMA represents seek a permanent solution that will allow customers, regardless of how they pay for their groceries, to be served with dignity, offered healthy, perishable items at all times of the month, put employees back to work throughout the month, and allow for grocery stores that are operating in areas where there is high SNAP usage to remain viable.  Despite IRMA’s objection to moving the bill until a distribution solution is reached, the bill passed both Houses.  The sponsors, committee chairmen and Republican members of the House committee have vowed to help us reach a solution with the Department and advocate community this year.  We would also like to thank Rep. Patti Bellock for her presentation on the House floor explaining the need to solve this problem. IRMA looks forward to resolving this issue in the near future.


Return to Top

LIQUOR CONTROL ACT AMENDMENTS

 
“Of Value” Provisions

HB 4018 (Rep. Frank Mautino, D-Spring  Valley) clarifies that alcoholic liquor can be packaged in combination with non-alcoholic products without violating the three-tier system.  In addition, it makes clear that manufacturers and distributors can furnish non-alcoholic merchandise to retailers for free as long as the merchandise is not tied to an alcoholic product.  The Illinois Liquor Control Commission had previously taken the heavy-handed position that furnishing items such as coolers to promote non-alcoholic products (e.g. sports drinks, bottled water, etc.) violated the Act.  Therefore this change was sought to clarify that such a practice will not be considered as violating the prohibition of giving something “of value” to retailers to sell or promote the sale of alcoholic products.

Happy Hour, 100ft Rule Exemptions and Sunday Sales

SB 398 (Sen. Antonio Munoz, D-Chicago/Rep. Sara Feigenholtz, D-Chicago) will give businesses some flexibility to have traditional happy hours and will clarify that meal and party packages with unlimited drinks for a set price are allowed by law.  The city of Chicago wrote tickets to hotels and restaurants for their offering of such packages on New Year’s Eve in violation of Trade Practice Policies (TPP) written by the Illinois Liquor Control Commission (ILCC).  The TPPs have always been issued to describe “best practices” and have never been given the force of law.  A number of the restaurants and hotels that were cited for the practice have since sued the city and all of the cases that have reached a final decision have been decided in favor of the business.  SB 398 was written to address this issue and to allow licensees to serve discounted drinks for up to 4 hours/day for no more than 15 hours/week.  The bill will also include the following measures:

•           Prohibit TPPs

•           Allow hotel restaurants under the same ownership to have one license and transfer liquor from one location to the other as long as the restaurants are in the same hotel

•           Deletes the Sunday sales prohibition, but will allow local jurisdictions to prohibit through local ordinances

•           Grants the local liquor commissioner the authority to provide an exemption to the 100 ft. rule so that businesses don’t have to seek the exemption from the state legislature

•           Requires that all servers be BASSET certified

•           Prohibits licensees from selling drinks “2 for 1”, from increasing the volume of a drink without proportionately increasing the price and from allowing drinking games

The changes to this bill represent agreements made between everyone involved in the 3-tier system.  They are common sense changes that allow retailers and restaurants to have flexibility and certainty in the sale of alcohol and, most importantly, to sell and serve it responsibly.

Return to Top

TOBACCO

Tobacco Licenses

House Bill 2494 was introduced and passed last year as P.A. 98-1055 and requires retailers to obtain a license to sell cigarettes. The legislation was introduced to reduce the sales of cigarettes to minors, illegal sales of contraband tobacco, and the illegal smuggling of cigarettes in Illinois. The license includes an annual fee that is intended to help fund the interdiction of smuggling and retail inspections. P.A. 98-1055 also included an employee training program, a merchant citation mitigation provision, and record keeping provisions.  HB 2513 (Rep. Marcus Evans, D-Chicago/ Sen. Julie Morrison, D-Deerfield) is a trailer bill that clarifies the provisions passed in P.A. 98-1055. Specifically, the legislation: (1) allows a waiver for records to be kept out of state; (2) broadens the employee training requirements; (3) allows the employee training to be conducted electronically; (4) provides an avenue to mitigate retail tobacco citations; and (5) provides a waiver for closed loop distribution invoice record keeping requirements.  The good faith negotiations between the Illinois Department of Revenue and IRMA led to an agreed bill that passed both Chambers unanimously and has been sent to the Governor for his signature.

IRMA would like to thank Rep. Marcus Evans, Sen. Julie Morrison, staff and the Department of Revenue for all of their hard work on reaching an agreeable compromise on this legislation.

Contraband Cigarettes

SB 509 (Sen. Antonio Munoz, D-Chicago/Rep. John Cabello, R-Loves Park) will allow cigarettes without the tax stamp of the local jurisdiction to be considered contraband and thus make retailers subject to penalties outlined in the Cigarette Tax Act.  The City of Chicago sought the change because the sale of cigarettes without the Chicago/Cook County tax stamp is on the rise and they wanted the option to impose stronger fines on retailers who are caught selling such unstamped packs of cigarettes.  We should note that it seems the rise in the illegal sale of cigarettes is not only relegated to bad actors in the retail community, but increasingly such sales are occurring in person-to-person sales controlled by local gangs.  In addition, we also note that the rise in the illegal sale of cigarettes seems to correspond to the tax increases that have occurred at the state and local levels over the past couple of years.  These tax increases have made the price of cigarettes more expensive than any other city in the country; a fact that is not lost on the growing underground market for unstamped cigarettes.

Return to Top

TELECOM MODERNIZATION

The current 9-1-1 network in Illinois is outdated and lacks the necessary funding to maintain adequate 9-1-1 services for the State.  In 2013, the Illinois General Assembly extended the sunset on the Telecommunication Act and in doing so also created the 9-1-1 Services Advisory Board (“Board”). The Board was convened to determine the 9-1-1 costs necessary for every 9-1-1 system to adequately function and to recommend options to fund these systems. SB 96 (Sen. John Sullivan, D-Quincy/Rep. Brandon Phelps, D-Harrisburg) contains the recommendations as presented by the Board after numerous statewide meetings. It also contains important changes to modernize Illinois telecommunications and the video competition laws.

Currently, there are three surcharges that help fund the current 9-1-1 systems and network. One of these charges includes a 1.5% tax that is collected by a retailer on the sale of any prepaid wireless telecommunications service.  The retailer must include a line item on the receipt to show the surcharge. The retailer remits the surcharge to the Illinois Department of Revenue where they place it in the Wireless Service Emergency Fund.

In order to fund the Illinois Telecommunications Access Corporation (“ITAC”), which provides equipment for hard of hearing and deaf people, SB 96 adds an additional 1.5% surcharge on the purchase of any prepaid wireless telecommunications service. Similar to current law, the retailer will collect the 3.0% surcharge from the consumer. To remain consistent with current law the retailer may combine both surcharges in one line item on the receipt. The 3.0% tax will be remitted to the Illinois Department of Revenue where it will be divided between the Illinois Telecommunications Access Fund and the Wireless Service Emergency Fund. SB 96 also implements a statewide $0.87 tax per landline, wireless, VOIP, and cable provided telecommunications which will be collected by telecommunication carriers and remitted to the Illinois Department of Revenue.

Return to Top

DIRECT SALES

SB 142 FA #1 (Sen. Kotowski, D-Park Ridge) as introduced allowed a person over the age of 65 to cancel a direct sales contract (Tupperware, Etsy, Mary Kay, Pampered Chef, etc.) after 15 business days or three weeks. Illinois, along with 48 other states, follow Federal Trade Commission (“FTC”) rules that allow consumers of all ages to cancel a direct sales contract within three business days. These guidelines were promulgated in 1972 and have continuously been reviewed by the FTC and found to provide adequate protection for all consumers, including those over the age of 65. Sen. Kotowski amended the bill to require a different format for the cancellation provision adjacent to the consumer’s signature. This too would be inconsistent with 49 other states and the FTC rules.  The amendment passed the Senate Judiciary Committee based on the reservations expressed by members of the Committee. Sen. Kotowski held the amendment on 3rd reading to allow IRMA to help negotiate and develop a comprehensive bill over the break that would target and address the bad actors in the direct sales industry while protecting both legitimate businesses and vulnerable consumers.

Return to Top

FOOD ESTABLISHMENT SELF-INSPECTIONS

SB 1800 (Sen. Heather Steans, D-Chicago/Rep. Sara Feigenholtz, D-Chicago) will allow the City of Chicago to implement a self-inspection program for low-risk food establishments.  Qualifying food establishments would perform their own health inspections every two years which would then be randomly audited by the Department of Public Health.  The department will develop the inspection form and fines for noncompliance will be assessed.  The city has run a successful pilot program for the past couple of years, so this bill would make the program permanent and allow them to expand beyond current program participants.  Allowing low-risk food establishments to perform their own inspections allows the city to use its limited inspection resources wisely and cover more ground to ensure the safety of the food residents consume.  IRMA members have participated in the pilot program and we look forward to having more members qualify for the expanded program.

Return to Top

CONCEAL CARRY

SB 836 (Sen. John Sullivan, D-Quincy/Rep. Brandon Phelps, D-Harrisburg) amends the conceal carry law which went into effect last year.  Since the bill was signed into law, there have been a number of interested parties on both sides of the issue looking to amend the bill in any number of directions.  While it did not seem that there was much desire to actually change the law this soon after passage, SB 836 will make a number of changes that will mostly be of no concern to the retail community.  Members should note two changes in particular.  First, it allows a person to purchase a firearm with a conceal carry license instead of the FOID card. We can expect the Illinois State Police to promulgate administrative rules implementing this new provision. Second, it also allows a person to transfer a loaded firearm from their person or inside the vehicle to the trunk while in a parking lot. Currently, the weapon must be unloaded prior to exiting the vehicle for placement into the trunk. SB 836 passed both chambers and now awaits action by Governor Rauner.

Return to Top

robtanyaalec

Illinois This Week in Springfield – 99-14

SNAP DISTRIBUTION
WORKERS’ COMPENSATION
GOVERNOR’S AGENDA
RETAIL THEFT
TORT REFORM
DATA SECURITY
MILLIONAIRE TAX
SERVICE TAX
WEEK AHEAD

This Week In Springfield, the House continued bringing components of Governor Bruce Rauner’s Turnaround Agenda to the floor for debate and vote. Additionally, with the scheduled date of adjournment looming, both chambers were busy moving and debating legislation including, data breach, heroine abuse, SNAP, and millionaire’s tax.

 SNAP DISTRIBUTION

 

A large problem for grocers, their employees, and their customers will soon get a lot worse. Unfortunately, it is being portrayed by some as a win-lose proposition when it can easily be a win-win situation.

SB 1847 (Sen. Daniel Biss, D-Skokie/Rep. Robyn Gabel, D-Evanston) will allow more people in Illinois to qualify for SNAP benefits.  It is estimated that the bill will add 40,000 more SNAP cases (cases include individuals and families) to the program.  While IRMA generally would not be opposed to such a measure, when we consider the current manner in which SNAP benefits are distributed in this state, IRMA feels compelled to oppose this bill at this time as it simply inserts more eligible participants into a distribution system that fails recipients, grocers, and employees of grocers. While these outcomes are not the desire of the sponsors of SB 1847, these outcomes will occur as a result of unnecessary unilateral changes made by the Illinois Department of Human Services during the administration of former Governor Pat Quinn.

Prior to 2013, Illinois had one of the most workable SNAP distribution schedules in the country because it distributed benefits throughout the month.  After making some software changes in 2013 that were allegedly necessitated by the Affordable Care Act (ACA), the Department also elected to change SNAP distribution to the first 10 days of the month.  This change was not required by ACA and was particularly baffling because it was made after the USDA (the federal Department that issues SNAP benefits to the states) wrote a letter to all of the states encouraging them to distribute benefits throughout the month.  In response to the letter, a number of states began expanding their distribution beyond the first few days of the month.  Illinois was the only state to move in the opposite direction.

Amidst IRMA’s strong objection, the Department moved forward with the distribution change.  A few months later, IRMA submitted proof that changing the distribution caused job loss and a significant reduction of employee hours and store traffic in the latter half of the month.  Presented with that data, the previous administration agreed to temporarily add additional dates beyond the 10th of the month to relieve the pressure on the independent grocers that largely serve communities in need and to put their employees back to work.  As this was a temporary compromise, a resolution was passed that required everyone to come back to the table in 2015 and hammer out a permanent fix to SNAP distribution that was fair to everyone involved in the program.  Before the group reconvened, SB 1847 was introduced to add more people to the SNAP program and further exacerbate the existing distribution problem.

IRMA has proposed a permanent solution that will allow customers, regardless of how they pay for their groceries, to be served with dignity, offered healthy, perishable items at all times of the month, put our employees back to work throughout the month and allow for grocery stores that are operating in areas where there is high SNAP usage to remain viable.  In order to turn this into a win-win proposal, all that is needed is an amendment requiring the Department to make permanent the temporary fix by February 1, 2017.

WORKERS’ COMPENSATION

 

The last few weeks, Speaker of the House Michael Madigan has put before the House for consideration parts of Governor Bruce Rauner’s Turnaround Agenda.  As reported in previous issues of TWIS, the House has considered amendments regarding right to work, property tax freeze, and budget cut initiatives. This process is being used by the House Democrats to publicly debate and attempt to frame components in Governor Rauner’s Turnaround Agenda.  In response, the House Republicans largely voted ‘present’ on the proposals as a way of protesting the process which they see as a ‘sham’.

Following the same format, and as a follow up to the Workers’ Compensation Committee of the Whole last week, Speaker Madigan introduced four workers’ compensation amendments to HB 1287 (Speaker Michael Madigan, D-Chicago) for consideration and debate. The amendments largely provided for business friendly reforms to the workers’ compensation system.

House Amendment 1 to HB 1287 included a heightened ‘causation’ standard that would require the workplace be the major contributing cause of injury (at least 50%).

House Amendment 2 to HB 1287 would have allowed the determination of permanent or partial disability to be corroborated by independent medical examinations and treating medical records (such as AMA Guidelines).

House Amendment 3 to HB 1287 proposed a significant reduction in the medical fee schedules. These schedules are used to determine what medical providers will be paid for the procedures they perform related to workers’ compensation injuries. Despite a 30% reduction in 2012, Illinois still has the fourth highest medical fee schedule in the nation.

House Amendment 4 to HB 1287 would have subjected insurance companies to a rate approval process.

Similar to the past debates, the House Republicans referred to the process as disingenuous. As a result, Republicans voted ‘present’ on the four amendments while Democrats voted ‘no’ on the first three amendments. Consequently, the first three amendments failed. On the fourth amendment, the Democrats voted ‘yes’ contending the amendment would force insurance companies to pass workers’ compensation savings to businesses. Consequently, the fourth amendment was adopted to the bill but was held on the order of Second Reading and was not called for a vote.

Prior to the votes in the House, a coalition of employer representatives, including IRMA, issued the following statement calling on all members to vote present: “At this time, we are asking all House lawmakers to vote present on the workers’ compensation amendments filed today until our elected officials have reached comprehensive agreement on reform.  Illinois employers stand ready to work with leaders on both sides of the aisle.”

TORT REFORM

 

Speaker Madigan continued to submit pieces of Governor Rauner’s Turnaround Agenda to the full House. This week, tort reform was considered.  As TWIS readers are aware, a Tort Reform Committee of the Whole was convened last week to discuss tort reform in Illinois. The committee was stacked with witnesses that suffered from a variety of injuries from negligent or other tortious actions. As mentioned above, this process is being used by the Democrats to frame the discussions around the Governor’s initiatives.

According to the Turnaround Agenda, the Rauner Administration is seeking, among other things, to limit joint and several liability, and limit damage awards as a result of medical expenses to those expenses that are actually paid.

In response to the Tort Reform Committee of the Whole debate, and Governor Rauner’s Turnaround Agenda, Speaker Madigan has filed House Joint Resolution Constitutional Amendment 37 (HJRCA 37) (Speaker Michael Madigan, D-Chicago) that would limit awards for damages for certain tort claims. Specifically HJRCA 37 limits punitive damages to no greater than three times the amount of compensatory damages awarded or $50,000. Additionally, HJRCA 37 limits the total amount recoverable for an injury or death of a patient as a result of medical malpractice to no more than $1,250,000; limits a health care provider’s liability for medical malpractice to $250,000 per occurrence; and limits the damages for the loss of consortium to no more than $300,000.

HJRCA 37 is scheduled to be heard in the Judiciary Civil Law Committee next Tuesday.

 GOVERNOR’S AGENDA

 

TWIS noted several weeks ago that the Governor had created a number of working groups comprised of representatives of each of the four legislative caucuses, the Governor’s office, and key staff. The working groups were decided to facilitate compromise in the following subject areas: tax reform, infrastructure, economic development, ethics, state budget, and pensions. While those groups have met, progress has been minimum at best.

Friday morning, six pieces of legislation were filed in each chamber by Republicans on behalf of the Governor’s office containing most of the Governor’s desired goals. These proposals are as follows:

  • Senate Amendment #1 to SB 1046/HB 4224 contain property tax freeze proposals, changes to collective bargaining with public sector unions, and prevailing wage reforms.
  • HB 4214 allows municipalities to declare bankruptcy.
  • SJRCA 14/HJRCA 39 contain proposed term limits. These are proposed constitutional amendments. In order to be placed on the ballot they must pass each chamber with a 3/5ths majority and then be approved by 60% of the voters voting on the question in a general election (November 2016).
  • SJRCA 15/HRJRCA 40 contain a proposal to establish a non-partisan redistricting commission to draw the boundaries of legislative districts every ten years. Currently, if one party holds both chambers of the Assembly as well as the Governor’s Office, that party will draw the boundaries. If one of the two legislative chambers or the Governor’s office is held by a different party, the tie-breaker goes to a drawing. The winner of the drawing gets to draw the maps. Again, these are constitutional amendments and must follow the process noted above.

RETAIL THEFT

SB 202 (Sen. Bill Cunningham, D-Chicago/Rep. Michael Zalewski, D-Chicago) passed out of the House Judiciary Criminal Committee this week on a 9-1-0 vote.  The bill is an initiative of Cook County Sheriff Tom Dart to institute an accelerated resolution court pilot program for misdemeanor retail theft cases as well as criminal trespass to real property and/or state supported land.  This measure comes out of concerns raised by the Sheriff about jails overcrowded with non-violent offenders and the housing of non-violent offenders in jail who cannot afford to bond out.  Persons accused of the aforementioned crimes, if they qualify, will either have a final adjudication of their case within 30 days of arrest or be allowed to bond out of jail on their own recognizance until their hearing date.

The State’s Attorney’s office has expressed some concern about their ability to adjudicate cases within 30 days and there has also been some conversation about whether felonies should be included.  An amendment was introduced this week to address some of those concerns.  It is unclear at this writing whether the amendment will come back to committee or whether it will be agreed to on the House floor.

IRMA would like to thank Sheriff Dart, State’s Attorney Anita Alvarez, Rep. Zalewski and Sen. Cunningham for including us in this important conversation.  Reducing the taxpayer burden in Cook County while ensuring that non-violent offenders get a speedy trial is sound public policy that IRMA supports.

DATA SECURITY

The House Judicial Civil Committee passed the data security bill out of committee this week with a party-line vote of 7-4-0.  SB 1833 (Sen. Daniel Biss, D-Skokie/Rep. Ann Williams, D-Chicago) changes what is currently considered “personal information” for the purposes of requiring notification if the information is breached.  Specifically, the bill charts some new territory by requiring notification for breaches of consumer marketing and geolocation information.  After months of negotiations with the Attorney General’s office, IRMA was able to negotiate several key changes to the bill which, in total, will remove our opposition and place IRMA in a neutral position.  Some of the significant changes include:  narrowing the definitions of consumer marketing and geolocation information to more closely target specific behavior of concern to the Attorney General, removing the requirement to notify the individual when geolocation and consumer marketing information is breached, raising the threshold that triggers notification requirements, and expanding the time allowed for businesses to notify individuals and/or the Attorney General when information is breached.  There were a number of other changes made in a good faith effort by the Attorney General’s office to address IRMA’s concerns.  The bill has been sent to the House floor where it will be considered next week.

IRMA would like to thank Attorney General Lisa Madigan, Rep. Williams and Sen. Biss for their earnest efforts to address many of our initial concerns as this bill has moved through the legislative process.

MILLIONAIRE TAX

In 2014, voters were asked if they would support a higher tax on personal income over $1 million to help fund schools.  The results of that non-binding ballot initiative revealed that 60% of the voters were indeed in favor of the additional 3% tax.  Armed with that information, Speaker Madigan renewed his bid for a change to the Illinois Constitution that would permit such a tax to help fund schools.  After a hearing in the House Revenue Committee, HJRCA 26 (Rep. Michael Madigan, D-Chicago) was passed on a vote of 8-5-0.  This week, that measure was debated on the House floor.

A long, heated debate ensued regarding several points including:  whether higher earners should pay more in taxes, the reasons why businesses are leaving the state and taking jobs with them, how Illinois’ tax structure compares with neighboring states and whether the state’s current system of taxing personal income is “fair.”  In the end, the measure failed to receive the necessary number of votes for passage, falling three votes short, and it was postponed for further consideration.  If the measure had passed, it would have put forth a ballot question in the next general election (November 2016) where it would have to be approved by 60% of those voting on the question. “Postponed Consideration” is a procedural maneuver that allows a proposal to be voted on one more time should the sponsor so desire. If it again fails to receive the required number of votes, in this case 71, the measure is considered ‘lost’.

SERVICE TAX

A report advocating for the expansion of the Illinois sales tax to services was jointly issued this week by the Taxpayers Federation of Illinois and the Center for Tax and Budget Accountability. According to the report, their proposal would generate an additional $2 billion in tax revenues. Business-to-business transactions would be exempt because such taxes would result in taxes being paid on taxes – a process known as ‘pyramiding’.

WEEK AHEAD

Both chambers have adjourned for the Memorial Day weekend and will reconvene Monday afternoon. When they reconvene, we will be six days from the scheduled adjournment of May 31st. If the Assembly has not adjourned by midnight on June 1st, 3/5ths is required to pass any item including a budget.

As noted above, the Governor convened working groups to attempt a compromise. He has also had several pieces of legislation introduced containing his reform agenda. The Democrats are reportedly working on a budget with cuts not as severe as those proposed by the Governor. The Governor has signaled a willingness to consider additional revenues but only in exchange for some of the reform items noted previously.

If the Assembly passes a budget to the Governor, he could sign it (unlikely), either reduction veto certain line-items to bring it into balance with anticipated revenues, or outright veto the budget. The Governor will then have to call the Assembly back into Special Session to consider the budget and any other items he specifically designates in his call.

This week, the Springfield State Journal-Register carried a letter from the Governor telling everyone associated with the legislative process to “expect a very long extra session” if the Assembly passes a budget but not his reforms.

robtanyaalec

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.

Return to Top

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.

Return to Top

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.

Return to Top

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.

Return to Top

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.

Return to Top

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.

Return to Top

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.

Return to Top

 robtanyaalec