Illinois This Week in Springfield – 99-12

BUSINESS DAY 2015 SETS RECORD
ILLINOIS PENSION REFORM UNANIMOUSLY RULED UNCONSTITUTIONAL
BUDGET VOTES
WORKERS COMPENSATION
TORT REFORM & RIGHT TO WORK

 

This Week In Springfield witnessed record-breaking attendance at Business Day 2015 and a noteworthy, but not unexpected, ruling by the Illinois Supreme Court.

BUSINESS DAY 2015 SETS RECORD

Business Day 2015 drew its largest crowd yet of employers as over 400 employers came to Springfield to meet with legislators and tell share with them the challenges and rewards of owning a business in this state.  At a time when the Assembly is looking to cut budgets, increase revenue and restructure pensions, employers are concerned about how all of it will affect the success of their businesses and their workforce.

The event actually started Tuesday night with a combined dinner of IRMA and IMA’s respective Boards of Directors. Governor Bruce Rauner stopped in to mix with the crowd and welcome them to Springfield. The Governor echoed his consistent theme that he is focused on achieving structural reforms (e.g. tort, workers’ compensation, property tax, etc.) prior to any discussion of new tax revenues.

Wednesday’s event began with a luncheon where a standing-room-only crowd heard directly from two people who are heavily involved in determining the outcome of budget discussions, Senate President John Cullerton (D-Chicago) and House Republican Leader Jim Durkin (R-Burr Ridge).  After hearing about Illinois’ current financial condition and diametrically opposing viewpoints for how to address that financial condition, the crowd had the added bonus of hearing from Congressman Adam Kinzinger (R-16th District) as he was home to tend to the matters of his district.

Sen. Cullerton focused his remarks on the importance of passing a state budget and criticized the Governor’s proposed budget as being substantially out-of-balance particularly as it relates to his proposed pension reforms.  While the Governor has set up a series of working groups to discuss various aspects of the budget, he has not yet said what he will cut, and what revenue, if any, he will raise.  The Senate President believes the state’s budget problems cannot be fixed by cuts but will require additional revenues. To that end, Sen. Cullerton addressed the state’s income tax stating that Illinois’ rates were favorable when compared to the income tax structures of neighboring states, even those of Indiana and Wisconsin, both states with Republican Governors. According to the Senate President, Illinois would have an additional $5 billion in revenue if we had Indiana’s income tax structure and an additional $10 billion if we had Wisconsin’s. As the May 31st deadline looms closer, it is clear that both sides are still very far from agreement and while these issues can be considered beyond that date, it will take a super-majority to pass any initiative beyond the deadline.  President Cullerton noted that the Senate Democrats would not pass a budget all on their own – that significant votes from Republican legislators would be required. The final solution, according to Sen. Cullerton, would need to be bipartisan and would, ultimately, need to raise revenue.

Illinois House Minority Leader Jim Durkin urged business to keep their faith in the State and General Assembly.  He thanked the employers present for remaining in Illinois and keeping the residents of Illinois’ employed while facing high costs and cumbersome regulations.  Despite the combative tone being set at the Capitol, Leader Durkin expressed optimism in the Governor and the ability to reach a bi-partisan consensus on the budget negotiations.  Although the State’s revenue is projected to be the same as in 2011, Durkin made it clear that raising taxes is not a viable solution and stated that Republicans are trying to repair 12 years of Democratic mismanagement. He explained that history has shown a tax increase has not worked by pointing to continued unemployment and $9 billion in unpaid bills despite an additional $31 billion in revenue. He believes the General Assembly has an opportunity for the Assembly to truly balance the budget and this does not require a wholesale increase in taxes but a fundamental change in how the State spends revenue.

Subsequent to Leader Durkin’s presentation, Congressman Adam Kinzinger addressed attendees. He provided an overview of the environment in Washington D.C. and commented that the new Republican controlled House and Senate has accomplished more in the new term than the previous years combined. He stated the Illinois has advantages that other states do not have such as, infrastructure; transportation hubs that include airports, and river access; diverse industries that include manufacturing, agriculture, and a booming tech industry; one of the top cities in the nation; and a diverse population that is highly educated, skilled and motivated.

After lunch, over 400 employers made their way to the Capitol to touch base with their representatives to talk about the issues that are important to them and Illinois. During their visit to the Capitol, IRMA’s Board heard from Speaker of the House Michael J. Madigan who spoke about pension reform and the need for a bi-partisan solution to the state’s fiscal situation. He also stated that while he would listen to ideas on workers’ compensation reform, he believes the 2011 reforms were a significant step forward. Additionally, he noted there were not yet the votes in his caucus to pass minimum wage.

Senate Republican Leader Radogno stated that the Senate Republican Caucus is able and willing to make the tough votes that will be required as the price for once again being a part of the process as a result of the election of a Republican governor. Leader Radogno also noted that the financial needs of the City of Chicago will also play into the budget debates that will soon ensue.

Finally, Senator Cullerton welcomed the IRMA Board to his offices for more intimate discussions where he reiterated the need for additional revenues to meet the service needs of Illinois.

The day concluded with the not-to-be-missed Party Under the Tent where expectations were once again exceeded and attendees and policy makers had the opportunity to mingle in a relaxed and fun atmosphere.

IRMA would like to thank the following Co-Hosts, Sponsors, and Reception Caterers for their generous support. Without their participation, Business Day would not be the success that it has become.

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ILLINOIS PENSION REFORM UNANIMOUSLY RULED UNCONSTITUTIONAL

Efforts to address the financial situations of both the state and City of Chicago hit a significant but not unexpected speed bump Friday morning when the Illinois Supreme Court (“Court”), in Heaton vs. Quinn, unanimously struck down Public Act 98-599 that sought to address Illinois’ pension crisis. The seven justices unanimously declared the law violates the state constitution because it would leave pension contracts “diminished or impaired.”  This ruling was predictable after the Illinois Supreme Court struck down an attempt in Kaverva vs. Weems to force government retirees to pay more for their subsidized state health insurance. Although the case only focused on retiree healthcare subsidies, the opinion made it clear that any changes to pension benefits will face a tough time passing constitutional review.

Similar to Kanerva vs. Weems, three issues were presented for their review: (1) does a reduction of retirement annuity benefits owed to members of retirement systems violate the pension protection clause; (2) if so, can the law’s reduction of those benefits nevertheless be upheld as a proper exercise of the State’s police power; and (3) if not, are the invalid provisions severable from the remainder of the statute?

As to the first issue regarding reducing benefits, the Court clearly stated that there is no wiggle room to the clause that provides that “[m]embership in any pension or retirement system of the State shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”  Specifically, they stated:

“…the new legislation directly reduces the value of retirement annuities for those members in no fewer than five different ways. While we presume statutes to be constitutional and must construe enactments by the legislature so as to uphold their validity whenever it is reasonably proper to do so there is simply no way that the annuity reduction provisions in Public Act 98-599 can be reconciled with the rights and protections established by the people of Illinois when they ratified the Illinois Constitution of 1970 and its pension protection clause. Those provisions contravene the clear requirements of article XIII, section 5, as set forth in the provision’s plain and unambiguous language and construed by the legion of cases we have just discussed. In enacting the provisions, the General Assembly overstepped the scope of its legislative power.”

After the Court decided that Public Act 98-599 improperly impaired and diminished pension benefits, it took aim at the State’s argument that the reduction in retirement annuity benefits under Public Act 98-599 is a valid exercise of police power because it is necessary and reasonable to secure the State’s fiscal health and the well-being of its citizens. It pointed out that the circumstances presented by this case are not unique as economic conditions are cyclical and expected, and fiscal difficulties have confronted the State before. In the midst of previous downturns, the State has attempted to reduce or eliminate expenditures protected by the Illinois Constitution. Whenever those efforts have been challenged in court, the Court has clearly and consistently found them to be improper. The Court stated:

Throughout the past century, market forces have periodically placed significant pressures on public pension systems. The repercussions of underfunding those pension systems in such an environment have been well-documented and were well-known when the General Assembly enacted the provisions of the Pension Code which Public Act 98-599 now seeks to change. The General Assembly had available to it all the information it needed to estimate the long-term costs of those provisions, including the costs of annual annuity increases, and the provisions have operated as designed. The General Assembly understood that the provisions would be subject to the pension protection clause. In addition, the law was clear that the promised benefits would therefore have to be paid, and that the responsibility for providing the State’s share of the necessary funding fell squarely on the legislature’s shoulders. Accordingly, the funding problems which developed were entirely foreseeable. The General Assembly may find itself in crisis, but it is a crisis for which the General Assembly itself is largely responsible.

The court reasoned that to allow such authority on the legislature through judicial fiat would require the Court to ignore the plain language of the constitution. Accepting the State’s position that reducing retirement benefits is justified by economic circumstances would require the Court allow the legislature to do the very thing the pension protection clause was designed to prevent it from doing.

The Court summarily rejected the severability issue. The Court argued that the reduction provisions in Public Act 98-599 are the very reason for its construction. Without the reduction provisions, the legislature would not have enacted the legislation. The Court reasoned that it would make no sense to allow the legislation to stand once the very heart of the language was stripped away along with the legislature’s intent.

This leaves very few options for Governor Rauner the General Assembly, and the City of Chicago as they seek to address both the state and city’s substantial pension obligations. Realistically, many believe severe cuts to services, raising taxes significantly, amending the Illinois Constitution, or a combination of all these are the only options available.  As we have seen this last week, House Democrats are reluctant to vote for additional cuts to human services and Governor Rauner has stated that no additional revenue will be considered until his “Turnaround Agenda” is considered.  This leaves Illinois in a precarious predicament with no clear path in sight.

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BUDGET VOTES

In a surprise move Wednesday afternoon Speaker Madigan introduced and moved to the floor for immediate consideration legislation containing Governor Rauner’s budget for human services and other programs that would cut close to $2 billion in Medicaid and other social services for Fiscal Year 2016. Additionally, sixteen amendments were offered restoring the cuts to certain human service programs while remaining under the target revenue estimate of $32 billion for FY 2016.

As a way of signaling their displeasure with the lack of notice and reflect their contention that the process was not authentic, the House Republicans all voted ‘present’ on the proposals. Conversely, the Democrats voted ‘no’ on the Governor’s proposal and ‘yes’ on the restoration amendments thereby signaling to the Rauner Administration that they are not prepared to make these cuts.

This action by the House Democrats establishes negotiation markers as budget discussions begin in earnest.

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WORKERS COMPENSATION

This week, the House met as a Committee of the Whole to discuss the current state of Illinois’ Workers Compensation system.  With Illinois having one of the most expensive workers compensation systems in the nation, changes were made to provide some relief to the employer community in 2011.  While the relief provided in 2011 was important and a significant step forward, it was also emphasized to be a starting point by the employer community. Prior to the 2011 reforms, Illinois had the third most expensive workers’ compensation system in the country and only fell to seventh upon implementation of the reforms. Governor Rauner has made addressing the causation standard one of the cornerstones of his tenure and expects that such reforms will be made as part of a larger budget package.  In addition, he has tied any discussion of raising revenue to these types of changes.

During the Committee of the Whole, the House heard from witnesses that had been hurt on the job, employers and members of the medical community.  A series of nine panels of guests were invited with seven of the nine featuring workers from Illinois and Indiana who had been hurt on the job.  The workers and their attorneys cautioned against using Indiana as a model for workers compensation reform alleging that they could never be fully compensated for the injuries they sustained under a system that, according to them, was unfair to employees.  The business community, represented by the Illinois Manufacturers’ Association, noted that although much of the day’s testimony centered on whether employees were fairly compensated for their losses, no one was talking about reducing employee benefits and the goal of employers was to achieve savings in other areas of workers compensation.  Namely, savings could accrue from attacking fraud in the system, reducing fees to medical providers, and strengthening the use of American Medical Association standards to gauge impairment.

No votes were taken during the committee as no bill was being considered and the purpose of the meeting was to hear from affected parties in order to later determine whether more reform is actually needed and what reform can be achieved.  IRMA expects more discussion to come.

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TORT REFORM & RIGHT TO WORK

Friday afternoon, Speaker of the House Michael J. Madigan announced a Committee of the Whole to explore the topic of tort reform. Reforms to Illinois’ tort system are one of the oft-mentioned priorities of the Rauner Administration. This Committee of the Whole will convene at noon on  Tuesday, May 12th.

Additionally, the Speaker announced his intent to put before the House for a vote Right to Work legislation. TWIS readers will recall that 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. The Turnaround Agenda also envisions eliminating ‘fair share’ requirements for state employees. Fair share requires employees who work in a unionized work setting but are not members of the union to pay fees from the paychecks for the portion of the union’s efforts that benefit those employees.

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robtanyaalec

Chicago Retail Merchants Alert

CHICAGO ENERGY BENCHMARKING REPORTING

DEADLINE  AUG. 1, 2015

Owners of certain commercial buildings located within the City of Chicago must comply with the new City of Chicago Building Energy Use Benchmarking Ordinance by August 1, 2015.

Who must comply?

The Ordinance requires commercial and municipal buildings with between 50,000 – 250,000 square feet and residential buildings with over 250,000 square feet to submit verified reports on whole-building energy use and specific building attributes. The City has issued “2015 Notice of Upcoming Obligation to Comply” notices to applicable property owners over the past few weeks.

When must buildings comply?

Property owners must file their 2015 reports by August 1, 2015. Starting in 2016, annually updated reports must be filed before June 1st.

What are the direct costs associated with compliance?

In addition to time needed to gather energy and property data, in 2015, the first year (and every third year thereafter), buildings must have data reviewed by a City-certified in-house or third-party professional engineer, licensed architect, or other trained individual to verify data have been tracked and reported correctly. The costs for this service varies according to the number and complexity of the buildings under consideration.

    • For IRMA members with in-house staff who can be assigned to gather and report required building attributes and energy usage, and also have in-house staff who hold licenses or certifications required by the City to verify data – there may be no direct costs.
    • For members who do not have in-house staff who hold accepted credentials designated by the City to verify reported data, they, minimally, may incur out of pocket costs to hire a 3rd party to verify data.

 

Where can I find more information about benchmarking requirements?

Visit www.cityofchicago.org/energybenchmarking. If you own a commercial building located in the City of Chicago that is 50,000 sq ft or larger and you did not receive notice from the City of Chicago, contact the Help Center at:

info@chicagoenergybenchmarking.org or call (855) 858-6878.

IRMA Members Request Assistance

IRMA has received a number of inquiries surrounding Chicago’s Energy Benchmarking Reporting Requirements. In response, IRMA has asked Mark Pruitt, principal of The Power Bureau, to be available to help assist members with a wide range of services related to reporting requirements, including arranging for 3rd party professionals required for building and usage data verification. Mark has agreed to provide services at reduced rates for IRMA members, starting with a $50 hourly rate for site visits and data verification for single gas/electric account buildings. IRMA’s Utility Program Coordinator, Maggie Murphy, will be “on call” to assist Mark with this effort. You can contact Mark and/or Maggie directly.

# # #

*One of the country’s most respected and innovative energy experts, Mark Pruitt served as the first Director of the Illinois Power Agency – the state agency responsible for securing wholesale electricity and renewable energy for the 4.7 million residential and small commercial accounts located in Illinois. He now advises energy managers (and others) in cities, businesses, non-profits, and universities, including providing insight into the deregulated (or not) market, legislation and regulation that is unique to them and the industry. Mark was selected by the City of Chicago to assist in establishing and implementing the country’s largest aggregation purchasing programs of its kind, and has worked tirelessly on behalf of energy buyers and consumers to force suppliers to adopt transparent bidding and contractual protocols in rates negotiations. His efforts include participating in dialogues with regulators, elected officials, advocates, utilities, and wholesale market operators to ensure stable rates for the future in environments which consumers are assured fairness and transparency.

Contact Information:

 TanyaTricheTanya Triche
Vice President & General Counsel
312/726-4600

 ttriche@irma.org

Illinois This Week in Springfield – 99-11

In This Issue:

BUSINESS DAY
UNEMPLOYMENT INSURANCE
WORKING GROUPS
REVENUE ESTIMATES
PHARMACY CUTS
TELECOMMUNICATIONS
DRONES

This Week In Springfield, both chamber began work on bills that have crossed over from the other chamber.

BUSINESS DAY 2015

Over 400 employers are attending Business Day 2015 next Wednesday, May 6th. As a result of the enthusiastic response of employers, Business Day will once again be the largest gathering of employers in Illinois. The opening luncheon will feature comments from Governor Bruce Rauner as well as Senate President John Cullerton. The luncheon is now standing room only. After spending the afternoon meeting with policy makers at the Capitol, attendees will mix with their peers, policymakers, and staff at the Party Under the Tent – a unique social opportunity that has become a not-to-be-missed event. IRMA would like to thank our event sponsors and receptions hosts for helping to make this day possible!

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 UNEMPLOYMENT INSURANCE

On Wednesday morning, Governor Rauner convened an ‘agreed bill’ process regarding Illinois’ unemployment insurance system.

Since the early 1980’s, Illinois’ unemployment insurance system has been governed by an ‘agreed bill’ process. This process periodically brings together representatives of employers and employees typically under the auspices of the Governor and monitored by representatives of the four legislative caucuses (i.e. Senate Democrats, House Democrats, Senate Republicans, House Republicans). The employee representatives are led by the Illinois AFL-CIO and the employer representatives are led by IRMA.

The process usually occurs when the Unemployment Insurance Trust Fund, the fund from which unemployment benefits are paid, is in crisis. The other time the process occurs is when ‘speed bumps’ must be addressed. ‘Speed bumps’ are intentionally inserted to incentivize both sides to return to the table to review the current agreement, whenever it may have been reached, and negotiate any changes that may be necessary or either side, or the Governor’s Office, desires. In this case, it is speed bumps that brings everyone together.

In 2011, then Governor Patrick Quinn convened an ‘agreed bill’ process to address the deficit in the Unemployment Insurance Trust Fund. Agreement was reached, ‘speed bumps’ were included and take effect January 1, 2016 if they are not removed. In this case, the ‘speed bumps’ take the form of a potential $470 million unemployment insurance tax hike on employers and a $300 million benefit cut for unemployed workers. These ‘speed bumps’ provide significant incentive for both sides to return to the table to review the current agreement.

As is always, all participants are abiding by a self-imposed agreement to not discuss the details of the negotiations until agreement is reached.

The agreed bill process for unemployment insurance in Illinois has worked successfully since its inception. It has brought stability and avoided the problems other states have seen in terms of wild swings in either benefit and tax increases or cuts or both.

IRMA appreciates the fact that Governor Rauner as well as Senate President John Cullerton, Speaker of the House Michael Madigan, Senate Republican Leader Christine Radogno, and House Republican Leader Jim Durkin continue to utilize and support the agreed bill process.

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WORKING GROUPS

The Rauner Administration has convened six working groups in addition to the unemployment insurance agreed bill process noted above. The six working groups are comprised of a bi-partisan mix of legislators from both the House and Senate as well as key legislative staff and representatives of the Governor’s office. The six groups are divided into the following subject areas: Economic Growth, Taxpayer Protection, Transforming Government, Pension Reform, Capital Plan, and Budget Implementation. The Economic Growth group will examine issues such as workers’ compensation reform, tort reform, and empowerment zones. Transforming Government will discuss issues such as combining the offices of the State Treasurer and Comptroller and term limits). The issue areas the other groups will discuss are largely self-explanatory.

These groups are an attempt by the Rauner Administration to construct a massive agreement that would secure some of the budget items Democrats in the Assembly may want (e.g. additional revenue, funding of certain programs, etc.) in exchange for reforms the Governor and Republicans in the Assembly may want (e.g. tort reform, workers’ compensation reform, tax reform, etc.).

These groups will meet at least weekly through the month of May.

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REVENUE ESTIMATES

Wednesday evening, the Commission on Government Forecasting and Accountability appeared before the Senate Revenue Committee to provide an update as to important state economic indicators. One important note is that state revenues in the exiting fiscal year are now predicted to be $300-$500 million more than initially predicted. This good news led the Rauner Administration to announce they will rescind the $26 million in cuts announced on Good Friday. These numbers will not impact the $1.5 billion in cuts made to just prior to Good Friday to balance the state’s current FY 15 budget.

Looking ahead to FY 16, COGFA estimates Illinois will have just over $32 billion in revenues. This means that without additional revenues, there will have to be cuts of $3-$4 billion, in addition to the cuts recently enacted to balance the FY 15 budget.

COGFA also noted that there is a $7.6 billion pension payment due next fiscal year. Additionally, the state’s unfunded pension liabilities now stand at $104.6 billion. Overshadowing action on pensions is the fact the Illinois Supreme Court is set to rule on whether or not the pension reform passed in 2013 is constitutional. If rules constitutional, the pressures on the budget for FY 16 change radically. If the reform is held to be unconstitutional, the pressures remain. On top of the pension liabilities, the healthcare costs for state employee health insurance is expected to increase 6.8 percent for a total of approximately $2.8 billion.

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PHARMACY CUTS

As part of the recently enacted budget cuts to close a gap in the state’s Fiscal Year 2015 budget. The solution was an across the board 2.5% annualized reduction effective the last two months of FY ’15 (May and June). The result was an effective cut of approximately 13% over these last two months.  The result for pharmacy was devastating. The Department of Healthcare and Family Services reduced the dispensing fee for brand and generics by $1.00 respectively. These cuts take effect Friday, May 1st.

These additional pharmacy cuts come on the heels of a 9% cut as a result of the SMART Act reforms of 2011 (other providers received a 3% cut) and additional cuts are being considered for the FY 2016 budget.

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TELECOMMUNICATIONS

IRMA joined a wide-array of entities from law enforcement to community groups in support of a modernization of Illinois’ telecommunications laws. Illinois law currently requires one company, AT&T, to continue to invest hundreds of millions of dollars in outdated technology – the old copper wires upon which the original telephone infrastructure was built. This obligation is a legacy of the Ma Bell break-up of 1984. These old copper wires have only one capability – to carry voice communication. They have no ability to multi-task by carrying data, streaming video, or any of the other functions of modern telecommunications. The monies being spent to maintain these old wires could be spent replacing them as well as more quickly expanding high-tech communication options. Those who want to keep their land-line phone will be able to do so. If a consumer wants a voice-only option, it will be available to them. The question isn’t about the types of phones consumer utilize, the question is the wires leading to them or, for that matter, the availability and development of additional or more wide-spread wireless options. Ensuring Illinois laws governing telecommunications do not discourage or impede technological development and implementation is essential if Illinois is to compete effectively.

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DRONES

As drones make their way from military application to commercial and personal uses, some foresee the need to plan for their widespread adoption. SB 44 (Sen. Julie Morrison, D-Deerfield/Rep. Brandon Phelps, D- Harrisburg) seeks to create the Unmanned Aerial System Oversight Task Force Act. The purpose of the Task Force is to “provide oversight and input into creating comprehensive laws and rules for the operation and use of drone technology within this State subject to federal oversight and regulation”. Assuming SB 44 passes both chambers of the Assembly and is signed into law by the Governor, the Governor has 90-days to complete the appointments to the Task Force. Currently, 17 people will serve on the Task Force including a representative of IRMA. The members of the Task Force must ‘consider commercial and private uses of drones, landowner and privacy rights, as well as general rules and regulations for the safe operation of drone, and prepare comprehensive recommendations for the safe and lawful operation of [drones] in this State”.  The Task Force must issue a report no later than July 1, 2016.

 robtanyaalec

 

 

Illinois This Week in Springfield – 99-10

In this Issue:

BE THERE!
DATA SECURITY RESOLUTION
DATA SECURITY BILL
RETAIL THEFT
FAMILY CARE PROVIDER ACT
WORKERS’SCHEDULES
CRIMINAL BACKGROUNDS IN HIRING
LIQUOR “OF VALUE” PROVISIONS
POWERED FOOD AND BEVERAGE PRODUCTS
RESTAURANT SELF-INSPECTIONS
MANDATORY GAS STATION UPGRADES
TAX PAYMENTS AND REFUNDS
TOBACCO LICENSE TRAILER BILL
ECONOMIC DEVELOPMENT
CAPTIVE INSURNACE

 

This Week In Springfield, both chambers of the Illinois General Assembly reached their first Third Reading Deadline. This means any legislation left in its chamber of origin (i.e. Senate Bill in the Senate/House Bill in the House) that does not have its deadline specifically extended, will be considered ‘held’ for the spring.

Be There!

Governor Bruce Rauner and Senate President John Cullerton will address the opening lunching of Business Day 2015 on Wednesday, May 6th. It is not too late to participate in the largest gathering of employers in Illinois. After the luncheon, attendees will meet with policy makers at the Capitol. Register now at www.irma.org . IRMA would like to thank the generous sponsors of Business Day 2015 listed below.

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 Data Security Resolution

SR 142 (Sen. Mattie Hunter, Chicago) recognizes that all industries including but not limited to financial, public, government, retail, manufacturing, medical, utilities, etc., suffer from data breaches. The resolution urges the federal government to focus on increased security measures for credit card data kept by all affected industries. As originally introduced, SR 142 left the impression that data breaches were largely a retail problem which would have left a false impression.

IRMA would like to thank Sen. Hunter for recognizing that all industries suffer from data breaches and that a comprehensive approach to security measures for credit card data is required to deter and reduce future breaches.

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Data Security Bill

SB 1833 Amendment #2, (Sen. Daniel Biss, D-Skokie) proposing to expand the IL Personal Information Protection Act (PIPA), was passed out of the Senate and will now be debated in the House.  In its current form, the bill will expand what is considered personal information which must be protected by persons that own and/or store data.  Historically, only information that would lead to a particular risk of harm and that an individual could take actions to change and protect themselves, has been regulated. For example, the current Act, protects credit card and account numbers, social security numbers, and driver’s license/state id numbers.  Credit card or financial account information in the wrong hands can lead to financial harm but it can also be changed if the holder is aware that it has been compromised.  Social Security numbers in the wrong hands can lead to identity theft but can also be changed or flagged.  The same is true of driver’s license/state identification numbers.  This bill would now protect such information as geolocation data, consumer marketing and biometric information.

The breach of some of this information would not make it more likely that a person could have their identity stolen or their credit ruined.  In fact, this information is readily available through, positive impact on the Cook County jail and on a person’s right to a speedy trial while simple on-line searches.  In addition, with the amount of information that individuals post online on their own (e.g. social media), much of the information previously considered private is now willingly placed into the public domain. This bill would protect such public information as the combination of a person’s name, home address and telephone number.  This information can be found for free and with little effort in the White Pages, MyLife.com, etc. Finally, would we rather have entities focusing on protecting truly vital information or spread too thin making protection efforts less effective?

After several discussions with the Attorney General’s office, this amendment reflects several changes. Changes include determining the standard for who needs to be notified of a breach and when, decreasing the likelihood that individuals may receive duplicate notifications of breaches and increasing the number of days that a company has to notify individuals and the Attorney General that a breach has occurred.  Such notices will have a better chance of being accurate without needing to be further amended which can eventually cause confusion to the consumer. While these changes are a step in the right direction, there are many issues left to discuss.

IRMA would like to thank Sen. Biss for his leadership on this issue and appreciates that the Attorney General’s office has agreed to continue the discussion regarding making other reasonable changes as the bill moves over to the House.

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Retail Theft

A number of bills have been introduced this legislative session that propose to do everything from changing the current remedies for retail theft to reducing jail overcrowding by focusing on adjudicating retail theft cases quickly.  IRMA supports HB 2919 (Rep. Michael Zalewski, D-Riverside) and SB 202, Senate Amendment #1 (Sen. Bill Cunningham, D-Chicago) which represent common sense approaches to addressing retail theft cases.  HB 2919 allows individuals in the Cook County jail awaiting a final adjudication of their misdemeanor or low level felony retail theft case to bond out on their own recognizance if the case is not finalized within 30 days.  This measure would only be afforded to persons with a non-violent criminal record.  SB 202 would institute a “Rocket Docket” process in which persons accused of retail theft or criminal trespass would have their cases finalized within 30 days of the arrest.  Neither measure diminishes any civil or criminal remedies that are available to the retailer.  Instead, the bills focus on a person’s right to a fair and speedy trial and re-focus taxpayer dollars that are currently being used to essentially house poor people awaiting trial and refocus those efforts on areas of the jail that need those dollars most.

IRMA would like to thank Rep. Zalewski, Sen. Cunningham and Cook County Sheriff Tom Dart for including IRMA in these discussions and for promoting policies that will have a significant not undermining the severity of retail theft.

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Family Care Provider Act

SB 1238 (Sen. Napoleon Harris, D-Chicago) expands the federal Family Medical Leave Act (FMLA) by removing federal Department of Labor (DOL) criteria that establishes a requisite relationship between family members to determine leave eligibility.  Consequently, this would require Illinois employers to provide up to twelve unpaid weeks of leave to employees who wish to care for people with whom they do not have an existing federally-recognized relationship for leave purposes.

IRMA and a coalition of business groups met with the Women’s Legislative Leadership Project to discuss their initiative and review the leave benefits established under the FMLA and extended by subsequent DOL administrative rulings. IRMA pointed out that grandparents already have the right to take time off under the FMLA for the birth, adoption, and care of a grandchild.Moreover, Congress intended the definition of “son or daughter” to reflect the reality that many children in the United States today do not live in traditional ‘nuclear’ families with their biological father and mother. Congress ensured these individuals can take leave to care for a family member under a standard of “in loco parentis”, meaning a family member that assumes the parental rights of another family member. Likewise, grandchildren already have the right to take time off under the FMLA to care for ailing grandparents. If an employee can show his/her grandparent stood in loco parentis to them when they were a minor, then they are entitled to FMLA leave to care for that grandparent.

The advocates also believe that employees are not aware of current FMLA leave benefits. The business coalition offered to form a partnership with the advocates to educate both employers and employees of the benefits already allowed under current federal law. The advocates rejected this idea and continue to pursue an unmitigated expansion of current FMLA rights by removing a federally implemented balancing approach between businesses and employees.

IRMA would like to thank Sen. Harris for convening the stakeholders to discuss the issue.

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Workers’ Schedules

Rep. Will Guzzardi, D-Chicago introduced HB 3554 HCA#1 which requires an employer to enter into negotiations with an employee if the employee requests a schedule change. Employers consider a broad range of factors when scheduling, including employee preferences and availability.Employees are generally asked when they want to work based on their preferences and employers schedule around the employee’s stated preferences.  As factors change for the employer and the employee, schedules are adjusted. This allows for an employee and the employer to account for unforeseen circumstances such as family emergencies, weather conditions, school closings, etc. Employee scheduling requires continued employee/employer dialogue.

Despite employer’s best efforts to predict scheduling needs in each location, those needs are subject to external factors that may change for reasons outside the control of the employer. Circumstances such as last minute employee requests for time-off or shift changes, weather, disrupted deliveries, sales and special events all impact an employer’s ability to develop schedules. A “one-size-fits-all” mandate fails to recognize the negative impact that the regulations will impose on employees. Losing the flexibility to make adjustments to the schedule to account for unexpected changes harms the employer and employee.  Once a regulation is in place, businesses are less likely able or capable of responding to employee preferences, availability and emergencies.  Consequently, schedule mandates restrict the ability of employers to allow employees to trade or cover shifts with/for other employees to meet changing circumstances.

Rep. Guzzardi informed IRMA that he does not intend on pursuing a legislative initiative this spring but would like to pursue additional negotiations during the summer. IRMA would like to thank Rep. Guzzardi for his willingness to discuss this issue and we look forward to continuing the discussions.

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Criminal Backgrounds in Hiring

SB 567 Amendment #1 and Amendment #2 (Sen. James Clayborne, Jr., D-East St. Louis) attempts to codify into Illinois law long-standing case law which states that if an employer makes an adverse hiring decision based on an applicant’s criminal background, that the background must be job-related and consistent with business necessity.  In addition, the bill prohibits “forum shopping” by prohibiting complainants from bringing a case in more than one forum.

After the EEOC issued guidance in 2012 on the lawful consideration of criminal backgrounds in making employment decisions, there has been some discussion in the General Assembly of codifying parts of that guidance into law.  IRMA has been opposed to such an effort as the EEOC’s guidance was meant to be helpful to employers and applicants, but not written to have the force of law. The consideration of an individual’s criminal background in making employment decisions has many moving parts and having a consistent law is key to ensuring that applicants are treated appropriately during this process.  To that end, IRMA would prefer for the federal government to be the ultimate arbiter in this area of employment law.

We note that this bill is yet another measure aimed at accomplishing the goal of helping put people with criminal backgrounds in a better position to find employment.  Over the last several years, a number of changes have been made to Illinois law to do just that.  Such measures have included allowing certain criminal histories to become eligible for expungement and sealing sooner after an individual has completed their sentence and passing the recently enacted ban the box legislation.  IRMA has worked with the sponsor of each of these efforts such that IRMA did not oppose their proposals.

We appreciate Sen. Clayborne’s willingness to make changes so that Illinois law is not inconsistent with what the federal government requires.  We would also like to thank Rep. Esther Golar (D-Chicago) who has worked with us in earnest on this issue for the past few years.   

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Liquor “of value” Provisions

HB 4018 (Rep. Frank Mautino, D-Peru) passed out of the House unanimously this week.  The bill seeks to clarify 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 when they are related to non-alcoholic products.  The Illinois Liquor Control Commission had previously taken the position that furnishing such items as coolers to promote non-alcoholic products (e.g. bottled water o sports drinks) violated the Act.  Therefore the distributors and retailers sought clarification in the law that such a practice was lawful and could not be considered as giving something of value to retailers.

IRMA would like to thank Rep. Mautino for sponsoring this common sense legislation.

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Powdered Food and Beverage Products

This week, the Illinois Senate determined that certain products in powdered form have the ability to pose a risk to the health and safety of Illinois residents such that they should be banned from sale in the state.  SB 9 (Sen. Jennifer Bertino-Tarrant, D-Plainfield) and SB 67 (Sen. Ira Silverstein, D-Chicago) both passed unanimously out of the Senate this week.  The bills would ban the sale of powdered caffeine and powdered alcohol respectively.  Both controversial substances have made headlines around the country as there have been reports that the use or abuse of powdered caffeine has been linked to the deaths of some consumers.  There is also concern about the lure that powdered alcohol could have on children and the concern about facilitating binge drinking by young adults as each package is the equivalent of a shot of alcohol.  IRMA is neutral on both bills.

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Restaurant Self-Inspections

SB 1800 Amendment #1 and Amendment #2 (Sen. Heather Steans, D-Chicago) passed out of the Senate overwhelmingly this week.  This would 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.  This bill would have the effect of allowing department personnel to spend more time in high-risk food establishments where food is being prepared and where there is greater risk of the transmission of food borne illness.  The department will develop the inspection form and fines for noncompliance will be assessed.

IRMA would like to thank Sen. Steans for spearheading this business-friendly reform.  It refocuses the city’s limited resources on inspecting high-risk establishments while ensuring the protection of the health and safety of the city’s consumers.

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Mandatory Gas Station Upgrades

SB 268 FA#1 (Sen. Emil Jones III, D-Chicago) mandates that each gas station must be capable of operating its fuel terminals using an alternate generated power source for a minimum of 72 hours.  It also requires any newly constructed retail outlet, any renovated retail outlet or specific retail outlets that are located within one-half mile of an interstate highway or State or federally designated evacuation route must be pre-wired with an appropriate transfer switch and be capable of operating all fuel pumps, dispensing equipment, life safety systems, and payment-acceptance equipment using an alternate generated power source.

This is an initiative of Cook County Board President Toni Preckwinkle.  Similar legislation was passed in Florida in response to the aftermath of hurricane season.  Although Illinois is not in a hurricane zone, the legislation would require private businesses to spend millions on upgrades so that they can stay open after a natural disaster occurs to serve the public. Generally, in times of natural disaster, employees of these businesses are affected as well, and they would be expected to put themselves in harm’s way to operate the station.  Such an expensive and potentially harmful piece of legislation should be discussed in detail before it moves further.

Senator Jones and President Preckwinkle have agreed to hold the legislation this spring for further discussion over the summer.  IRMA would like to thank Senator Jones and President Preckwinkle for their willingness to discuss the issues presented in the legislation before moving forward.

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Tax Payments and Refunds

SB 1732 and SB 1804, both sponsored by Senator Pam Althoff (R- McHenry) and supported by IRMA, passed out of the Senate unanimously this week. These bills target the responsible treatment of certain tax refunds and overpayments.  SB 1732 provides for a portion of the revenue from sales and use taxes to be placed into a sales tax refund fund for more timely payment of refunds. Currently, refunds can take many months to receive.  SB 1804 allows for tax overpayments under certain Acts including the cigarette, OTP and liquor control Acts to be used as a credit against any future liabilities under those Acts.

IRMA commends Sen. Althoff for pursuing these efforts that have a positive impact on taxpayers in the state.

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Tobacco License Trailer Bill

SB 1919 (Sen. Julie Morrison, D-Deerfield) and HB 2513 (Rep. Marcus Evans, D-Chicago) are trailer bills that set out to clarify the provisions passed last spring in P.A. 98-1055. That Act requires retailers to obtain a license to sell cigarettes beginning January 1, 2016. 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.

SB 1919 and HB 2513 is agreed upon language that ensures the books and records retention requirement reflects current retention practices; ensures consistent employee training programs across varying federal and state jurisdictions; clarifies merchant citation mitigation procedures that were included in the Act; and clarifies and streamlines invoice requirements for closed loop distributors.

IRMA would like to thank both Rep. Evans and Sen. Morrison as well as the Illinois Department of Revenue for their work on this important initiative on the behalf of Illinois tobacco retailers.

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Economic Development

A reorganization of Illinois’ economic development apparatus, a priority of Governor Rauner, took an important step forward this week as HB 574, co-sponsored by Speaker of the House Michael J. Madigan (D- Chicago) and House Republican Leader Jim Durkin (R- Burr Ridge), was unanimously approved by the House Executive Committee and now awaits consideration by the full House. HB 574 would create a not-for-profit corporation focused solely on economic development while the existing economic development agency, the Department of Commerce and Economic Opportunity (DCEO) would focus on other priorities. The idea is the new corporation will be agile and able to respond quickly to economic development opportunities.

HB 574 also contains provisions eliminating the current Historic Preservation Agency and transferring its functions to DCEO. Additionally, the Abraham Lincoln Presidential Library & Museum will be become its own agency.

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Captive Insurance

Last year, the Illinois Department of Insurance (DOI) under the Quinn Administration, advanced legislation (Public Act 98-978) containing an obliquely written phrase DOI later interpreted to mean that Illinois-domiciled companies that self-insure their risk via a captive insurance company would be taxed. A captive insurance company is a wholly-owned entity that only insures the risk of its parent. Senator Bill Haine (D- Alton), chairman of the Senate Insurance Committee, acted quickly in an attempt to repeal the new law. This effort was supported by IRMA as well as the Illinois Manufacturers’ Association, Taxpayers Federation of Illinois, and the Illinois Hospital Association. Unfortunately that effort fell short.

Senator Haine is trying again this year in the form of S.B. 1573. SB 1573 passed the Senate unanimously and now moves to the House for additional consideration. IRMA would like to thank Senator Haine as well as Senate President Cullerton, Senate Republican Leader Radogno, every member of the Senate who supported SB 1573 as well as House Republican Leader Jim Durkin who is the House sponsor.

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