This Week in Springfield – 101-04

February 15, 2019

Despite bi-partisan opposition, Thursday afternoon the Illinois House passed Senate Bill 1 (Sen. Kimberly Lightford, D- Westchester/Rep. Will Guzzardi, D- Chicago) on a partisan roll-call of 69-47-1. It is important to note five House Democrats joined all the House Republicans in opposition. Nevertheless, SB 1 will now go to Governor JB Pritzker’s desk where a quick signature is expected.

IRMA would like to thank the IRMA members who repeatedly made contact with their State Senators and State Representatives. It did have impact and while history will never record how close we came to achieving genuine compromise, we know.

IRMA approached the issue with two viable compromises  and IRMA was willing to stand in public support of both. One of the compromises got everyone to $15 but gave suburban and downstate employers the same time to ramp up that Chicago employers have been given. Despite the fact the same proponents advocating for SB 1 in Illinois supported both alternatives IRMA put on the table when they were adopted in other states, there was no true effort to compromise. One of IRMA’s alternatives agreed to get everyone to $15 but gave suburban and downstate employers the same time and consideration that Chicago employers have been given. To no avail.

The press coverage was voluminous and very much in favor of the compromises IRMA, and a broad coalition of employer organizations led by IRMA, offered.

Nevertheless, the other side chose differently and had the advantage.

As passed by the Assembly, SB 1 amends the Illinois Minimum Wage Law to phase-in the $15 starting wage over five years:

18 years and older Under 18 years of age*
1/1/2020 $9.25 1/1/2020 $8.00
7/1/2020 $10.00 7/1/2020
$11.00 $8.50
1/1/2022 $12.00 $9.25
1/1/2023 $13.00 $10.50
1/1/2024 $14.00 $12.00
1/1/2025 $15.00 $13.00

While it looks like six-years, it is, in fact, five. The first three increases occur within 367 days – one year for the planning purposes of employers.

Additionally, the legislation contains a tax credit, allegedly for small employers. However, it excludes many small employers. For example, the following are not eligible for the credit:

  • Any employer with more than 50 full-time equivalent employees in their entire operation – not by location. NOTE: The legislation does not define how many hours constitute full-time. That will be determined in rules therefore employers have no way of knowing how to calculate the potential credit.
  • Any employer who has more than one franchised store OR files taxes as part of a unitary group.
  • Any employer who pays more than the minimum wage at that time.
  • Any employer whose average wage is less in the current quarter vs. the quarter the year before. Therefore, if an employer is forced to lay-off or cut hours to afford the rapid rise to $15, she/he would not be eligible for the credit.

For Chicago employers, you will follow the city of Chicago’s minimum wage until January 1, 2024 when the state’s starting wage will be higher. Of course, this would change if the city increases their wage again. Proponents are already talking about wanting to increase Chicago’s wage to $17 or $20.

To make matters worse, as currently written, no employer is eligible because the bill contains an error. While the sponsor was informed of the error multiple times, he refused to repair the bill because he was concerned about sending it back to the Senate. It is widely anticipated a trailer bill will occur at a later date to repair.

The tip credit remains the same at 40%.

The training wage remains the same at $0.50 less per hour than the minimum wage in effect at that time through the first 90-days of employment.

Finally, penalties for wage theft are increased substantially. Civil damages are increased from damages to treble damages; damages increase from 2% of underpaid wages to 5%; an additional $1,500 must now be paid to the Department of Labor. These damages are on top of the existing 20% of damages that must be paid to the Department.

IRMA would like to the Senate and House Republicans who did such a great job of noting the way SB 1 discriminates against suburban and downstate employers, the economic advantages Chicago enjoys vis-a-vis those same regions, and the substantial additional impact taxpayers will bear due to the costs on local governments, park districts, K-12 schools, higher education, social services, etc. Specifically, IRMA thanks House Republican Leader Jim Durkin, Representatives Mark Batinick, C.D. Davidsmeyer, Tom Demmer, David McSweeney, former restauranteur Mike Murphy, Steve Reich, Grant Werhli, Keith Wheeler, and many more not only for their floor comments but leadership in committee over multiple hearings.

IRMA would also like to thank the four Democrats who voted “no” and one who voted ‘present’. They are Representatives Monica Bristow (D- Alton), Terra Costa-Howard (D-Lombard), Jerry Costello (D-Red Bud), and Mary Edly-Allen (D-Libertyville). Additionally, Representative Stephanie Kifowit (D-Aurora) voted ‘present’ expressing her support for an increase but opposition to the way it was done in SB 1.

Today is the bill filing deadline for both the House and Senate.  This deadline is arbitrary as the filing deadline for an individual bill may be extended and amendments can be continuously filed during the remainder of Session. As of this writing the following is a sample of the bills filed:

Paid Sick Leave MandateHB 2343 (Rep. Jehan Gordon-Booth, D-Chicago) creates the Healthy Workplace Act and requires employers to provide at least 5 paid sick leave days to all employees in Illinois.

Confidential Sales Tax Information CollectionHB 2947 (Rep. Mike Zalewski, D-Riverside) allows a third-party contingency fee auditor access to the sensitive sales tax information of local businesses. This initiative failed in the Senate two years ago.  It failed in the House last year after it came to light that Azavar, a private auditing firm, was illegally collecting businesses’ private sales tax information from municipalities.

Sharps Take-back MandateHB 3246 (Rep. Greg Harris, D-Chicago) requires retailers to install boxes to allow residents to put their used needle in. It requires an employee to receive training to handle and dispose of the needles. It also allows municipalities to require retailers within their jurisdiction to provide sharps take-back boxes.

Mileage TaxHB 2864 (Rep. Marcus Evans, D-Chicago) creates the per-mile road usage charge pilot program. The pilot programs charges a tax for every mile driven on Illinois roads.

Data Broker Registration ActHB 2872 (Rep. Celina Villanueva-D, Chicago) creates the Data Broker Registration Act. Requires a data broker to annually register with the Secretary of State. Defines data broker as a business or unit of a business, separately or together, that knowingly collects and sells or licenses to third parties the brokered personal information of a consumer with whom the business does not have a direct relationship.

Hiring MandateHB 3056 (Rep. Sonya Harper, D-Chicago) provides that if two employees are equally qualified for a position and one has an arrest record, the employer shall not take an adverse action against the employee with the arrest record.

App Privacy Protection ActHB 3051 (Rep. Carol Ammons, D-Champaign) creates the App Privacy Protection Act and requires an entity that owns, controls, or operates a web site, online service, or software application to identify in its customer agreements or applicable terms whether third parties collect electronic information directly from the digital devices of individuals in Illinois who use or visit its web site, online service, or software application. Requires the disclosure of the names of those third parties and the categories of information collected.

SNAP Wage MandateHB 3220 (Rep. Mike Halpin, D-Rock Island) requires an employer to pay an employee the difference between their wages and the amount the person receives from the Supplemental Nutrition Assistance Program (SNAP)

Personal Tobacco LicenseHB 3178 (Rep. Deanne Mazzochi, R-Westmont) raises the minimum age for the purchase, possession, and use of tobacco products, electronic cigarettes, and alternative nicotine products from 18 years of age to 21 years of age. It authorizes the Secretary of State to issue a smoking license to a person who: (1) is at least 18 years of age but under 21 years of age; (2) has completed the 8-hour online educational program regarding the dangers and consequences of smoking as verified by the Department of Public Health; and (3) has paid a $50 fee to the Secretary of State.

Restaurant Anti-Harassment Training MandateHB 3351 (Rep. Anne Williams, D-Chicago) creates the Restaurant Anti-Harassment Act and requires restaurants to have a sexual harassment training policy and provide training to all employees.

10 Cent Plastic Bag TaxHB 3335 (Rep. Anne Williams, D-Chicago) places a $.10 fee on all carryout bags–plastic, paper or compostable–used at a retailer by a consumer.

Plastic Straw BanHB 3379 (Rep. Michelle Mussman, D-Schaumburg) creates the Plastic Straw Ban Act and prohibits a bar, restaurant, or any business that sells food to the public from providing a customer a single-use plastic straw unless requested by the customer.

Female and Minority Board Mandates HB 3394 (Rep. Chris Welch, D-Chicago) requires no later than the close of the 2020 calendar year, a publicly held domestic or foreign corporation whose principal executive offices are located in Illinois shall have a minimum of one female director and one African American director on its board of directors.

IRMA Announces New Executive Vice President of Development

FOR IMMEDIATE RELEASE                                                                                                

February 1, 2019

CONTACT: Ryan McLaughlin, 312-969-0255,


SPRINGFIELD – The Illinois Retail Merchants Association (IRMA), which represents over 20,000 retail stores across the state of all sizes and types including chains and family-owned and operated stores as well as pharmacy, grocery, hardware and restaurants, announced today that Gary Lukovich has joined the association as the new Executive Vice President of Development.

Lukovich most recently served as the corporate vice president for Homeowners Choice insurance company where he orchestrated a company-wide plan to enter nine new state markets. With a background in health/life and property/casualty insurance, as well as financial and banking services, Lukovich has a had a long career of creating business growth through sales, marketing and staffing and he has managed multi-million dollar budgets and workforces with as many as 25,000 professionals.

In this new role, Lukovich will be responsible for driving membership growth and ensuring IRMA’s services reach the widest breadth of retailers in Illinois as the industry continues to expand and change.

“Gary’s wealth of experience in expanding sales operations as well as developing marketing and recruitment systems makes him excellent fit to drive membership and program operations at IRMA. As the leading organization representing retailers of all types and sizes across the state, we touch many different workers and are a driving force in state revenue. Gary brings a unique skill set to reach more retailers as the industry continues to evolve,” said Rob Karr, president & CEO, IRMA.


About The Illinois Retail Merchants Association (IRMA)

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

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This Week in Springfield – 101-03


February 8, 2019

This Week in Springfield, the Senate passed a $15 wage and the Senate Public Health Committee passed a Tobacco 21 measure.


Despite concerns by suburban and downstate legislators in particular over the impact on the state budget (over $1 billion) and the impact on suburban and downstate employers, the Senate passed a proposal to increase the Illinois starting wage to $15 over 5 years as contained in Senate Amendment #1 to Senate Bill 1 (Sen Kimberly Lightford, D- Westchester). The 39-18 vote was along strictly partisan lines and came only after Governor JB Pritzker spent 30-minutes in the Senate Democratic caucus imploring a united front for his first major policy initiative. This action comes despite two very reasonable alternatives put forward by IRMA under the belief that an increase is inevitable, everyone was genuine in their desire to turn the page on the last four-years and seek genuine compromise, and the two alternatives IRMA put forward were supported in those respective states by the same proponents who are pushing the $15 wage increase in Illinois.

IRMA first suggested following the Oregon model where a different wage would be paid in different parts of the state. For example, $15 would be paid in Chicago, a lower wage in the collar counties, and a yet lower wage downstate. The Oregon model makes the most sense for a state as economically and geographically diverse as Illinois in that no other location in Illinois enjoys the economic benefits of Chicago. Nowhere else has over 55 million tourists per year, nowhere else has millions commuting into the city center every day spending money, nowhere else has the concentration of business headquarters, and nowhere else has the concentration of wealth. However, several legislators and the Governor’s Office expressed reservations over voting for $15 for some parts of the state but not others.

As an alternative, IRMA put forward the New York model. New York increased the starting wage in New York City over 4 years. The starting wage in the two counties on Long Island and Westchester County were increased to $15 over 6 years, and the starting wage in the rest of New York over 10-12 years (increased by CPI until reaches 15). While less sensitive to the economic diversity of New York and Illinois, it is an apt example for Illinois. The city of Chicago began increasing its minimum wage in 2015. If SB 1 is enacted as is, employers in the city of Chicago will have been given 10 years to get to $15 per hour. Employers in the suburbs and downstate will only be given 5 years. It raises the question as to why suburban and downstate employers are not being given the same consideration as employers in the city of Chicago. For those who say ‘well, the city raised the wage on its own, the answer is proponents don’t get it both ways. They can’t oppose preemption and then not count the actions of the city of Chicago. Employers don’t get that luxury.

Claims that alternatives were never presented are simply false. These alternatives were provided to the Governor directly the evening of Tuesday, January 29th, the primary legislative sponsors and the proponents during a morning meeting on Thursday, January 31st, repeated during another meeting the morning of Tuesday, February 5th and shared with other legislators and legislative staff throughout the week. Clearly, given the facts noted above, there does not appear to be a genuine desire for what would otherwise be considered an easily achievable compromise.

The proponents claim that a tax credit inserted into the bill will help small business. In fact, the tax credit as proposed is inadequate to soften the size and pace of the proposed increase and applies to very few employers. The following would NOT receive the credit:

• Any employer with more than 50 full-time equivalent employees. The legislation does not state what constitutes ‘full-time” so it is impossible to accurately calculate. However, given the fact the proposal started with a firm cap at 50, we can expect a definition that keeps close to that number.

• If you are a franchisee and have more than one store OR file as part of a unitary group (e.g. you are a franchisee, run some other type of business and they file taxes together) you would not be eligible for the tax credit.

• If your average wages paid are less than the same quarter the year before, you are not eligible for the credit. For example, if you are forced to cut hours worked, lay off workers, or if workers are absent, your average wages could easily drop.

• Employers with 5 or fewer employees are eligible for a credit for a year longer than everyone else. While the proponents claim this applies to 48% of all employers, they don’t tell you that the vast majority of that 48% is comprised of employers where the only employee is the employer. According to the Illinois Department of Employment Security (IDES), in the City of Chicago, such businesses account for 6.6% of employers. According to the US Small Business Administration, 80% of all employers fall into this category. Therefore, 1.4% – 2.0% of employers in Illinois would qualify.

Clearly, the tax credit is nothing more than a talking point.

As passed by the Senate, SB 1 increases the starting wage as follows:

18 years and older                     Under 18 years of age*

YEAR              WAGE                      YEAR            WAGE
1/1/2020       $9.25                    1/1/2020        $8.00
7/1/2020       $10.00                  7/1/2020
1/1/2021       $11.00                                         $8.50
1/1/2022       $12.00                                         $9.25
1/1/2023       $13.00                                        $10.50
1/1/2024       $14.00                                        $12.00
1/1/2025       $15.00                                        $13.00

*If the employee who is under 18 years of age works more than 650 hours for the employer during a calendar year, then the employer must pay the full minimum wage regardless of the employee’s age.

While it looks like a six-year phase-in, it is really a five-year phase in because employers will experience a $2.75 per hour increase (33.3% increase) in the first 366-days. For an employer’s planning purposes, a year-and-one-day, is not two years. This phase-in is an average annual increase to an employer’s largest or second-largest line-item of over 16% per year for a total increase of 81.8% over 5 years.

The House Labor & Commerce Committee is scheduled to consider SB 1 on Wednesday, February 13th at 2:00 p.m. IRMA members should register their opposition by filing a slip at this link. Additionally, IRMA members are encouraged to continue to register their opposition per the action alerts IRMA has distributed.

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SB 21 (Sen. Julie Morrison, D-Deerfield) prohibits an Illinois licensed retailer from selling tobacco products to anyone below the age of 21, but removes the penalties for the purchase, possession, selling, or consumption of tobacco for the same individuals. It completely removes the specific prohibition of the possession of tobacco products by a minor. And it only prohibits a minor from selling tobacco products, as an employee, at a licensed retailer. In fact, the only thing SB 21penalizes a minor for is using a fraudulent identification.

As a result, since the Illinois statutes would no longer penalize a minor for any of the aforementioned, SB 21 makes it “legal” for a person under the age of 21 to: (1) possess tobacco, (2) consume tobacco, (3) sell tobacco, (4) buy tobacco from an unlicensed Illinois retailer or individual, or (5) buy tobacco from a licensed out-of-state retailer or online. As such, the bill protects unlicensed, unregulated, and, untaxed individuals selling tobacco to minors while prohibiting licensed Illinois retailers from selling tobacco products to anyone below the age of 21.

SB 21 passed the Senate Public Health Committee by a partisan vote of 8-4.

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The Illinois General Assembly has introduced nearly 4,000 bills to date. With the bill filing deadline of February 15th quickly approach, there will likely be a large number of bills filed next week. Here are a sample of bills that were filed this week:

Check out Bag TaxSB 1240 (Sen. Terry Link, D-Gurnee) creates the Checkout Bag Tax Act and imposes a tax of $0.07 on each checkout bag used by a customer at a retail establishment in the State. The proceeds from the tax shall be distributed as follows: (1) the retailer shall retain $0.02 per bag; (2) $0.02 per bag shall be distributed to the General Revenue Fund; and (3) $0.03 per bag shall be deposited into the Checkout Bag Tax Fund.

The $.03 from in the Checkout Bag Tax Fund is then distributed to municipalities to use for funding the collection of household hazardous waste such as needles, paint, batteries and other common items such as mattresses, plastic bags, auxiliary containers, etc. Municipalities that do not already have a plastic bag ban or tax would be prohibited from instituting a ban or Chicago, Oak Park, and Evanston would be able to keep their current ordinances but could not change them unless to make them consistent with the proposed state law.

Retail DiscountHB 2079 (Rep. Will Guzzardi, D-Chicago) and SB 1132 (Sen. Omar Aquino, D-Chicago) reduces the reimbursement that is provided to retailers for collecting sales taxes on behalf of the state. It caps the amount at $1,000 per retailer per year. Unknown to most people, retailers are responsible for interpreting, administering, collecting, and remitting the occupation and use taxes also known as the sales tax. In return for the expenses that they incur during this process, retailers are allowed to retain 1.75 percent of the sales tax they collect. This is known as the retail discount. This allowance serves as a partial reimbursement. If retailers were to be fully reimbursed for their costs, independent studies conclusively demonstrate the allowance would have to be nearly 4 percent. The Illinois Department of Revenue (IDOR) retains 2 percent of the monies they collect on behalf of local governments. Additionally, while retailers subsidize the state retail sales tax collection, retailers are paying between 1.5% and 3%, plus $.10 of the sales tax directly to the banks in credit card fees. If 50% of their sales are on credit cards, that means an amount equal to between ¾% and 1.32% is paid in credit card fees on the retailer’s entire universe of sales tax collections. Therefore, credit card fees alone erase all or most of any retailer’s partial reimbursement. While IRMA is not asking that this allowance be increased, we adamantly oppose any effort to reduce or eliminate the existing allowance.

Food AllergenHB 2123 (Rep. Jonathan Carroll, D-Northbrook) requires sesame to be labeled in any food product containing sesame. It is unclear whether the bill refers to packaged food or to prepared food. Food allergen labeling is governed by the federal Food Allergen Labeling and Consumer Protection Act (FALCPA). FALCPA keeps food allergen labeling consistent in all 50 states. As drafted, this legislation would require a different Illinois specific label for any food containing sesame sold in Illinois.

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This Week in Springfield – 101-02

February 1, 2019

This Week in Springfield the minimum wage debate began in earnest.


An effort to increase Illinois’s starting wage to $15 has gained early traction driven by the desire of Governor J.B. Pritzker to achieve passage sooner rather than later. TWIS readers will recall that the Governor made a $15 starting wage one of the cornerstones of his campaign.

Wednesday, during a subject matter hearing of the Senate Labor Committee, IRMA testified on the subject. It was noted that while IRMA is philosophically opposed to artificially imposed starting wages, we recognize that an increase is going to occur.

Proponents have noted that $15 starting wages in places like Seattle have not apparently led to significant job loss although research does point to lost hours particularly for low or unskilled workers. However, as even pro-wage increase researchers have noted, no one knows what the impact will be outside of urban centers like Seattle, New York City or Chicago and you cannot assume the experiences of a thriving city center will be the same experiences elsewhere as there are major economic differences. IRMA noted that the suburbs and downstate do not enjoy the concentration of economic dynamics that such urban centers enjoy. For example, Chicago benefits from robust tourism, a concentration of business headquarters, the daily influx of millions who spend money, and a concentration of wealth. No other location in Illinois even comes close to enjoying that combination of benefits.

IRMA also pointed to states like Oregon and New York that appeared to recognize such differences and took geographic-based approaches to increasing their starting wages.

In Oregon, the starting wages are higher in the Portland metro area, somewhat lower in their suburbs, and then even lower in the rest of the state. This is an approach that recognizes the substantial cost-of-living differences. It also recognizes the substantial differences that will occur between Illinois and every border state. With retail increasingly able to serve consumers regardless of where they are located, and 2/3rds of Illinois’ population within a 40-minute drive of a border, those disparities will have impact on employers.

New York increased the starting wage to $15 quickly in New York City, a bit more slowly in Long Island and Westchester County, and much more slowly in the rest of the state. In both cases, the increase to $15 started at a much higher rate in New York City. Similarly, Chicago will be at $13 July 1st while Cook County will be at $12. That is a significantly different starting point than the rest of Illinois which is currently at $8.25. A phase-in such as five years for the City of Chicago and Cook County, seven years for the collar counties and 10 years for the rest of the state is more realistic but will still be a large cost item for employers.

Even if the Illinois starting wages were increased from $8.25 to $15 over a 10-year period, the average annual increase would be just over 6% to the largest or single largest expense item of retail employers. That is why the tax credit currently proposed by the advocates to soften the blow on smaller employers is inadequate if policy makers insist on not taking an Oregon-like approach. First, the tax credit as currently proposed, only applies to employers with fewer than 50 employees at all locations. As IRMA noted, a single retail store can have more than 50 employees. Second, it treats franchisees as if they are owned by the franchisor. Franchisees are, in fact, small businesses so this inequality must be repaired. Third, the tax credit itself is not robust enough.

Additionally, the Illinois probationary/training wage allows employers to pay a trainee $0.50 less per hour than the current minimum wage. That was not very adequate at $8.25 but it is wholly inadequate at $15.00. The probationary/training wage needs to be in the neighborhood of $2.00 per hour less for the 90-day probationary/training period if employers are going to have any incentive to take the risk of hiring no-or-low-skilled employees.

While there are other issues, these are the primary issues under discussion. Additional considerations exist about impact on taxpayers. At $15, the State budget will be negatively impacted a few hundred million annually not to mention at least that kind of impact on local governments, higher education institutions, K-12 schools, park districts, etc.

IRMA will keep you posted as developments warrant.


New Year, New Laws | Top Retail Laws Going into Effect January 1

SB 2577, Main Street Fairness  

SB 2577 requires online retailers to collect sales taxes on purchases made in Illinois.  The bill was modeled after the South Dakota law that was upheld by the United States Supreme Court.  Specifically, SB 2577 provides that if a retailer or serviceman makes a sale to purchaser in Illinois from outside of Illinois, then that retailer or serviceman is considered to be “maintaining a place of business in this State” if (1) the cumulative gross receipts from sales of service to purchasers in Illinois are $150,000 or more; or (2) the retailer or serviceman enters into 200 or more separate transactions for sales of service to purchasers in Illinois.


PA 100-1003, Nursing Mother’s Act

PA 100-1003 (HB 1595) requires an employer to provide for reasonable break time during the first year after the child’s birth each time the employee needs to express milk. The break time may run concurrently with any break time already provided to the employee. An employer may not reduce an employee’s compensation for time used for the purpose of expressing milk or nursing a baby. An employer shall provide reasonable break time as needed by the employee unless to do so would create an undue hardship as defined by the Illinois Human Rights Act.


PA 100-1094, Employee Expenses

PA 100-1094 (SB 2999) requires an employer to reimburse an employee for all necessary expenditures or losses incurred by the employee directly related to services performed for the employer. “Necessary expenses” include all reasonable expenditures or losses including, but not limited to, uniforms, equipment, vehicle expenses, electronic devices such as cell phones, tablets, and computers, and any other expenditures or losses an employer requires an employee to incur in direct consequence of the discharge of employment duties. An employer is not liable under this Section unless the employer knew or had reason to know that the employee incurred the expenditure or loss.


PA 100-0954, Food Service Sanitation Managers Certification (FSSMC)

PA 100-0954 (HB 5011) grandfathers the Food Service Sanitation Manager Certificates (FSSMC) that were approved prior to last year’s passage of the legislation that removed the redundant state certification and fee on food retailers.  Last year, IRMA convinced lawmakers to remove the redundant state food certification and accompanying unnecessary fee on food retailers.  The Illinois Department of Public Health (IDPH) complied but has refused to acknowledge the expiration date of current FSSM certificates. This has required some employees to retake the federal tests before the expiration of the current 5 year certificates.  HB 5011 grandfathers those FSSM certificates approved before the change in the law.