This Week in Springfield
The Illinois General Assembly wrapped up its regular scheduled spring session last night without any cloture on the state’s ongoing budget impasse.
Instead of passing meaningful, pro-growth reforms, the Illinois General Assembly went the opposite direction spending their final hours of session approving an increase in the state’s minimum wage (SB 81). A measure that will incrementally increase the state’s minimum wage to $15 per hour by 2022 for those over the age of 18 and to $12 per hour by 2022 for those under the age of 18.
Senate and House Democrats abandoned bi-partisan negotiations on reforming our state’s workers’ compensation system in favor of “fake” workers’ compensation reform. As amended, HB 2525 would not lower workers’ compensation premiums, but potentially add costs to the system. The legislation’s main features will create higher costs for employers due to more government regulation and litigation. The provisions in the legislation intended to reduce costs will not offset the increased, negative impact that the other provisions will cause.
To put it simply, with this bill there will be more government, more friction and more litigation that all boils down to higher workers’ compensation costs.
Additionally, House Bill 2622 uses $10 million of employer and insurer tax dollars to capitalize the creation of a state established, mutual insurance company. This $10 million is diverting one third of the funds currently used to run the workers’ compensation system in Illinois. Consequently, claims by injured workers likely will be delayed. Employer costs for temporary benefits likely will increase. With over 300 insurers already competing in the Illinois workers’ compensation market, HB 2622 is not about competition but a political diversion that will have serious negative consequences for injured workers and Illinois employers.
The bills will now be sent to the governor for final consideration where we will be urging the governor to veto both measures.
However, not all was bad. The Chamber was instrumental in defeating two pieces of legislation that were being pushed by special interest groups who make a living off filing lawsuits against businesses large and small. The “Right to Know” bill would have required businesses large and small to keep track of the names of every third party that receives personal information about an Illinois consumer. Along with that list of names, businesses would have to keep a log of all the categories of personal information involved – potentially costing Illinois businesses thousands of dollars to reconstruct IT systems. The bill was called for a vote in the House this week but fell five votes short of passage in the Illinois House.
The Chamber also contributed to the defeat of another anti-consumer, anti-technology bill, otherwise known as the “geo-location bill.” This bill would have required mobile applications to post complex and confusing prompts before consumers can use mobile applications. The bill would have put businesses of all sizes at risk of frivolous lawsuits by unfairly voiding terms of service agreements for simply forgetting to include a minor piece of information in a service contract. The Chamber testified in opposition to the bill on the same day it failed by one vote in the House Cybersecurity Committee.
Both the “Right to Know” bills and the “geo-location” bill were more about setting up a regulatory system that drives litigation over innovation and putting plaintiff attorney’s above tech investment. The defeat of these bills will send a strong message to tech investment and business that Illinois remains open for innovation.
The General Assembly approved meaningful procurement reform that will create a more friendly environment for private industry to enter into state contracts with the state. Two key provisions for employers included the best value program and allowing cooperative purchasing agreements. The Chamber supports SB 8. It now heads to the governor’s desk.
Both chambers also approved the Chamber-supported 2017 Illinois Telecom Modernization bill that updated Illinois law to attract more investment in high-speed internet networks that power consumers’ lives. If approved by the governor, this law will ensure customers can connect to modern networks, strengthen and expand wired and wireless high-speed internet networks, help create jobs, and improve 9-1-1 services throughout the state.
Adding, no significant tax omnibus passed favorably out of both chambers this session. However, HB 160 (Zalewski) did pass the House this week 63-50-0. However, Representative Currie filed a motion for reconsideration and the bill did not move to the Senate. As amended by amendments 2 and 3, HB 160 retains the clawback provisions that would require the repayment of any state tax credits exemptions, grants and loans if a recipient business ever moves all or part of its business operations and the jobs created by its business out-of-state. The corporate income tax rate cut was eliminated by amendment 3, as were provisions in the EDGE credit dealing with data centers. The Chamber is opposed to the bill as amended.
In addition, the Chamber-opposed “investment management tax” (SB 1719), did pass favorably out of the House Revenue Committee yesterday but was never called for a vote on the floor. The bill would add a 20% gross-receipts tax on investment management services. We are hearing this tax may be included in an overall tax omnibus bill in the House. The Chamber is unalterably opposed to such an idea.
Both the House and Senate will be in continuous session for the foregoing future. As a reminder, the state’s fiscal year ends June 30th. Any votes on legislation during a continuous session require a 3/5 majority to pass.
ODDS AND ENDS: LEGISLATION
SB 647 (Collins/Turner) is headed to the governor’s desk. This bill would continue the collection of court fees (up to $500) associated with filing a foreclosure lawsuit in Illinois. It also extends a judicial sale fee (up to $300) on foreclosed homes. The Chamber is opposed to the bill.
HB 2462 (Rep. Moeller/Sen. Biss) would prohibit an employer from: (i) screening job applicants based on their wage or salary history, (ii) requiring that an applicant’s prior wages satisfy minimum or maximum criteria, and (iii) requesting or requiring as a condition of being interviewed or as a condition of continuing to be considered for an offer of employment that an applicant disclose prior wages or salary. Prohibits an employer from seeking the salary, including benefits or other compensation or salary history, of a job applicant from any current or former employer.
In addition, the very concerning changes being made by HB 2462 are the undermining of employer defenses along with the expansion of civil penalties, including punitive damages and injunctive relief. The question we ask is this legislation really about limiting what employers can ask of a job applicant or is the bill all about increasing litigation opportunities and judicial awards against employers? The Senate approved the legislation on a 35-18-1 vote. The legislation now goes to the Governor who has yet to signal his intentions on this measure.
HB 2771 (C. Mitchell) did not pass both houses this session. This bill would have mandated 5 paid sick days for employees statewide. The Chamber opposed this measure.
HB 302 (Martwick-Collins) passed the House on concurrence 65-47. The bill as amended provides that an insurer shall initially perform a comparison of certain policies, contracts, and accounts in force on or after January 1, 2012 by using the full Death Master File (rather than all certain policies, contracts, and accounts). Provides that an insurer required to perform a comparison of certain policies, contracts, and accounts in force on or after January 1, 2000 shall perform a comparison of certain policies, contracts, and accounts in force between January 1, 2000 and December 31, 2016 on or before December 31, 2018 by using the full Death Master File.
SB 484 (Cullerton/Currie) passed the Senate this week 37-11-9. This bill would freeze property tax levies in the state for two years. The bill remains in the House.
HB 3004 (Riley-Sandoval) passed the Senate today 39-11. The bill provides that the RTA may issue, sell, and deliver additional working cash bonds. The Chamber supports the bill.
SB 1720 (Biss/Hernandez) prohibits any person or business who violates the Illinois Wage Payment and Collection Act, the Minimum Wage Law, the Illinois Worker Adjustment and Retraining Notification Act, the Employee Classification Act, the Day and Temporary Labor Services Act, the Fair Labor Standards Act of 1938, or any comparable state statute or regulation of any state which governs the payment of wages to do business with the State or any State agency or enter into a subcontract that is subject to the Code for a period of 5 years. The bill also ups the penalty for persons or businesses who do not comply with the act from a misdemeanor to a felony. The Chamber is opposed to the bill.
House Amendment No. 1 was offered to HB 1438 (Stratton) The bill as amended would require that Illinois laws and regulations remain as strict as federal laws that were in place on January 1, 2017. Further, it would allow for a public interest enforcement process that allows a member of the public to sue if state standards fall below federal standards that were in place on January 1, 2017. In essence, this is an attempt to prevent any rollback of federal environmental regulations by the Trump Administration from happening in Illinois. The Chamber opposed the bill and worked against it. Ultimately, the sponsor did not have enough votes in Committee and the bill was not called.
SB 1417 (Althoff-McAsey), the e-waste bill, passed House Environment this week. The Chamber testified in opposition to the bill. Negotiations remain ongoing for a trailer bill that could be heard in the expected June session.
HJR 3 (Thapedi/Harris) passed the Senate this week. This resolution would create the Trade Policy Task Force t o study and analyze important issues relative to the growth of international trade from and to Illinois. The Chamber has a seat on the task force and is in favor of the resolution.