|The House and Senate took their last breaks before the scheduled adjournment. Previous to the break, lawmakers pushed to get their bills out of their respective chambers to meet the 3rd reading deadline. Because of the flurry of activity, this summary of legislative action will be anything but short. Lawmakers return Tues., May 3.
Let’s start with an “old” proposal that is back on the table.
House Speaker Michael Madigan revived the so-called Millionaire’s Tax for another vote. The Illinois Chamber has held that this kind of tax hike would hit small businesses that are not filing taxes under the corporate rate. We believe that increasing taxes on the very employers who make up the backbone of jobs in Illinois would hurt the state’s economy. HJRCA 26 (Madigan), would have added a 3 percent income tax surcharge on individuals that make greater than $1 million for the taxable year, with revenues going to schools. The measure failed for the second time in a year 68-47-0.
HJRCA 8 (Mitchell) is also a graduated income tax constitutional amendment. This proposal was also introduced last year and never made it out of Rules Committee, but was recently assigned to the House Revenue committee and to the Income tax subcommittee of the Revenue committee. The Chamber is strongly opposed.
Meanwhile, the House Executive Committee passed HB 689 (Lang) after hearing from Chamber President and CEO Todd Maisch testified against HB 689 about the effect on small businesses. HB 689 would statutorily provide new personal income tax rates in the event a constitutional amendment is ratified by the voters. HJRCA 59 (Mitchell) and SJRCA 1 (Harmon) are the two proposed constitutional amendments that would trigger the rates provided in HB 689, but they weren’t brought up for a vote. The Chamber opposes all three. For more information, see the statement or this video on HB 689. Chamber Tax Institute Executive Director Keith Staats testified against HJRC 59 in the House Executive Committee.
Chamber Initiatives Move Ahead
We are pleased to report that several Illinois Chamber of Commerce initiatives passed out of their respective chambers in April with bi-partisan support.
HJRCA 36 (Phleps), or the Lockbox Amendment, would protect the dollars collected for transportation infrastructure from being diverted for any purpose other than transportation, passed out of the House 98-4-2 and now moves to the Senate where Sen. Haine has agreed to sponsor the resolution. If this passes by the May 8 deadline for constitutional amendment passage, it will go on the November ballot. The Chamber’s statement on passage is here.
Another Chamber initiative, SB 2921 (Hutchinson) passed the Senate unanimously April 21. This legislation amends the Uniform Penalty and Interest Act to provide for automatic abatement of the underpayment penalty when a taxpayer has been determined upon audit to have paid at least 95% of the taxes due. The bill also caps the underpayment penalty at 15% and eliminates the provisions in the current law that impose a 20% penalty on any underpayments paid after commencement of an audit unless the audit results are agreed to by the taxpayer. The bill now heads to the House where Rep. Zalewski is the sponsor.
SB 2506 (Righter), a Chamber initiative that aims at streamlining employment discrimination investigations passed out of Senate unanimously. It would require the Dept. of Human Rights to close any investigation if the change is based on a litigated discrimination violation that is identical to a charge filed with a local government unit or the federal EEOC and protection is proved by the other governmental body The bill now heads to the House where Rep. Andersson is the sponsor.
The Tax Institute’s initiative SB 2921 (Hutchinson) passed the Senate Revenue Committee 11-0-0. This legislation amends the Uniform Penalty and Interest Act to provide for automatic abatement of the underpayment penalty when a taxpayer has been determined upon audit to have paid at least 95% of the taxes due. The bill also caps the underpayment penalty at 15% and eliminates the provisions in the current law that impose a 20% penalty on any underpayments paid after commencement of an audit unless the audit results are agreed to by the taxpayer. The Dept. of Revenue requested an amendment to the legislation.
Other Constitutional Amendments
Besides the Lockbox Amendment and those trying to change the personal income tax, a couple of other attempts to change the state constitution are important to note. One, which the Illinois Chamber supports, HJRCA 58-Franks, would change the redistricting process. The other would eliminate the Illinois Lt. Governor’s Office ( SJRCA29 T.Cullerton).
Successful Negotiation on Employee Leave
Several paid employee leave bills have been working their way through the Capitol halls, trying to affect anything from bone marrow and organ donor leave to child bereavement leave. As the leading voice for business in Illinois, the Chamber tends to oppose any paid leave mandates on employers. However, we are pleased to announce that many of these bills have either been amended to address the business community’s opposition or the sponsor has decided not to call their bill.
Two bills, however, remain in play:
HB 3297 (C. Mitchell) creates the Employee Paid Health Care Time Act to require any employer employing one or more individual to provide paid health care time, accruing at a rate of one hour for every 22 hours worked for an employer with 50 or more employees and at a rate of one hour for every 40 hours worked for an employer with fewer than 50 employees. This bill has recently been re-referred to House Rules Committee, which tends to mean the bill is dead. However, as a precautionary measure the Chamber will continue to work with allies of the business community to prevent its passage.
SB 2147 (Hutchinson) creates the Health Workplace Act and requires employers to provide specified paid sick days to employees. Employees who work in Illinois who are absent from work for a reason set forth in the Act shall be entitled to earn 7 paid sick days in a 12-month period. (Accrue at the rate of one hour of paid sick time for every 30 hours worked). The deadline in which this bill may pass favorably out of the Senate has been extended to May 13. With the extension, the Chamber has reason to believe that the bill will be called for a vote.
HB 4501 (Yingling) passed favorably out of the House today 93-19-0. This legislation would extend the DuPage ACT initiative to all counties in the state. This bill would allow for county government to dissolve units of local government in which the county board chairman appoints the members. As a member of the Transform Illinois Coalition, the Chamber slipped in support of this measure.
Illinois Chamber President and CEO Todd Maisch testified last month in opposition to SB 2600 (Delgado) and SB 2531 (Lightford). Both pieces of legislation are similar in that both would require any economic development council that receives public money to have two members of labor and two minorities represented on the council. The sponsors of both pieces of legislation agreed to work with the Chamber on an agreement. In addition, the testimony sparked a discussion about holding a future subject matter hearing on EDGE credits. Both bills passed out of committee.
An amendment to SB 517 establishes a new Targeted Tax Credit Act. This new act was adopted by the Senate State Government and Veterans Affairs Committee. It is similar to the existing EDGE credit and would establish an EDGE-like credit for border counties with unemployment rates in excess of the state average, as well as census tracts with unemployment rates in excess of the state average.
HB 6020 (Yingling) amends the Freedom of Information Act. Provides that a member-based organization is subject to FOIA on receipts or expenditures documents if it is a public body that has a membership that includes one or more government taxing body, lobbies on behalf of its governmental members, and receives a majority of its funding from governmental members. We believe this will negatively impact local economic development organizations.
HB 1290 (Currie) creates the Wage Lien Act to allow an employee to have a lien on all property of the employer, including the after-acquired property, for the full amount of any wages, penalties, and interest owed to the employee. Wages include labor and services rendered by an employee and vacation pay, sick leave pay, parental leave pay, or severance pay pursuant to an employment contract or agreement. This bill is on House 2nd Reading. The Chamber is opposed to this measure.
HB 4036 (Lilly) would require all employers to provide a total of 12 workweeks of leave for during any 12-month period. This bill is now in the Senate with Sen. Hutchinson as the Senate sponsor. The Chamber remains opposed to the legislation and believes there will be a hearing in May in the Senate.
HB 4999(Guzzardi) passed the House. It creates the Right to Privacy in the Workplace Act and would make it unlawful for an employer or prospective employer to request or require an employee or applicant to authenticate or access a personal online account in the presence of the employer; to request or require that an employee or applicant invite the employer to join a group affiliated with any personal online account of the employee or applicant; or join an online account established by the employer. The Chamber worked closely with the sponsor to include adopted language to the bill and was neutral on its passage.
SB 2964 (Harmon) passed the Senate 38-17-0. Under the Prevailing Wage Act, SB 2964 would require the prevailing wage rate to be less than the rate that prevails for work of a similar character on public works in the locality in which the work is performed under collective bargaining agreements or understandings between employers or employer associations and bona fide labor organizations (includes public works performed without a written contract), provided that the agreements or understandings cover at least 30 percent of the workers. If bargaining agreements do not exist in the locality, the Department of Labor must establish the prevailing wage to be paid under the act. In addition, the Department will be required to publish prevailing wages schedules on its website. The bill now heads to the House with Rep. Hoffman as the sponsor. The Chamber remains opposed.
SB 2145 (Lightford) amends the Minimum Wage Law to increase the minimum wage from $8.25 to $9 beginning July 1, 2016 and increases it by $0.50 each July 1st until July 1, 2019 when the minimum wage will be $11. It inserts a provision that the State has the exclusive power and function of establishing a minimum wage, preempting home rule with the exception of the City Council of the City of Chicago and amends the Illinois Income Tax Act to create a credit against the withholding tax liability of employers with fewer than 50 employees, calculated based on the increase in the minimum wage. The Chamber opposes this legislation and has reason to believe it will be called for a vote next week.
HB 5604 (Conroy) passed the House unanimously April 22. This bill would make coverage a mandatory offer rather than an outright mandate, so employers and individuals have the option to purchase this kind of coverage (subject to premium adjustments). This coverage will be for treatment of pediatric autoimmune neuropsychiatric disorders associated with streptococcal infections and pediatric acute-onset neuropsychiatric syndrome, including the use of intravenous immunoglobulin therapy. The Chamber was neutral on the measure.
SB 2355 (Holmes) passed the Senate unanimously April 22. This bill provides that any contract entered into or renewed which allows the rights and obligations of the contract to be assigned or leased to another insurer, must provide notification of that change to the contracting dentist within 30 days. With the adopted language, the Chamber was neutral on its passage.
HB 5621 (Ives) provides that neither an insurer nor a provider may terminate an agreed-upon contract earlier than the end date of the original contract terms. An insurer may not remove a contracted provider from its provider network until the end date of the original contract terms. Sponsor committed to hold on 2nd Reading to work out an amendment. The Chamber is opposed.
HB 4554 (Flowers) passed out of House Insurance Committee 21-1-0 with the sponsor stating that another amendment would be filed to remove opposition. This bill would mandate coverage for all drugs that are approved for marketing by the FDA and that are recommended by the federal Public Health Service or the CDC for pre-exposure prophylaxis and related pre-exposure prophylaxis services, including, but not limited to, HIV and sexually transmitted infection screening, treatment for sexually transmitted infections, medical monitoring, assorted labs, and counseling to reduce the likelihood of HIV infection among individuals who are not infected with HIV but who are at high risk of HIV infection. The Chamber remains opposed.
HB 5621 (Ives), as amended, passed the House Insurance Committee 22-0-0 with an agreement to hold on 2nd reading to work out an amendment. This bill provides that neither an insurer nor a provider may terminate an agreed-upon contract earlier than the end date of the original contract terms. The Chamber opposes this bill.
HB 5671 (Harris) is an initiative of the Illinois Health and Hospital Association and passed out of the House Human Services Committee on Tuesday 14-0-0. The sponsor agreed to hold the bill on 2nd reading until an agreement has been made. The bill authorizes HFS to create a Performance Metrics tool requiring MCOs to report on their operational performance as well as implement procedures to ensure that provider directory listings are updated.
HR 1092 (Flowers) urges the reinstatement of the Glass-Steagall Act. That act prohibited commercial banks from joining the investment business. The Chamber believes this will not move, however remains opposed.
SB 2865 (Collins) creates the Small Business Lending Act which requires on-line lenders to small businesses to obtain a license from DFPR. Requires certain disclosures and reporting requirements and essentially applies a payday loan database to an installment loan product. The Chamber believes this will restrict the ability of small business owners to use certain types of lenders and dry up capital. The bill passed the Senate Financial Institutions Committee 8-0-2. The Chamber has reason to believe that the bill will not be moving this session, however will remain opposed and monitor its action.
Tax Law Changes
HB 5527 (Manley) passed the House unanimously and heads to the Senate. This is a Dept. of Revenue initiative which creates the Tax Preparer Oversight Act. This bill provides that, for taxable years beginning on or after Jan. 1, 2017, the department shall require any income tax return preparer to include his or her federal PTIN on any tax return prepared by the income tax return preparer and filed under the Illinois Income Tax Act or any claim for refund of tax imposed by the Illinois Income Tax Act. The department is required to develop a program using the PTIN as an oversight mechanism to assess returns, to identify high error rates, patterns of suspected fraud, and unsubstantiated basis for tax positions by income tax return preparers.
SB 2148 (Hutchinson), was moved from the Senate Revenue committee to the Senate Executive committee. This legislation amends the Illinois Income Tax Act to decouple from the federal Domestic Production Activities Deduction, it would eliminate for foreign and domestic dividend subtractions, and eliminate the “non-combination rule” for unitary businesses that apportion income under differing statutory apportionment formulas. The Chamber strongly opposes.
Amendment 1 to SB 2367 (Stadelman) was posted in Senate Revenue Committee but was not considered for a vote. This bill would amend the Property Tax Code to modify the assessment procedures for certain “big box” stores defined as “limited market or special purpose property.” The Chamber is opposed to this measure, however will be meeting with the sponsor to negotiate with other stakeholders next week.
SB 2933 (Hastings) this bill seeks to require the Illinois Department of Revenue to disclose sales tax information of businesses located within municipalities directly to independent third-parties hired by such municipalities. This would include third-parties hired on a contingent fee basis to challenge tax allocation decisions made by IDOR.
Tobacco Minimum Age Increase
There is a movement in the Illinois General Assembly to increase the minimum age requirement in the state to purchase tobacco products from 18 to 21. SB 3011 (Mulroe) passed Senate Public Health Committee 6-3-0 and has since been added to the Senate calendar of 3rd Reading. The Chamber is opposed to this proposal and expects the bill to be called for a vote next week.
Energy and Environment
SB 2417 (Althoff) passed unanimously out of the Senate Environment and Conservation Committee on Thursday unanimously with the understanding that the bill would be held on 2nd for further discussions. Amendment 1 would allow recycling collectors to charge a fee of up to $25 for each CED containing a cathode-ray tube that they accept.
Senate Floor Amendment 1 to SB 551 (Bush) was filed this week. This amendment would impose nuclear storage impact fees. The Chamber’s Energy Council is monitoring the proposed measure.
A Chamber-supported bill that would define steel slag products passed out of the Senate Environment Committee 10-0-0. SB 2810 (Haine) bill provides that “waste” does not include steel slag products.
SB 2920 (Hutchinson) passed out of Senate Environment Committee 9-0-1. This bill would require the Commission on Environmental Justice to review any state implementation plan to comply with the U.S. EPA Clean Power Plant and provide comments to the IEPA before submittal to the U.S. EPA for approval. The Chamber opposes this legislation.
HJR 125 (Durkin) is the binding resolution that is required for IDOT to move forward on potential managed lanes and potential public-private partnership (P3) for I-55 from I-355 to roughly the I-90/I-94 interchange. The resolution was heard during a subject matter hearing and the committee has asked for subject matter hearings to continue. The Chamber remains in support of the resolution.
HB 3755 (Hoffman) would require rail carriers to operate with a two-man crew. This bill passed out of the House Transportation: Regulation, Roads and Bridges committee 12-8-0 and now heads to the House floor. The Chamber is opposed to this legislation.
Committee Amendment 1 to HB 5526 (Smiddy) was filed this week. The as introduced would require any person selling meat in Illinois to package the meat with a label indicating the country in which the meat was produced. Committee Amendment 1 would change the requirement from “shall label” to “may label.” The Chamber believes this is a WHO issue and remains opposed.
SB 3267 (J.Cullerton) and SB 3279 (Steans) are similar bills that would both create the Illinois Road Improvement and Driver Enhancement Act. These bills would require each owner or lessee of a motor vehicle that is required to register in the State to pay a distance-based road user fee for metered use of the public roads in Illinois by a motor vehicle. Both of these bills are scheduled for Senate Executive Committee hearing Wednesday, April 13 at 1:30.
HB 5759 (Hoffman) would require contractors and subcontractors to comply with Responsible Bidder requirements outlined in the Illinois Procurement Code to qualify for public works projects at the local level. The Chamber remains opposed and has since received word that the sponsor does not plan on calling the bill.
Lawmakers approved and Gov. Bruce Rauner signed SB 2059, which is a $600 million stop-gap measure to keep state universities, community colleges, and grant programs, such as the Monetary Award Program (MAP), from closing. The passage of this bill came as Chicago State University warned it would be closing its doors if an agreement was not made by May 1.
There is plenty of speculation that this agreement is a sign that the cold relationship in budget talks is thawing. As we wrap up the tenth month of operations without a state budget, this is a welcome sign.