April 13, 2018

This Week in Illinois 

Both the House and Senate were in town this week.  This week was the deadline week for legislation to pass out of their originating committees.  Oftentimes deadlines are extended on bills or are passed out of committees to satisfy the deadline, only to have the bill return to committee with an amendment.  Deadline week is not concrete, but rather a way to better manage the flow of legislation.  

Thanks to those who came out to the Chamber's inaugural Chamber Day on Wednesday!  Thanks to our sponsors, attendees, speakers who came to the event and the reception. The event was a great success and we look forward building off the event next year.  

We were able to catch up afterwards with two speakers to discuss healthcare and tax reform.  In addition, Governor Rauner's address to attendees.  Check them out below.

Yesterday, the Chamber President and CEO Todd Maisch joined Gov. Rauner in his signing of SB 1451, otherwise known as the "small cell bill." 

Small cells are lower-profile wireless signal alternatives to traditional cell towers that can be attached to existing structures. Their deployment will help lay the foundation required to support the technologies of the future, such as the next generation wireless systems known as 5G.

Now law, Illinois can create jobs and attract investment in 5G and faster wireless internet service for our residents and employers. The Governor's signature is crucial for Illinois to join the other states throughout the nation who have enacted similar legislation.   Full deployment of 5G wireless internet, along with "Internet of Things" and "Smart Cities" technologies that use data to help save taxpayer dollars, will generate enormous economic activity in Illinois. Based on methodology developed by Accenture Strategy, Illinois will enjoy nearly 100,000 jobs created and nearly $8.9 billion in investment over seven years with the approval of this law.  

Video of the signing ceremony can be found here

SB 2480 (Hastings) will have the effect of requiring all construction and maintenance work at privately owned petroleum refineries and petrochemical facilities within the state to be exclusively performed by members of certain trade unions. It requires a certain percentage of all workers to have successfully completed apprenticeship training. It requires advanced safety training regulated by the Illinois Environmental Protection Agency (IEPA). 

Contractors and facility owners take training & safety seriously. There is no data or examples indicating a lack of training or safety being performed. Typically, a worker that SB 2480 seeks to cover already receives about 40 hours per year of safety training. Understanding the hazardous nature of the work being performed, employers and site owners are diligent in their emphasis on safety and getting the job done properly either by their workforce or outside contractors. The required safety training would only be allowed to be delivered by IEPA or a community college which will cause access issues.

Construction is defined very broadly and not limited to hazardous work... "means all work at a stationary source involving laborers, workers or mechanics. "Construction" includes any maintenance, repair, assembly, or disassembly work performed on equipment whether owned, leased, or rented." Such a broad definition would include work such as plumbing repairs, updating employee locker rooms, etc. Work that is non-hazardous in nature. 

SB 2480 would send another strong signal that Illinois works against business and interferes with the private marketplace to the detriment of job retention and growth. The National Labor Relations Act (NLRA) prohibits states from regulating conduct that Congress reserved for the free play of economic forces. By requiring owners and operators of petroleum refining and petrochemical manufacturing to utilize certain apprentice training programs, SB 2480 discriminates against merit shop employers and union employers that are not affiliated with the union(s) providing such apprenticeship and training programs. 

SB 2480 requires the use of the "prevailing wage rate" for private work. This change sets a dangerous precedent as there is no state or local nexus of financial support to the work being performed. It creates an artificial wage rate that eliminates competitive market forces for companies affected by this legislation and will add to Illinois' reputation as a high cost state to do business in.

This bill passed out of the Senate Labor Committee 10-5-0.  It now heads to the Senate floor.  

A nationwide push to require original equipment manufacturers (OEM's) to make available detailed repair manuals to everyone has made its return to Illinois.  HB 4747 (D. Harris) would create the Digital Fair Repair Act and mandate open access to machine repair and diagnostic tools, or access to embedded software code to everyone; risking the release of proprietary information. This Act applies to a broad swath of digital equipment ranging from consumer products to tractors.  
Release of the information creates safety and environmental issues as millions of lines of code are critical to emissions and the safety of the equipment. For this reason, embedded software code is copyright protected and U.S. copyright law governs its access.  

Intended or unintended consequences of changing the code could result in: unsafe operation of products, violation of emission controls, voiding of warranties, disruption of machine capabilities and performance, less than optimal customer experience, and lack of transparency on changes during resale.

HB 4747 fails to make the appropriate distinction between (1) access to software encoded in machinery or devices and (2) access to diagnostic tools and repair information. Current diagnostic and repair manuals for nearly every product are available to the general public and repair shops. Confidential and proprietary software and coding should be protected.

Unfortunately , this legislation passed out of the House Consumer Protection Committee 3-2-0.  The sponsor agreed to bring the bill back to committee with additional language carving out other various industries.  The Chamber opposed this bill.  

This week, a proposal that seeks to address a federal issue, passed out of the House Cybersecurity Committee.  HB 4819 (Williams) creates the Broadband Procurement and Disclosure Act and states that the state may not award any contract to an Internet service provider that includes broadband service unless the contract provides specified terms concerning access to and impairment of Internet services. 

Further, the bill requires each Internet service provider to make available on its website a clear and conspicuous statement informing end users of the Internet service provider's network management practices and performance, including commercial terms offered to end users.  While the Chamber is neutral on the overall concept of net neutrality, we vastly oppose weaponizing the state's procurement code to address a federal issue.  It is also important to note that the FCC repeal of the Obama-era net neutrality rules specifically preempted state's from enacting their own enforcement.  

The bill passed out of committee by one vote and now heads to the floor for a full vote.  

The Illinois Chamber is pushing SB 3053 , sponsored by Sen. Bill Cunningham (D-Chicago) and Sen. Chris Nybo (R-Elmhurst), which would amend the state's biometric law. In 2008, Illinois enacted the Biometric Information Privacy Act (BIPA), a law that was designed to regulate the collection and storage of "biometric data." 
The use of biometric data has become increasingly prevalent among employers trying to solidify pay practices and maximize inventory control or facility security. BIPA went largely unnoticed after its enactment, until a series of lawsuits were brought in against private entities that allegedly collected and used biometric data in violation of BIPA.  With biometric technology becoming more commonplace in the workplace, BIPA has been used as a potentially lucrative new litigation mechanism for the trial bar.  
Dozens of employers have been caught off guard by the rash of class-action lawsuits recently filed in Illinois alleging violations of BIPA.  The suits target many industries, including restaurants, hospitality, grocery stores, gas stations, nursing homes, logistics and building management companies.  The surge in BIPA litigation results from employers' increased use of fingerprint scan technology, and the fact that BIPA is the only existing biometric privacy statute that creates a private right of action against employers for damages and attorneys' fees.  
Currently Illinois is one of only three state's that have a biometric statute. However, both Texas and Washington statutes limit the scope to commercial purposes only.  Ourproposal simply exempts employers from the Act for internal employment purposes (i.e. time keeping, human resources, fraud prevention, or security purposes.), as long as the employer is not selling or similarly profiting from the biometric identifiers.
Opponents of the bill are attempting to defeat our proposal because they have a monetary incentive to keep the status quo in place.  Various boutique law firms who have created a cottage industry on filling class action lawsuits on employers who have allegedly committed minor technical violations of the BIPA.   Until we are successful in amending the BIPA, it is important for employers to evaluate their HR and timekeeping purposes to ensure they are compliant with the BIPA.  

Business Regulation
House Amendment 4 to HB 4275 (Andrade) passed out of committee this week.  This bill amends the Physical Fitness Services Act by removing a provision that prohibits any contract for basic physical fitness services that requires payment of a total amount in excess of $2,500 per year. In addition, provides that the initial term of services to be rendered under a contract may not extend over one year (rather than 2 years).  The Chamber supports this bill.  

HB 5564  (Moeller) failed inHouse Judiciary-Civil, Civil Procedure Subcommittee.  The bill would require compensation to be determined by a jury trial before access is given to land in eminent domain cases for certain industries.  This bill is similar to a bill that passed last season and advanced in Subcommittee, but did not proceed in full Committee.  The Chamber opposed the bill.

SB 2213 (Biss) would require that Illinois environmental laws and regulations, as well as workplace safety laws, remain as strict or more stringent than federal laws in place on January 1, 2017.  We opposed the bill and the Senator committed to bringing the bill back with an amendment offered by the AG's office. 

SB 3174 (Koehler) would prohibit wells that utilize horizontal or directional extensions from a vertical bore hole from classifying as confidential.  We opposed the bill.  Currently, Illinois allows these wells to be classified as confidential for two years.  An amendment was added to the bill, drafted by IDNR, that further spells out the protections for proprietary information.  However, when the Hydraulic Fracturing Act was agreed to, small wells were left out of disclosures.  There is no need to reopen the bill past further interest in making it tougher for fracking to actually happen in Illinois, which it is not currently.  The bill is an initiative of People's Action, the Sierra Club, and the Illinois Environmental Council. Senator Koehler has committed to holding the bill on 2 nd  for further discussion.

HB 5101 (Evans) failed today in committee.  This bill would have effectively limit both gas and electric retail energy choice to suppliers serving customers through municipal aggregation programs. This would also limit businesses who use electricity choice. The Chamber opposed this legislation.

HB 68 (Lang) passed out of House Mental Health committee.  This bill amends the Illinois Insurance Code in relation to coverage for mental and emotional disorders. Expands certain coverage requirements to individual policies.  The Chamber opposed. 

HB 4146 (Fine) passed out of the House Health and Life Insurance Committee 9-5-0.  HB4146 prevents the modification of a health insurance plan's prescription drug formulary during a plan year if a drug has been previously approved for coverage, a prescriber continues to prescribe the drug and a patient continues to be an enrollee of a healthcare plan. The legislation blocks cost containment options that a health insurance plan or pharmacy benefits manager can currently utilize, such as removing a prescription drug from a formulary, moving a drug to a more restrictive tier or increasing cost-sharing arrangements. These changes typically occur when a similar, more cost-effective drug enters the marketplace.  The sponsor agreed to hold the bill and bring it back to committee for an amendment.  The Chamber's opposed.  

SB 3101 (Castro) passed out of Senate Environment Committee this week unanimously.  This bill amends the Environmental Protection Act. Contains provisions requiring the Environmental Protection Agency to create a State beneficiary mitigation plan in accordance with specified consent decrees. Provides that the Agency shall establish the Volkswagen Settlement Task Force. Given the absence of business-industry on the task force, the Chamber opposed.  

HB 4656 (Manley) failed in committee 8-5-0.  This bill would mandate insurance providers require coverage for hearing aides for all individuals over the age of 65.  The Chamber opposed this bill. 

HB 5261 (Bellock) passed out of committee this week.  This bill amends the Rivers, Lakes, and Streams Act and requires the Director of the Environmental Protection Agency to seek negotiations with each state that borders Lake Michigan to establish a notification policy under which the states will notify one another when permitting new sources of water pollution or increased levels of pollution into Lake Michigan.  The sponsor acknowledged there remains more work that needs to be done to the bill.  Chamber opposed this bill.  

HB 4508 (Sauer) passed favorably out of committee.  The bill extends the sunset 10 years (from 6/1/18 to 6/1/28), makes technical changes, and permits any size municipality, not just the small ones as the law currently stands, to receive fair market value when selling their water or wastewater assets.  The Chamber supports.  

Economic Development
SB 3285 (Sims) passed out of Senate Commerce and Economic Development today unanimously.  This bill Creates the Illinois Home Grown Business Opportunity Act. Provides that the Department of Commerce and Economic Opportunity shall develop an economic plan to assist businesses and municipalities located geographically close to bordering states.   The Chamber supported this measure and is working with Sen. Sims to further the discussion to revamp our states economic development tool box.  

HB 5727 (Walsh) failed in committee this week.  This bill allows that a municipality with a population under 1,000,000 and has approved an ordinance, resolution or vote can annex contiguous territory. Chamber is opposed. The sponsor did agree that much work remains to be done to the bill.  

Employment Law
HB 4572 (Guzzardi) amends the Illinois Human Rights Act. Provides that "employer" includes any person employing one (instead of 15) or more employees within Illinois during 20 or more calendar weeks within the calendar year of or preceding the alleged violation.  The Chamber opposed. 

SB 3229 (Harmon) passed favorably out of the Senate Judiciary Committee this week.  Amends the Revised Uniform Unclaimed Property Act. This is an initiative of several financial institution groups.  The Chamber's preferred amendment to the unclaimed property law is SB 2901 (Althoff), which was also posted in Senate Judiciary.  SB 2901 did not move today.  However, Sen. Harmon agreed to work with Sen. Althoff and the Illinois Chamber on a more comprehensive fix to the state's unclaimed property law that was hastily approved under the SB 9 tax increase last year.  

SB 3291 (Clayborne) passed favorably out of the Senate Executive Committee.  This bill amends the Illinois Aeronautics Act. Defines "unmanned aircraft systems". Provides that regulation of unmanned aircraft systems is an exclusive power and function of the State. Restricts home rule power. Chamber supports. 

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Illinois Chamber of Commerce

2017 Government Affairs Report | Tyler Diers, Editor