April 20, 2018

This Week in Illinois 

This week, the Illinois Chamber joined lawmakers from both sides of the aisle and a diverse group of statewide associations in supporting the effort to amend the state Constitution to allow for a more fair redistricting process.  

District boundaries are redrawn every 10 years to ensure that Congress and state legislatures are representative. An independent, transparent redistricting process that ensures communities are fully and fairly represented in the legislature would protect the integrity of the democratic process and restore citizens' faith that their votes--and voices--matter.

Unlike other states that gerrymander voters to discriminate against people of a certain race or party, here in Illinois, it's about protecting incumbents from competitive elections. The mapmakers draw the districts to be so heavily partisan that it's basically impossible for an incumbent to lose. They reward the officials that toe the party line with safe seats and in return, keep themselves in leadership positions they've held much too long.

In many places in Illinois, the primary election is much more competitive than the general; this is not normal. It happens because gerrymandering has created such a high number of safe seats. The most extreme candidates from both parties therefore win seats by fighting over the most fervent supporters, which fuels the growing partisan divide and results in gridlock.

More than 60 percent of state legislative general elections in 2016 were uncompetitive, meaning that incumbents faced little or no opposition. Why? Because the gerrymandered maps made those districts so partisan - favoring one party or another - that the other party would have absolutely no chance to compete.

When such a high number of districts that are uncompetitive and uncontested, there is no way to hold our elected officials accountable. Too many elected officials know they can safely coast to reelection without listening to their constituents or fighting for our votes. Instead, they focus on their own personal or partisan goals and ignore the needs of the people they're supposed to represent.

The Fair Maps Amendment is modeled after former-Rep. Jack Franks' 2016 proposal, HJRCA 58, which received 105 "YES" votes in the House. Additions to the amendment were made to strengthen transparency and public accountability language as well as explicitly protect the constitutional rights of communities of color.

HJRCA 43 (Spain) and SJRCA 26 (Morrison) would both: 
1. Remove politicians and sitting legislators from drawing their own districts 
2. Establish an independent redistricting commission that must be demographically, politically, and geographically representative of our state to draw our Congressional and General Assembly maps 
3. Protect the constitutional rights of communities of color to elect a representative of their choosing 
4. Add sunshine and transparency by requiring the release of all communications made by the Commission as well as any data used to create and propose any and all maps 
5. Give the public the opportunity to participate in the process by requiring at least 30 public hearings on the maps before a final vote is taken. Public will have the ability to comment on proposed maps and submit their own.

Amending the Illinois Constitution is not an easy task.  However, as the Illinois Chamber proved in 2016 with the Safe Roads Amendment, it can be done.  In order for the amendment to appear on the November ballot, the resolution must pass by May 6, 2018.  

After a lengthy debate yesterday, a bill opposed by the Illinois Chamber narrowly passed the Illinois House 61-49-0HB 4081  (Halpin) would place egregious restrictions on companies operating call centers or back office operations in Illinois.  Backed by organized labor, this bill would create the Call Center Worker and Consumer Protection Act and would require any employers with 50 or more employees that intends to relocate a call center from Illinois to another state or foreign country to notify the Illinois Treasurer at least 120 days prior to the relocation. 

Employers that do not notify the Treasurer would be subjected to a civil penalty of $10,000 for each day they are found in violation! Companies moving out of the state would also be blacklisted on the state Treasurer's website for public display. And it does't stop there. Any employer that appears on the blacklist would be ineligible for any direct or indirect state grants or loan for 5 years and would have to pay back any grant, loan, or tax benefit it previously received from the state back to the Treasurer. 

The Chamber is opposed to this bill for many reasons. One, this bill severely restricts Illinois' business competitiveness to companies looking to locate call centers in Illinois. Second, the definition of "call center" is broadly defined it could impact many unintended business operations. And lastly, this legislation undermines a businesses ability to locate a call center in outside areas to communicate with customers in a language other than English. Just to name a few. 

The bill now heads to the Senate, where the Chamber team will be actively working to oppose the measure. 

A proposal making its way through the Illinois House may end up costing employers.  HB 4146 (Fine) 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.

Under current practice, consumers are notified in writing when a formulary is changed, and are given the option to appeal the decision. The legislation does not prevent a healthcare plan from making drug formulary changes at the start of a new plan year.

The Food and Drug Administration painstakingly reviews new pharmaceuticals - if an effective and cheaper drug becomes available, we should not prohibit its utilization in favor of more expensive options. In addition, c onsumers are already protected under current practices. There are ample written notification procedures and appeals options if a consumer needs to continue with a specific drug. Changing formulary tiers helps incentivize generic drug utilization. The legislation would prevent that option, and also is silent on interchangeable biosimilars which are not generic drugs.

Business Regulation
SB 2522 (Stadelman) passed out of Senate Commerce & Economic Development this week 7-2. The Chamber opposed this legislation which seeks to limit fees on specific terms regarding the uses of a rental car

HB 4275 (Andrade) passed out of the House this week 84-25-1.  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 4900 (Guzzardi) is Rep. Guzzardi's generic drug price control bill.  The bill passed the House 65-38-1.  The Illinois Chamber of Commerce opposes government interference in prescription drug pricing. A state-by-state regulatory approach would be very disruptive to the marketplace and is not in the best interest of our healthcare system.

The House Transportation Subcommittee held a subject matter hearing on the proposed O'Hare expansion this week.  The Chamber engaged to ensure modernization and improvement move forward at O'Hare.  

The House Transportation: Regulation, Roads, and Bridges committee held a subject matter hearing on implementation of design build and other cost saving measures. Benjamin Brockschmidt of the Chamber testified in support of these measures with a focus on HB 5468, a Chamber initiative sponsored by Rep. McDermed that includes some of these measures.

Employment Law
SB 2863 (Raoul) passed the Senate this week 34-21-0.  This bill a mends the Employer's Liability Rates Article of the Illinois Insurance Code to regulate workers' compensation insurance rates. Includes employer safety and return to work programs, returns injuries to the shoulder part of the arm and hip part of the leg, provisions concerning repetitive and cumulative injuries, annual reports done by IWCC on self-insurance, a Workers' Compensation Premium Rates Task Force, an evidence-based drug formulary, and other changes. This bill is identical to HB 2525 which was vetoed last year by the Governor .  The Chamber opposes.  

SB 2480 (Hastings) passed out of Senate Labor this week on a partisan roll call vote and is on third reading in the Senate. The bill 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. Further, the bill requires the use of prevailing wage rate for private work. SB 2480 sends another strong signal that Illinois works against business and interferes with the private marketplace to the detriment of job retention and growth.  Chamber opposes.  

This week, the House passed HB 4237.  The bill is a work around to the $10,000 federal SALT deduction cap.  It creates an income tax credit in an amount equal to the contributions made by the taxpayer to the Illinois Excellence Fund during the taxable year.  The bill, (1) provides that the Fund shall be known as the Illinois Education Excellence Fund; (2) provides that the Illinois Education Excellence Fund may accept contributions for exclusively public education purposes; (3) provides that the tax credits for contributions to the Illinois Education Excellence Fund and the county fund for charitable purposes apply to individual taxpayers only; (4) provides that the State Treasurer shall provide a copy of the certification to the taxpayer and the Department of Revenue as soon as possible after the contribution is certified; (5) provides that the income tax credit applies for taxable years ending after December 31, 2017 and before January 1, 2026; and (6) provides that provisions amending the Counties Code apply for taxable years 2018 through 2025. 

The Senate passed SB 2577 (Castro) on Tuesday.  This bill amends the Use Tax Act and the Service Use Tax Act and 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 $100,000 or more; or (2) the retailer or serviceman enters into 200 or more separate transactions for sales of service to purchasers in Illinois. The bill provides that the amendatory Act may be referred to as the Marketplace Fairness Act. This legislation is identical to legislation being considered by the U.S. Supreme Court today in South Dakota v. Wayfair Inc.,, Inc., and Newegg Inc.  The Chamber is neutral. 

Also on Tuesday, SB 2604, and initiative of the Illinois Chamber of Commerce Tax Institute passed the Senate unanimously.  The bill amends the Uniform Penalty and Interest Act and provides that the penalty for failure to pay the tax shown due or required to be shown due on a return shall be 15% (instead of 20%) of any amount that is paid after the date the Department of Revenue has initiated an audit or investigation of the taxpayer. The legislation provides that the penalty shall be abated if the taxpayer paid to the Department at least 95% of the total tax liability (including any additional liability resulting from the audit or investigation) prior to the initiation of the audit or investigation.

HR 765 (Harris) passed out of the House International Trade and Commerce Committee unanimously.  This resolution urges the President of the United States and the Congress to take caution in modifying the North American Free Trade Agreement.  The Chamber supports both NAFTA and the resolution.  

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If you have questions about the Government Affairs Report, contact Tyler Diers at Do not reply to this email. 

Illinois Chamber of Commerce

2017 Government Affairs Report | Tyler Diers, Editor