Good morning Illinois Chamber Technology Council members and welcome to our first substantive newsletter of the Council. I am excited to keep you informed on policy issues that are facing the industry both in Illinois and Washington D.C., provide you with intelligence from the statehouse, share pertinent articles of interest, and invite you to special events (both general Chamber and Tech Council events).
As we grow this group, I welcome the opportunity for you to use this newsletter as an example for the type of work this council produces. If there is someone in your organization that would like to be put on this distribution list, please let me know. If there is someone in your network that you think ought to belong to the Council, please let me know. If you have any thoughts on legislation, suggestions on the newsletter, or if I can be of any help to your organization, I welcome your input.
SPRINGFIELD
The 2018 Spring legislative session is under way. Last week marked the deadline in which legislation was required to be introduced. Given that the dust has finally settled (for the time being), we now have a general idea on some of the issues we will face this year.
There is a lot of volatility in an election year as gubernatorial and attorney general politics will likely shape policy debates. Below I have highlighted a few pieces of legislation that I wanted to point out that may be of interest to the group that are up in committee this week. I am currently tracking 57 bills in our technology portfolio. For a complete list of those bills, click
here. For a complete list of general Chamber tracked bills, click
here. Otherwise, here is pertinent information I'd like to share with you:
Data Breach
SB 3007 (Raould) would amend the state's data breach law (otherwise known as PIPA) to require a data collector to report data breaches of more than 100 Illinois residents to the Attorney General (AG)
within 14 days. The AG must then report annually to the General Assembly of specified information concerning data breaches on an annual basis.
This is contrary to current law which requires a data collector to only notify the resident "in the most expedient time possible and without unreasonable delay." Current law does not require notice to the AG or a report to the General Assembly (currently only a state agency is required to report to AG if a breach occurs).
From the Chamber's review, we are opposed to this proposal. Most states do not appear to require notice to the AG, but almost all of those that do allow such notice to be at the same time, or after, notification of individuals. California and Iowa require AG notice if a breach affects 500 customers, New Mexico and Hawaii require notice if a breach affects 1,000. So, clearly we would be an outlier here.
We are not necessarily opposed to the idea of notifying the AG, however it should be at the same time as notice is given to a resident of a breach. 14 days is simply not enough time to determine the nature, scope, and details of a breach.
I have communicated with Sen. Raoul (who is also running for Office of the Attorney General) on his proposal and he showed willingness to accept feedback and proposed language. It is unknown whether or not the bill will actually be called this week.
This bill is
scheduled
for Senate Judiciary Committee on Tuesday.
Also related to data breaches, HB 4174 (B. Wheeler) and HB 4367 (B. Wheeler), which would both change the time in which a data collector is required to notify a resident of a data breach from "the most expedient time possible and without unreasonable delay," to 48 hours and 14 days. I have met with the sponsor and she has indicated to me she does not plan to move these bills.
"Digital Fair (Right to) Repair"
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 cell phones 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.
For those reasons, the Chamber is opposed to HB 4747. It is worth noting this bill was introduced last year but failed to advanced out of committee. We are working with other organizations in town to defeat the bill.
Biometrics
In today's world, the use of biometrics (i.e. retina, facial scan, voice recognition, finger prints, etc.) are becoming a commonplace. You may not know that Illinois is one of three states (Texas and Washington) that has a biometric law on its books. Although Illinois was a pioneer by being the first state to enact a biometric statute, the law is as old as the iPhone 3G. As we look to replace passwords and as employers look to increase their use of biometrics to solidify pay practices expect the state biometric law (aka BIPA) to receive several modifications.
First up is a redraft that was introduced last year, but never advanced out of committee. HB 4330 (Yingling) would amend the Biometric Information Privacy Act to prohibit a private entity from requiring a person or customer's biometric information as a condition for the provision of goods or services.
There are many products and services that require biometric information as part of how they work. This law would outlaw many of the functions and features that we enjoy using daily. For example, a clothes shopping service that collects body measurements to show you virtually how outfits might look on you. Or a service for athletes that analyzes your running motion to diagnose problems with your form. Or an exercise band that collects information about your body movements so you can keep track of your daily activity.
The underlying law that this bill would amend lends itself to class action abuse, as Illinois businesses have already seen. The bill provides high statutory damages (740 ILCS 14/20) even for unintentional technical violations of the statute where there was no actual harm to any consumer. If passed, we expect that this provision would immediately lead to frivolous litigation filed against Illinois businesses. And for that the Chamber is opposed.
On another note, the Chamber is proposing an amendment to the BIPA.
HB 5103 (Thapedi) and
SB 3053 (Cunningham) would both amend the biometric statute to provide employers the ability to use biometric information for internal employment purposes, so long as the employer is not using the information for commercial purposes.
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
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.
Joint hearing on Crypto currencies & blockchain Tuesday
This Tuesday the House Revenue & Finance Committee and the House Cybersecurity, Data Analytics and IT Committee are holding a joint subject matter hearing (in other words no bills will be voted on) to discuss crypto currencies and blockchain technology. The posting is rather vague and I am still trying to find out what the hearing will cover.
However, last year the General Assembly approved the creation of the Blockchain and Distributed Ledger Task Force. The group met periodically and did issue a report on their findings. Highlights from the report include creating a secure platform that enables immutable and irrevocable digital identities; having the ability to provide universal access to financial services and government benefits; and fueling greater economic participation that will spur a stronger economy.
According to Bloomberg Law, Illinois is one of seven states to have launched initiatives to study government uses of the technology.
The report can be found here.
It is also worth mentioning that there are two pieces of legislation that would expand the technology within the state. For example,
HB 5335 (Zalewski) would allow the Department of Revenue to accept cryptocurrency for any tax imposed by the state. The state would then convert such payments to US dollars at the prevailing rate within 24 hours of payment and would credit the taxpayer's account with the converted dollar amount.
And then there's
HB 5553 (Zalewski), which would create the Blockchain Technology Act, allowing for the permitted uses of blockchain technology in transactions and proceedings.
Tuesday's hearing will likely cover all of the above.
Governor Rauner proposes funding for U of I research center
Earlier this month, Gov. Rauner highlighted in his state of the budget address his efforts to recommend a capital grant to the University of Illinois for its Illionis Innovation Network and Discovery Partners Institute. The Governor's plan would provide $500 million in state funding to match private donations for a new statewide research enterprise led by the U of I.
If approved, the state funding will go toward design and construction of the downtown Chicago innovation center, which will be home to world-class research and the hub of a new initiative known as the Illinois Innovation Network (IIN) that would spread its impact across the state. State funding, through the Department of Commerce and Economic Opportunity, would match private donations that also are being sought to build and operate the new innovation institute.
If you missed the October 2017 announcement of the Illinois Innovation Network and Discovery Partners Institute,
click here.
Call Center Restrictions Hurt Tech Prospects
A proposal that is very problematic for the business community and may shine a cloud over our state for future technical support jobs is posted for committee this week.
HB 4081 (Halpin) would create the Call Center Worker and Consumer Protection Act. The proposed bill would require an employer with 50 or more employees that intends to relocate a call center or substantial operations from Illinois to another state or foreign country to notify the Illinois Treasurer at least 120 days prior to the relocation.
An employer that does not notify the Treasurer is subject to a civil penalty of $10,000 for each day they are found in violation. The Treasurer is also required to annually compile a blacklist of all employers that relocate their call center operations to another state or foreign country and post the list on the Treasurer's website.
In addition, any employer that appears on the blacklist would be ineligible for any direct or indirect state grants or loan for 5 years. Furthermore, blacklisted employers would have to remit the unamortized value of any grant, loan, tax benefit, or any other governmental support it previously received from the state back to the Treasurer. Lastly, the bill would require any state agency to ensure that all state-business-related call center and customer service work be performed by state contractors entirely within the state.
State Rep. pushes for mandated computer sci education
With a growing demand for computer literacy in many of today's jobs, state Rep. Welch, has introduced a measure (
HB 4291) that would require high school students to receive computer science education before being eligible for graduation. If enacted, Illinois' students entering their freshman year of high school during the 2019-2020 school year would be the first class of students to have to meet the technology requirement for graduation. The bill is posted for House Elementary & Secondary Education Committee for Wednesday. The Chamber has no position but is interested in feedback from members on these type of education mandates.
Marketplace Fairness Act proposal introduced
HB 2577 (Castro) has been introduced and is posted for Senate Revenue Committee on Wednesday. This proposal would amend the state's Use Tax Act and the Service Use Tax Act to provide that if a retailer or serviceman makes a sale 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.
This bill is a result of the pending United States Supreme Court case (
South Dakota v. Wayfair, Inc.) dealing with the nature of sales tax for purchases made over the Internet. The petitioner, the state of South Dakota, seeks the Court to abrogate the 1992 decision of
Quill Corp. v. North Dakota, which held that by the Dormant Commerce Clause states may not collect sales tax from purchases made by their residents through electronic or online retailers unless those retailers have a physical presence within their state. The Court has agreed to hear the case, with oral arguments scheduled for April 2018 and a decision expected by the end of the current term in June 2018.
It is not expected that this bill will move this week but if the
Quill case gets overturned, expect this bill to be used as a placeholder.
Chamber initiative brings state government into 21st Century
Illinois is lacking in transparency in comparison to many states throughout the union that archive webcasts (audio or video) of floor proceedings or archive webcasts (audio or video) of committee hearings.
According to NCSL, 43 states + DC, Puerto Rico, and the Virgin Islands archive webcasts of floor proceedings. In addition, 35 states + DC, Puerto Rico and the Virgin Islands archive webcasts of some or all committee hearings. The Chamber's proposal,
HB 4903 (B. Wheeler) would require the state legislature to archive either in audio or video both House and Senate floor proceedings and committee hearings to be available on ILGA.gov.
