GOVERNMENT AFFAIRS
------------Report
May 28th, 2021

This Week in Illinois
Session Update
On Monday afternoon, the House and Senate both returned to Springfield. Floor action has once again significantly increased this past week with many bills and resolutions passing out of both chambers in the closing days of session. The Senate and House remain in session today. Both chambers continued to conduct committee hearings through the virtual platform at ilga.gov.

The Senate and House are both scheduled to remain in session all weekend with business intended for conclusion on Monday the 31st. With many necessary tasks still incomplete, it is expected to be an exceptionally busy weekend. The legislature is still expected to tackle an energy package, remapping of both legislative and supreme court districts, and the budget.

Monday, May 31st is the constitutionally-mandated end of session. If the legislature remains in Springfield beyond May 31st, all legislation will require a three-fifths majority for passage. The Chamber will keep you posted on any updates to the session calendar.

Data Center Incentives Are Threatened
Last week, the data center cleanup bill, SB 2182 was drastically changed in the House in the form of a hostile amendment introduced by Representative Walker. SB 2182 was intended as a cleanup to the data center tax incentives passed in 2019. SB 2182 had previously passed the Senate unanimously.

The Illinois Chamber now opposes a bill that began as our initiative as the bill in its current form no longer is a benefit to the tech industry. The Chamber's data center clean up legislation as amended by House committee amendment 1 remains on 3rd reading in the House. The amendment, which was adopted in the House Revenue Committee, keeps the industry-supported four fixes but also added the requirement of a labor peace agreement (LPA). 

The amendment provides that within 180 days after the effective date of this amendatory Act of the 120nd General Assembly, all new and existing data centers seeking a certificate of exemption under this Section shall require the contractor to enter into a labor peace agreement with any union representing workers who operate and maintain a critical system or equipment used or maintained by the data center.  

The amendment, which would be detrimental to the data center industry, is a power play by a local union. The Chamber is disappointed that the House Sponsor of SB 2182, Representative Mark Walker has acquiesced in this attempt. On Wednesday, Representative Walker filed a second amendment to SB 2182 that delays the effective date of the legislation to January 1, 2022. Delaying the effective date does nothing to lessen the adverse impact of the bill.  

If, as expected, SB 2182 passes through the House, the Chamber will continue efforts to block this legislation as amended when the bill goes back to the Senate for concurrence.  

In the last week, the Chicago news media has provided impressive coverage on this issue. Illinois Chamber Vice President of Government Affairs Clark Kaericher spoke with Greg Hinz of Crain’s for an article that appeared in the paper earlier this week and helped shine a light on the risk to this important economic development tool. 

You can read the Crain's article here.
 
Also, this morning the Chicago Tribune wrote a fantastic editorial on the bill. You can read the Tribune article here.

Crain's published a second article on the data center legislation earlier today. Significantly, Crain's revealed that, if successfully implemented with data centers, labor peace agreements may be incorporated into other state incentives like the EDGE tax credit program. Read the second Crain's article here.

"Good Corporate Citizen" Bill Shelled in the Senate
Despite the real threat to data centers, this final week of session has also yielded some positive developments concerning state administrative oversight of business credits and incentives. On Thursday, HB 1839, the so-called "Good Corporate Citizen" bill was shelled in the Senate. Meaning, all of the bill's provisions were removed so that the bill number could be used as a vehicle for another undisclosed legislative priority.

HB 1839 contained the following language: The Department may require a business organization to agree to certain terms that ensure the business, including its related members, is a good corporate citizen as a condition for receiving development assistance. A business that cannot truthfully agree to any required terms shall be ineligible for the development assistance. Terms include: the business is not to have not been the subject f any criminal charges within 5 years prior to the application for development assistance or during the term of a development assistance agreement; there has been no charges, complaints, or other actions having the effect of initiating judicial or administrative proceedings brought by the State of Illinois or any governmental body within the State of Illinois, including the federal government, with respect to the business or its officers or a corporate parent or affiliate that relates to alleged fraud or activity that poses a substantial threat or persistent nuisance to public health, safety, or welfare; the business and any corporate parent or affiliate are not delinquent on the payment of any taxes to the State of Illinois or the United States; and the business and any corporate parent or affiliate  operating within Illinois will comply with the requirements of all applicable laws governing the project.

The EDGE tax credit and the data center sales tax exemption and income tax exemption programs are two examples of the programs that would be affected by this proposal.

The Chamber’s President & CEO Todd Maisch and the Chamber’s Tax Institute Executive Director Keith Staats opposition to this proposal in committee helped to lead to its failure. While this does not guarantee that the language of bill is dead this session, it does make it far less likely a Good Corporate Citizen statute will be enshrined into law at this time.

The Chamber opposed this legislation as we believe it grants the Department of Commerce & Economic Opportunity (DCEO) outsized regulatory control over business operations and incentives and would allow unaccountable bureaucrats to make regulatory decisions without appeal. We also believe the bill lacked a concrete definition of a “good corporate citizen” which could erroneously threaten assistance for Illinois businesses. The Chamber opposed this bill at its filing and continue to oppose it today.

Good and Bad News: Today Governor Pritzker Signs Two Major Pieces of Legislation
Today, Governor Pritzker signed two major bills into law. Both of these bills are detailed below.

First, the good news:

SB 2183, Transportation Network Providers Act was signed into law today. This bill passed out of both the House and Senate and was sent to the Governor in the last week. This bill extends the sunset of the the Transportation Network Providers Act to January 1, 2023. The Chamber strongly supports this legislation and applauds Governor Pritzker for his work today.

And now, the bad news:

SB 72, Prejudgment Interest was also signed into law. This bill passed out of both chambers at the end of March. This bill, which the Chamber opposes, does the following:
  • Provides for pre-judgment interest in personal injury and wrongful death cases
  • Interest shall begin to accrue at 6% rate when the case is filed (HB 3360 interest began at notice of the injury. Prior versions were at 9 and 7 percent)
  • Interest does not apply to punitive damages, sanctions, statutory attorney’s fees and statutory costs
  • If the judgment is greater than the amount of the highest written settlement offer made by the defendant, interest shall only apply to the difference between the amount of judgment and the settlement offer
  • Prejudgment interest capped at 5 years (no cap in previous versions of the bill)

The Illinois Chamber sent a veto request within 24 hours of passage to the Governor for SB 72. House Bill 3360, a prior prejudgment interest bill, was exceptionally egregious, but the improvements of Senate Bill 72 from the original still represent a black eye on our state’s judicial system. Read the Chamber's full veto request letter for SB 72 here.

Governor Pritzker previously vetoed HB3360, which amongst other things, established prejudgment interest at 9 percent. HB3360 was passed during the lame duck session in January. The Chamber opposed HB3360 and requested its veto as well.

SJRCA 11, Anti-Right-to-Work Proposed Constitutional Amendment Passes Both Houses
Senate Joint Resolution Constitutional Amendment 11 passed out of both the House and Senate this week. The Chamber strongly opposes this proposed amendment to the constitution and believe it will have a negative impact on the business climate of the state for generations. On Tuesday, SJRCA 11 was heard in the House Labor and Commerce Committee. IL Chamber President & CEO Todd Maisch testified in opposition.

Following the passage of the bill the Chamber released a statement in response. Provided below is a portion of the statement.

"The Illinois Chamber is adamantly opposed to SJRCA 11 and concerned that this proposed legislation will deal yet another blow to Illinois’ crumbling reputation as a place to do business. In fact, it is not too much to say that this legislation will force many Illinois employers and national firms to question whether Illinois’ business climate is redeemable at all.

At issue is an amendment to the constitution that will shut down even reasonable debate over laws that would guarantee Illinois’ workers the ability to decide for themselves whether to join a union to secure a job. The amendment specifically bars laws or ordinances that interfere with agreements that require union membership “as a condition of employment." 

This legislation must be viewed in the context of Illinois’ overall, anti-competitive situation. The Illinois Constitution already enshrines lavish public pension benefits that taxpayers are powerless to adjust. Our Supreme Court has inexplicably extended this benefit to include health care at near-zero cost to public employees as taxpayers are held hostage. At the same time, pro-employment provisions such as fair taxation of employers’ hard work is under a constant barrage from the Governor and majority party.

The Chamber looks forward to bringing these arguments and others in a robust debate to Illinois voters on yet another proposal from a distrusted state government. As with the Progressive Income Tax Amendment, this proposal will hamstring the Illinois economy for generations to come."

Energy Proposal Released 
This morning, a new omnibus energy package was released to the public. The proposal comes in at 667 pages and is clearly still a work in progress. Missing from this language is anything on ratemaking or nuclear subsidies. Read the full proposal here. Energy Council Executive Director Alec Messina is closely following this bill and any other energy developments that may arise after an additional working group meeting tonight, or through the rest of this final weekend. Messina can be reached at amessina@ilchamber.org. 

Illinois Chamber Participates in US Chamber "Common Grounds" Series
On Thursday, the US Chamber of Commerce hosted another episode of their monthly "Common Grounds" series. This series brings together two lawmakers from each party for a bipartisan conversation on a pressing national issue. This month's episode featured Illinois Congressman Adam Kinzinger (R) and California Congressman Scott Peters (D) for a discussion on energy and climate policy.

Concerning energy, one thing that Representative Kinzinger spoke of was the importance of nuclear infrastructure despite outdated hesitancy on the subject from both sides of the political aisle at the federal level.

During the episode, Illinois Chamber President & CEO Todd Maisch highlighted the issue of funding mechanisms for critical infrastructure projects. Investment in infrastructure isn't just roads and bridges, but it is also waterways, air and rail. Maisch acknowledged the recent infrastructure proposal by President Biden, but questioned how it would all be paid for. The Chamber believes that new funding mechanisms have to be considered.

Representative Kinzinger responded to Maisch by agreeing that a long-term funding solution has to be crafted. He said that public-private partnerships are common around the world, and should be considered in the US. Tolls on certain highways were also a consideration. Kinzinger did note that consumers should rethink the gas tax and how they pay less today for the same use of American infrastructure than they did in 1995. To combat the decline in gas tax revenue, the Congressman suggested an inflationary mechanism on the gas tax and possible registration fees or a "per mile" tax exclusively on electric vehicles.

The Illinois Chamber , a cosponsor of the event, had previously participated in the first episode of Common Grounds featuring Illinois Congressman Rodney Davis (R) and a discussion on Infrastructure. The full episode on climate and energy policy can be found here.

Legislation to Watch:

HB 53, AI Interviews passed out of the Senate by a vote of 43-11-0 and has now passed both chambers. This bill provides that employers that rely solely upon artificial intelligence to determine whether an applicant will qualify for an in-person interview must gather and report certain demographic information to the Department of Commerce and Economic Opportunity. Requires the Department to analyze the data and report to the Governor and General Assembly whether the data discloses a racial bias in the use of artificial intelligence.

HB 117, Secure Choice Savings Program passed out of the Senate by a vote of 42-15-0 and has now passed both chambers. This bill Provides that the Act applies to employers with at least 5 employees, rather than at least one employee. (Current law applies to employers with fewer than 25 employees.) Provides that a small employer is an employer that employed less than 5 employees during any quarter of the previous calendar year, rather than less than 25 employees at any one time throughout the previous calendar year. As a product of negotiations the Chamber is neutral on this bill.

HB 118, Wage Underpayment Penalties passed out of the Senate by a vote of 40-15-0 and has now passed both chambers. This bill Provides that an employee is entitled to recover damages of 5% (rather than 2%) of the amount of any underpayments in wages for each month following the date of payment during which such underpayments remain unpaid. The Chamber opposes this legislation.

HB 270, Pedestrian/Bicycle Ways passed out of the Senate by a vote of 56-1-0. This bill provides that, in or within a municipality with a population of over 1,000 people, the Department of Transportation shall establish and solely fund bicycle and pedestrian ways in conjunction with the construction, reconstruction, or other change of any State transportation facility. Adds an exemption in cases in which the municipality passes a resolution stating that a bicycle or pedestrian way does not fit within its development plan. Provides that if programmed funds identified as supplemental funding for the Illinois Transportation Enhancement Program are not expended for 5 years, the Department has the option to use those funds to pay the cost of bicycle and pedestrian ways in roadway projects.

HB 399, High Speed Rail Commission passed out of the Senate by a vote of 53-4-0 and is now placed on the House calendar for concurrence. This bill Creates the High-Speed Railway Commission Act. Prescribes the membership of the Commission. Provides that the Commission shall create a statewide plan for a high-speed rail line and feeder network connecting St. Louis, Missouri and Chicago, Illinois that includes current existing Amtrak and Metra services, connects the cities of Rockford, Moline, Peoria, and Decatur, and uses inter-city bus service to coordinate with the rail line. Provides that the Commission shall conduct a ridership study and shall make findings and recommendations concerning a governance structure, the frequency of service, and implementation of the plan. Provides that the Commission shall report to the General Assembly and the Governor no later than December 31 of each year. 

HB 711, Prior Authorization passed out of the Senate by a vote of 57-0-0 and has now passed both chambers. This bill, as amended does the following: in the Prior Authorization Reform Act, deletes a Section concerning obligations with respect to prior authorization concerning emergency health care services, and makes changes in provisions governing applicability; definitions; disclosure and review of prior authorization requirements; obligations with respect to prior authorizations; personnel qualified to make adverse determinations of a prior authorization request; adverse determinations; review of appeals; denials; length of prior authorization approval; continuity of care; effect of failure to comply with the Act; and administration and enforcement. Makes further changes in the Illinois Insurance Code in a Section concerning obligations under the Managed Care Reform and Patient Rights Act. Deletes changes made to the Managed Care Reform and Patient Rights Act in a Section concerning emergency services prior to stabilization. Read the full engrossed bill here.

HB 1711, Pet Shops passed out of the Senate Agriculture Committee by a vote of 12-1-0 and is now on the calendar for 3rd reading. This bill provides that a pet shop operator may offer for sale a dog or cat only if the dog or cat is obtained from an animal control facility or animal shelter. Provides that an animal control facility or animal shelter that supplies dogs or cats to pet shop operators to be offered for sale shall not be a dog breeder or a cat breeder or obtain dogs or cats from a dog breeder, a cat breeder, a person who resells dogs or cats from a breeder, or a person who sells dogs or cats at auction in exchange for payment or compensation. Provides that "offer for sale" means to sell, exchange for consideration, offer for adoption, advertise for the sale of, barter, auction, give away, or otherwise dispose of animals (rather than to display, sell, exchange for consideration, offer for adoption, advertise for the sale of, barter, auction, give away, or otherwise dispose of animals). Provides that provisions concerning the prohibition of dogs and cats sold by pet shops shall not prohibit a pet shop operator from providing space to an animal control facility or animal shelter to showcase dogs or cats owned by these entities for the purpose of adoption. The Chamber opposes this bill.

HB 1779, Biomarker Testing passed out of the Senate by a vote of 58-0-0 and has now passed both chambers. This bill provides that a group or individual policy of accident and health insurance or managed care plan amended, delivered, issued, or renewed on or after January 1, 2022 shall include coverage for biomarker testing. Provides that biomarker testing shall be covered and conducted in an efficient manner to provide the most complete range of results to the patient's health care provider without requiring multiple biopsies, biospecimen samples, or other delays or disruptions in patient care. Provides that biomarker testing must be covered for the purposes of diagnosis, treatment, appropriate management, or ongoing monitoring of an enrollee's disease or condition when the test is supported by medical and scientific evidence. Provides that when coverage of biomarker testing for the purpose of diagnosis, treatment, or ongoing monitoring of any medical condition is restricted for use by health insurers, nonprofit health service plans, or health maintenance organizations, the patient and prescribing practitioner shall have access to a clear, readily accessible, and convenient processes to request an exception, and the process shall be made readily accessible on the insurer's website.

HB 1839, Good Corporate Citizen was shelled in the Senate Executive Committee. The Chamber was prepared to testify in opposition to the bill. While this bill no longer contains "good corporate citizen" language we will continue to watch for these provisions in other legislation in this final week of session.

HB 3523, IEMA Cyberattack passed out of the Senate Executive Committee by a vote of 11-4-0. This bill amends the Illinois Emergency Management Agency Act. Provides that "disaster" includes cyber incidents. Defines "cyber incident".

HB 3712, Car Sharing Program passed out of the Senate by a vote of 58-0-0 and has now passed both chambers. This bill, as amended, provides that a car-sharing program shall assume liability of a shared-vehicle owner for bodily injury or property damage to third parties or uninsured and underinsured motorist or personal injury protection losses during the car-sharing period in an amount stated in the car-sharing agreement, which amount may not be less than 4 times the minimum amounts required under the Illinois Vehicle Code (instead of those amounts set forth in the Illinois Vehicle Code). Provides that a car-sharing program shall ensure that, during each car-sharing period, the shared-vehicle owner and the shared-vehicle driver are insured under a motor vehicle liability insurance policy that provides insurance coverage in amounts that, for the shared-vehicle driver, are equal to 2 times the minimum amounts set forth in the Illinois Vehicle Code (instead of in amounts no less than the minimum amounts set forth in the Illinois Vehicle Code).

SB 117, Treasurer Infrastructure Development passed out of the House by a vote of 116-0-0 and has now passed both chambers. This bill creates the Infrastructure Development Act. Provides that the State Treasurer shall segregate a portion of the Treasurer's State investment portfolio in the Infrastructure Development Account, an account that shall be maintained separately and apart from other moneys invested by the State Treasurer. Allows the State Treasurer to make investments concerning the Infrastructure Development Account. Provides for Infrastructure Development Account-Recipient Funds created by Illinois infrastructure development firms in which the State Treasurer places money. Provides further requirements concerning Infrastructure Development Account-Recipient Funds. Provides for the adoption rules. Provides that the Infrastructure Development Fund is created as a special fund in the State treasury, which may receive a portion of earnings from the Infrastructure Development Account and may be used by the State Treasurer to pay expenses related to the Act. 

SB 632, Restore Illinois Commission passed out of the House by a vote of 71-45-0 and has now passed both chambers. This bill reenacts the Restore Illinois Collaborative Commission within the Department of Commerce and Economic Opportunity to monitor actions taken by the Office of the Governor with regard to the Restore Illinois plan and to keep members of the General Assembly informed of those actions and any need for further legislative action. Repeals provisions on January 1, 2023. 

SB 672, Covenant Not To Compete passed out of the House Labor Committee by a vote of 24-0-0. This bill, as amended, provides that a covenant not to compete shall not be valid or enforceable unless the employee's actual or expected annualized rate of earnings exceeds $75,000 per year on the effective date of the amendatory Act, $80,000 per year beginning on January 1, 2027, $85,000 per year beginning on January 1, 2032, or $90,000 per year beginning on January 1, 2037 (rather than no employer shall enter into a covenant not to compete with any low-wage employee of the employer). Provides that a covenant not to solicit shall not be valid or enforceable unless the employee's actual or expected annualized rate of earnings exceeds $45,000 per year and increasing in steps to $52,500 per year in 2037. Provides that a covenant not to compete is void and illegal for any employee who an employer terminates or furloughs or lays off as the result of business circumstances or governmental orders related to the COVID-19 pandemic, or under circumstances that are similar to the COVID-19 pandemic, unless enforcement of the covenant not to compete includes compensation equivalent to the employee's base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement. Provides that a covenant not to compete is void and illegal for individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Educational Labor Relations Act. Establishes exclusions for management professional personnel engaged in the construction industry. Provides a procedure for enforcement by the Attorney General. Contains provisions concerning the enforceability of a covenant not to compete or a covenant not to solicit; notice requirements for employers under a covenant not to compete or a covenant not to solicit; remedies for employees who prevail against an employer's civil action to enforce a covenant not to compete or a covenant not to solicit; and certain factors a court may consider when determining whether to reform a covenant not to compete or a covenant not to solicit. T

SB 1767, Prevailing Wage Public Search passed out of the House by a vote of 116-0-0 and has now passed both chambers. This bill provides that beginning January 1, 2022, the Department of Labor shall make accessible to the public on its website by the 16th day of each month following the month the work was performed the following information from certified payrolls submitted under this Act: each worker's classification or classifications, skill level, such as apprentice or journeyman, gross wages paid in each pay period, number of hours worked each day, starting and ending times of work each day, hourly wage rate, hourly overtime wage rate, and hourly fringe benefit rate. Provides that the database shall be searchable by contractor name, project name, county in which the work is performed, and contracting public body. 

SB 1770, Wetlands/Cairo Port passed out of the House State Government Administration Committee by a vote of 7-0-0. This bill amends the Interagency Wetland Policy Act of 1989. Provides that notwithstanding any other provision of this Act, this Act does not apply to certain construction activities or property, provided that such facilities or property are located within 5 miles of the confluence of the Ohio River and the Mississippi River. The Chamber supports this bill.

SB 1846, Child Beverages passed out of the House by a vote of 86-28-0. This bill provides that, notwithstanding any other provision of law, a restaurant shall, by default, include a specified type of water, milk, milk alternative, or juice with a children's meal sold by the restaurant. Provides that a restaurant may include another beverage with a children's meal upon request. Provides that, during any inspection of a restaurant by a health officer or health inspector of a local health department, the health officer or health inspector shall inspect the restaurant to determine whether it complies with these provisions. Provides that restaurants that violate the provisions are subject to a warning and specified civil penalties. Allows the Department of Public Health to adopt any rules it deems necessary for the implementation, administration, and enforcement.

SB 2279 HFA 1, Taxpayer Audit amendment passed out of the House Revenue Committee. Part of this bill amends various tax Acts to provide that upon filing a claim for a credit or for a refund, if the statute of limitations will expire less than 6 months after the date a taxpayer files the claim for credit or refund, that will trigger an automatic 12-month extension of the statute of limitations for assessing additional tax due. The Chamber opposes this provision within the bill that provides the Department of Revenue an additional year to conduct an audit. We believe this is unnecessary. We believe the Department of Revenue already has sufficient time to conduct audits. The Chamber opposed the original version of the bill, and maintain our opposition, but through negotiation were able to reduce the amount of time from 12 months to 6 months before the statue of limitations expires for when an audit extension is triggered.

SB 2424, Railroads passed out of the House by a vote of 112-0-0. This bill amends the Railroad Supplier Diversity Act. Adds the National Railroad Passenger Corporation (doing business as Amtrak) to the list of entities that may report to the Illinois Commerce Commission under the Act.

SB 2563, Emissions passed out of the House by a vote of 116-0-0 and has now passed both chambers. As amended, this bill requires the Department of Transportation to include in its diesel powered vehicle emission inspection report the number of inspections conducted at a brick-and-mortar official testing station and the number of inspections conducted by an official portable emissions testing company. Removes language allowing a permittee to issue certificates of safety. Allows a permittee to conduct interstate inspections on interstate carriers in accordance with federal regulations. The amendment removed the onerous California emission standards in favor of an IDOT study. Senate Amendment 3 Changes the date by which the Department of Transportation must make available a public report on emission testing data from September 15, 2022 to March 15, 2023. Changes the date through which the Department of Transportation must collect data on diesel emission testing to include it its public report from June 1, 2022 to December 31, 2022. With the amendments the Chamber is neutral on this bill.

SJRCA 11, Proposed Labor Constitutional Amendment passed out of the House by a vote of 80-30-3 and has now been adopted by both chambers. This proposed amendment provides that employees shall have the fundamental right to organize and to bargain collectively through representatives of their own choosing for the purpose of negotiating wages, hours, and working conditions, and to protect their economic welfare and safety at work. Provides that no law shall be passed that interferes with, negates, or diminishes the right of employees to organize and bargain collectively over their wages, hours, and other terms and conditions of employment and work place safety, including any law or ordinance that prohibits the execution or application of agreements between employers and labor organizations that represent employees requiring membership in an organization as a condition of employment. Provides that these provisions are controlling over home rule powers. The Chamber opposes this proposed amendment to the constitution.

Connect with the Chamber
If you have questions about the Government Affairs Report, contact Clark Kaericher at ckaericher@ilchamber.org. Do not reply to this email.