Senate “Grand Bargain” Delayed
The Senate adjourned this week after lawmakers failed to take a vote on key components of the “grand bargain” following by dueling press conference where Democrats and Republicans pointed fingers at each other. Senate President John Cullerton (D-Chicago) and Republican Leader Christine Radogno (R-Lemont) have been meeting for nearly two months to craft a bipartisan agreement to end the nearly two-year budget impasse.
Several non-controversial components of the “grand bargain” including procurement reform (SB 8) and local government consolidation (SB 3) passed the Senate with limited Republican support. When the Senate President sought to vote on contentious issues such as tax reform (SB 9), pension reform (SB 16), and workers’ compensation (SB 12), Republicans balked because final agreements had not been reached on these key issues while Senate Democrats sought to lay blame at the hands of Governor Bruce Rauner.
The IMA is one of only two business groups that are continually invited to participate in discussions and negotiations with both the Governor’s Office and lawmakers.
It’s imperative that any final solution must actually result in a balanced budget so that government lives within its means (budget cuts) and fiscal discipline is restored. Lawmakers must reform the pension system and eliminate the nearly $12 billion backlog of bills and reduce the bill payment cycle that now approaches one year. Job growth reforms including workers’ compensation changes must be included in a package and tax law changes must address key issues such as permanent extensions of the Research & Development tax credit, Manufacturers Purchase Credit, and Graphic Arts exemption.
The pension reform plan contains a “consideration model” whereby employees who fail to move to a new, cheaper pension system will no longer receive pensionable pay raises. Additionally, a new plan is now being proposed (Tier 3) that will include a 401-k style hybrid along with a significantly reduced defined benefit program. It’s estimated that this proposal will save more than $1.75 billion annually.
The IMA remains hopeful that lawmakers can finalize a package that will right the state’s fiscal ship while making Illinois more attractive for job creators. It’s essential to fix the problem because Illinois is racking up nearly $11 million in debt every single day and the impact on Illinois families and businesses is worsening.
IMA Leading Opposition to Digital Fair Repair Act
The Illinois Manufacturers’ Association is leading opposition to a proposed Digital Fair Repair Act (HB 3030) sponsored by Rep. David Harris (R-Mt. Prospect). This legislation that is appearing across the nation would require original equipment manufacturers to provide diagnostic and repair information to independent repair shops. With the increasingly technological world, this legislation applies to a litany of products ranging from automobiles, tractors, refrigerators, microwave ovens, and cell phones. It would require manufacturers to provide confidential coding and embedded software to sources that would risk the loss of intellectual property and could result in several changes to a product’s performance (increased emissions for example).
The bill is scheduled for a committee hearing next week and the IMA continues to meet with Rep. Harris and other legislators to express our opposition.
Manufacturers Support Telecomm Reform Bill
The Illinois Manufacturers’ Association and a host of business and labor organizations strongly supports the proposed 2017 Telecommunications Modernization proposal that is contained in SB 1381. The IMA has spoken with all four legislative staffs and plans to offer testimony in the Senate Telecommunications and IT Committee.
In the rapidly evolving world, it’s critical that Illinois’ laws reflect modern society to help attract and retain investment in the state. The telecommunications network, like roads and bridges, requires strong and continued investment. Manufacturers, for example, rely on these systems to communicate, integrate multiple sites under a network, track products in the supply chain, and communicate with manufacturing equipment on the shop floor.
Consumer Electronics Recycling Law (E-Waste)
After three years of negotiations, a coalition of electronic manufacturing groups led by the Illinois Manufacturers’ Association, introduced a proposal this week to revamp Illinois’ consumer electronic recycling law. Illinois currently uses an extended producer responsibility model that has faltered in recent years because of advances in light-weight products coupled with declining prices for recycled commodities. The IMA and our partners are advocating for a shift to a shared-responsibility convenience standard for consumer electronics recycling.
Testifying before the Senate Environment Committee this week, the IMA noted that a temporary stopgap was negotiated two years ago to prop up the faltering program while details of the re-write are worked out. If changes are not made to the law this year, a sunset of provision built into the law will diminish electronic waste collections from 50 million to nearly 30 million pounds a year. Manufacturers are proud of our record of sustainability and strong recycling programs which is why industry is calling for the removal of arbitrary collection goals in favor of a system that accepts 100% of eligible electronics turned in for recycling. The proposal supports a wide variety of recycling opportunities including county run programs, retail collection, residential pickup and manufacturer run collection programs.
The proposed re-write language was largely crafted but the IMA’s Manufacturers’ Environmental Group sub-group on e-waste issues.
IMA Joins Amicus Suit on Non-Compete Agreements
The Illinois Manufacturers’ Association joined the National Association of Manufacturers and three other organizations in an amicus brief supporting the use of non-compete covenants. It is critical that manufacturers have the ability to use these non-compete clauses to protect their confidential research, technical, and customer information from being disclosed to competitors by employees after they leave. They also protect long-standing customer relationships from unfair competition due to recently departed employees soliciting the business. Restrictive covenants also provide for an extra layer of protection from the disclosure of confidential and trade secret information.
The amicus brief in the case of Automated Industrial Machinery, Inc. v. Tom J. Christofilis and IP Automation, Inc. provides that the bright line rule announced in Fifield and relied on in the circuit court fails to account for legitimate business interests that employers have in maintaining their competitive advantage. The current case is in the Second District Appellate Court.
In Illinois, the Senate Labor Committee voted unanimously this week to pass SB 858 that essentially bans companies from enforcing non-compete agreements for low wage employees who earn the greater of minimum wage or $13 per hour, whichever is greater. This legislation was proposed following media stories that restaurant chain Jimmy Johns prohibited workers from seeking employment at other sandwich shops.
Transglutaminase or “Meat Glue” Proposal
The Illinois Manufacturers’ Association met with Senator Emil Jones, III. (D-Chicago) at his request to discuss the use of transglutaminase (TG) that is mischaracterized as “meat glue.” This enzyme (protein) that occurs naturally in plants, animals, and the human body is used to bind proteins together. It is generally recognized as safe by the Food and Drug Administration while the U.S. Department of Agriculture has determined that TG is safe and suitable for use in meat products.
Despite the fact that the product is safe, and only used to improve food texture or shape and form protein foods, Senator Jones expressed strong concerns about its usage. After a discussion, the Senator may proceed with legislation but it will likely not include a ban on the use of TG. Rather, he may look at requiring some form of disclosure despite the fact that the USDA’s Food Safety and Inspection Services sets all labeling requirements.
