IMA Returns from Trade Mission to Germany & Poland
Two representatives from the Illinois Manufacturers’ Association recently returned from Germany and Poland where they participated in Governor Bruce Rauner’s trade mission that focused on manufacturing and workforce development. For the past six months, the IMA has worked with the Governor, Illinois Department of Commerce, and Intersect Illinois to set up the trade mission and visits to dozens of companies who have facilities in Illinois or are looking to expand or invest in the state.
The IMA visited member companies including Archer Daniels Midland, Continental Tire, Fresenius Kabi, Eaton Corporation, Bosch Rexroth, ThyssenKrupp, and Haribo on the mission. Additionally, the group toured the Port of Hamburg and visited world-class schools that focus on apprenticeships and vocational education.
The trade mission culminated in two days of visits to the iconic Hanover Messa trade show in Germany that is the largest industrial trade show in the world. At a press conference, officials including Governor Rauner, announced that the Hanover Messe trade show will leave Germany for the first time and have a four-day show at McCormick Place in Chicago this fall.
Governor Rauner led the delegation that also included representatives from the University of Illinois, Rend Lake Community College, Harper Community College, and several economic development organizations. The IMA was the only statewide business organization represented on the trade mission designed to help recruit more companies and expand manufacturing in Illinois.
IMA-Lead Opposition Stops Digital Fair Repair Act
The Illinois Manufacturers’ Association led a coalition of three dozen stakeholders that successfully defeated an effort to create a Digital Fair Repair Act in Illinois. Sponsored by Rep. David Harris (R-Arlington Heights), HB 4747 would require manufacturers to provide access to machine repair and diagnostic tools, along with access to embedded software, to independent repair shops.
The IMA opposed this legislation that would have impacted every electronic product from bulldozers and combines down to computers and cell phones. Most importantly, this legislation would risk the release of confidential and proprietary software coding. In addition to the potential loss of theft of intellectual property, HB 4747 would allow unskilled workers the ability to change coding that could result in unsafe operation of equipment, violation of emission controls, voided warranties, and less than optimal customer experience.
In an attempt to reduce opposition, Rep. Harris agreed to amend the bill to exempt off-road equipment. That action, however, did not remove IMA opposition to the legislation. The sponsor ultimately announced that he would not proceed with the bill this year, noting strong opposition from the IMA and manufacturing sector.
The IMA appreciates the leadership of many legislators including Rep. Norinne Hammond (R-Macomb) and Rep. Tony McCombie (R-Savannah) who lead opposition in the House of Representatives.
Businesses Win Protection of Sales Tax Information
The House of Representatives delivered a stinging rebuke to Rep. Chris Welch (D-Westchester) this week by overwhelmingly defeating his attempt to give contingency fee auditors access to a business’ confidential tax information. HB 2717 was soundly defeated by a vote of 42-61-3 following intensive lobbying by the Illinois Retail Merchants Association and the Illinois Manufacturers’ Association.
The defeat of HB 2717 is a victory for Illinois businesses. The legislation was a special sweetheart deal for one company, Azavar, that sought to require the Illinois Department of Revenue to disclose sales tax information of businesses located within municipalities directly to their company who would profit from challenging tax allocation decisions. Illinois law prohibits the disclosure of confidential tax information. Opponents were able to show that Azavar was already violating state law through information gleaned from FOIA requests of local governments.
Taxpayer information is among the most sensitive of information, and allowing access to this information outside a strict chain-of-custody endangers the taxpayer both in terms of finances and reputation.
Senate Defeats Effort to Block New Federal Environmental Policies
In an attempt to block any environmental policy put into place at the federal level since President Trump took office, Senator Daniel Biss (D-Evanston) and environmental activists pushed SB 2213 in the Senate this week. The bill required that Illinois environmental laws and regulations, as well as workplace safety laws, remain as strict or more stringent than federal laws that have been in place before January 19, 2017.
The IMA previously spoke out against SB 2213 in a Senate subject matter hearing, stating that the bill would “burden Illinois businesses with a real competitive and economic disadvantage by forcing them to comply with different environmental laws than the rest of the country.”
The bill fell one vote shy of a simple majority and failed to pass the Senate with a vote of 29-18-11. The bill is still alive as the sponsor used a parliamentary procedure that allows one more vote to try and pass the measure.
VW Settlement Bill Heads to the House
A long battle between Democrats allied with environmental activists and Governor Rauner’s Environmental Protection Agency came to head on Thursday when Senator Castro (D-Elgin) narrowly pushed through a measure attempting to stall the EPA from distributing funds from the VW Settlement to immediately reduce NOx emissions.
The bill, SB 3101, requires the Illinois EPA to withdraw its plan for the distribution of VW Settlement funds and instead hold public hearings that would extend the process by a year, conveniently past the next election. The current plan developed through a long and transparent process over the past year would distribute money regionally and be used to get the most significant reduction in emissions. Environmentalists would prefer to use the money only for electric cars and prevent businesses from replacing truck engines, locomotives, or barges.
Business and industry have argued that there are projects ready now that could use the money to start immediately reducing NOx emissions and improve Illinois’ air quality. The bill still narrowly passed 31-21-0 and is now in the House Rules Committee.
House Democrats Pass Inadequate Workers’ Compensation Reform
Rather than addressing the root causes of the high cost of workers’ compensation in Illinois, Democrats allied with trial lawyers and labor unions passed legislation that seeks to create a state fund to compete with the private sector insurance industry. Sponsored by Rep. Laura Fine (D-Glenview), HB 4595 is simply a political ploy by Democrats to say that they are addressing a significant cost negatively impacting Illinois employers by pointing a finger at insurance companies. Illinois currently has more than 300 insurance companies selling workers’ compensation insurance and has been deemed to have a competitive marketplace.
The legislation would take $10 million of employer money from the Illinois Workers’ Compensation Commission to create a new state fund that could offer workers’ compensation insurance. However, according to experts, if the state fund has to follow all of the state mandates in terms of medical costs and indemnity benefits, there will be no cost reduction. HB 4595 does not address a causation standard, medical fee schedule, drug formulary, AMA guidelines, or other major cost drivers.
HB 4595 passed on a partisan roll call vote of 62-43-0. Identical legislation passed the General Assembly last year and was vetoed by the Governor.
Business Groups Reach Accord on Wage Lien Legislation
After the IMA and business community were successful in stopping the original wage lien proposal that would have allowed an individual to file a lien on an employer without judicial or administrative review for six months, a compromise was reached to speed up the current process of handling wage claims at the Department of Labor.
As introduced by Rep. Chris Welch (D-Westchester), HB 4324 would have allowed employees or former employees to slap a wage lien on a company and their property for up to six months. It would have resulted in the inability to ship property or possibly secure bank financing if needed. The business community was able to get the measure stopped in the House Labor Committee with the help of Chairman Jay Hoffman (D-Collinsville).
A coalition of employers led by the Retail Merchants Association reached an agreement that will require the Illinois Department of Labor to adjudicate wage claims within 30 days. Wage claims currently take between 12-18 months and could allow an employer to dissolve, reorganize, or disappear leaving an employee in limbo. Employers with claims may have to post 10 percent in an escrow account for the thirty-day period. After thirty days, or upon a favorable ruling, the funds would be returned to the employer.
HB 4324 passed on a vote of 88-3-0 and now moves to the Senate.
Plastic and Paper Bag Fee Introduced
Six years ago, Senator Terry Link (D-Gurnee) successfully worked with manufacturers, retailers, and the environmental community to pass a new five-year pilot program that would pre-empt local governments from regulating plastic bags and film in exchange for a recycling program funded by the manufacturing sector. At the last minute, the environmental community reneged on their support and Governor Pat Quinn vetoed the legislation. Hundreds of thousands of pounds of plastic bags and film have since gone into landfills instead of being recycled.
Senator Link has been attempting for two years to recreate a program that would help reduce the use of plastic bags in particular. He’s proposing legislation (SB 1597, amendment #3) that would create a three-tier program under which a 5-cent fee would be imposed on all paper and plastic bags, while exempting reusable bags. In exchange, local units of government could not regulate plastic bags or any other auxiliary containers and revenue would go to counties to fund Household Hazardous Waste cleanup programs.
The IMA is opposed to this current draft legislation with a preference to simply prevent local governments from regulating or banning plastic bags and other auxiliary containers as has been done in many other states. This would prevent a patchwork of regulations; however, this approach would not pass the legislature in Illinois.
Senator Link plans to hold additional meetings next week with the IMA and other stakeholders including retailers, solid waste agencies, and environmental activists.
Converting Non-Recycled Plastics in Illinois to Fuels and Chemicals
Policymakers in the House approved of a measure that encourages Illinois manufacturing to continue not only to grow, but also lead in innovation and technology. The House passed HB 5198 (Walsh, D-Joliet) an initiative of the Chemical Industry Council that ensures that post-use, non-recycled plastics that are converted to crude oil, fuels, chemical feedstock, or other valuable raw materials or products via pyrolysis or gasification are not misclassified as solid waste. This classification is important to ensure that manufacturers in Illinois who take part in this particular chemical process are regulated like other manufacturers, not as solid waste management facilities or waste sites. The IMA supported the bill that passed with overwhelming bipartisan support on a vote of 81-20-0; the bill now heads to the Senate.
Senate Passes Bill to Raise Age for Tobacco Product Purchases
This week, the Senate passed a measure to raise the age for the legal purchase of tobacco products from 18 to 21. Senator Morrison’s (D-Deerfield) SB 2332 passed the Senate 35-20-0 with most of the support coming from Democrats.
Opponents argued that the legislation would hurt small businesses, put Illinois citizens out of work and reduce revenue at a time when the State is struggling to pay its bills. Other states that have raised the age of buying tobacco products have seen drastic reductions in revenue. In Texas, for example, in only two years the state took a $40 million hit to the general state budget and a $40 million hit to the Property Tax Relief Fund.
SB 2332 moves over to the House for consideration.
Consistent Regulations of the Drone Industry
The Senate unanimously approved IMA-backed legislation that would prevent local units of government from regulating drones (unmanned aircraft) to ensure consistent state regulation and avoid a patchwork of regulations. This concept was a recommendation of the Drone Task Force, including the IMA, that met last year.
Drones are heavily regulated at the federal level but are often faced with a patchwork of local regulations that vary greatly from one community to another. Due to the lack of consistency in the local regulations, there are often questions surrounding the legal operations of drones in Illinois. Senator Clayborne’s (D-East St. Louis) legislation (SB 3291) preempts local ordinances in order to simplify and streamline drone regulation while ensuring Illinois’ laws comply with federal guidelines. This measure has been in the works for years after the establishment of the Drone Task Force created in 2016. The task force, among other things, determined a singular statewide law that is reflective of federal guidelines was necessary.
The bill passed out of the Senate unanimously on a vote of 52-0-0. Representative Marcus Evans (D-Chicago) has filed to carry the bill in the House.
Senate Passes Anti-Fracking Measure
Democrats in the Senate passed a new set of regulations aimed at deterring hydraulic fracturing in Illinois over objections from the IMA and oil and gas industry. While the shale in Southern Illinois has not yet been tapped, this new legislation would create a confusing and conflicting law because it amends the wrong section of Illinois law. Illinois needs an “all of the above” approach for energy and the use of hydraulic fracturing has spurred an energy revolution in the United States resulting in low gas and energy prices along with the expansion of chemical plants.
In 2015, the General Assembly passed a High Volume Hydraulic Fracturing Act that regulates the industry and contains many of the provisions sought in SB 3174. However, this legislation mistakenly amends the Oil & Gas Act that is not intended to regulate hydraulic fracturing, thereby setting up the possibility of two conflicting statutes.
In addition to requiring information about the location and direction of horizontal wells, SB 3174 would risk the release of confidential information regarding the use of chemicals in a formula. The release of chemicals is not an issue but providing the “recipe” would create serious concerns.
The IMA will continue to work to stop HB 3174 in the House of Representatives.
