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Springfield Highlights

Springfield Highlights – Feb. 9, 2018

Buy Illinois and Buy American Bills Reintroduced

For the second year in a row, Rep. Jay Hoffman (D-Collinsville) has introduced two bills (HB 4574, HB 4575) amending the Illinois procurement law to incent the purchase of Illinois or American-made products. While the IMA supports the intent to encourage the purchase of American products, this legislation has the potential to do more harm than good. Rather than giving preference in state law, Illinois policymakers should pass meaningful reforms that will actually help all manufacturers grow and invest in Illinois.

There are concerns these bills will exponentially increase the complexity of the procurement system for businesses and could result in small and mid-size companies simply choosing not to sell to the State of Illinois. If other states adopt similar preference laws, Illinois companies could lose more out-of-state sales. Companies with cross-border supply chains would face challenges to ensure that domestic components exceed 50 percent of the cost of all components of a product in order to qualify to receive a 12 percent variance in cost. The standard would change from an “unreasonable amount” to the 12 percent threshold but would be subject to price exemption if the purchasing agency receives a waiver from the state’s chief procurement officer.

The Buy Illinois language contains similar waivers to the current Procurement of Domestic Products Act in that products do not have to be purchased from Illinois manufacturers if (1) not manufactured in reasonably available quantities, (2) the price exceeds comparable products by more than 12 percent, (3) the quality of American products in substantially less, (4) the purchase of products manufactured outside the U.S. better serves the public interest by helping protect or save life, property, or the environment, (5) the products are pharmaceutical or regulated by the Food & Drug Administration, or (6) are in conjunction with telecommunications, fire suppression, security systems, communications services, Internet, or information services.

The Illinois House of Representatives approved two identical measures (HB 137, HB 138) last year but they were not considered in the Senate. This is purely political legislation designed to generate content for political advertisements in the coming election.


Democrats Introduce Workers’ Compensation Legislation

Rather than addressing the root causes of high workers’ compensation costs in Illinois, House Democrats have again introduced two pieces of legislation that simply protect trial lawyers, labor unions, and health care providers. Illinois has the eighth highest cost of workers’ compensation in the United States and neither of these bills would significantly reduce the employer costs and make Illinois more competitive.

The Democrat bills fail to address key issues including primary causation, exorbitant medical costs, American Medical Association standards, and higher than average indemnity benefits.

The first bill (HB 4432) sponsored by Rep. Jay Hoffman (D-Collinsville) is a sleight of hand designed to take focus off the core costs of workers’ compensation. The legislation shifts blame to insurance companies and requires rate regulation by state bureaucrats who would be tasked with approving insurance rates before putting them into use. It corrects the Will County Forest Preserve case that overturned one hundred years of precedence by ensuring that the shoulder is considered part of the arm. Additionally, the legislation would create a new drug formulary to manage pharmaceutical costs.

Rep. Laura Fine (D-Glenview) would take ten million dollars of employer funds at the Illinois Workers’ Compensation Commission to create a new WC State Fund to compete with the private sector. HB 4595 is identical to legislation that passed the General Assembly last year and was vetoed by Governor Bruce Rauner. Illinois has been designated as a competitive insurance marketplace with more than three hundred insurance companies competing for business.

The IMA will continue to fight for real and meaningful workers’ compensation reform; however, real reform is unlikely to pass in a General Assembly controlled by Democrat legislators allied with trial lawyers and labor unions.


House, Senate Committees Advance Smoking Age Increase

Committees in the House of Representatives and Senate voted along party lines this week to increase the smoking age from 18 to 21 years. Sponsored by Rep. Camille Lilly (D-Oak Park) and Senator Julie Morrison (D-Deerfield), the legislation (HB 4297, SB 2332) would increase the age at which people can buy tobacco products in Illinois. Additionally, the legislation decriminalizes the possession of tobacco. Therefore it would be illegal for persons between the ages of 18-21 to buy tobacco but there would be no penalties for possessing it.

Proponents argued that increasing the age of purchase would reduce tobacco usage and improve health. However, with two-thirds of Illinois’ population living within forty-five minutes of the state border, its more likely that younger consumers will simply buy the products elsewhere resulting in less revenue for state coffers. Opponents also argued that 18-year olds can buy guns, join the military, or get married so they should be free to make the decision to buy tobacco.

The bills are now on the floor of the House and Senate.


Rep. Welch Proposes New Tax on Natural Gas

Democrat Chris Welch (D-Westchester) filed legislation this week allowing municipalities to impose a new 5 percent tax on natural gas for the “privilege” of using out-of-state gas within its borders. If enacted into law, Illinois municipalities could start charging the tax at a rate of 2.4 cents per therm or 5 percent of the purchase price for the billing period. The tax would be assessed on the self-assessing purchaser of the gas and collected by the supplier.

The legislation (HB 4680) is still in the House Rules Committee.


U.S. Department of Treasury Releases Updated Guidance Plan

The United States Treasury Department released its updated priority guidance plan this week after passage of the historic tax reform legislation at the end of 2017. The plan includes eighteen items related to the implementation of the tax reform legislation including guidance on the new pass-through deduction, the new limitation on interest deductibility, and full expensing. This guidance plan outlines nearly two hundred projects that Treasury hopes to complete before June 30, 2018.


Business Day in May!

Mark your calendars and plan to attend the largest gathering of business leaders at the State Capitol on Wednesday, May 9 in Springfield. More than three hundred and fifty manufacturing and retail leaders will converge for Business Day. Make sure you register before the event sells out or help sponsor the event.

The IMA is pleased to announce that noted media entrepreneur and political expert Jim VandeHei will be the keynote speaker at the IMA’s Business Day in Springfield on Wednesday, May 9. Jim is the co-founder and CEO of Axios, a new media company delivering news and insights on politics, business, media, and tech. In addition to Axios, Jim was co-founder and former CEO of POLITICO, the digital media company that upended and revolutionized political and policy journalism in Washington, New York, and Europe.

Jim’s unique insights and expertise will deliver a riveting view of the intersection between politics, media, and business. He is better positioned than virtually anyone else to pull back the curtain and address what is happening in the White House, Congress, politics, and the media today.

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