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Springfield Highlights

Springfield Highlights – May 11, 2018

Successful Business Day at the Capitol

Nearly three hundred fifty business leaders convened in Springfield this week as part of the IMA’s Business Day at the Capitol. This is the largest gathering of job creators at the Capitol and we appreciate the support of key partners who joined us including the Illinois Retail Merchants Association and the Illinois Biotechnology Innovation Organization (iBIO).

Attendees heard fascinating remarks from Jim VandeHei, founder of both POLITICO and the Axios newsletter that are revolutionizing the way in which viewers consume news in the 21st century. VandeHei provided a candid view about how President Trump utilizes social media to reach American voters directly on key issues such as trade, North Korea, Russia, tax reform, and judicial appointments. Interestingly, he noted that 19 of the top 20 stories read on Facebook in the final days of the election came were “fake” and it will take a concerted effort by voters to educate themselves about candidates and issues. Facebook and its algorithms are designed to highlight “like minded” stories which further leads to the polarization of the electorate.

Following the luncheon, manufacturers visited lawmakers in the Capitol to address key issues including balancing the budget, education and workforce development, tax reform, and numerous environmental regulations pending in the legislature. The IMA Board met personally with Governor Bruce Rauner, Senate President John Cullerton, Senate Republican Leader Bill Brady, and House Republican Leader Jim Durkin.

The IMA would like to thank all of the attendees and sponsors who shared the positive message about manufacturing with elected leaders.

 

House Democrats Play Politics with Workers’ Compensation

In a silly political game, House Democrats at the direction of Speaker Michael J. Madigan are holding up several insurance-related measures in an effort to leverage additional support for their preferred workers’ compensation legislation. Disappointingly, an IMA initiative (SB 1286) that would modernize captive insurance regulations used by self-insured companies is caught up in this game, risking the loss of millions of dollars and jeopardizing the ability of Illinois-domiciled companies to locate their captive insurer in Illinois.

Rep. Jay Hoffman (D-Collinsville) and the Speaker’s general counsel issued an ultimatum at a meeting on Wednesday that if “nothing” happens with their workers’ compensation legislation (HB 4595, HB 4432), then “nothing” will happen with the five bills (SB 1286, SB 1737, SB 2388, HB 1337, and HB 5160) supported by the business community and insurance sector.

The Democrat workers’ compensation bills are a legislative sleight-of-hand designed to focus attention away from the key cost drivers in workers’ compensation that has led Illinois to have the eighth highest costs in the nation. Illinois manufacturers pay nearly twenty percent more for workers’ compensation insurance than the average state. Instead of addressing a causation standard, medical costs, payments to workers, or American Medical Association guidelines, the Democrats are simply trying to deflect blame to the insurance sector despite the fact that Illinois has a competitive market with more than three hundred companies competing for business.

Later today, Democrats plan to try and get the medical community engaged in the issue by offering new language allowing doctors and hospitals access to the courts to sue for interest payments on medical claims. It will increase interest rates while hiking penalties on employers and insurance companies for vexatious delays in treatment and also require insurers to provide Explanation of Benefits (EOB) and utilize electronic billing for workers’ compensation claims.

Another meeting is planned where the IMA will again argue that these issues should not be linked. The IMA is ready to have a real discussion on workers’ compensation reform but Democrats allied with trial lawyers, labor unions, and the medical community have expressed no desire to fundamentally reform the system.

 

Grants to Support Industrial Arts Advances

Legislation to authorize high schools and community colleges to access a little-known state fund advanced this week from the Senate Higher Education Committee. HB 4858 is part of a four-bill initiative of the IMA Education Foundation designed to support statewide efforts to prepare a high quality workforce for 21st Century manufacturing. Under the bill, high schools and community colleges with programs of study in Industrial Arts would be able to receive grants authorized by the Industrial Development Assistance Act to pay for updated facilities and equipment. The bill is critical if the state’s education system is to keep pace with manufacturing’s technological advancements. The bill was unanimously approved 9-0 by the Higher Education Committee and now goes to the full State Senate for final passage before heading to the Governor’s desk for his signature.

 

Continued Negotiations on Volkswagen Settlement Funding

The Illinois Environmental Protection Agency continues to meet with environmental activists and certain members of the General Assembly in hopes of reaching an agreement that would allow the state to move forward with a Beneficial Mitigation Plan for the proper distribution on Volkswagen (VW) Settlement funding. VW entered into a multi-billion-dollar settlement with the federal government for violations of the Clean Air Act after publicly admitting to installing “defeat devices” in certain diesel vehicles that caused the vehicles to operate differently during emission testing compared to normal operation, circumventing federal vehicle emissions standards. Of the multi-billion-dollar settlement, the State of Illinois received $108 million for the purpose of reducing Nitrogen Oxide (NOx) emissions from mobile sources in the state. The Illinois EPA was designated as the lead agency to administer the funds and released their Beneficiary Mitigation Plan in late February for public comment.

As originally proposed prior to the EPA’s public outreach, the draft plan proposed spending money in three general categories including:

  • Off-road projects (up to 65 percent) for freight switcher locomotives, ferries/tugs, passenger locomotives, and associated electric charging infrastructure;
  • On-road projects (up to 20 percent) for Class 8 local freight trucks, school buses, shuttle buses, transit buses, and Class 4-7 local freight trucks;
  • All-electric school bus projects (up to 10 percent) to replace diesel school buses

The EPA’s goals are to reduce NOx emissions in areas where affected VW vehicles were located while maximizing the reduction of these emissions. They set three priority areas that included the Chicago metropolitan non-attainment area, Metro East non-attainment area, and seven downstate counties with a significant number of VW vehicles.

Environmental activists opposed the use of funds for industry, preferring to use all of the funds for electric vehicles and charging stations. They initiated legislation sponsored by Senator Castro and Representative Moeller, SB 3101, revoking the Illinois EPA’s current Beneficiary Mitigation Plan, creating a task force, and delaying projects that are ready to receive funding to immediately reduce NOx emissions. Unfortunately, the environmental proposal would not maximize emission reductions and it would prohibit significant projects in the private sector and public sector such as barring transit agencies like METRA from replacing locomotives.

The Agency is attempting to satisfy the concerns of those opposed to their plan by recently announcing that they will hold three public hearing across the state to allow for more public participation. Additionally, they are reviewing comments from dozens of meetings and public comments to adjust spending levels in the three categories.

The IMA continues to work with member companies and stakeholders to make sure that the settlement funding is used appropriately and available to all entities.

 

Special Hearing on Autonomous Vehicles

This week, the House Transportation Vehicle Safety Committee held a subject matter hearing on autonomous vehicles as the rapidly advancing technology continues to force legislatures across the country to take notice. Autonomous vehicle (AV) technology is innovative and – if Illinois legislators show they are willing to accept the technology – will transform the lives of Illinoisans and Illinois businesses. AV technology will drastically improve safety and reduce accidents, increase efficiency and reduce congestion, reduce energy consumption as well as reduce carbon emissions, and increase productivity. For Illinois to reap the benefits of autonomous vehicle technology, the Illinois General Assembly will be tasked with matching federal guidelines with state regulations that embrace the need to grow, test, and advance driverless vehicles.

A recent advisory letter from Attorney General Lisa Madigan indicated “authorizing legislation would be necessary to expressly permit and regulate the operation of autonomous vehicles on public roads in Illinois.” While not an official legal opinion, this letter sent notice to lawmakers that official action is needed. Last year, the IMA helped lead a coalition that successfully passed legislation pre-empting local government from regulating the industry so that laws and regulations are uniform across the entire state.

The IMA joined auto manufacturers General Motors and Ford Motor Company in testifying at the hearing in support of AV technology. The IMA stated, “Illinois already has the resources it needs to embrace this growing technology. Illinois has world-class manufacturers, leading institutions of higher learning, and fantastic tech companies. With these resources, Illinois should be a leader in the world of autonomous vehicles and can be rewarded with the impressive benefits.” The IMA also called for a level playing field that would allow current and new auto manufactures and technology companies a seat at the table as conversations regarding the regulation of AV technology continue.

While a majority of groups who participated in the hearing praised the growing technology, some groups expressed concerns. The Illinois Trial Lawyers Association expressed their concerns over liability and the safety of AVs while also stating that it will be unclear how insurance will play out on the issue. Others groups, such as ABATE, an advocacy group representing motorcyclists, expressed concerns over the future freedoms of being able to drive one’s own vehicle.

No formal action was taken on AV legislation in the hearing; however, the conversation highlighted the importance of the technology in the state and set the tone for future discussion to help grow the technology.

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