February 13, 2009
Expansion of Prevailing Wage Clears Senate Labor Committee
The Senate Labor Committee approved a measure this week that would impose a substantial increase in labor costs on any business seeking to expand, repair, or remodel their facilities in an Enterprise Zone or Tax Increment Financing District (TIF). SB 43 (Clayborne) extends the prevailing wage to private projects within these areas considered to be crucial tools for encouraging economic development.
The Chamber strongly opposes this legislation and its companion bill in the House (HB 63) as it not only drives costs up for Illinois businesses, it threatens to suffocate economic development at a time when many communities are struggling to thrive in the weakened economy. The legislation cleared the committee on a partisan vote and now moves to the Senate floor for action.
In the meantime, two other bills have been introduced seeking to alter and expand the current prevailing wage law. HB 952 (Beiser) proposes expanding the prevailing wage to public works while SB 322 (Steans) alters the current notification requirements to consider the publication of an ordinance or resolution passed by a public body revising the prevailing wage rate sufficient notification to the contractor and each subcontractor. Both bills have yet to be assigned to committee.
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New Proposed Payroll Tax for Healthcare Expansion Reemerges
Former Governor Blagojevich’s infamous “Illinois Covered” proposal was revived this week with the introduction of two new bills- SB 1331 and HB 1081- pursuing a massive expansion of healthcare coverage funded on the backs of businesses. Both bills call for the creation of the Illinois Family and Employers Health Care Act, which establishes a series of programs aimed at drastically altering the health insurance market while imposing a sizeable new tax on employers.
The bills, much like SB 5 (Illinois Covered) from the 95th General Assembly, would assess a graduate payroll tax on all Illinois employers in order to finance a program that offers small employers and individuals the option to buy into private health plans with limited eligibility criteria. The proposal offers employers a full or partial tax credit for the new assessed tax, depending on their healthcare costs as a percentage of payroll, but like SB 5, the new bills penalize small to medium-sized employers.
Other provisions of the proposed legislation include a program to provide premium assistance to individuals who are legal residents of Illinois and whose family income is at or below 400% of the Federal Poverty Level and the creation of a new Office of Patient Protection within the Division of Insurance to provide strict oversight of private insurers.
The Chamber is strongly opposed to both of these bills and will provide a more detailed analysis of the proposals soon.
House and Senate Resolve “Rules Amendment” Dispute
A major dispute between the House and Senate that bogged down much of the legislative process last year was finally resolved this week after the Senate quickly signed off on legislation reinforcing the viability of the Joint Commission on Administrative Rules (JCAR). HB 398, which passed both chambers unanimously, requires all proposed administrative rules to adhere to the provisions of the Illinois Administrative Procedure Act, which includes signoff from JCAR.
After former Governor Blagojevich blatantly ignored several JCAR rulings last year, the House required any legislation that may demand the promulgation of administrative rules for implementation to include an amendment that required those rules be approved by JCAR. The Senate, however, under the leadership of Senate President Emil Jones, refused to accept that amendment and numerous bills, including the Chamber’s wellness bill, were held hostage.
HB 398 is currently on the governor’s desk awaiting his signature.
Governor Quinn Appoints New Chief of Staff
Governor Quinn appointed Jerome Stermer as his new Chief of Staff earlier this week. Prior to his appointment, Stermer served as the president of Voices for Illinois Children for over two decades lending his voice to a number of major policy issue debates, including early childhood education and healthcare. For more information on Stermer’s background and his previous organization’s position on taxes, please click here.
New Joint Committee on Government Reform Convenes Next Week
The new Joint Committee on Government Reform created by SJR 1 will hold its first hearing next Wednesday, February 18 at 9 am in the Capitol room 114. At this time, four ethics-related proposals have been assigned to the new joint committee, including several bills addressing the lobbying revolving door prohibition for state employees. HB 736 (Fritchey) also proposes tightening other regulations on lobbyists.
House and Senate Democrats announced their selected committee members, as well as a tentative agenda and schedule of subject matter topics earlier this week. Democrat Representatives Acevedo, Currie, Hannig, and Turner and Democrat Senators Clayborne, Crotty, Garrett, and Delgado have all been named as members. Senate Republicans have also named Senators Cronin and Bivins to the committee. House Republicans have yet to name their two members.
Both Speaker Madigan and Senate President Cullerton will serve as the committee co-chairs while House Minority Leader Cross and Senate Minority Leader Radogno will serve as vice-chairs. Committee information has since been posted at the state legislative website. For more information on the proposed agenda of subject matter topics, please click here.
In the meantime, Governor Quinn’s new Illinois Reform Commission is continuing to hold a series of public hearings around the state regarding various ethics issues. The Commission sent a letter to the governor this week requesting for more transparency in state agencies. The letter specifically requests state agencies respond promptly to FOIA requests; something agencies regularly ignored under the previous administration.
The Commission is scheduled to meet again on February 23 and March 5 to take up the topic of campaign finance reform.
Prejudgment Interest and Abusive Work Environment Bills Scheduled for Hearings Next Week
Two bills strongly opposed by the Chamber have been scheduled for committee hearings next week. The first of these measures- SB 184- which was detailed in last week’s Government Affairs Report, would require prejudgment interest to be paid by defendants in lawsuits and arbitration claims where monetary damages are awarded. Mandatory prejudgment interest creates a potential windfall for plaintiffs while imposing huge costs on businesses.
The second anti-business bill scheduled for a hearing next week creates yet another path towards excessive litigation by protecting employees from so-called “abusive work environments.” HB 374 loosely defines “abusive conduct” as conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interest and “abusive work environment” as a workplace where an employee is subjected to abusive conduct so severe it causes physical or psychological harm to the employee.
The Chamber has had a preliminary conversation with Representative Turner, the primary sponsor of SB 374, regarding our opposition to the legislation. The Chamber has had and maintains a close working relationship with Representative Turner and we believe he will be responsive to our concerns with this legislation.
SB 184 is scheduled to be heard before the Senate Judiciary Committee on Wednesday, February 18 at 2:30 pm in the Capitol room 400. HB 374 is scheduled to go before the House Labor Committee on Thursday, February 19 at 2 pm in the Capitol room 118.