Capitol News Report: May 2018
By Shattuck & Associates Consulting, Inc.
General Assembly Enters Final Month of Spring Session
A key point in the legislative process was reached last Friday. Both legislative chambers had a deadline for passage for bills in their house of origin on April 27th. Now, legislative measures will proceed thru the second chamber during the month of May. The scheduled adjournment of the General Assembly is May 31st. A handful of bills of interest in the Senate had their deadline extended to May 3rd.
A little concerning is the lack of evidence that a FY 2019 budget will be pulled together before the scheduled adjournment of the Spring Session on May 31st.
Here are some of the key business issues of interest:
Power Grab of Specialized Private Construction Jobs:
SB 2480, sponsored by Sen. Hastings (D-Frankfort), sets a precedent that certain privately-owned petroleum refineries and petrochemical facilities within the state will be required to pay government mandated wages on construction work done on their own facilities. It also will have the effect of requiring all construction and maintenance work at to be exclusively performed by members of certain trade unions. SB 2480 mandates these privately-owned businesses to have a certain percentage of all workers to have successfully completed apprenticeship training. It requires undefined, advanced safety training regulated by the State. Senate Third Reading deadline extended to May 3rd. ABC OPPOSED
ABC member contacts have helped slow the advancement of this proposal. Several refineries affected directly by the legislation are meeting with their local labor officials this month. The Senate Sponsor has indicated that he does not intend to call SB 2480 for a vote with the meetings pending.
Changes to Wage Payment & Collection Act Passes the House with Agreed to Amendment
HB 4324 (Rep. Welch) Amends the Illinois Wage Payment and Collection Act requiring the Department of Labor to adjudicate claims under the Act within 30 days. IDOL is required to request that an employer deposit up to 10% of a disputed wage claim with the Department pending adjudication of the claim. Increases the administrative fees imposed upon an employer who has been demanded or ordered by the Department of Labor or a court to a pay wage settlement. Authorizes the placement of a judgment lien upon and employer's real estate and authorizes action under the Code of Civil Procedure for a citation or a supplementary proceeding to discover assets. The original bill created a nightmare of regulation and potential liability for business owners. The broad, strong opposition of business interests led to a more reasonable approach that House Labor Chairman Jay Hoffman (D-Belleville) helped persuade the proponents to accept. ABC Neutral
Agreed to Employee Expense Reimbursement Measure Passes Senate
SB 2999 (Sen. Van Pelt)/Rep. Conyears-Ervin) Sen. Van Pelt worked with the Illinois Chamber on an agreed amendment. As amended, SB 2999 requires an employer to reimburse an employee for all necessary expenditures or losses incurred by the employee directly related to services performed for the employer. It requires that the expenditure must be within the scope of employment, authorized or required and appropriate documentation is provided. Any rules and interpretation of law must be consistent with federal law. The measure is in House Rules Committee. It needs additional work to avoid abuse that we will try to iron out in the House. ABC Neutral
Governor Rauner Vetoes Power Grab Measure
SB 193, sponsored by Sen. Kwame Raoul (D-Chicago) and Rep. Hoffman, creates the Worker Protection Unit within the Office of the Illinois Attorney General to intervene in, initiate, enforce, and defend all criminal or civil legal proceedings on matters and violations relating to several statutes currently enforced by the Illinois Department of Labor. It also establishes the Worker Protection Task Force, which is to submit a report to the Governor and the General Assembly regarding its progress no later than December 1, 2018. ABC Supports Veto
Scheduling Proposals are Held
HB 5046 (Rep. Welch) Creates the Fair Scheduling Act to require employers to provide work schedules to employees at least 72 hours before the start of the first shift of the work schedule and to provide pay when an employee's work shift is canceled or reduced within 72 hours of the beginning of the shift. Prohibits retaliation by employers when employees seek to enforce rights under the Act. Authorizes private actions for damages. Enforced through the Department of Labor. Re-referred to House Rules Committee. A companion proposal SB 202, amendment 1, sponsored by Sen. Castro was re-referred to the Senate Assignments Committee. ABC Opposed
ABC Bills of Interest:
Wage Salary History: HB 4163, sponsored by Rep. Moeller (D-Elgin)/Sen. Castro (D-Elgin), amends the Equal Pay Act of 2003 to prohibit an employer from: (i) screening job applicants based on their wage or salary history, (ii) requiring that an applicant's prior wages satisfy minimum or maximum criteria, and (iii) requesting or requiring as a condition of being interviewed or as a condition of continuing to be considered for an offer of employment that an applicant disclose prior wages or salary. Prohibits an employer from seeking the salary, including benefits or other compensation or salary history, of a job applicant from any current or former employer, with some exceptions. Greatly expands administrative penalties and provides for punitive and compensatory damages while reducing employer defenses. Approved by the House on an 87-24 vote. Assigned to Senate Labor Committee ABC OPPOSED
Mechanics Lien: HB 4268, sponsored by Rep. Thapedi (D-Chicago), passed the House with agreed to language in House Amendment 1, which amends the Home Repair and Remodeling Act to replace notice language relating to lien waivers in the home repair consumer rights pamphlet. The new language states, “Before you pay your contractor, understand that the Mechanics Lien Act requires that you shall request and the contractor shall give you a signed and notarized written statement that lists all the persons or companies your contractor hired to work on your home, their addresses along with the amounts to be paid, and the total amount owed after the payment to those persons or companies. Suppliers and subcontractors have a right to file a lien against your home if they do not get paid for their labor or materials. To protect yourself against liens, you should demand that your contractor provide you with a Sworn Statement before you pay the contractor. You should also obtain lien waivers from all contractors and subcontractors if appropriate. You should consult with an attorney to learn more about your rights and obligations under the Mechanics Lien Act.” The pamphlet language is informational only and is not a substantive enforceable provision of the Home Repair and Remodeling Act and does not affect substantive law under the Mechanics Lien Act. Senate First Reading ABC Neutral
Construction Man-Hour Requirements: HB 4513, sponsored by Rep. Conyears (D-Chicago), same as HB 3744 from last year, amends the Illinois Procurement Code to require any project under a construction contract at least 10% of man-hours performing construction services be performed by individuals who reside in areas of poverty. Requires the Department of Central Management Services to annually release a list of areas of poverty that meet the requirements. Passed the House 61-47-1 ABC OPPOSED
Local Government Construction Bonds: HB 4531, sponsored by Rep. Moylan (D-Des Plaines), amends the Public Construction Bond Act, the Counties Code, and the Illinois Municipal Code to allow a county or municipality to require an irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, or insurance company from a builder or developer to guarantee completion of a project improvement. Eliminates the preemption of home rule powers. Lost on a House vote 45-62 ABC OPPOSED
State WC Insurance Company: Rep. Laura Fine (D-Glenview) is seeking to create a state-backed workers' compensation insurer in HB 4595. The measure is identical to legislation vetoed by Governor Rauner last summer. The measure includes a $10 million loan from the IWCC Operations Fund. The fund is supported by fees paid by employers thru their WC insurance policies or directly by self-insured employers. $10 million represents one third of the Commission's budget. The measure was approved by the House on a 62-43 vote. It now goes to the Senate for consideration. ABC OPPOSED
Local Preference: HB 4774, sponsored by Rep. Kofowit (D-Aurora), amends the Counties Code in provisions regarding determination of the lowest responsible bidder by a county with fewer than 2,000,000 inhabitants, by requiring the county board to award the contract to a local company that bids no more than 10% of the lowest bid, if that lowest bid is made by a non-local company. Defines “local company” as a company or business entity located within the contracting county or any contiguous county in the State that has the majority of its regular, full-time workforce within the contracting county or contiguous county. Amends the Township Code and Illinois Municipal Code to make similar changes concerning construction contracts (in municipalities of less than 500,000). Lost on a House vote 42-46-8 ABC OPPOSED
Mechanics Lien Pilot Program: HB 5201, sponsored by Rep. Ford (D-Chicago), amends the Counties Code to create a mechanics lien demand and referral pilot program. It allows a recorder for a county with a code hearing unit to adopt rules establishing a mechanics lien demand and referral process for residential property after a public hearing. The recorder may serve a Notice of Defective Lien to the owner if the recorder determines the mechanics lien is defective. If the owner of the residential property confirms in writing that the lien is not involved in pending litigation, the owner may request the recorder to refer the defective mechanics lien to the county’s code hearing department for adjudication or serve a Demand to Commence Suit forcing the lienholder to either file suit, respond to the Demand, or forfeit the lien. Senate Assignments
Blue Collar Jobs Act: HB 5864, sponsored by Rep. K. Wheeler (R-Oswego), creates the Blue Collar Jobs Act to create a High Impact Business construction jobs credit and an Enterprise Zone construction jobs credit against the taxpayer’s Illinois income taxes based on the incremental income tax attributable to laborers or workers employed at certain construction sites located in Enterprise Zones. Creates a New Construction EDGE Credit based on the incremental income tax attributable to laborers or workers employed at a construction site associated with EDGE projects. Creates a River Edge construction jobs credit based on the incremental income tax attributable to laborers or workers employed at certain construction sites in a River Edge Redevelopment Zone. Requires contractors and subcontractors associated with projects that receive credits under the amendatory Act to file certified payroll information with the Department of Labor and the Department of Commerce and Economic Opportunity. House Rules ABC Reviewing
Procurement Bulletin: SB 1901, sponsored by Sen. Weaver (R-Peoria)/Rep. Spain (R-Peoria), amends the Illinois Procurement Code to set forth provisions providing that whenever a project requiring construction management services is proposed for a State agency, the Capital Development Board shall provide advance notice published in the procurement bulletin setting forth the projects and services to be procured. Removes a provision to require the request for proposals to be mailed to each prequalified firm. Assigned to House State Government Administration Committee
Green Building Requirements: SB 3031, sponsored by Sen. Weaver/Rep. Cabello (R-Loves Park), amends the Energy Efficient Building Act to require the International Code Council’s International Energy Conservation Code, as adopted by CDB, to also apply to certain State facilities beginning on the effective date of the amendatory Act. Amends the Green Buildings Act to remove provisions requiring construction and major renovation projects to achieve the highest level of certification practical within the project budget. New State-funded building construction and major renovations of existing State-owned facilities would be required to achieve, at a minimum, the silver certification of the Leadership in Energy and Environmental Design’s rating system or an equivalent standard. Assigned to House Energy Committee
Prompt Payment-Retainage: SB 3052, sponsored by Sen. Mulroe (D-Chicago)/Rep. Turner (D-Chicago), amends the Contractor Prompt Payment Act. Provides that a retainage of 10% of the payment may be withheld from a payment under a construction contract prior to the completion of 50% of the contract. Provides that after 50% of the contract is completed, the amount of retainage for any subsequent payment may not exceed 5%. Effective immediately. House Rules