End of Session Report: June 2018
General Assembly Adjourns Approving a Bipartisan Budget…
The General Assembly approved the FY 2019 budget intended to create financial stability for Illinois. The $38.5 billion proposal is expected to be signed by Governor Rauner. Lawmakers indicate that the budget is balanced through a combination of higher revenue and almost $600 million in cuts. Included is $350 million in new funding for public schools, as established in the new, evidence-based formula passed last year, and an additional $50 million for early education. Higher education institutions receive a 2 percent increase in funding, and MAP grants are extended to four years and $25 million has been set aside for a new grant program, AIM HIGH, that will provide additional tuition assistance.
The budget makes several changes to the governor’s proposal. Instead of shifting the cost of pensions to local schools, the budget includes a pension buyout option estimated to save over $400 million. Group health for state employees will also continue to be fully funded, and the governor’s proposed 4 percent cut to Medicaid rates was not included.
Illinois Legislature Takes Backward Steps on Workers' Comp… On May 31, Illinois Senate's final significant action before adjournment was to pass two bills that contained provisions that cannot be characterized as positive steps for contractors. Neither of these proposals are reform of the system.
SB 904, sponsored by Sen. Mike Hastings (D-Orland Hills) and Rep. Jay Hoffman (D-Belleville), will allow medical providers to pursue the 1% per month interest penalty on unpaid medical bills in circuit court. During debate it was clarified that the intent of the legislation is that the changes to Section 8.2 (d) apply to undisputed bills. In addition, the measure adds language to Section 8.2a Electronic Billing requiring the Illinois Department of Insurance to adopt rules regarding health care providers responsibility "for supplying only those medical records pertaining to the provider's own claims that are minimally necessary under the federal Health Insurance Portability and Accountability Act of 1996". Nine Republicans joined 29 Democrats in passing the measure on a 38-7-4 roll call. The legislation now heads to Gov. Rauner for his consideration. ABC was opposed.
House amendment 1 to SB 1737 makes changes to the workers’ compensation insurance rates overseen by the Illinois Department of Insurance (DOI). Those changes will take Illinois from its current competitive marketplace approach to requiring an insurer/rating organization to file its rates, manuals, rules, etc. with DOI 30 days before their use. DOI would have 30 days from the filing to approve or disapprove the rates. It also, requires a company that intends to deviate from the filing of a licensed rating organization of which it is a member, the company shall provide the Director with supporting information that specifies the basis for the requested deviation and provides justification for the deviation. At renewal, if a rate is greater than 5% more than the rate filed with DOI, a notice of the increase must be provided to the policyholder 30 days prior to renewal. The House approved the measure 85-28 and the Senate sent onto the Governor with a 42-5 vote. ABC was neutral.
Employment Law Issues Heading to Governor… HB 4572, sponsored by Rep. Will Guzzardi (D-Chicago) and Sen. Castro, amends the Illinois Human Rights Act to redefine "employer" to include any person employing one (currently 15) or more employees within Illinois during 20 or more calendar weeks within the calendar year of or preceding the alleged violation. The Illinois Chamber opposes this measure. This bill passed both houses and ABC will seek a veto by Gov. Rauner.
SB 2999, sponsored by Sen. Patricia Van Pelt (D-Chicago) and Rep. Melissa Conyears-Ervin (D-Chicago) 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. ABC’s lobbyist worked out an amendment to remove our opposition and ABC was neutral on its passage. The bill now heads to the Governor’s desk.
HB 4163, sponsored by Rep. Anna Moeller (D-Elgin) and Sen. Cristina Castro (D-Elgin) amends the Equal Pay Act of 2003 prohibiting an employer from inquiring about salary and wage history by adding new standards that limit employer defenses and adding new compensatory and punitive damage penalties on businesses who are not compliant. The ABC opposed this bill and prefers the alternative method outlined in SB 3100, sponsored by Sen. Jennifer Bertino-Tarrant (D-Plainfield). SB 3100 only prohibits the inquiry about or using of a job applicant's wage, salary, benefits history. It does not diminish employer defenses or enhance and expand legal remedies and fines as HB 4163 does. HB 4163 passed both houses. The Senate sponsor has filed a motion to reconsider the vote which hold the bill in the Senate until the motion is withdrawn. ABC will be urging a total veto when it goes to the Governor.
HB 4743, sponsored by Rep. Lashawn Ford (D-Chicago) and Sen. Kimberly Lightford (D-Chicago) amends the Equal Pay Act providing that no employer may discriminate between employees by paying wages to an African-American employee at a rate less than the rate at which the employer pays wages to another employee who is not African-American for the same or substantially similar work on a job that requires equal skill, effort, and responsibility and is performed under similar working conditions. We have recommended that "race" would be more appropriate than singling out African Americans or any other race. We also point out that the protection being sought is already prohibited under state and federal law. The bill heads to the Governor’s desk.
HB 1595, sponsored by Rep. Katie Stuart (D-Edwardsville) and Sen. Bill Haine (D-Alton) amends the Nursing Mothers in the Workplace Act provides for reasonable break time (instead of "unpaid break time each day") during the first year after the child's birth each time the employee needs to express milk. The break time may run concurrently with any break time already provided to the employee and an employer may not reduce an employee's compensation for time used for the purpose of expressing milk or nursing a baby. An employer shall provide reasonable break time as needed by the employee unless to do so would create an undue hardship as defined by the Illinois Human Rights Act. The bill heads to the Governor’s desk.
Other key employment law issues that did not pass…HB 4324, sponsored by Rep. Chris Welch (D-Hillside) and Sen. Lightford, 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, including ABC, led to a more reasonable approach that was approved by the House. However, Sen. Lightford amended the bill that unraveled the agreement. The House sponsor, Rep. Welch, filed a motion to non-concur which the House approved. During the fall veto session, the Sen. Lightford may recede from the Senate amendment which then sends the measure to the Governor. If the non-concur motion is rejected, the bill likely dies later this year.
HB 2771, sponsored by Rep. Christian Mitchell (D-Chicago) and Sen. Toi Hutchinson (D-Olympia Fields) requires employers to provide 40 hours of paid sick time. The bill exempts unionized construction companies, certain railroad employees, school districts, park districts, and City of Chicago sister agencies. An employee may earn sick days after 180 days of employment. The bill failed to receive the required number of votes in the House to concur to Senate amendments. We expect this ABC-opposed measure to resurface during veto session.
This session saw two committee hearings on two related bills. HB 5046 (Welch) and SB 202 (Castro). Both measures create 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. Neither of these ABC opposed bills were moved this session but we do expect similar legislation to return next session.
ABC ISSUES THAT PASSED BOTH CHAMBERS
HB 4268 HOME REPAIR-CONSUMER NOTICES, sponsored by Rep. Andre Thapedi (D-Chicago)/Sen. John Mulroe (R-Chicago), amends the Home Repair and Remodeling Act replacing in the home repair consumer rights pamphlet notice language relating to lien waivers with the following: "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 (known as a "Sworn Statement") that lists all the persons or companies your contractor hired to work on your home, their addresses along with the amounts about 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." ABC was neutral.
HB 4790 COMPOST SOIL CONSTRUCTION, sponsored by Rep. Carol Sente (D-Buffalo Grove)/Sen. Dave Koehler (D-Peoria), amends the Illinois Procurement Code providing that any State agency that undertakes a landscaping project that requires the use of new or offsite soil for landscape-related use and that is located within 10 miles of any Illinois Environmental Protection Agency-permitted compost facility shall request a base bid with an alternative for compost-amended soil for that project. The State agency shall consider whether compost-amended soil shall be used. Requires the State agency to incorporate compost-amended soil into a landscaping project if the cost of using compost-amended soil is equal to or less than the cost of using other new or offsite soil. Provides that in 2019, the Department of Transportation shall conduct 2 pilot demonstration projects using compost-amended soil. Within one year of substantial completion of both projects, the Department shall report electronically to the General Assembly stating the immediate costs of the projects, long-term operational cost savings, and advantages and disadvantages of using compost-amended soil. ABC was neutral.
HB 5201 MECHANICS LIEN DEMAND & REFER, sponsored by Rep. LaShawn Ford (D-Chicago)/Sen. Cristina Castro (D-Elgin), creates a mechanics lien demand and referral pilot program. In counties with a code hearing unit, a recorder may adopt rules establishing a mechanics lien demand and referral process for residential property after a public hearing. If a recorder determines that a mechanics lien recorded in the grantor's index or the grantee's index is an expired lien, the recorder shall serve a Notice of Defective Lien by certified mail to the last known address of the owner. When the lienholder commences a suit or files an answer within 30 days or the lienholder records a release of lien with the county recorder provisions (rather than the mechanics lien is forfeited because no suit or answer is filed), then the demand and referral process is completed for the recorder for that property. A lienholder or property owner may remove the matter to circuit court under specified circumstances and if the matter is not resolved in the circuit court, the recorder may reinstitute the demand and referral process; and provides that the administrative law judge handling the demand and referral proceedings needs to be familiar with the areas of law relating to mechanics liens. ABC was neutral.
SB 1901 PROCUREMENT CODE-CONSTRUCTION NOTICE, sponsored by Sen. Chuck Weaver (R-Peoria)/Rep. Ryan Spain (R-Peoria), amends the Illinois Procurement Code 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 (currently, published in a request for proposals) setting forth the projects and services to be procured. ABC was neutral.
SB 3031 GREEN BUILDINGS-REQUIREMENTS, sponsored by Sen. Weaver/Rep. John Cabello (R-Loves Park), amends the Energy Efficient Building Act to provides that the International Code Council's International Energy Conservation Code, as adopted by the Capital Development Board, shall also apply to certain State facilities beginning on the effective date of the amendatory Act. Amends the Green Buildings Act to remove provisions providing that construction and major renovation projects must achieve the highest level of certification practical within the project budget. Requires new, State-funded building construction and major renovations of existing State-owned facilities to be designed to achieve, at a minimum, the silver certification of the Leadership in Energy and Environmental Design's rating system or an equivalent standard. ABC was neutral.
Here are other measures that ABC Opposed that we were able to contribute to their defeat…
ABC was extensively engaged in the defeat of SB 2480 (Hastings). This measure would have the effect of requiring all construction and maintenance work at privately owned petroleum refineries and petrochemical facilities within the state to be exclusively performed by members of certain trade unions. It requires a certain percentage of all workers to have successfully completed apprenticeship training. It requires advanced safety training regulated by the Illinois Environmental Protection Agency (IEPA). The bill was never called for a full vote in the Senate.
SB 3052 CONTRACT PROMPT PAY RETAINAGE, sponsored by Sen. Mulroe/Rep. Luis Arroyo (D-Chicago), amends the Contractor Prompt Payment Act allowing a retainage of 10% of the payment to be withheld from a payment under a construction contract prior to the completion of 50% of the contract. After 50% of the contract is completed, the amount of retainage for any subsequent payment may not exceed 5%. ABC was neutral.
SB 2213 (Biss/Stratton) would have required Illinois environmental laws and regulations, as well as workplace safety laws, remain as strict or more stringent than federal laws in place before January 19, 2017.
SB 3005 (Raoul) would allow any “persons” to appeal or intervene in lawsuits challenging decisions of state agencies. This means that any person, Illinois resident or not, can be listed as an interested party in a proceeding, a power currently afforded to the agencies and plaintiff party requesting the proceeding.
HB 2717 (Welch) if the Department of Revenue discloses confidential financial information to a municipality or county, then the Department of Revenue may also disclose that financial information to an independent third party who is authorized in writing by that municipality or county to receive the information.
A motion to override the Governor's veto on SB 193 (Raoul/Hoffman) failed to receive the required number of votes in the House. The measure would have created 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.