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Government Affairs Reports

  

May 5, 2017

This Week In Springfield

“RIGHT TO KNOW” AFFECTS LOCAL SMALL BUSINESSES

Springfield is at it again. Another year, another mandate on job creators. Senate Bill 1502 (Hastings), also known as the “Right to Know” bill, passed the Senate yesterday 31-21-0.

If enacted, this bill would require websites and online services to post a privacy policy identifying the categories of personal information they collect and respond to consumer requests for all categories of personal information that was disclosed.

This bill applies to any information that “identifies, relates to, or describes” an individual.  It includes things like a person’s name, address, or photograph, but also “deidentified” or anonymous information such as “alias, nickname, and user name,” or IP addresses.

The proposed legislation would require small businesses across our state to create massive databases of personal information about their online customers/users that would not otherwise have to create or collect. Many businesses will also have to pay extra to keep these databases secure from hackers and identity thieves, hire or train staff to respond to consumer requests and purchase more insurance in case of a data breach.

The Chamber is unalterably opposed to this legislation as it would add increased costs to small businesses, employee training and insurance costs.

If business owners do not comply in the exact way this legislation is written, they could be forced into expensive and superfluous lawsuits.

Many businesses will be forced to hire lawyers to draft privacy policies for their websites that ultimately don’t benefit consumers.

Click and share here, to tell your lawmakers that this legislation sends the wrong message to consumers and small businesses!

“TAX HAVEN” BILL FAILS TO ADVANCE IN SENATE 

Today, the Chamber was instrumental in the defeat of a bill that would punish companies that engage in perfectly legal tax planning.  SB 1798 (Hastings) failed to receive enough votes to pass favorably out of the Senate on a roll call of 29-20-0.

As noted previously, the Chamber was the only stakeholder that remained opposed to the bill after an amendment was filed that stripped the “tax haven” provisions out of the bill.

However, the bills retained prohibitions against “expatriate companies” from participating in bidding on state contracts under the Procurement Code. There are some carve outs for “expatriate companies” that have been identified as provided certain essential products or services to the State of Illinois.

The bills also retained language involving investment in expatriate companies by the various retirement systems. As amended, the bills require the State Board of Investment to identify “expatriate companies.” The retirement systems are required to either divest themselves of such investments, or engage in “shareholder activism.”  The bills provides that shareholder activism may include such actions as “bringing shareholder resolutions and proxy voting on shareholder resolutions.

The House version, which passed last week, has since been assigned to the Senate Executive Committee.  The Chamber remains opposed an stands ready to testify in opposition to a bill that is nothing more than political grandstanding.

CHAMBER TESTIFIES AGAINST 500% TAX INCREASE 

On Wednesday, Keith Staats of the Chamber’s Tax Institute testified in opposition to an initiative of the Chicago Teacher’s Union that would impose a 500% tax increase on partnerships and S corps that engage in investment management services.  The intent of the sponsor is to impose a tax of 20% in order to “fix” the lower federal income tax rate on “carried interest.”

Staats testified in strong opposition to the bill and highlighted that it would likely be declared unconstitutional as an unconstitutional service tax, or as violating the provision of the Illinois Constitution that forbids the imposition of more than one income tax.  Staats also noted that it is inappropriate to attempt to fix, perceived problems with the federal tax code through state legislation.  Finally, Staats noted that even if the bill were to somehow survive the apparent constitutional infirmities, the bill would likely cause investment management services providers to leave the state of Illinois and there would be litigation over when the “service” is provided in Illinois so as to be subject to taxation.

The bill was voted out of committee on a 5-4 vote.  All of three Republican members of the committee voted against the bill, as did one Democrat.  The bill is now on third reading in the Senate and could be called for a vote today.  We continue to express our strong opposition to this proposal.

COOK COUNTY ORDINANCE BAD FOR BUSINESS

Last Fall, Cook County passed two ordinances that would (1) raise the minimum wage to $13/hr and (2) force businesses within the county to provide up to 5 sick days a year for all employees. The Illinois Chamber is fighting these sorts of anti-business legislation at the state level in Springfield but we are equally concerned with these ordinances out of Cook County. The legislation does allow home rule municipalities within the County to opt-out of the ordinances, but they must do so prior to implementation on July 1, 2017. Many municipalities have begun to opt-out, but there are still many that have not.

The Illinois Chamber is encouraging our members and particularly local chambers to contact their local village and city councils to ask them to support the opt-out clause of this ordinance.

CHAMBER BILL HOLDS LOCAL GOV’T ACCOUNTABLE

This week, an initiative of the Chamber that is intended to hold local governments accountable, was given a subject matter hearing (no official votes taken).  The bill, SB 1701 (McConnaughay), would establish a Home Rule Administrative Procedure Act.  The bill requires the one home rule county, Cook, and all home rule municipalities to promulgate administrative interpretations and pronouncements related to local ordinances as rules through a process at the local level that would be similar to the rulemaking process at the state level.

This intent of SB 1701 is to require these units of local government to provide the opportunity for notice and comment to members of the public.  This legislation is designed to end situations such as when the City of Chicago issued Ruling #11 requiring automobile leasing companies located outside the City to begin collecting the Chicago automobile leasing tax, or when the City of Chicago determined that it would “re-interpret” its authority under the Personal Property Lease Transaction Tax to begin taxation of cloud-based software.  SB 1701 would require rulemaking before a home rule unit could take actions of this type.

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