March 7, 2014
Chamber Calls for Passage of Trade Promotion Authority
The Illinois Chamber is urging Illinois members of the US Congressional Delegation to support passage of trade promotion authority to increase global free trade. The Illinois Chamber of Commerce has been engaged in global trade over the last decade supporting numerous international initiatives to include Free Trade Agreements with Colombia, Panama and South Korea. Through its International Business Council the Illinois Chamber is committed to expanding Illinois’ role in the Global Marketplace and increasing the State’s import-export trading capabilities. This is critical to the future economic health of Illinois to drive much needed revenue and jobs.
The Illinois Chamber stressed the vital importance of Trade Promotion Authority (TPA) and encouraged the Illinois Congressional Delegation to come together on this crucial bi-partisan issue. Extending fast-track TPA for the President to pursue trade agreements will open markets for U.S. goods and services and will level the playing field for U.S. companies and workers to compete in overseas markets.
Illinois is the largest exporting state in the Midwest and the fifth largest in the U.S. Exports represent the single fastest-growing segment of the Illinois economy and are essential to its future development. In 2012, Illinois exports totaled over $68.1 billion, an increase of 5.1% or $3.3 billion from 2011, exceeding average U.S. export growth for the second consecutive year. Direct exports accounted for nearly 10% of the Gross State Product (GSP) and provided 210,913 direct jobs; 1.6 million jobs supported by trade overall . Top Illinois exports around the globe include a diverse range of professional services as well as industrial, agricultural, and consumer products; machinery was the single largest contributor to growth with a $2.3 billion, or 13% increase over 2011. Moreover, Illinois is home to over 2,000 foreign firms that employ more than 350,000 Illinois residents. It is ranked fifth among all states and Chicago second among all metropolitan areas in locations for new and expanded corporate facilities.
In short, trade plays a crucial role in Illinois economy as it serves as an engine for growth, a vehicle for innovation, a driver of prosperity and a substantial job provider.
TPA will provide a clear framework to negotiate trade agreements. Under TPA, Congress will set negotiating objectives and require the executive branch to consult with legislators during negotiations. It will also offer assurance to our negotiating partners that the United States is committed to the international trade negotiating process. Since 1930s Congress has authorized every president to negotiate trade agreements. Congress must pass a new TPA to capitalize on the benefits of current and future trade agreements — tear down barriers to our products and services, increased U.S. investment, growth and jobs.
The record of America’s FTAs is outstanding. While our 20 FTA partners represent just 10 percent of the global economy, they buy nearly half of U.S. exports. The expansion in trade fueled by these FTAs supports more than five million American jobs.
To expand these benefits, the U.S. is negotiating the Trans-Pacific Partnership agreement with 11 other Asia-Pacific nations, including some of the world’s fastest growing economies. The U.S. is also negotiating the Transatlantic Trade and Investment Partnership with the European Union, the largest market for U.S. business. The success of these treaties will boost American exports and provide an anchor against trade discrimination.
However, to make either of these growth-driving trade agreements a reality, Congress must first approve TPA. Ignoring or disengaging competing countries will not change the realities of the global economy. A proactive approach is needed: the best posture is for our President to be at the bargaining table to negotiate the best possible agreement to open foreign markets, spur economic growth and create American jobs.
Loophole Closure Bill Returns
Governor Quinn’s suggested tax increases from last year have all been resurrected again in SB 3401. Senator Toi Hutchinson, Chairperson of the Senate Revenue Committee, is the sponsor. The proposed legislation would decouple Illinois from the federal Domestic Production Activity Deduction (DPAD); eliminate the deduction for both domestic and foreign dividends; and eliminate the non-combination rule for unitary filers.
We met briefly with Senator Hutchinson this week to ask about her plans for SB 3401. She indicated that she has no immediate plans to move the bill and that she is open to further discussion on the provisions of the bill –she is not committed to passing it as is. We may have a better sense of where this bill is going after the Governor gives his Budget Address on March 26th. We will be monitoring it closely and will keep you advised.
Municipal Contingent Fee Audits
HB 5422, sponsored by Rep. Natalie Manley of Joliet, would allow any person designated by a municipality to “examine all of the records reported to the Department pertaining to the collection of use and occupation taxes for the municipality by the Department…” It also broadens the number of municipal officers or employees with access to sales tax data at the local level. We believe HB 5422 would encourage municipalities to conduct local sales tax audits independent of the Department of Revenue which could lead to all sorts of conflicting policy positions on the application of local sales taxes—not to mention the increased burden on Illinois business’s due to the addition of yet another level of tax audit. We understand that the language has been proposed by persons interested in conducting local sales tax contingency fee audits for Illinois municipalities. A representative of the Department of Revenue notified us today that they are opposed to the bill. The Illinois Chamber strongly opposes the bill and will be working with a coalition of other business associations to prevent its passage.
Illinois Chamber Legislative Initiatives – part 2
Every year the Illinois Chamber files a number of legislative initiatives to focus on during session. This week we will focus on the key remaining items of various topics from our legislative package.
HB 5936 – Chamber initiative to transfer asbestos regulatory authority of commercial buildings from the Department of Public Health to the EPA’s Pollution Control Board passed out of House Business & Occupational Licenses Committee by a vote of 9-0-0. Bill likely to be modified significantly, but we expect it to be an important step forward in resolving the issues Illinois businesses have been facing with redundant and overreaching regulations from the Department of Public Health.
SB 2971 – Chamber initiative to provide more clarity in the federal government’s E-Verify employment verification program. This legislation would make it a civil rights violation to “knowingly” fail to follow certain procedures under the program, rather than the provisions of current law of just “failing” to follow the procedures.
HB 5439 / SB 3388 / SB 3394 – Chamber initiative provides that the research and development credit applies on a permanent basis. Provides that the credit may be carried forward for a period of 20 years instead of 5 years. Increases the amount of the research and development credit by providing that the increase in qualifying expenditures shall be an increase over 50%, instead of 100%, of the average of the qualifying expenditures for each year in the base period.
SB 3278 – Chamber initiative that extends the Manufacturer’s Purchase Credit until August 30, 2019. MPC is set to expire this August.