Next session dates: April 15-18, 2008
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This week...
Democrats, Trial Lawyers Team Up for New Structural Work Act
At the behest of the Illinois Trial Lawyers Association, one of the strongest allies and party fundraisers, Democrat members of the House Judiciary Civil Law Committee voted in lockstep this week to reinstate the Structural Work Act (HB 2094) in Illinois. Imposing this duplicative law will increase costs on businesses and consumers and hinder the economy while lining the pockets of trial lawyers.
The measure, contained in an amendment to HB 2094 (Rep. John Fritchey, D-Chicago), was filed, released from the Rules Committee and passed by the Civil Law Committee in less than 24 hours. The IMA applauds Representatives Chapin Rose, David Reis, Ron Stephens, Sid Mathias, and JoAnn Osmond for their opposition.
Originally created in 1907, the Structural Work Act or "Scaffold Act" was originally intended to allow for civil action for on-the-job injuries. Subsequently, Illinois created the Workers' Compensation Act in 1911 as a no-fault system where employees receive medical treatment for injuries and workplace wages in exchange for holding employers harmless for liability. At the time, the Structural Work Act was not repealed because Illinois law prohibited an employee from taking advantage of both laws.
However, in the 1950s, a lawsuit was filed and a judge ruled that injured workers could seek compensation under both Acts. Unfortunately, trial lawyers seized upon this ruling and created a cottage industry spawning countless lawsuits against employers where they were entitled to an unfair "second bite at the apple" for the same injury.
In 1995, Governor Jim Edgar and members of the General Assembly repealed the Structural Work Act after intensive lobbying by the IMA and business community. Following its repeal, New York is the only state in the country that continues to have both laws on the books.
Proponents of the bill falsely claim that the Structural Work Act will result in safer worksites. However, statistics clearly show this is not true. Since the repeal of the Structural Work Act in 1995, the number of construction jobs has risen from 215,000 to 275,000 while the number of construction site fall fatalities decreased from 20 to 14.
The Structural Work Act is an archaic and unnecessary burden on employers that would further underscore Illinois' anti-business climate. IMA members should immediately contact your State Representatives to urge opposition to this hostile attack on Illinois employers. Your contact information for your elected officials can be found here.
Graduated Income Tax Proposal Defeated
An effort by Rep. Mike Smith (D-Pekin) and thirteen fellow House Democrat lawmakers to double the income tax on individuals earning more than $250,000 per year was defeated this week on a vote of 52-60. Contained in HJRCA 42, the measure sought to increase the individual income tax rate from 3 to 6 percent in order to raise nearly $3 billion annually.
The Illinois Constitution (Article IX, Section 3(a)) states that the income tax shall be on a non-graduated rate. Its inclusion into the State Constitution means that Illinois lawmakers are prohibited from changing the rate on a particular class of individuals without amending the Constitution which requires approval by the electorate.
According to testimony, doubling the individual income tax on persons earning 250,000 or more would have impacted nearly 107,000 individuals. While the proposal did not change the corporate income tax rate, the change would have negatively impacted many small and medium-sized business that are set up as Subchapter S Corps, LLCs, and partnerships where revenue is sources to the individual shareholders.
While the proposal was defeated, it technically remains alive because a legislator has filed a motion to reconsider the vote. For the measure to be included on the ballot in the 2008 fall election, it must pass both the House and Senate by a 3/5 majority before May 4.
IMA Business Day – Your Help is Needed!
Action at the Capitol this week clearly demonstrates the need for manufacturers of all sizes from across the state to join in the IMA's Annual Business Day event on May 7. With critical tax, labor, and environmental issues being debated, we need your voice at the table. Legislators need to hear directly from businesses in their districts about the need to stop the loss of manufacturing jobs by creating a positive economic climate.
Please consider attending this important event that will feature a luncheon, topical breakout sessions, Capitol visits with legislators, and an evening reception. Sponsorships are also available.
Senate to Consider Graduated Income Tax Proposal
In response to the House proposal to create a graduated income tax, similar legislation was introduced in the Senate by Sen. Mike Frerichs (D-Gifford). Under the terms of SJRCA 92, the Illinois Constitution could be amended to authorize a graduated income tax on both individuals and corporations if approved by the voters in the fall election. The proposed change would continue to maintain the current 8 to 5 income tax ratio between corporations and individuals.
Again, if passed by a 3/5 majority in both chambers, the proposed constitutional amendment would go to the Illinois voters for ratification. If approved, the Governor and General Assembly would be able to increase the income tax rates by passing legislation. The current measure does not recommend or suggest specific income tax rates.
SJRCA 92 is posted for a hearing in the Senate Executive Committee next week.
House Passes Recall Amendment
Fueled in large part by animosity toward Governor Blagojevich, a bipartisan group of Illinois House members voted this week in favor of a constitutional amendment that would allow voters to recall elected officials. HJRCA 28, sponsored by Rep. Jack Franks (D-Woodstock) would allow voters to recall both constitutional officers and members of the General Assembly. Members of the judiciary are exempt from recall. If approved by the legislature by May 4, the measure will appear on the ballot in November. If the voters ratify the amendment, it would allow for recall elections if 12 percent of voters for a constitutional office in the previous election sign a petition or 20 percent of the voters for a legislator.
In practicality, it would take nearly 416,000 signatures to recall a constitutional officer (Governor, Lt. Governor, Secretary of State, Attorney General, Comptroller, and Treasurer) and generally between 5,000 and 10,000 signatures to begin a legislative recall election.
The measure now moves to the Senate for consideration.
Senator Proposes Further Changes to E-Waste Bill
At the request of two state senators and one consumer electronics manufacturer, Sen. Susan Garrett (D-Lake Forest) and environmental groups plan to amend the proposed Electronic Products Recycling and Reuse Act. Contained in SB 2313, the measure seeks to require manufacturers, retailers, and recyclers to perform certain duties in order to encourage the residential recycling of computers, laptops, processors, and televisions. In particular, the program would create recycling goals for manufacturers and associated penalties for not complying.
Under the new amendment, printers would also be considered a residential product that would be required to be recycled. This proposed change would violate a previous agreement that strictly limited items and excluded cellular phones, printers, and other products because they are recycled in other ways.
The IMA will continue to engage in discussion and debate on this issue which has raged for more than a year.
Department of Revenue Supports Use of Dyed Diesel Fuel Program
Acting quickly in response to concerns from the manufacturing community about comments made by auditors at the Department of Revenue, Illinois Director of Revenue Brian Hamer confirmed the continued existence of the dyed diesel fuel program in Illinois.
Under the program created in 2000 (P.A. 91-0173), red dye is added to motor fuel used for non-highway use (i.e. testing engines) and this fuel is not taxed because the motor fuel tax is imposed only for the privilege of operating motor vehicles and recreational watercraft in the state of Illinois. Red dye is added to the fuel so that law enforcement officers and auditors can verify that vehicles using Illinois roadways are not trying to avoid paying appropriate taxes.
The importance of this program has enhanced compliance and eliminated the need for the department to license, process, and maintain accounts on approximately 8,000 Bulk Users of special fuel. As a result, taxpayer burden has been reduced as they are no longer required to file bulk user returns. These taxpayers have also benefited by not having to maintain support documentation and file claims for refund on the dyed fuel they used off-highway.
In recent days, Revenue auditors had questioned whether the tax system was still in place or whether it had expired due to a sunset provision contained elsewhere in law. The IMA applauds Director Hamer for his quick and accurate response to ensure that this successful program continues.
More Candidates File for November Ballot
The deadline to fill vacancies for federal, state and local offices passed last Monday and dozens of candidates filed to run for election. Nearly 70 additional candidates filed their required paperwork by the Monday deadline to seek spots in Congress or the Illinois General Assembly.
Notable candidates include Republican Joan Krupa who will now face Democrat challenger Jehan Gordon in the 92nd House district being vacated by Rep. Aaron Schock (R-Peoria). Schock, who is leaving the Illinois legislature to replace retiring Congressman Ray LaHood (R-Peoria), now has a new opponent, Colleen Callahan, in the congressional race.
Other new candidates include Democrat Joseph Heneghan who will face Republican Michael Connelly in the 48th district to replace retiring Rep. Jim Meyer (R-Naperville). Elsewhere, incumbent officials Sen. Terry Link (D-Vernon Hills), Rep. Mark Beaubien (R-Barrington Hills), Rep. Skip Saviano (R-Elmwood Park) and Rep. Sandy Cole (R-Grayslake) all face challengers.
A complete list of incumbents and challengers is available at the Illinois State Board of Elections.
Other Springfield Highlights available online
