Legislative News

The Legislative News is here to keep you informed of upcoming legislation.

Federal Updates

ecaling Back Financial System Reform Plan
LEGISLATIVE UPDATE:

Federal Legislation

Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011 .

On April 15, 2011, President Obama signed into law H.R. 4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011, which passed the Senate by a vote of 87 to 12, without amendments.

 

The law effectively repeals the unpopular new corporate information reporting requirements that were set to go into effect in 2012 as a part of the Patient Protection and Affordable Care Act (i.e., the health care reform laws). In general, the law previously required employers to furnish a 1099 statement to a corporate vendor when that corporation spent more than $600 in one year with the vendor .

 

Tax Refunds Amounts Surge

The Wall Street Journal estimated about three-quarters of filers will receive tax refunds this year. While the number of those receiving refunds remains the same, the amount of those refunds has surged.

 

This recent increase in the amount of tax refunds is not limited to taxpayers in any one income level; thus the overall increase cannot be attributed to job or investment losses. One possible explanation for the increase is the new or short-lived tax benefits for which taxpayers may not have adjusted their withholding. Also, non-tax reasons may play a role in the increase. For example, some taxpayers like the notion of a big lump-sum refund payment, somewhat similar to a bonus.

 

Tax Relief Act of 2010 and Life Insurance

The Federal Estate Tax, which was temporarily abolished for the year 2010 was reinstated for the years 2011 and 2012. Persons dying in those years can leave a $5 million estate, tax free, with amounts over $5 million taxed at a new federal rate of 35%. The spousal exclusion remains and bequests to a spouse are not subject to the federal estate tax. Many states, including Illinois, impose a separate estate or inheritance tax that also must be paid. Consult with your estate planner regarding Illinois estate tax obligations for decedents. On December 31, 2012 this new federal estate tax law will sunset, and the size of a federally taxable estate will be reduced to $1 million with estates in excess of that amount to be taxed at 55% of the excess over $1 million.

 

While the Tax Relief Act of 2010 certainly lessens the estate, gift and generation-skipping transfer (GST) tax burdens for many Americans, it may not necessarily eliminate or even lessen the need for life insurance.

 

As the law currently reads, in year 2013, the exemption amount will be reduced to $1 million per person for federal estate and gift tax purposes. For federal GST tax purposes, the exemption amount will be just $1 million per person, subject to indexing for inflation. Portability will end, and the estate, gift and GST tax rate will be increased to 55%. Thus, in light of the uncertainty of the future tax laws, it is somewhat risky to reduce life insurance at this point.

 

Further, other reasons for purchasing life insurance still exist: replacement of income of a deceased family breadwinner, protection of the value of a business on the death of a key employee, provision of liquidity under a buy-sell agreement, and asset protection purposes.

 

Thus, even in light of the Tax Relief Act of 2010, insurance producers can make multiple arguments to their clients to support the purchase of life insurance.


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State Updates


ENACTED LEGISLATION

Two new Bills of note have been signed by the Governor:

 

  UNEMPLOYMENT COMPENSATION CLAIMANT’S ADDED TO JURY LIST

 

•  HB 2066 – Amends the Jury Act and the Jury Commission Act by providing that lists of claimants for unemployment insurance are now to be added to the other lists (Illinois Driver’s License, Identification Card, Disabled Person Identification Card and Registered Voters Lists) now used to create jury lists. The Director of the Department of Employment Security shall annually compile a list of persons who in the last twelve months have filed a claim for unemployment insurance and shall send the list to the Secretary of State to be combined with the other lists mentioned above to constitute the master list for persons called for jury duty. The Bill is now known as Public Act 97-0034.

 

ILLINOIS RADON AWARENESS ACT EXTENDED TO RESIDENTIAL RENTAL PROPERTIES

•  HB 141 – The Illinois Radon Awareness Act has been passed by both Houses and sent to the Governor for signature. It expands the disclosure requirements under the Radon Awareness Act and expands it to leased property . If a tenant notifies a landlord that a radon test indicates a radon hazard in the dwelling unit, then the landlord must disclose that risk to any perspective tenant of that unit unless a later test indicates that it no longer exists. If a landlord’s test indicates a radon hazard, then the landlord must notify current and prospective tenants of that unit. This Act does not apply to dwelling units located on the third floor of a building or higher, or if the landlord has undertaken mitigation activities and a later test indicates that radon hazards no longer exist.

The provisions of this section apply only to dwelling units located below the third story above ground level.

Nothing in this new law requires a landlord to conduct radon testing.

ILLINOIS WAGE THEFT ENFORCEMENT ACT

• Went into effect on July 30, 2010. This new law increases criminal penalties for violations of the Wage Payment and Collection Act making willful failure of an employer to pay wages due under the Act a Class B misdemeanor for amounts up to $5,000 and a Class A misdemeanor for larger amounts. Repeat offenses can result in conviction of a Class IV felony.

 

The new law also provides civil enforcement mechanisms. Employees may now pursue wage claims in court directly without filing a complaint with the Department of Labor. Employees who prevail on a wage claim may recover attorney’s fees and costs as well as damages at a rate of 2% of the amount of any unpaid wage for each month that the wage remains unpaid. The new law also allows the Illinois Department of Labor to set up a system for directly adjudicating small wage claims up to $3,000. Employees who claim they have been subjected to retaliation for complaining about non-payment of wages may file a complaint with the Department of Labor or a civil lawsuit and may recover costs and attorney’s fees.

Public Act 096-1544 “Amazon Tax” Law

• Passed by the legislature in the lame duck session and signed by Governor Quinn, thereafter. This legislation requires internet retailers like Amazon.com and Overstock.com to collect Illinois 6.25% sales tax if they have affiliated sellers in the state. Dubbed the “Mainstreet Fairness Bill”, the Bill conforms to a 1992 U.S. Supreme Court ruling that only sellers with a physical presence in the state are required to collect sales tax. Simply shipping into a state isn’t enough to establish a “nexus” that would allow the taxation of the product being shipped. People buying on line still owe use, that is, sales taxes, to their states but few bother to pay. The purpose of this law is to compel the affiliates of the internet retailers to collect and pay the tax to make up some of the shortfall resulting from the internet sales where tax is not being collected. Various challenges have been mounted by Amazon to the constitutionality of this Bill. None of these challenges have been successful. See Janet Novack’s article at Forbes.com for a good outline of the affects of this legislation.

 

PENDING LEGISLATION

Worker’s Compensation Reform – House Bill 1698. This Bill has been passed by both Houses of the General Assembly and has been sent to Governor Quinn for signature. It is believed that he will sign the Bill. Worker’s compensation claims are adjudicated by Administrative Hearings, which ultimately can be appealed to the Circuit Court. Employers purchase worker’s compensation insurance for the purpose of insuring them against employee’s claims. Premiums in Illinois are substantially higher than those in surrounding states and the system has been the subject of alleged fraud.

The reform Bill purports to save $500 billion annually for employers by making a 30% reduction in fees that businesses must pay to doctors and hospitals for treating injured workers. The Bill also reduces payments for Carpal Tunnel Syndrome claims. The Illinois Chamber took a neutral position regarding the Bill. The Bill was supported by the Democratic majority in both Houses of the General Assembly but all but one Republican (Chris Neibel of Elmhurst ) voted against the measure. Republicans believe that the Bill fails to give employers adequate safeguards against workers seeking compensation for injuries that don’t occur in the workplace and that the Bill reduces costs at the expense of doctors rather than further limiting claims by workers.

The Bill supported by the Illinois Chamber of Commerce, Senate Bill 1349, was recently defeated in the Senate (25-06-28). Sens. Crotty and Maloney voted “present”. As amended, that bill defined injury as a condition or impairment that arises out of and in the course of employment. “Injury” included the aggravation of a pre-existing condition by an accident arising out of and in the course of the employment, but only for so long as the aggravation of the preexisting condition continues to be the primary factor causing the disability.

•  The Bill also provided as follows:

•  Standards of conduct for Commissioners and arbitrators.

•  For limited binding agreements between construction employers and labor organizations.

•  That for 60 days from the report of injury to the employer, the employer shall choose all necessary medical services reasonably required, and that the employee may secure his own physician and medical services after 60 days from the report of injury.

•  That no employer shall be required to pay temporary partial disability benefits to an employee who has been discharged for cause.

•  That an employer may utilize a preferred provider program approved by the Illinois Department of Insurance to satisfy its liabilities.

•  That an award for wage differential shall be effective only until the employee reaches the age of 67 or 5 years from the date of the award, whichever is later.

•  For a new determination of permanent partial disability for injuries occurring on or after December 31, 2011. Moves the utilization review program registration and administration to the Department of Insurance.

•  Made numerous other changes concerning privacy, employee intoxication, fee schedules, prescriptions, billing and best practices reports, utilization review, signature certification, a ban on gifts, fraud, sentencing, and annual reports.

As stated above, this Bill was defeated in the Senate, but the Illinois Chamber of Commerce will continue to support this legislation despite its defeat in this session. It is the Chamber’s belief that implementation of reforms of this nature will result in the reduction of workers’ compensation premiums which burden Illinois businesses.

At one point during the Legislative deadlock, the General Assembly came close to abolishing the Worker’s Compensation system altogether. Democratic Representative John Braddigan of Marion sponsored a Bill, with Speaker Madigan’s support, that would have thrown all workers’ compensation into the Circuit Courts (about 50,000 cases a year). The Bill passed Committee in the House and was on its way to its third reading until HB 1698 passed and superseded it.

Attempts to repeal the income tax increase. Both Houses of the General Assembly, Senate and House, failed in their attempts to repeal the income tax increase which was passed in the Lame Duck Session of the 96 th General Assembly late last year. Public Act 96-1496 passed and signed by the Governor increased the income rate tax for individuals from 3% to 5% and the corporate income tax rate from 4.8% to 7%. The combined corporate income tax rate will be 9.5% with the addition of a personal property replacement tax of 2.5%. For the time being, any attempt to reduce or repeal those numbers is dead.

 

Members are encouraged to consult their accountants with regard to the estimated tax increases that will now be due to the State of Illinois as a consequence of Public Act 96-1496.

 

H. B. 1600 Trans Fat Restriction Act - Defeated in the Senate, this bill attempted to create the Trans Fat Restriction Act which would ban “food facilities” from serving and selling food containing artificial trans fat. Food containing artificial trans fat was defined as food that lists as its ingredients or contains vegetable shortening, margarine or any kind of partially hydrogenated vegetable oil over 0.5 grams per serving. Natural trans fat is present in milk and meat from hooved animals. Those would not have been banned by this Act. “Food facility” would have included restaurants and other entities that package, serve and/or otherwise provide for human consumption at the retail level, except for those facilities that are operated by local or state government. This legislation was sponsored by representatives LaShawn Ford and Monique Davis and by State Senator Donne E. Trotter. The Bill was defeated in the Senate on May 26, 2011.

 

Local Government Distribution of Funds proposal – Although no bill has yet been introduced in Springfield , there has been a lot of talk in the legislature about terminating the practice of the State distributing 30% of state income tax revenues to local municipalities. This could have a devastating effect on the ability of local governments to fund vital services particularly in the area of police and fire protection. We will keep you advised as to the status of any legislation which may be introduced that would codify this practice.



The link to find all of these bills is http://www.ilga.gov/legislation/default.asp

  Village Updates

Six municipalities along the 159th Street Corridor have been collaborating on a long-term vision for physical improvements and a common marketing strategy for 159th Street , and are now seeking public input through an on-line survey...Click here to read full article.

 

Take Action! Make Your Voice Heard!

Contact your Federal, State, and Local elected representatives and let them know how you feel.


http://www.house.gov


http://www.senate.gov/general/contact_information/senators_cfm.cfm?State=IL

http://www.ilga.gov

http://www.orland-park.il.us

For More Information and To Get Involved:

http://www.chicagosouthland.com/government-affairs/

http://www.ilchamber.org/Government_affairs/About_gov_affairs/about_gov_affairs.htm

http://www.friendsoftheuschamber.com

http://www.chicagolandchamber.org/yourvoice/GovernmentLinks/Pages/default.aspx

The OPACC Legislative & Government Affairs Committee is dedicated to the following: 

Strengthening the relationship between the Chamber and the Village of Orland Park as well as other Local, State, and Federal government bodies and representatives. 

Keeping our membership informed of legislation and projects that will affect business in the local area.

Do you know of an upcoming event, political issue, piece of legislation, or transportation issue that is valuable to share with OPACC members? Please contact Committee Chairperson Ken Sidlowski at (708) 478-3440 x302