Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
The roundup is back with a full report this week covering some bills signed by Governor Pritzker as well as Quantum Computing, PBM, and Carbon Capture news.
Additionally, for those impacted by the severe storms in July, the Will County Emergency Management Agency (EMA) has launched a damage assessment survey for those who have been impacted by the severe weather on July 15, 2024. The survey will support the ongoing efforts of damage assessment teams who are visually inspecting damage to personal property, businesses, and public infrastructure throughout the county. For more information and to participate in the survey, please visit https://www.willcountyema.org/storm
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Governor Pritzker Signs BIPA Bill Along with 50+ Others
Dozens of measures impacting employers, education, health care, criminal justice, and more have become law after Illinois Gov. J.B. Pritzker signed 59 bills last Friday. The Illinois General Assembly passed over 450 measures during the spring session, which concluded in May. While Governor Pritzker has held bill signing ceremonies for some measures, others have been announced through news releases. Late last Friday, Pritzker’s office announced the signing of 23 House bills and 36 Senate bills.
One highly anticipated measure amending the Illinois Biometric Information Privacy Act is now law. Effective immediately, Senate Bill 2979 broadens the definition of written release to include electronic signatures and consolidates multiple violations of BIPA into a single violation if committed against one individual. Business groups advocated for these changes following several high-profile lawsuits against employers.
State Rep. Abdelnasser Rashid, D-Bridgeview, emphasized that Illinoisans’ biometric data will still be protected. “But it adds much-needed clarity that helps small businesses operate in a more predictable regulatory environment,” Rashid said when the measure passed. “I know that many small business owners will be relieved to see this measure pass.”
Pritzker signs ‘Worker Freedom of Speech Act’
Last Wednesday, Governor Pritzker signed the “Worker Freedom of Speech Act,” a new law aimed at limiting the practice of “captive audience” meetings, where businesses discourage workers from forming a union. The signing ceremony took place at the Illinois AFL-CIO’s biennial convention, reflecting the significance of this legislation for organized labor groups in the state.
“You’re helping every worker in the state of Illinois,” Pritzker told the hundreds of organized labor members and leaders gathered at a suburban Chicago hotel. “And as people recognize that more and more, they organize and they join a union.”
The Worker Freedom of Speech Act, which passed the General Assembly this spring with mainly Democratic support and a few Republicans crossing the aisle, will go into effect on January 1. This will make Illinois the eighth state to prohibit companies from punishing workers who opt out of meetings where employers express views on religious or political matters, including unionization. Companies also cannot reward employees for attending such meetings.
Under the new law, workers who believe they were unfairly retaliated against for not attending such meetings can take their employer to court. They can also report their employer to the Illinois Department of Labor, which can impose fines of $1,000 per violation.
The Worker Freedom of Speech Act builds on Illinois voters’ approval of the “Workers’ Rights Amendment” to the state constitution in the November 2022 election, which established a “fundamental right” for Illinois workers to unionize and engage in collective bargaining. It also prohibits state and local governments from enacting “right-to-work” laws, which prevent employers from requiring workers to join a union as a condition of employment. Right-to-work laws, which generally result in lower unionization rates, have seen a resurgence in Republican-controlled states over the past decade after initially being adopted by southern and rural states in the 1940s and ‘50s.
Illinois Grocery Tax Eliminated by 2026, Local Governments Empowered to Levy Own Taxes
Governor Pritzker announced that he signed House Bill 3144, which eliminates the state’s grocery tax by 2026 and grants local governments the authority to impose their own 1% grocery tax and other sales tax increases via ordinance, bypassing voter referendums.
“Even with inflation cooling off every dollar counts, so I’m proud we’re doing what we can to make trips to the grocery store a little easier,” Pritzker said in a statement. “It’s one more important part of lifting the burden on Illinois families.”
Pritzker emphasized that the removal of the 1% grocery tax, along with other policies such as a child tax credit, are practical measures aimed at alleviating financial pressures on Illinois residents.
However, the statewide grocery tax elimination will not take effect until January 1, 2026. Meanwhile, local governments can immediately start imposing their own grocery taxes and increasing other sales taxes through ordinances.
When the statewide tax is eliminated, it could result in up to $420 million less in revenue for local governments.
Illinois Updates Child Labor Regulations to Enhance Protections for Minors
Governor Pritzker signed a new law updating Illinois’ child labor regulations, setting additional standards for working conditions for children aged 15 and younger, and expanding the list of jobs that minors are prohibited from holding.
These updates come as President Joe Biden’s administration and some states have strengthened enforcement of child labor laws, while others, including neighboring Iowa, have moved to relax them. Pritzker emphasized that Illinois is “modernizing” its “regulatory framework to further protect minors from unscrupulous employers. Minors should be able to experience safe, age-appropriate work in an educational setting.”
State Sen. Robert Peters, a Chicago Democrat and the bill’s main sponsor, explained that Illinois lawmakers were motivated by states weakening child labor laws as the workforce struggled to recover post-pandemic. “Illinois, being a state that has had workers’ rights front of mind for years now, I said, ‘We are in the perfect position to actually go in the other direction, and literally strengthen our child labor laws, modernize our child labor laws, and truly protect children so they can be children,’” said Peters, who chairs the Senate’s Labor Committee.
Under Illinois’ longstanding child labor regulations, school officials must review a minor’s work opportunity and, with parental or guardian consent, issue an employment certificate before the minor can lawfully work.
The new law, effective immediately with Pritzker’s signature, reduces the allowable work hours for minors, capping them at 18 hours per school week and 40 hours during weeks when school is out, down from the previous 24 and 48 hours, respectively. Additionally, the updated list of prohibited workplaces now includes cannabis dispensaries, live adult entertainment businesses, gambling establishments, and gun ranges.
The law also updates penalties for violations and clarifies reporting requirements for child worker injuries or fatalities. Employers found violating the new law can be fined up to $60,000 if a child dies on the job and up to $30,000 if a child is injured. While parts of the law went into effect immediately, other provisions will become effective on January 1.
Illinois Secures $1 Billion Quantum Technology Investment
The first major quantum computer in the country, promised to “change how the world lives, works, and heals,” will be assembled in Chicago, according to an announcement made by California-based PsiQuantum. This milestone event was celebrated by state and local government agencies.
“Right here beneath our feet will be a catalyst for a potential revolution in science and technology in the betterment of life for all humankind,” stated Illinois Gov. J.B. Pritzker, who aims to position Illinois as a global leader in quantum technology. “We intend to drive innovation on a history-altering scale and provide unprecedented economic opportunity for the people of this great city and state.”
PsiQuantum will receive $200 million in tax incentives for its work in Illinois and will be the anchor tenant of a quantum campus on Chicago’s Southeast Side. The state is allocating $300 million from this year’s budget to build this campus at Pritzker’s behest.
Cook County government is also contributing $5 million and a new property tax incentive program, as announced by Board President Toni Preckwinkle. “Other countries, particularly China, have made significant investments in quantum, and we need to accelerate our efforts to catch up,” she said. “Today stands as yet another reminder that world-class technological opportunities and achievements can and will come into being not just in Silicon Valley or Boston, but on the Southeast Side of Chicago.”
The quantum campus, formally called the Illinois Quantum and Microelectronics Park (IQMP), will be located at the former U.S. Steel South Works site, an industrial area abandoned since 1992. Mayor Brandon Johnson remarked that the site is “long overdue for transformation.”
“This was a bustling steel mill that produced a million tons of steel each year, shaping the face of our nation through skyscrapers, trains, bridges, and cars,” Johnson said. He added that the quantum park would once again “revitalize this community and reconnect the people of the southeast side of Chicago to opportunities in this thriving economy.”
PsiQuantum CEO and co-founder Jeremy O’Brien acknowledged the site’s historical significance. “It’s been a long time since this plant hummed with industry,” he said. “Yet just like that U.S. Steel facility, quantum computing will be the fulcrum of a new innovation community. It will serve as a critical foundation for critical industries in Illinois and across the United States, steering a new industrial revolution.”
The “first U.S.-based utility-scale quantum computer” that PsiQuantum will build has the potential to play a role in developing new life-saving drugs, electric batteries, and solar cells. PsiQuantum hopes to start the project as soon as possible.
Despite the enthusiasm, local residents associated with the Alliance of the SouthEast expressed reservations about the project. They voiced concerns over the lack of community involvement and the environmental impact of heated water released into Lake Michigan from computer cooling systems, which could lead to algae and toxin growth, harming aquatic life and making the water unsafe to drink.
“We don’t want our communities to be left behind,” said community organizer Sam Corona in a press release. “We look forward to a working partnership for a successful development that supports our community without displacement, ensures the next generation advances into a digital economy, and that the environment is not at stake for our future.”
The organization has called for meetings with the Pritzker and Johnson administrations to address issues like jobs, construction, and the impact of the park on property values and rent prices that could lead to resident displacement.
Gov. Pritzker, a self-proclaimed “quantum geek,” is determined to make Illinois America’s quantum capital. “Today we bring ourselves a step closer to our quantum future, opening up a world of possibilities in everything from climate solutions to national security to healthcare and beyond,” he said. “And in doing so, we are bringing jobs and opportunity and laying the groundwork for long-term, broad-based economic prosperity for the state of Illinois.”
PsiQuantum is set to occupy 300,000 square feet “with room to grow” at the state quantum park, creating 150 jobs in fields like engineering and non-technical positions in sales and finance.
Pritzker’s efforts to galvanize Illinois as the nation’s quantum leader have won praise from business groups, though some lawmakers have expressed concerns about the state’s spending on quantum technology amid other needs. According to a Reuters report in September 2023, PsiQuantum has a valuation of $3.15 billion.
Recently, Pritzker and the U.S. Department of Defense jointly announced that the Defense Advanced Research Projects Agency (DARPA) will base its new Quantum Proving Ground program for testing computing prototypes at the IQMP. The state budget allocates a half billion dollars this year to quantum initiatives, including $300 million for the quantum park and $200 million in matching funds for quantum research, with $140 million going to DARPA’s testing program.
This funding is in addition to the $200 million in incentives PsiQuantum is set to receive over the next 30 years, which includes tax credits for job creation, tax breaks on equipment, and grants for energy readiness and workforce development training.
Previously, Illinois invested $200 million to support the Chicago Quantum Exchange, a hub for universities, labs, and companies to trade information and train a workforce in quantum technology.
What is Quantum Technology? Quantum technology can be thought of as modern computing on steroids. “In a few short years, it’s predicted that quantum will soon touch all aspects of our lives,” said Preckwinkle. “It will revolutionize the way we approach challenges, providing unprecedented insight into the mysteries of traffic jams, diseases, and even the economy.”
State Health Care Committee Intensifies Scrutiny of Pharmaceutical Middlemen
This week, state legislators resumed a series of hearings to scrutinize pharmacy benefit managers (PBMs), an industry under fire for driving up prescription drug costs and limiting drug availability. These third-party intermediaries negotiate drug prices and create formularies, effectively controlling which drugs are available to patients and pharmacies.
Rep. Natalie Manley, D-Joliet, chairs the House Health Care Availability and Access Committee and has spearheaded these hearings. She aims to gather insights from PBM executives, though only lobbyists from the trade association representing major PBMs have testified so far.
Two weeks prior to the latest hearing, the Federal Trade Commission (FTC) released an interim report from its ongoing antitrust probe into PBMs. The report confirmed what Illinois health care professionals have been telling the committee: corporate consolidation in the PBM industry has led to fewer pharmacies remaining operational and fewer medication options for patients.
The FTC report highlighted the market’s concentration, revealing that the top six PBMs process 94 percent of the drugs dispensed by U.S. pharmacies. FTC Chair Lina Khan’s joint statement noted that this concentration and vertical integration give PBMs significant power over drug access and prices.
Manley pointed out the impact on her constituents, mentioning that independent pharmacies in her hometown of Joliet have closed, forcing residents to use big-box stores or mail-order services. “Pharmacies that they’re used to dealing with are no longer able to compete,” she said.
The FTC report also criticized PBMs for using delay tactics over the past two years to avoid providing requested records. Reports from CNBC and the Wall Street Journal indicate the FTC is preparing to sue PBMs to obtain these documents.
Antonio Ciaccia, an advocate for restructuring prescription drug pricing, testified that PBMs prioritize profits over consumer health. “PBMs are not inherently rotten, and vertical integration is not inherently rotten,” he said. “But it creates inherent conflicts of interest that work against the interests of the end payer.”
Chad Worz, executive director of the American Society of Consultant Pharmacists, criticized PBMs for exploiting their middleman position to manipulate drug pricing. “They are in the business of making more money today than they made yesterday,” Worz said.
The FTC found evidence that PBMs are overcharging for certain cancer drugs and reimbursing their affiliated pharmacies at higher rates than unaffiliated ones. The report also noted that the four PBMs part of health care conglomerates (CVS Health Corporation, The Cigna Group, UnitedHealth Group, and Humana) have more than doubled their collective revenue in the past decade, now exceeding $1 trillion and accounting for 22 percent of national health expenditures.
Rep. William Hauter, R-Morton, an anesthesiologist, acknowledged the hearings have illuminated the health care industry’s complexities. “There’s so much unfairness in this market,” Hauter said. “There’s just so many inequities.”
Connor Rose, a lobbyist for the Pharmaceutical Care Management Association, defended the PBMs, arguing that the industry is competitive and that alternatives exist. “This is a competitive environment, there is a lid for every pot,” Rose said. He urged the FTC to conduct a more thorough analysis, despite the report noting PBM non-compliance with the investigation.
The state health care committee continues to press for answers and reforms, aiming to address the significant impact of PBMs on drug pricing and availability in Illinois.
Illinois Puts Carbon Capture Projects on Hold
Governor J.B. Pritzker has enacted a two-year moratorium on carbon capture and sequestration (CCS) projects in Illinois. CCS technology, which captures CO2 emissions from sources like ethanol production and stores it underground, has sparked both anticipation and environmental concern.
What is CCS? CCS aims to reduce carbon dioxide emissions, a key driver of climate change. The process involves capturing CO2, converting it into a liquid, and transporting it via pipelines to underground sequestration wells. While energy producers in Illinois see CCS as a path to cleaner energy, landowners and environmentalists worry about its safety and environmental impact.
Local and Federal Scrutiny
The Federal Trade Commission (FTC) recently reported that corporate consolidation in the PBM industry, which handles drug pricing and availability, negatively impacts pharmacies and patients. Similarly, the Illinois committee hearings have revealed concerns about CCS projects. For instance, One Earth Energy’s CCS proposal has faced local opposition, particularly regarding its proximity to the Mahomet Aquifer, a major drinking water source.
Environmental and Safety Concerns
Critics argue that CCS poses risks at every stage. The energy and water used in the capture process, potential pipeline ruptures, and the threat to groundwater are significant issues. Notably, compressed CO2 is heavier than air and can cause suffocation in case of leaks. Past incidents, such as the 2020 pipeline rupture in Mississippi, have heightened these concerns.
Regulatory Landscape
The new state law requires stringent safety measures and protections for landowners. It mandates that 75% of property owners must consent to pipeline construction to minimize eminent domain use. Additionally, CCS projects must receive county-level zoning approval, signoff from the Illinois Commerce Commission, and EPA approval for sequestration wells.
Future Prospects
Once the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) issues final rules, CCS projects may resume. However, they will face several hurdles, including obtaining approvals from multiple regulatory bodies and securing landowner consent.
Industry and Environmentalist Views
Steven Kelly, CEO of One Earth Energy, remains optimistic about the future of CCS, viewing it as a means to produce sustainable aviation fuel and be better stewards of the planet. Conversely, environmental advocates like Jenny Cassel from Earthjustice emphasize the potential perils of CCS, including the risk of leaks and their impact on public health and safety.
Despite the temporary pause, the debate over CCS in Illinois continues. The new law aims to balance industrial growth with environmental and public safety, setting the stage for future discussions and developments in the field of carbon capture and sequestration.
Federal Grant Targets Workforce Shortages in Illinois Trades
A new federal grant program aims to bolster careers in heavy machinery operation in Illinois. In July, the Biden administration announced over $244 million in funding through the U.S. Department of Labor to expand the Registered Apprenticeship system. Illinois will receive $8 million of this funding.
Eric Hill, CEO of the Youth Workforce Development Foundation, announced a partnership with the Associated Equipment Distributors for this program. “Our two organizations, in collaboration with SkillsUSA Illinois, came together with a singular idea: to help heavy equipment operators and dealers across the country access highly skilled technicians,” Hill said.
The partnership will work to equip schools in Illinois with necessary heavy equipment training programs. They will also support career-focused Industry Pathways events, providing students with hands-on instruction and experience working with diesel and heavy equipment alongside industry professionals.
The heavy equipment supply chain is crucial to the national economy, yet workforce shortages in diesel technicians and heavy equipment operators are expected to reach between 24,000 and 42,000 within a decade due to retirements and career changes.
Caterpillar, which operates at least a dozen facilities in Illinois, announced earlier this year its goal for dealers to hire 40,000 new technicians in two years to address a global shortage. This shortage stems from a widening skills gap, as more high school students opt for four-year colleges over trade schools.
Illinois U.S. Rep. Nikki Budzinski, D-Springfield, emphasized the importance of community colleges in the program. Speaking at Lincoln Land Community College in Springfield during the grant announcement, Budzinski said, “I believe the future of our workforce in central and southern Illinois does not require a four-year college degree.”
The new federal grant and partnerships aim to address critical workforce shortages in the trades, ensuring that Illinois can meet the growing demand for skilled heavy machinery operators and technicians. Through expanded training programs and support for career-focused events, the initiative seeks to close the skills gap and strengthen the state’s labor market.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct