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Blog comments do not reflect the views or opinions of the Author or Ancel Glink. Some of the content may be considered attorney advertising material under the applicable rules of certain states. Prior results do not guarantee a similar outcome. Please read our full disclaimer

Wednesday, September 11, 2019

Court Orders Public Release of Records Relating to Police Shooting of a Minor

Last week, the First Circuit decided NBC Subsidiary (WMAQ-TV) LLC v. Chicago Police Department, a case addressing FOIA and the confidentiality provisions of the Juvenile Court Act (JCA).

In July 2014, Chicago Police Department police officers fatally shot a 16-year-old after he pointed a firearm at the officers on numerous occasions. There were several witnesses to the shooting, and the independent police review board in Chicago subsequently released basic details of the incident including the minor’s name, the date and time of the incident, and the type of incident. In January 2016, WMAQ filed a FOIA request with the CPD, requesting “all police reports, case reports, case incident reports and supplemental reports filed in the police shooting.” CPD denied the request arguing that the JCA barred disclosure of these records to WMAQ as it was not an “authorized party” entitled to access of the records. After CPD denied the FOIA request, WMAQ filed a request for review with the Public Access Counselor (PAC).

In February 2016, the PAC issued a nonbinding determination letter that concluded the CPD violated FOIA by withholding records concerning the investigation into the police shooting death of the minor. The PAC stated that the CPD had to disclose records that involved the investigation into whether the homicide of the minor was justifiable.

The CPD did not produce the records and WMAQ filed suit, seeking disclosure of all reports filed in the matter. The circuit court ruled in WMAQ’s favor, holding that the JCA’s prohibitions against unauthorized disclosure did not apply to the records of the investigation of the conduct of the police officers involved in the shooting of the minor.

On appeal, CPD asserted that the plain language of the JCA prohibited the disclosure of the requested records because WMAQ did not obtain a court order, and because the records were confidential since the victim of the shooting was a minor.

The Appellate Court ruled in favor of WMAQ and ordered release of the records. The Court rejected the CPD’s interpretation of the JCA as too broad since the purpose of the JCA is to protect the privacy of minors and not to shield alleged misconduct of public employees from public view. The Court stated that WMAQ was not required to obtain a court order to review the records because the records related to the investigation of police officers and did not relate to “the investigation, arrest, or custodial detention” of the minor in this case - an essential basis for confidentiality under the JCA. Finally, the Court rejected the CPD’s argument that the records of the independent police review board were wholly exempt from disclosure because the Act was amended in 2009 to provide independent agencies who investigate police conduct access to law enforcement records that relate to minors who have been investigated, arrested, or detained in custody.

Post Authored by Ashton Tunk & Julie Tappendorf, Ancel Glink

Monday, September 9, 2019

New Quorum Forum Podcast Episode Released: Nice Meeting U!

Ancel Glink's Quorum Forum Podcast Episode 28 was just released: Nice Meeting U!

In this episode, the Quorum Forum podcast is heading back to school at Nice Meeting University! Ancel Glink’s Stewart Diamond teaches us about rules for good local government meetings, while Ashton Tunk covers Open Meetings Act news. We also study hard seltzer consumers' claims of immunity from statutes and local ordinances, based on the theory "there ain't no laws when you're drinking claws." 

What tips do you have for good local government meetings? Email us at podcast@ancelglink.com!

This podcast is provided as a service to our public and private sector clients and friends. It is intended to provide timely general information of interest, but should not be considered a substitute for legal advice. Read our full disclaimer: ancelglink.com/disclaimers

Wednesday, September 4, 2019

Seventh Circuit Upholds Cook County's Assault Weapon Ban

Last week, the Seventh Circuit Court of Appeals upheld Cook County, Illinois' assault weapon ban against a Second Amendment challenge. Wilson v. Cook County, (7th Cir., August 29, 2019).

In 2006, Cook County adopted an ordinance making it illegal to "manufacture, sell, offer or display for sale, give, lend, transfer ownership of, acquire, carry or possess" an assault weapon or large-capacity magazine in Cook County. Shortly after enactment of the ordinance, three county residents sued the county claiming that the ordinance violated various provisions of the U.S. constitution and exceeded the county's police powers. The Illinois Supreme Court dismissed most of these claims, but remanded the Second Amendment claim. The plaintiffs voluntarily dismissed the case at that time.

In 2015, the City of Highland Park enacted its own ban on assault weapons and large-capacity magazines which was also challenged on constitutional grounds. The Seventh Circuit Court of Appeals upheld that ordinance in 2015 in the case of Friedman v. City of Highland Park.

In 2017, two Cook County residents refiled their lawsuit against Cook County, including their previously dismissed due process and equal protection claims and the Second Amendment claim. The case was removed to federal court where it was dismissed by the district court. 

On appeal, the Seventh Circuit Court of Appeals reviewed the claims in light of its decision in the Friedman case involving the challenge to Highland Park's ordinance. The Seventh Circuit first noted that the Cook County ordinance was nearly identical to the Highland Park ordinance that the court had previously upheld. Second, the Court rejected the residents' argument that the Friedman case should be reconsidered, finding that its earlier ruling was still valid. Specifically, the Court determined that an assault weapons ban does not offend the Second Amendment because it does not leave residents without a means of self-defense. Third, the Court held that the U.S. Supreme Court's decision in Heller that struck down D.C.'s firearm ban, finding that an assault weapon ban is not "as sweeping as the complete handgun ban at issue in Heller." 

Tuesday, September 3, 2019

Illinois Adopts Single Occupancy Restroom Law

The Illinois General Assembly recently amended the Equitable Restrooms Act to address single-occupancy restrooms. P.A. 101-0165Effective January 1, 2020, all single-occupancy restrooms in any "place of public accommodations" and any "public building" must be identified as all-gender and marked with exterior signage that does not indicate any specific gender.  

This new law applies to "public buildings," which is not defined in this statute. It appears, however, that the new requirement will affect units of local government throughout the state that have single-occupancy restrooms in their government buildings. It is not clear whether the new requirements apply to all restrooms in a public building (including those in employee-only areas) or only to those restrooms that are made available to the public. We may get more clarity on how this law will be interpreted when administrative regulations are issued by the Department of Public Health, as required by the new law.

It is also important to note that this law is not restricted to only new construction or renovations, as indicated in section 20 of the new law. That means local governments should begin evaluating the need for modified or updated signage in their public buildings over the next few months to ensure compliance by January 1st.

The text of the new law is below:
    Section 5. The Equitable Restrooms Act is amended by changing Section 20 and adding Section 25 as follows:

 (410 ILCS 35/20)  (from Ch. 111 1/2, par. 3751-20)                    
    Sec. 20. Application. Except for Section 25, this This Act applies only to places of public accommodation that commence construction, or that commence alterations exceeding 50% of the entire place of public accommodation, after the effective date of this Act.

    (410 ILCS 35/25 new) 

    Sec. 25. All-gender single-occupancy restrooms. 
    (a) In this Section:
    "Place of public accommodation" has the same meaning provided in Section 5-101 of the Illinois Human Rights Act. 
    "Single-occupancy restroom" means a fully enclosed room, with a locking mechanism controlled by the user, containing a sink, toilet stall, and no more than one urinal.
    (b) This Section applies to any existing or future places of public accommodation or public buildings.
     (c) Notwithstanding any other provision of law, every single-occupancy restroom in a place of public accommodation or public building shall be identified as all-gender and designated for use by no more than one person at a time or for family or assisted use. Each single-occupancy restroom shall be outfitted with exterior signage that marks the single-occupancy restroom as a restroom and does not indicate any specific gender. 
    (d) During any inspection of a place of public accommodation or public building by a health officer or health inspector, the health officer or health inspector may inspect the place of public accommodation or public building to determine whether it complies with this Section.  
    (e) The Department of Public Health shall adopt rules to implement this Section.

Section 99. Effective date. This Act takes effect January 1, 2020.                   

Wednesday, August 28, 2019

Open Meetings Act "Personnel" Exemption Expanded

HB 2124 (proposing amendments to the Open Meetings Act) became effective last Friday. That legislation amends the OMA to allow a public body to go into closed session to discuss the hiring, firing, compensation, discipline, and complaints against specific individuals who serve as independent contractors in a park, recreational, or educational setting and specific volunteers under the "personnel" exemption under the OMA. 

Public bodies should remember that the PAC office of the Illinois Attorney General expects that public bodies using this exemption to go into closed session provide more detail in their motion that simply stating "personnel exemption." While the motion need not name the individual, it should provide a bit more detail, such as why the individual will be discussed (i.e., hiring, termination, etc). 

Tuesday, August 27, 2019

Appellate Court Addresses Prisoner FOIA Use

Last week, an Illinois appellate court upheld a circuit court's ruling that an inmate was not entitled to home addresses of other individuals under FOIA in an unpublished opinion.

In Serio v. Putnam Cnty. Sheriff’s Dept., Raymond Serio, an inmate of the Illinois Department of Corrections, sent two FOIA requests to the Putnam County Sheriff’s Department seeking specific information regarding individuals that had been booked into custody at the Putnam County jail. He asked for the name, age, full address, offense, date of arrest, and photos of each individual under Section 2.15(a) of FOIA. The Sheriff’s Department subsequently provided Serio the records he requested in part in response to both FOIA requests, but withheld the home addresses under Section 7(1)(b), which protects home addresses from release as "private information."

Serio sued, arguing that the Sheriff’s Department (1) willfully and intentionally failed to comply with his FOIA requests, (2) should be ordered to release the home addresses, and (3) should pay civil penalties and Serio’s costs of filing the lawsuit. The Sheriff’s Department reasserted its use of the "private information" exemption to bar disclosure of the addresses. The trial court ruled in favor of the Sheriff’s Department and denied Serio’s claim for relief. Serio appealed.

On appeal, Serio argued that the plain language of FOIA expressly provided for obtaining that information if it is included in arrest reports. This time, the Sheriff’s Department argued that Section 7(1)(e-10) of FOIA barred the disclosure. At the time of the trial court’s ruling, the exemption in Section 7(1)(e-10) had not yet been enacted.  This section exempts from FOIA the following:

  (e-10) Law enforcement records of other persons requested by a person committed to the Department of Corrections, Department of Human Services Division of Mental Health, or a county jail, including, but not limited to, arrest and booking records, mug shots, and crime scene photographs, except as these records may be relevant to the requester's current or potential case or claim.

The appellate court determined that the Sheriff’s Department’s use of this exemption was proper and that it could withhold the home addresses. The court reasoned that although Section 7(1)(e-10) became effective after the trial court ruling, it applied retroactively as the legislature did not expressly state otherwise, and because it was a procedural change to FOIA rather than a substantive change that would preclude Serio from exercising his rights under the statute. Finally, Serio failed to explain in both his complaint and FOIA requests how the information he requested was relevant to “his current or potential case or claim” as required by Section 7(1)(e-10).

Post Authored by Ashton Tunk & Julie Tappendorf

Monday, August 26, 2019

7th Circuit Upholds Construction Licensing Ordinance

Earlier this week, the Seventh Circuit Court of Appeals upheld an Indiana city's ordinance requiring a residential property owner who wants to make repairs to the residence either to obtain a license or to hire a licensed contractor. Regan v. City of Hammond.

Christopher Regan and the Northwest Indiana Creative Investors Association, Inc. were landlords who own and lease property in the City of Hammond. As property owners, they made periodic repairs and improvements to their properties. Before they could make improvements to their properties, however, they were required by city ordinance to either obtain a license or hire a Hammond-licensed general contractor. The code also makes an exception for persons making repairs or improvements to their own private, single-family residences in which they reside. Because the plaintiffs do not reside in their respective properties, they did not fall under this exception and were required to obtain a license or hire a licensed contractor.

In their lawsuit against the City of Hammond, the plaintiffs argued that the license requirements coupled with the exemption impermissibly burdened property owners who do not reside in the City, thus impeding "interstate commerce." They also argued that all owners of residential property in Hammond are participants and competitors in the national housing market, and that giving an occupant homeowner an exemption from the license requirement would discriminate against the non-occupant homeowner and landowners who are not domiciled in Hammond.

The Seventh Circuit rejected the plaintiffs' arguments, finding that the ordinance does not discriminate based on the where a homeowner lives. In its reasoning, the court explained that commerce clause analyses fall into three categories: laws that expressly discriminate against interstate commerce; laws that, although neutral on their face, bear more heavily on interstate than local commerce; and laws that may have a mild effect on interstate commerce but in practice do not give local firms any competitive advantage over firms located elsewhere. Because the ordinance draws no distinction between landlords that reside in Hammond and those who do not, the court concluded that the ordinance does not impose a disparate burden on non-Hammond landlords.

The court reasoned that the distinction rested on occupancy, which was a rational distinction considering occupants of residential property are more closely affected by property defects and repairs than that of the removed landlord. Furthermore, the court concluded that Hammond has an interest in the safety and habitability of the homes in which its residents reside, and the ordinance is a permissible exercise of its authority to promote that interest.

Although this case dealt with an Indiana municipality, the holding that this type of ordinance does not offend the commerce clause of the U.S. Constitution would also appear to apply to Illinois municipalities as well.

Post Authored by Rain Montero & Julie Tappendorf

Thursday, August 22, 2019

New FOIA Amendments Just Signed by Governor

Earlier this week, the Governor signed into law two bills to amend the Freedom of Information Act.

First, Public Act 101-0433 (SB1699) amends Section 2.15(e) of FOIA to redefine where law enforcement agencies may not publish booking photographs (i.e. mugshots). Before the amendment, an agency was not allowed to share on its “social media website”. With this amendment, the definition was changed to “social networking website” as it is defined in Section 10 of the Right to Privacy in the Workplace Act. Section 10 of the RPWA defines social networking site as:
an Internet-based service that allows individuals to: (i) construct a public or semi-public profile within a bounded system, created by the service; (ii) create a list of other users with whom they share a connection within the system; and (iii) view and navigate their list of connections and those made by others within the system. 
This definition excludes e-mail. This Act became effective yesterday.

Second, Public Act 101-0434 (SB1712) amends Section 7 of FOIA to add Exemption 7(1)(kk) which exempts from disclosure: 
The public body's credit card numbers, debit card numbers, bank account numbers, Federal Employer Identification Number, security code numbers, passwords, and similar account information, the disclosure of which could result in identity theft or impression or defrauding of a governmental entity or a person. 
This law becomes effective January 1, 2020.

Post Authored by Ashton Tunk & Julie Tappendorf, Ancel Glink

Tuesday, August 20, 2019

7th Circuit Addresses Privacy Exemption Under Federal FOIA

This week, the 7th Circuit delivered a victory for the federal government in Higgs v. United States Park Police, a case that involved balancing privacy interests against public disclosure under the federal FOIA statute.

Higgs was convicted and sentenced to death for participating in kidnapping and murdering three women with his two friends in 1996 in a federal park located in Maryland. Higgs, while on death row, insisted for several years that the federal government failed to turn over exculpatory evidence as required by law. In 2012, Higgs filed a FOIA request with the United States Park Police seeking “a complete copy of everything pertaining to the homicide convictions.” The Park Police notified Higgs that it would not release any documents because they were exempt under various exemptions, including the “privacy exemption.”  Higgs then filed a lawsuit to challenge the FOIA denial. The Park Police subsequently released some responsive documents to Higgs.

Higgs argued that the government’s response to Higgs’ FOIA request was inadequate on several grounds. The district court agreed in part, ruling that Higgs was entitled to certain records because (1) he demonstrated a sufficient public interest in trying to uncover government misconduct and (2) the government failed to identify what privacy interests would be impaired and to the extent they would be negatively impaired

On appeal, the government argued that: (1) the district court clearly erred in evaluating the individual privacy interests and (2) Higgs did not advance a sufficient public interest that warranted the disclosure of the subject records.  Higgs responded that the public interest he advanced was sufficient to warrant disclosure as he sought to reveal government misconduct and educate the public about how the Department of Justice carries out its law enforcement duties.

The 7th Circuit concluded that Higgs did not advance a sufficient interest under the FOIA privacy exemptions’ “balancing test.” The Court rejected Higgs’ government misconduct argument. The Court also found Higgs’ argument of an educational benefit a “vague interest” that did not meet the threshold burden to justify disclosure. 

Although this case strictly dealt with federal FOIA law, the rationale in this case is helpful in understanding how an Illinois court might analyze the “personal privacy” exemption and apply that exemption’s balancing test. Local governments, especially their police departments, should always review records based on sensitive or tragic events through the lens of both 7(1)(c) and 7(1)(d) of the Illinois FOIA statute to bolster their reasoning for withholding documents for privacy concerns.

Post Authored by Ashton Tunk and Julie Tappendorf, Ancel Glink

Tuesday, August 13, 2019

Amendments to OMA Allow Alternative Training for Municipal Officials

The Illinois Governor just signed legislation making it easier for municipal officials to complete the required Open Meetings Act training. Under current law, all elected and appointed members of public bodies in the state of Illinois must complete the electronic OMA training offered by the Illinois Attorney General within 90 days of taking office. Previous amendments to the OMA authorized  officials in park districts, school districts, drainage districts and others to satisfy the training requirement through alternative programs. Pursuant to P.A. 101-814, an elected or appointed official on a public body of a municipality may satisfy the OMA training requirements by participating in a training sponsored or conducted by an organization that represents municipalities in the state of Illinois. 

Tuesday, August 6, 2019

Public Body Did Not Violate FOIA in Multiple FOIA Requests

The second FOIA case decided last week is Walker v. Bruscato, 2019 IL App (2d) 170775. Walker had filed multiple FOIA requests with the Winnebago States Attorney's Office for records pertaining to his murder indictment. The first request asked for a copy of the grand jury transcript. The second request asked for a "current or previous list of the types and categories of records available for inspection and copying maintained in your office." His third request asked for a copy of the record of indictments in May and June of 2001. His fourth request asked for a copy of the grand jury votes and deliberation for all indictments returned during that same time period. 

The County provided the first requested record and responded to the second request that it had no responsive records. The County denied the third and fourth requests, citing to the confidentiality of grand jury records.  Walker then sued, claiming the County violated FOIA related to all four FOIA requests. The circuit court ruled in the County's favor, and Walker appealed.

The appellate court agreed with the circuit court's ruling in the County's favor. First, the court found that the County did, in fact, provide the transcript in response to the first FOIA request. Second, the court held that Walker had no cause of action under Section 11 of FOIA because he was not "denied access" to any public record since the requested records simply did not exist, stating that "A request for records not yet created is invalid." The court also rejected Walker's argument that the County failed to maintain the list as required by section 5 because the County created the list following Walker's request and subsequently provided a link to that list to Walker. Finally, the court agreed that the grand jury records requested in the third and fourth requests were exempt from release as state law expressly prohibits disclosure of grand jury proceedings. 

Monday, August 5, 2019

Quorum Forum Podcast Episode 29: Avoiding Employment Mistakes

Ancel Glink just released Episode 27 of its Quorum Forum Podcast: Avoiding Employment Mistakes. In this episode, Ancel Glink attorney John Hayes discusses ways employers can avoid common mistakes and law clerk Mike Halpin provides an update on recent employment laws and cases. And, as usual, Ancel Glink partner Dan Bolin keeps the episode lively and entertaining. 

Listen to this episode here.

Thursday, August 1, 2019

Public Body Did Not Violate FOIA Where Requested Records Did Not Exist

We don't see a lot of FOIA cases out of the appellate courts but two were issued yesterday that offer some guidance to public bodies on challenges to FOIA denials.

In Barner v. Fairburn, 2019 IL App (3d) 180742, Barner sued the Canton Police Department after the Department denied his FOIA request for a copy of dispatch transcripts for a particular time-period on May 12, 2015, as well as other police records during that time period. The Department provided a copy of an incident report but not the dispatch recording, stating in its response that the recording was no longer available because the dispatch system only keeps recordings for a few months. Barner sued, claiming the Department violated FOIA because it did not provide the requested records. He also claimed that the FOIA response was insufficient because it did not provide specific reasons for the denial of his request. The circuit court dismissed the case, and Barner appealed. 

On appeal, the Department argued that the dismissal was proper because FOIA does not compel a public body to turn over information the public body does not retain. The Department supported its argument with an affidavit that the FOIA Officer searched for the requested records and was unable to provide the recording because it no longer existed. 

The appellate court agreed with the Department that it did not violate FOIA by failing to turn over records that did not exist at the time of the request, citing to previous cases holding that "The nonexistence of requested documents is a cognizable affirmative defense to a complaint grounded in FOIA." The court also rejected Barner's argument that the Department's response was inadequate because it did not provide a "detailed factual basis" for the denial, holding that this particular requirement of FOIA only applies when the public body is claiming an exemption for a denial.

Wednesday, July 31, 2019

PAC Opinion Finds FOIA Violation for Failure to Respond

After three months without a binding opinion from the PAC Office of the Illinois Attorney General, the PAC issued an opinion finding a municipality in violation of FOIA for failing to respond to a union's FOIA request for various records pertaining to a bargaining unit and finances of the municipality. PAC Op. 19-006. Not only did the municipality fail to respond to the FOIA request, it also did not respond to the PAC's request for review. Nothing new or helpful in this binding opinion except another reminder that public bodies have an obligation to respond to FOIA requests.   

Tuesday, July 30, 2019

Court Upholds Village's Stormwater Fee Ordinance

In 2014, the Village of Winnetka adopted a storm water ordinance that imposed a fee on the owners of property in the Village in order to provide a dedicated funding source for various improvements to the Village's storm water system. That fee was calculated based on the "equivalent runoff value" (ERU) of 3400 square feet of impervious surface area on lots within the village. No fee was assessed on properties with less than 170 square feet of impervious surface area, and roads, sidewalks, and alleys were also not subject to the fee. Properties that do not discharge storm water into the Village's system could obtain a 100% credit of the fee, and properties that detained at least half of their own runoff could obtain a 50% credit of the fee. The fee was assessed on the Village's utility bills.

Green, a Village resident subject to the fee, filed a lawsuit against the Village to challenge the fee, claiming that it was an unlawful tax because the fee bears no relation to a property owner's actual use of the Village's storm water system. The parties filed motions for summary judgment, and the circuit court ruled in the Village's favor. Green appealed, and that appeal is the subject of an Illinois appellate court ruling in Green v. Village of Winnetka, 2019 IL App (1st) 182143.

The issue before the appellate court was Green's argument that the Village's storm water fee was actually a tax rather than a fee for services rendered. Green made a number of arguments, including that many property owners were being charged the fee without receiving any benefit, and that the fee was not tied to the actual use of the Village's storm water system. The Village defended the fee, arguing that a previous appellate court ruling had upheld a similar storm water fee adopted by Rock Island that was also based on impervious surface area.

The appellate court agreed with the Village that Winnetka's fee was similar to Rock Island's fee that was previously upheld by the Third District Appellate Court. Both ordinances assess the fee based on impervious surface and both defined impervious surface in the same manner. Both ordinances also allow for a 100% credit for properties that do not use the municipal system, and the revenues obtained in both municipalities are dedicated to a fund used solely to finance the municipal storm water system. Finally, both ordinances exempt public roads and rights of way. Moreover, the court determined that there was a rational basis to support the storm water fee ordinance. In sum, the court upheld the Village's ordinance.  

Monday, July 29, 2019

State Changes to Raffles Act Affect Local Raffles Regulations

On July 19, 2019, the Governor signed P.A.101-109 enacting significant amendments to the state Raffles and Poker Runs Act that modify, and in some cases relax, requirements for local raffle regulations. Illinois municipalities may want to review their current raffles regulations and consider amendments consistent with the amended Raffles Act.

One of the more significant amendments is that raffle chances can now be sold statewide, which is a substantial change from the previous language that restricted the sale to the locality where licensed.

Another change is to expand the list of eligible organizations to conduct raffles, which now includes: 
  • bona fide religious, charitable, labor, business, fraternal, educational, or veterans (5-year continuous operation requirement now waivable for certain national or state organizations)
  • other bona fide not-for-profit organization (newly eligible, but 5-year requirement not waivable)
  • non-profit fundraising organization organized for providing certain financial assistance to identified person or group 
  • law enforcement agencies and their statewide associations 
The Act also makes minor amendments to its list of ineligible persons.

The Act previously required municipalities to establish certain limits on prize values, chance prices, and duration of chance sales. But with the new Act, those limits are optional.

The Act now provides that directors, officers, employees, and members of the sponsoring organization may manage the raffle. Additionally, the sponsoring organization may contract with third parties to provide services in connection with the raffle. The Act now also allows a sponsoring organization to rent a premises for the raffle, subject to restrictions on rent.

Finally, although the Act still requires a bond for the raffle manager, there are relaxed voting requirements for a waiver of the bond.

Friday, July 26, 2019

New Law Amends Township Vacancy Law

The Illinois Governor signed P.A. 101-104 into law last week amending the Township Code relating to the process for filling vacancies in township office. 

Under the new law, if there is a vacancy in the office of Township Supervisor, then a Township Board trustee must be appointed as deputy supervisor to perform the ministerial functions of the supervisor's job until the vacancy is filled. Once the vacancy is filled, the deputy supervisor appointment is terminated. 

The law also clarifies the duties of the temporarily appointed deputy for other vacant offices as well. If that vacancy is filled temporarily by a trustee, the law authorizes the deputy to vote on matters before the board if the deputy is a trustee at the time of the vote, but provides that the trustee compensation be suspended during the temporary appointment. 

Thursday, July 25, 2019

New Law Imposes Additional Requirements on Certain Library District Annexations

On July 19, 2019, the Governor signed into law Public Act 101-0099 (HB 2993) making it more difficult for Illinois Library Districts to annex property that is unserved by tax-supported public library service. 

Prior to the bill’s passage, a Library District could annex property simply by adopting an ordinance, providing an opportunity for the public to provide comment, and posting adequate notice. The property had to be (i) located within a municipality or school district that was entirely or partially within the district, (ii) contiguous with the district, and (iii) unserved by any local, tax-supported public library service. (75 ILCS 16/15-15)  Unless 10% of the registered voters in the District, or the property to be annexed, filed a petition requiring a referendum (a "backdoor referendum"), the annexation would automatically become valid in 30 days. Otherwise, a majority of the voters in the District and the property to be annexed had to approve the annexation for it to become effective.

P.A. 101-0999 amended the Library District Act to make voter approval mandatory. Now, following adoption of an ordinance annexing property that meets the qualifications set forth above, the District board of trustees must submit the question of annexation to the voters of the District and the property to be annexed. A majority of the voters in the District and the property to be annexed must then approve the annexation for it to become effective.

The bill contains an apparent inconsistency in that it states the question must be submitted to the voters in the District or the property to be annexed but then states that a majority of voters in both the District and the property to be annexed must approve of the annexation. However, the use of the word “or” appears to be a drafting error left over from the prior law.

Post Authored by David Warner, Ancel Glink

Wednesday, July 24, 2019

New Law Affects Term Limits in Municipal Office

Last week, Governor Pritzker signed Senate Bill 1536 into law as Public Act 101-0114.  P.A. 101-114 amends the Illinois Municipal Code to establish certain restrictions on the imposition of term limits on municipal offices. The new law specifies that term limits can only be imposed prospectively (counting service in office only after a referendum is adopted) and not retroactively (counting someone’s service in office prior to a referendum being adopted). It also prohibits municipalities from counting service in one elected office to block service in a completely new office. The new law applies to any term limit imposed on or after November 8, 2016, and preempts home rule. 

Tuesday, July 23, 2019

7th Circuit Addresses Challenges to Local Alarm System Ordinances

Last week, the Seventh Circuit Court of Appeals decided two cases challenging local ordinance requirements that commercial buildings be equipped with fire-alarm systems. The cases addressed various claims by Alarm Detection Systems (ADS) that these local ordinances violate state and federal laws and the constitution because they require commercial buildings to contract directly with only one alarm system provider. In both cases, the local government bodies had entered into exclusive agreements with Tyco Integrated Security, LLC, a competitor of ADS. With the exception of a Contracts Clause claim, the court rejected ADS' arguments, and dismissed its claims.

In ADS v. Orland Park Fire Protection District, ADS argued that the local requirement that commercial businesses contract with Tyco for alarm services violated the Illinois Fire Protection District Act, the Sherman Act, and the 14th Amendment to the U.S. Constitution. The district court rejected those claims, ruled in favor of the local government, and dismissed the case. On appeal, the Seventh Circuit upheld the dismissal. First, the 7th Circuit held that ADS had no private right of action under the Illinois Fire Protection Act based on its status as a competitor to Tyco. Second, the 7th Circuit rejected ADS' Sherman Act claims because ADS could not show that its own system could comply with the local requirements. Finally, the 7th Circuit found no fundamental right of ADS to support a 14th Amendment claim, and ADS had accepted that the local ordinances were lawful.

In the second case, ADS v. Schaumburg, ADS brought a variety of claims against Schaumburg, including claims of antitrust and state tort claims which the 7th Circuit rejected. However, the 7th Circuit did allow ADS' claim that the Schaumburg ordinance violated the Contracts Clause of the U.S. Constitution to move forward. The Contracts Clause "restricts the power of States to disrupt contractual arrangements" through legislation, which also applies to municipalities. ADS claimed that Schaumburg's ordinance forces ADS customers to either cancel or not renew their contracts with ADS in order to comply with the ordinance requirement that it contract with Tyco. That claim was allowed to move forward for further proceedings.

Monday, July 22, 2019

Podcast: Legal Challenges to Parking Enforcement

Sometimes, you want to "listen" to your news rather than read it, and we have a recommendation for a podcast episode hosted by ELGL. In this episode of ELGL's GovLov Podcast titled "Legal Challenges to Parking Enforcement," Ancel Glink attorneys ShawnTe Raines and Matt DiCianni talk about the recent court ruling about the use of chalk in parking enforcement. They also touch on a few other legal issues at the local level.  

You can access the podcast by clicking on the title below:

Podcast: Legal Challenges to Parking Enforcement

Parking Enforcement GovLove

Friday, July 19, 2019

APA Webinar: Supreme Court Takings Decision in Knick

Planners, lawyers, and land use professionals won't want to miss this upcoming webinar hosted by the American Planning Association's Planning & Law Division on the recent Supreme Court's takings decision in Knick.  See below for details:

What the Supreme Court's Knick Decision Did and Did Not Change

Tuesday, July 30, 2019 
1 p.m. - 2:30 p.m. Eastern Time
noon - 1:30 p.m. Central Time

CM I 1.50 I Law
CLE 1.50 through Illinois State Bar

In June, a divided Supreme Court overturned part of a longstanding precedent that generally required plaintiffs alleging unconstitutional takings to first try and fail to obtain compensation under state law before pursuing a federal takings claim. Property rights activists celebrated their one-vote win, but as a practical matter does the decision really change things for planners? John Baker and Deborah Rosenthal will discuss the case and its impact on municipalities and property owners/developers.

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Monday, July 15, 2019

Miscellaneous New Laws Signed Into Law

A few miscellaneous new Illinois laws were signed into law last Friday that may affect units of local government, including the following:

P.A. 101-0041 amends the Fire Protection District Act to require a fire protection district to post on its website notices of any proposal to award any contract for work that will exceed $20,000. The amendment also removes a requirement that other notices be published in a daily newspaper.

P.A. 101-0047 amends the non-home rule municipal sales tax statute to extend the time period for non-home rule municipalities to use the local sales tax revenues for municipal operations to July 1, 2030. The previous deadline was December 31, 2020.  

P.A. 101-0058 amends the Park District statute to add new language regarding the staggering of terms of office for members of 7 member park district boards that have approved a change to the term of office from six years to four years. The new statutory language is below:
  (2) On a 7-member board under Section 2-10a, if the terms of only 2 commissioners are scheduled to expire in the year of the second election at which commissioners are elected after the first regular park district election at least 60 days after the date on which the proposition for 4-year terms was approved at referendum or by resolution, then:
  (A) if 3 commissioners are elected at the first regular election, 2 of the commissioners elected shall serve a 2-year term and one shall serve a 4-year term to be determined by lot between persons elected within 30 days after the first election; or 
  (B) if 2 commissioners are elected at the first regular election, those 2 commissioners elected shall serve a 2-year term. 

Thursday, July 11, 2019

Public Body Cannot Assess Fee for Late FOIA Response

Public bodies should be aware of an unreported appellate court case holding that a public body could not impose fees in response to a FOIA request where the public body did not respond to the request in a timely manner.  Varan v. White.

Varan had filed a FOIA request with the Secretary of State's office for various records. The state did not respond to the request until six months later, and informed Varan that he had to pay $19,711.55 for the requested records, which was calculated based on a $25 charge per record. Varan sued, and both the trial and appellate courts ruled in Varan's favor, finding that section 3(d) of FOIA expressly prohibits a public body from imposing a fee when it fails to respond to a FOIA request within the statutory time frames. 

Wednesday, July 10, 2019

Supreme Court Strikes Down 30 Plus Years of Takings Law Precedent and Gives Aggrieved Property Owners an Open Invitation to Federal Courts

You may recall that we briefly reported on this case the day it was issued, with the promise that we would provide more details on the ruling in a future blog post.  So, here it is!

In a dispute that arose over a cemetery, the U.S. Supreme Court recently buried longstanding precedent and held that takings-claim plaintiffs may now sue directly in federal court. The controversial ruling came down in Knickv. Township of Scott, where a cemetery owner claimed that a township ordinance requiring her to keep her land “open and accessible to the general public during daylight hours” constituted an unlawful taking under the Fifth Amendment.

Two lower federal courts struck down the plaintiff’s claim following the precedent of Williamson Cty. Reg’l Planning Com. v. Hamilton Bank of Johnson City. The Court in Williamson County held that property owners first had to “exhaust” all available remedies and litigate in state court before the claim could be brought in federal court. Additionally, the Williamson County Court reasoned that the “Fifth Amendment proscribes takings without just compensation,” and thus, no constitutional violation occurs until the compensation is denied to the plaintiff. The Williamson County Court relied heavily on earlier 19th Century precedent where governments may avoid paying compensation at the time of the property deprivation so long as they make a “reasonable, certain, and adequate” mechanism for recovering compensation available. Critics of the Williamson County stated that “Williamson County [has] essentially demoted the Takings Clause to a second-class citizen among the Bill of Rights,” because “no other constitutional right is subjected to a such a legal labyrinth.”

The majority in Knick overruled Williamson County, and reasoned that the “state-litigation requirement imposes an unjustifiable burden on takings plaintiffs.” Further, following the precedent set forth in Jacobs v. United States and First English Evangelical Lutheran Church v. Cty. of L.A., the Court concluded that a constitutional violation originates from the property deprivation itself, not so much from the denial of compensation that arises in state court later down the line. The majority provides some—perhaps cold—assurance that the government will not be hamstrung by injunctions from taking property in the future, when it states “as long as just compensation remedies are available…injunctive relief will be foreclosed.” Lastly, the majority addressed the concerns raised by the dissenters over its break with longstanding precedent, by reasoning that the quality, workability of the current rule established, and its consistency with other decisions.

In summary, the Court’s decision in Knick is a huge break with past precedent and will now allow takings-claim plaintiffs to bring a §1983 civil rights action directly in federal court. In addition, the decision may create an increase in takings-claim litigation over existing land use regulations. If it was not as obvious before, the Knick decision warrants governments carefully considering how existing and new land use regulation potentially create a taking. The further implications on local governments are not yet clear; however, local governments will still most likely be able to move forward in taking property without the hindrance of injunctions, so long as they are prepared to litigate the claim in federal court.

Post Authored by David Silverman and Rain Montero, Ancel Glink

Tuesday, July 9, 2019

BREAKING: Second Circuit Decides Trump Twitter Appeal

We have previously reported on the lawsuit filed against President Trump to challenge his blocking of users from his Twitter account, which the users argued violated their First Amendment rights. The federal district court ruled in their favor, finding (1) that President Trump's @realDonaldTrump account was a public forum subject to the First Amendment and (2) that his actions in blocking users from that account violated the First Amendment rights of those blocked users. 

The President appealed that ruling to the Second Circuit Court of Appeals. This morning, the Second Circuit issued its opinion in this appeal, upholding the district court's ruling that the President's actions in blocking critics from his @realDonaldTrump Twitter account violated the First Amendment. Specifically, the Second Circuit stated as follows:
The President contends that the Account is exclusively a vehicle for his own speech to which the Individual Plaintiffs have no right of access and to which the First Amendment does not apply. Secondarily, he argues that, in any event, the Account is not a public forum and that even if the Account were a public forum blocking the Individual Plaintiffs did not prevent them from accessing the forum. The President further argues that, to the extent the Account is government- controlled, posts on it are government speech to which the First Amendment does not apply. We are not persuaded. We conclude that the evidence of the official nature of the Account is overwhelming. We also conclude that once the President has chosen a platform and opened up its interactive space to millions of users and participants, he may not selectively exclude those whose views he disagrees with.
This opinion, like the Fourth Circuit Court of Appeals ruling last year finding a County Commissioner's personal Facebook page to be subject to the First Amendment, is an important one for local government officials who use their personal social media sites to communicate about government business. In certain circumstances, those personal pages and accounts may be so intertwined with government business that they are considered a "public forum," meaning that the government official must be careful not to censor the speech of those who  post on these pages and accounts.

You can read the Second Circuit's decision Knight First Amendment Institute v. Donald J. Trump here.

Social Media Database Catalogs Police Social Media Activities

Coming on the heels of stories in Philadelphia that 76 police officers were placed on leave for allegedly racial social media activities, Dallas announced last week that it was investigating 25 police officers who had allegedly posted or shared racist or other objectionable material on social media. 

News reports cite to a database published by an action group that catalogs thousands of racist or violent posts made by police officers in several states. Reportedly, five states are investigating police officers following release of this database. More than a thousand of the cataloged public posts were made by people identified as current and former Dallas police officers. 

Examples of a few of the following public posts by police officers that were cataloged by the action group:
It's a good day for a choke hold
Death to Islam
If the Confederate flag is racist, then so is Black History Month
Statistics show that criminals commit less crimes after they've been shot
I'm proud to be white
Employee social media activities are increasingly coming under scrutiny, and as we have reported in the past, these activities do not need to be at the workplace or while on duty to subject an employee to discipline, and even termination.

Monday, July 8, 2019

Claims Against School District For Construction Payments Can Move Forward

Restoration Construction Company filed a lawsuit against a school district claiming the district refused to pay for construction and restoration services provided by Restoration after a school building was damaged by fire. The work had been performed under a contract signed by the school district's superintendent. The value of the work under the initial agreement was over $331,000. The contract was not presented to the school district board for approval. Subsequently, the school district board president signed an amended contract with Restore Construction to repair the school. That contract valued the work at over $6.9 million and was also not presented to the school district board for approval.

Restoration moved forward with the work, and the school district made progress payments to Restoration in an amount of approximately $5.8 million, with a balance of approximately $1.4 million under the contracts when the school district ceased payment. At that point, Restoration sued for breach of contract and later added equitable claims. 

The trial court dismissed the case, finding that the two contracts were "void ab initio" because they were not approved by the school district board and because they were not subject to the competitive bidding process. As a result,Restoration could not recover under these void contracts. The court also dismissed the equitable claims, and Restoration appealed.

On appeal, Restoration argued that the trial court should not have dismissed its equitable claims because even if the contracts were void, Restoration should still be able to recover for the work they performed under a "quantum meruit" argument, which argues that there was a contract "implied by law." Although the appellate court agreed that the two contracts were void, the appellate court rejected the trial court's dismissal of Restoration's quantum meruit claim, finding that Restoration should have been able to proceed on that argument. The court specifically found that there was no case that holds that a quantum meruit claim is barred if a contract was determined to be void. 

In short, the appellate court sent the case back to the trial court for further proceedings on Restorations quantum meruit claim that the school district must pay them for the value of the work they provided to the district. Restore Construction Co. v. Board of Ed of Proviso Township HS Dist. 209, et al., 2019 IL App (1st) 181580

Monday, July 1, 2019

Quorum Forum Episode 26: Local Gov Legislation Update

After an historic legislative session, Ancel Glink Partner and State Rep. Chris Welch joins Kurt Asprooth for a special meeting of Ancel Glink's podcast, Quorum Forum, to discuss a capital bill bringing new casinos, sports betting, and more video gaming terminals to Illinois communities. We also discuss “Tobacco 21,” a new Open Meetings Act exception, and more important legislation affecting local governments. 

You can access this Podcast Episode 26 here.

Questions about new #localgov legislation? Email us at podcast@ancelglink.com!

Wednesday, June 26, 2019

Illinois Parking Excise Tax Act & Municipal Parking Garages and Lots

The Illinois legislature slipped a little-known provision into House Amendment 3 of Senate Bill 690 (part of the "Leveling the Playing Field for Illinois Retail Act) that would establish a parking excise tax. Beginning January 1, 2020, the Parking Excise Tax Act would impose a state excise tax on the privilege of using a parking space in a parking garage or area at the rate of 6% for hourly, daily, or weekly parking and 9% for parking paid on a monthly or annual basis. The tax would be collected by the "operator" of any parking area or garage, as defined in the proposed legislation. The bill (which also includes changes to the internet sales tax, gaming expansion, and increases to the gas and cigarette taxes, among other provisions) has been approved by the Illinois legislature and has been sent to the Governor. 

The question many local governments have asked is whether parking spaces in a parking garage or lot operated by a municipality or other unit of local government (including a commuter parking lot or garage) would be subject to this new tax. 

The answer to that question may turn on the definitions of "operator" and "person" under the proposed legislation. 

"Operator" is defined as any person who engages in the business of operating a parking area or garage..." 

"Person" is defined as "any natural individual, firm, trust, estate, partnership, association, joint stock company, joint venture, corporation, limited liability company, or a receiver, trustee, guardian, or other representative appointed by order of any court." 

It is relevant that the definition of person in the proposed legislation does not include any reference to municipalities or other units of local government. Where the state legislature has enacted an excise tax and has defined "person" for purposes of interpreting that tax, it has expressly included in the definition of person a reference to governmental entities where applicable. For example, the Motor Fuel Tax Act includes in the definition of person the following "or any city, town, county, or other political subdivision in this State.” Similar language is also included in the Simplified Municipal Telecommunications Tax Act, the Electricity Excise Tax, and other excise tax statutes. Here, no such language is included, which suggests that the legislature did not intend the tax to apply to parking garages or lots operated by municipalities or other units of local government. Perhaps it would have been clearer if the legislature had expressly exempted municipal and other local government parking areas and garages from the tax as the legislature did for the federal government.

We have reached out to various organizations and agencies to confirm our interpretation, and will update our readers when we have more information. We certainly hope to have more information prior to the proposed legislation being enacted. 

Monday, June 24, 2019

"Ongoing Investigation" Does Not Provide Blanket Exemption to FOIA Request

The Illinois appellate courts don't often decide FOIA cases, so it's always an interesting read when they do (most of our FOIA posts deal with PAC opinions). 

In Kelly v. Village of Kenilworth, et al., 2019 IL App (1st) 170780, an appellate court considered the appeal of a denial of a FOIA request for records relating to a 50 year old investigation into the murder of a 21 year old in her Kenilworth home. Kelly had filed various FOIA requests with the Village, the state police, the Cook County states attorneys office, among other government entities seeking all records pertaining to the murder investigation. The Village and other public bodies denied the request on the basis that the records were for law enforcement purposes and disclosure would interfere with an active or ongoing criminal investigation. 

Subsequently, Kelly filed a lawsuit against the Village and other defendants. After the trial court reviewed some of the requested records "in camera," the court ruled in favor of the Village and other defendants, finding that disclosure could interfere with an ongoing investigation.

On appeal, the appellate court first held that the Village could assert a FOIA exception over records held by the other defendants, including Cook County and the state police. Second, the appellate court held that trial court correctly determined that there was an ongoing investigation into the murder for purposes of the FOIA exemptions contained in 7(1)(d).  

However, the appellate court expressed concerns about the trial court's application of a blanket exemption over the requested records relating to the ongoing investigation. The appellate court determined that section 7(1)(d) requires a public body to redact and release that portion of the investigative records where release would not interfere with an ongoing investigation or obstruct an ongoing criminal investigation. The appellate court did, however, acknowledge that the scope of the requested records was extensive, and that the Village and other defendants may have properly asserted the "unduly burdensome" exception in response to the FOIA request. Although that exception had not been raised in the initial denial, the appellate court remanded the case to provide the defendants with the opportunity to raise that exemption, and work with Kelly to narrow his request to a more manageable proportion, as allowed by the FOIA statute.

Although the appellate court did not preclude the defendants from asserting the "unduly burdensome" exception on remand, this case is still a reminder of the importance of asserting any potential exception at the outset, in the initial response. 

Friday, June 21, 2019

US Supreme Court Overrules Williamson County "State Litigation" Requirement

In a 5-4 decision, the U.S. Supreme Court overruled longstanding precedent in Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985), that required property owners to pursue their claims against government in state court before they could bring a federal lawsuit alleging a "taking" in violation of the Fifth Amendment of the U.S. Constitution. See Knick v. Township of Scott (USSCT, June 21, 2019). The Williamson County ripeness doctrine allowed government bodies to defend these property and land use cases in state court, where state court remedies were available. The U.S. Supreme Court's decision in Knick overruling Williamson County's "state-litigation" requirement will certainly affect local governments across the country, including Illinois, as litigants can now initiate their land use and property claims in federal court in a civil rights 1983 action. 

We will report on this case in more detail next week.

Thursday, June 20, 2019

Ancel Glink talks “Law in Plain English” on GovLove Podcast

Check out Ancel Glink partner David Silverman’s appearance on ELGL’s GovLove podcast discussing “Law in Plain English,” as part of their #GovLoveLegal series. A description of the podcast is below and you can listen to the podcast here. 
Writing legalese for residents. GovLove Legal returns with a discussion of how to write about complex legal topics in a way that is understandable for residents and elected officials. Jenny Kosek, Communications Strategist in West Allis, WI, and David Silverman, Partner at Ancel Glink Law Firm, share their perspectives and tips for taking complex legal topics and communicating them clearly.
Post Authored by Dan Bolin, Ancel Glink

Tuesday, June 11, 2019

Court Upholds Termination of Employee for Violating Residency Requirement

The Illinois Appellate Court recently interpreted a municipal ordinance residency requirement to uphold the municipality's termination of a firefighter for failing to comply with that requirement. Cannici v. Village of Melrose Park, 2019 IL App (1st) 181422-U.

Cannici, a firefighter in Melrose Park, purchased a duplex in Melrose Park in 2000, about the same time he began working at the Village. He continued to live there with his wife and two children until 2008, when he purchased a home in Orland Park. His wife and two children moved into the new home, and he claims he stayed in the Melrose Park duplex and visited his family in Orland Park on the weekends. For a couple of years, he attempted to sell the Melrose Park house but a sale never happened. Instead, he entered into a lease to rent out the home in 2013 to another family who stayed until 2016.

In 2016, the Village sought to terminate Cannici for violating the residency requirement. The Board of Fire and Police Commission held a hearing, heard testimony from Cannici, and at the conclusion of the hearing, voted to terminate Cannici, finding that he had abandoned the Melrose Park residency when he leased the home in 2013. Cannici sued to challenge the Board's decision. The circuit court upheld the Board's decision to terminate, and he appealed to the First District Appellate Court. 

On appeal, the Appellate Court first reviewed the municipal ordinance requirement and held that the ordinance clearly defined "residency" for purposes of the employment residency requirement to require a village employee to occupy a dwelling place used as a home as the employee's principal place of residence and abode. In this case, the court found that Cannici did not occupy the Melrose Park home for three years while it was being rented out, and his primary residency and abode was in the Orland Park home where his family lived.  The court rejected Cannici's argument that the court should have applied the residency test used by the Appellate Court in the Maksym case involving the challenge to former Chicago Mayor Emanuel's residency, which examined the person's intent to return to the home. The court acknowledged that the court in the Maksym case had to craft a definition of residency because the statute at issue in that case (residency for purposes of eligibility for municipal office) did not define "residency." Here, however, the court noted that Melrose Park's ordinance at issue did, in fact, define residency, and that definition required actual occupancy rather than intent.

Municipalities with residency requirements may want to look at their own ordinances to determine whether they have a clear definition of residency, as that could be helpful in defending any challenge to the application of the ordinance.

Monday, June 10, 2019

Quorum Forum Podcast 25: Recreational Cannabis

There is a lot of information available in news articles, blogs, and social media about the recreational cannabis legislation recently passed by Illinois, which is awaiting the Governor's signature. For those of you who want to learn more, or just prefer to "hear" your news, we've put together a Quorum Forum podcast episode on the legislation.  More information below:

The Illinois General Assembly recently approved recreational cannabis and, with the Governor’s expected signature, the new law will bring sweeping changes for local governments and employers. Ancel Glink’s Adam Simon and Matt DiCianni discuss questions local governments will have about cannabis business regulations, personal use, possession, home cultivation, state and local taxes, prosecutions, expungements, and more! We also discuss how recreational cannabis will affect employers and employees in the workplace. 

Questions about the new law? Do you know who might have climbed in to our podcast studio? Email us at podcast@ancelglink.com.

Disclaimer: This podcast is provided as a service to our public and private sector clients and friends. It is intended to provide timely general information of interest, but should not be considered a substitute for legal advice. Read our full disclaimer.

Thursday, June 6, 2019

Illinois Levels the Playing Field for Internet Sales Taxes

Last June, we posted about a Supreme Court decision that eliminated the requirement that a retailer have a physical presence in a state for it to be subject to the assessment of sales taxes. After the Wayfair decision, Illinois adopted Public Act 100-0587 amending the Use Tax Act and Service Use Tax Act to incorporate language to tax Internet transactions. Unfortunately for municipalities, the Use Tax and Service Use Tax is not distributed to municipalities based on the point of sale or point of delivery, but on a per capita basis. So, while Illinois has been taxing Internet transactions, this was not the golden goose many communities had hoped for when the Wayfair case was decided.

Now, Illinois municipalities can truly celebrate. In the flurry of legislative activity over the weekend, monumental changes to Illinois’ sales tax laws were adopted (pending the Governor’s approval) in SB 690, including a new law called “Leveling the Playing Field for Illinois Retail Act.” As its name indicates, the purpose of the law is to facilitate the payment and collection of sales taxes from “remote retailers,” including Internet sales.

Significant to municipalities, the bill would now require the payment of the Retailers’ Occupation Tax and eliminate the payment of Use Tax or Service Use Tax on such sales, effective July 1, 2020. That means these sales taxes will now include the 1% local share. Not all Internet sales are subject to a tax under the law. A remote retailer is only responsible for paying a tax (and therefore collecting it from purchasers) if (1) the cumulative gross receipts from sales to purchasers in Illinois are $100,000 or more; or (2) the retailer enters into 200 or more separate transactions with purchasers in Illinois.

Another change worth noting is that the taxing jurisdiction that will receive the local tax is determined based on where the purchase is shipped or delivered. This is a “point of delivery” rule, which is different from the “point of sale” rule that applies to in-state transaction.

In addition to the changes described above, the bill directs the Illinois Department of Revenue to designate certified service providers who will perform the tax collection function for remote retailers and to create automated software systems to simplify the tax collection process. Part of the software system will include an electronic, downloadable database which (1) classifies the taxability of each type of personal property, (2) defines the tax rates for each jurisdiction in the State, and (3) assigns delivery addresses to each taxing jurisdiction. With any luck, this should create a turnkey solution to help remote retailers comply with the obligation to pay sales tax on transactions with Illinois residents.

As we continue to review the legislation, and any Department rules to implement these changes, we will provide updates on whether municipalities need to amend their local tax ordinances to capture their local sales taxes on remote transactions in addition to the local share of the State sales tax.

Post authored by Adam Simon

Wednesday, June 5, 2019

Police Scheduling Calendar Subject to FOIA

The PAC issued its fifth binding opinion in 2019 last week in PAC Op. 19-005. In this opinion, the PAC found the Chicago Police Department in violation of FOIA for denying a request for release of "extradition calendars." 

CPD personnel who work in the field services section on prisoner extradition matters put together a working schedule calendar containing various assignments to assist the officers and their supervisors in keeping track of court dates and related activities in the department. In response to a FOIA request for a copy of the calendar, the CPD denied the request, citing 7(1)(f), which exempts draft or predecisional documents from release.  The CPD argued that the calendar was created by the officers, not the CPD itself, and that the calendar was constantly updated based on evolving schedules. The requester filed an appeal with the PAC, which rejected the CPD's basis for denial, finding the extradition calendar to be releasable under FOIA. Specifically, the PAC stated that because the calendar was purely factual in nature, it did not fall under the "deliberative process" exemption under 7(1)(f).

Tuesday, June 4, 2019

Illinois General Assembly Passes Recreational Marijuana Bill

The Illinois General Assembly was quite busy last week, passing legislation legalizing the recreational use of marijuana, expanding gambling, putting forth a ballot question on modifying the state income tax provisions of the Illinois constitution, passing a budget, among many other bills. It is expected that Governor Pritzker will sign these bills into law. 

Although all of these will have an impact throughout the state, the legalized marijuana bill (HB 1438) may have the most impact on local governments. We had reported previously on an earlier draft of the recreational marijuana bill but the bill that passed both houses was substantively changed from that first bill. 

The bill allows state residents over the age of 21 to possess up to 30 grams of cannabis beginning January 1, 2020. Personal cannabis use will be allowed in most private residences, but not in prohibited areas including any public place or in close physical proximity to underage persons. An earlier proposal allowed households to grow up to five cannabis plants, but this new law would limit home cultivation to medical cannabis patients.

So, how does the bill affect local governments?

Will your Community Allow Cannabis Businesses?
The bill allows local governments to ban or significantly limit cannabis businesses in their jurisdiction, including dispensaries, cultivation centers, craft growers, processing organizations, and transportation organizations. Unlike in earlier proposals, the new law would not impose a time limit or require a referendum to adopt these restrictions.

How will your Community Regulate any Allowed Cannabis Businesses?
The bill allows local governments to adopt (1) reasonable zoning ordinances that do not conflict with the Act; and (2) ordinances and rules governing the time, place, manner, and number of cannabis businesses consistent with the Act.

Will your Community Allow Cannabis Lounges?
The bill grants local governments broad authority to authorize and regulate privately-owned facilities where cannabis and cannabis products may be consumed on-site (i.e., “cannabis lounges”) similar to hookah lounges.

Will Your Community Tax Recreational Cannabis?
Both home rule and non-home rule municipalities can adopt ordinances to impose a local tax on the operation of a cannabis dispensary. The rate of tax cannot exceed 3% of the dispensary's gross receipts from the sale of non-medical cannabis. If imposed, the tax may only be imposed in 0.25% increments. The tax will be collected and enforced by the Department of Revenue, which is entitled to retain 1.5% of the amount distributed to each municipality as an administrative fee.

How will your Community Engage in Crime Prevention?
In a change from prior proposals, the Cannabis Regulation Fund will now transfer 8% of the state tax revenue to the Local Government Distributive Fund (LGDF) to fund crime prevention programs, training, and interdiction efforts, including detection, enforcement, and prevention efforts, relating to the illegal cannabis market and driving under the influence of cannabis.

How will your Community Prosecute Cannabis Use and Possession?
While local ordinances cannot prohibit home cultivation for medical use or unreasonably prohibit personal cannabis use, local governments can regulate these activities consistent with the Act and should consider adopting ordinances enforceable through municipal prosecutions.

What Law Enforcement Records Should be Automatically Expunged?
In a significant change from prior proposals, expungements will now take place in three different processes: petitions (for Class 4 felonies), pardons from the Governor, and automatic expungements (for offenses of simple possession of no more than 30 grams, in certain circumstances). Many of the records will relate to municipal code violations, which will be required to be expunged according to a schedule described in the bill that will give municipalities until January 1, 2025 to expunge records that precede January 1, 2000.

How will you Manage Recreational Cannabis and your Employees?
Employers will likely want to update their personnel policies once the new law becomes effective. Employers will have the authority to adopt zero tolerance policies or other policies concerning drug testing, smoking, consumption, storage, or use of cannabis in the workplace provided that the policy is applied in a nondiscriminatory manner. In addition, employers will have the power to discipline or terminate an employee for violating an employer’s employment policies or workplace drug policy, subject to an appeals process. An employer may consider an employee to be impaired or under the influence of cannabis if the employer has a good faith belief that the employee manifests specific, articulable symptoms while working that decrease or lessen the employee’s performance of the duties or tasks. Additionally, the law prohibits discrimination against employees for use of “lawful products” like cannabis during nonworking and non-call hours.