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Wednesday, November 27, 2013

Supreme Court to Hear Appeal on Controversial Affordable Care Act Provision

In the last six weeks, President Obama has faced an onslaught of challenges to his signature piece of legislation, known as Obamacare, including a broken website and claims that he mislead voters about their ability to keep their existing insurance.  Today, President Obama faces another challenge: the Supreme Court.
The Supreme Court announced that it would hear an appeal in the case commonly referred to as Sebelius v. Hobby Lobby, brought by Hobby Lobby, the arts and crafts chain that has led the fight against this controversial provision. The appeal concerns a provision of the Affordable Care Act (Obamacare) that requires employers with more than fifty employees to provide health plans that cover contraceptives. This issue has divided the lower courts, who now look to the Supreme Court for a resolution.
This suit, which the Supreme Court combined with another suit brought by Conestoga Wood Specialties, claims that the contraceptive mandate violates the plaintiffs’ rights under the Religious Freedom and Restoration Act of 1993 (RFRA).  RFRA states that the government "shall not substantially burden a person’s free exercise of religion," unless doing so furthers a "compelling" interest.  The law was initially enacted to overturn the Supreme Court’s refusal to give religious objectors a constitutional exemption from other statutes.  Although RFRA was previously found unconstitutional as applied to states , it is still applicable to the federal government
Sebelius and Hobby Lobby are far from the only parties with an interest in this issue. Dozens of groups have lined up on both sides, flooding the lower courts with amicus briefs. Among the most vocal opponents have been private, for-profit corporations. Although the regulations exempt "religious employers," like churches, religiously-affiliated universities, and other non-profits, from offering health insurance plans that cover contraceptives, they do not exempt large, for-profit corporations like Hobby Lobby.

Oral arguments are expected to be held sometime in the spring, with a decision coming in late June.
Post Authored by Matt DiCianni and Julie Tappendorf, Ancel Glink 

Tuesday, November 26, 2013

No Duty to Keep Streets Safe for Pedestrians Outside Marked Crosswalk

As Thanksgiving approaches, municipalities can count one more blessing to be thankful for. In an opinion handed down last Friday, an Illinois appellate court issued a favorable ruling for municipalities just in time for the winter weather. In Harden v. City of Chicago, the appellate court held that the only part of the street that the City was required to keep safe for pedestrians was the marked crosswalk area. While this is not the first time that an Illinois court has articulated this rule, this case is significant because it extends the rule to situations where the plaintiff could not see the crosswalk because it was covered with snow.
In this case, the plaintiff was injured after she slipped on a metal plate while trying to cross the street. Although the plate was not located in the crosswalk, it was only a few feet away from it. The plaintiff argued that the city was liable to her because she thought she was using the crosswalk, as the lines marking it were covered with snow. The court rejected this argument, and held that the city had no duty to keep areas outside of the marked crosswalk safe for pedestrians, even if the crosswalk lines were covered with snow. The court noted that "the Illinois legislature has established a clear public policy to immunize government from the financial burdens of preventing injuries which occur as a result of unintended uses of the streets." Although the court felt bad for the plaintiff, it held that she had no claim against the city, since she was injured outside the marked sidewalk and was, therefore, an unintended user of the street.
This holding should provide some relief for municipalities, who already face a large number of cases every winter brought by plaintiffs injured after slipping on ice. In an era where municipalities face declining budgets and increasing workloads, let’s be thankful that they do not have to spend millions of extra dollars to keep those portions of the street outside the marked crosswalk safe for unintended users.
For more information on the types of lawsuits that municipalities may encounter, check out the Tort Immunity Handbook on the Ancel Glink website.
Post Authored by Matt DiCianni, Ancel Glink

Monday, November 25, 2013

Indiana's Robocall Law Not Preempted by Federal Law

Indiana enacted a law called the "Automated Dialing Machine Statute" to ban "robocalls," a type of automated, computer-generated calls, unless the receiver has consented to the calls in some manner before the automated message is delivered.  The robocall law includes certain exceptions, including school district calls to parents and employer calls, but no exception for political organizations.  
Patriotic Veterans, Inc., an Illinois non-profit organization,  used robocalls to inform voters of positions taken by candidates for office on issues of interest to veterans.  The group filed a complaint against the State of Indiana claiming that the law violates the First Amendment as it applies to political messages.  The group also claimed that the law is preempted by the Federal Telephone Consumer Protection Act (TCPA), which regulates telemarketers and autodialers.  The district court held that the TCPA preempted Indiana's law, and granted an injunction against enforcement of the law against Patriotic Veterans.  Indiana appealed to the Seventh Circuit Court of Appeals.
On appeal, the Seventh Circuit disagreed with the district court, and ruled that the Indiana law was not preempted by the TCPA.  Patriotic Veterans, Inc. v. State of Indiana (7th Cir. Nov. 21, 2013).  First, the TCPA contained no express preemption.  In fact, the TCPA contained a non-preemption clause.  Moreover, just because a federal law is comprehensive  in nature, that does not necessarily mean that states are barred from imposing additional requirements, such as Indiana's law.  Conflict preemption also did not apply because Patriotic Veterans could comply with the Indiana law without violating the TCPA. 
Because the district court did not rule on the First Amendment arguments, the case was remanded back to the district court.
Post Authored by Julie Tappendorf, Ancel Glink

Friday, November 22, 2013

"Business of Selling" and Not Sales Themselves Determine "Situs of Sale" for Taxation

The Illinois Supreme Court rejected a fuel oil company's attempt to choose the "situs of sale" for sales tax purposes.  In Hartney Fuel Oil Co. v. Hamer, 2013 IL 115130 (Nov. 21, 2013),
Hartney, a retailer of fuel oil, had its home office in the Village of Forest View, in Cook County.  The company also maintained a sales office in the Village of Mark, in Putnam County.  Hartney structured its sales so that all orders were processed through the Mark office, including taking customer orders and execution of sales contracts. Orders were filled, however, from the Forest View office.  Neither Putnam county or the Village of Mark imposed its own sales tax, and each rebated a portion of the state sales tax to Hartney.  In an audit, the Department of Revenue determined that the proper situs of sale was Forest View, not Mark, and sent a notice of tax liability in the amount of approximately $23 million.  Hartney appealed the DOR's determination, and both the circuit court and appellate court held that the proper situs of sale was Mark.
On appeal, the Supreme Court wrestled with the question as to where Hartney's "situs of sale" was for purposes of taxation.  First, the Court determined that Hartney had structured its sales to the Mark office in order to avoid liability for sales taxes to Cook County, Forest View, and the RTA, and to take advantage of the sales tax rebate arrangement with Mark and Putnam County.  The Court then looked at both state law and the administrative regulations pertaining to "situs of sale" and the business of selling to determine whether Hartney's sales were properly taxed in Mark rather than Forest View. In reviewing the various activities and conduct involved in Hartney's business, the Court concluded that Hartney conducted the bulk of its selling activity in Forest View, including marketing efforts, maintenance of inventory, setting of prices, and cultivation of sales relationships. The Court interpreted the statute and regulations to require that sales taxes be imposed on the "business of selling" and not just the sales themselves.  Here, the only activity conducted to Mark was the actual processing of sales orders, which was not enough to find Mark was the "situs of sale" for purposes of taxation.
Although the Court determined that Hartney's business sales should have been taxed in Forest View, it ordered that all back taxes be abated, in part because the Court invalidated the DOR's own regulations and guidance to taxpayers for being inconsistent with state law and cases.  The Court also acknowledged that it would be difficult, if not impossible, for Hartney to recover these amounts from its customers. 
Post Authored by Julie Tappendorf, Ancel Glink

Thursday, November 21, 2013

Prevailing Wage Act Applies to Water Utility Contractor

The Department of Labor filed a complaint against E.R.H. Enterprises, Inc., alleging that E.R.H. violated the Prevailing Wage Act for water main repair work it performed on behalf of the Village of Bement.  E.R.H. argued it was not subject to the Prevailing Wage Act as it fell within the "public utility" exception under the Act.  The trial court ruled E.R.H did not fall within the "public utility" exception of the Act and, therefore, was subject to paying prevailing wages.  The appellate court reversed, concluding E.R.H. did qualify as a public utility, as that term is defined in the Utilities Act.  Specifically, the appellate court determined that E.R.H was responsible for maintaining and operating the Village's potable water facility and certain segments of the water infrastructure, so qualified as a public utility under the Act.  The DOL appealed to the Illinois Supreme Court.
The Illinois Supreme Court first reviewed the language of the Prevailing Wage Act, finding that the legislature did not include a definition of "public utility" nor any rationale for exemption public utilities from the prevailing wage requirement. People of State of Illinois v. E.R.H. Enterprises, 2013 IL 115106 (Nov. 21, 2013).  The Court then reviewed the definition of "public utility" under the Utilities Act as applied by the appellate court, and determined that the appellate court failed to acknowledge a specific exemption in the Utilities Act definition for utilities that are owned by a "municipal corporation."  Based on this language, the Court found that E.R.H. was a contractor, not a public utility company and that the Village was the operator of the water facility, not E.R.H.  Consequently, E.R.H was not exempt from the Prevailing Wage Act and was required to pay its employees prevailing wages for work performed on the Village's water facility and improvements. 

Wednesday, November 20, 2013

Electoral Board Must Be Separately Served in Lawsuit

In another example of a court's strict application of the election code to election challenges, a court recently dismissed a case because the plaintiff failed to serve the electoral board with a copy of her petition for judicial review. Bettis v. Marsaglia, 2013 IL App (4th) 130145 (Nov. 13, 2013).
Plaintiff filed a lawsuit seeking to overturn an electoral board's decision that struck a referendum petition she filed regarding a school district's issuance of bonds.  In the caption of her petition for judicial review, she had only named the objectors, but not the electoral board or its members.  The objectors filed a motion to dismiss with the court, alleging that the court lacked subject matter jurisdiction because plaintiff failed to name and join the electoral board and its members as required by the Election Code.  The trial court agreed and dismissed her case.
On appeal, the court first rejected defendant's mootness argument, finding that the issues were a matter of public concern and likely to recur.  Second, the court analyzed the language of Section 10-10.1(a) of the Election Code, finding that although it does not require that the caption of the complaint name the electoral board and its members, it does expressly require that a petitioner "serve a copy of the petition upon the electoral board and other parties." 
In this case, plaintiff did not serve the electoral board itself, but only served a copy of the petition for judicial review on the individual members of the electoral board were served. The court acknowledged that there was a split in the various appellate districts as to whether the electoral board itself must be separately sued.  The First District has interpreted this section to require service of the Electoral Board, while the Fifth District has ruled that it was unnecessary to separately serve the electoral board.  The Fourth District reasoned that the First District's interpretation was the correct one, and determined that plaintiff did not strictly comply with the election code requirement that the electoral board be separately served.

The Municipal Minute blog is authored by Julie Tappendorf, a partner at the Ancel Glink law firm, and provides timely updates on a variety of topics of interest to municipalities and local governments.

Tuesday, November 19, 2013

Government's Termination of Employee for Derogatory Facebook Posts Upheld

From Strategically Social:  Government can regulate its employee's speech on social media sites without offending the First Amendment. In Shepherd v. McGee, (D. Or. Nov. 7, 2013), an employee sued her former employer, the Oregon Department of Health Services, alleging First Amendment retaliation under Section 1983. Specifically, she alleged she was fired because of derogatory Facebook comments she made in violation of her First Amendment rights to free speech.

 The plaintiff was employed as a child protective services worker who determined child custody cases. On multiple occasions, she posted to her Facebook derogatory remarks about individuals on public assistance, including the following post:
I was listening to the radio and they were making up rules for society. Here are my rules: (1) If you are on public assistance, you may not have additional children and must be on reliable birth control (e.g. an IUD), (2) If you've had your parental rights terminated by DHS, you may not have more children.... it's sterilization for you buddy! (3) If you are on public assistance and don't pay taxes, you shouldn't get taxes back from that child tax credit[,] (4) If you are on public assistance, you may not own a big flat screen television, (5) If you receive food stamps, you should be limited on what you may purchase (no more ribeye steaks, candy, soda, chips, etc), (6) If you physically abuse your child, someone should physically abuse you, (7) I should be president so I can make up more rules, (8) If you don't like my rules, too bad. I have a Ph.D. and you don't so I get to make up my own imaginary rules.

After an investigation, DHS fired the plaintiff, and she sued.

In ruling in favor of DHS against the employee, the court looked at "whether the state had adequate justification for treating the employee differently from other members of the general public." The court agreed that the state had adequate justification for treating the plaintiff differently by firing her.
First, the court agreed with DHS that her posts irreparably impaired her ability to perform her duties, since every time she appeared in court to testify on a CPS matter, she would immediately be impeached by the defense attorney. In fact, DHS had already concluded that the employee's Facebook posts would prevent her from ever being called as a witness prospectively, even though she had been doing so 6 to 8 times per month as part of her job responsibilities.
Second, the court agreed with DHS that the Facebook posts caused disruption in the workplace sufficient to warrant her firing. Specifically, as a result of the Facebook posts, two coworkers doubted plaintiff's ability to be effective in her role. This was considered by the court to be sufficient evidence of a "substantial disruption" in their working relationships.
Finally, the court noted that the speech was not at the core of the First Amendment nor had it been disseminated to a wider audience, although the court noted that even if plaintiff's speech met either or both of these tests, the balance would still tip in the employer's favor. 

Monday, November 18, 2013

No Requirement to Record Mortgages in Illinois

The Seventh Circuit Court of Appeals recently held that there is no requirement that mortgages be recorded in Illinois.  Union County v. MERSCORP, Inc.  Union County had sued MERSCORP (a mortgage servicer), claiming it was in violation of Illinois law because it failed to record mortgage assignments.  The district court had dismissed the case, finding no such requirement in Illinois.  On appeal, the Seventh Circuit agreed, rejecting the county's argument that the "plain language" of 765 ILCS 5/28 requires that "deeds, mortgages....shall be recorded in the county in which such real estate is situated," finding that the purpose of this language is to instruct as to where mortgages should be filed if they are recorded rather than establish a recordation requirement for initial mortgages or assignments.  The court acknowledged that there may be good reason to record mortgages (to protect priority of the security interest) but no law required it.

Friday, November 15, 2013

Court Overturns PAC Ruling that School Board Violated OMA by Not Discussing Prior to Vote

We previously reported on the 7th PAC ruling of 2013 that found a school district in violation of the OMA for failing to adequately discuss a matter prior to voting and for signing an agreement in executive session.  School Board Violated OMA by Not Discussing Item Prior to Vote

A Sangamon County Judge overturned the PAC ruling on Wednesday, holding that the school district board members did not violate the OMA by signing the separation agreement in executive session.  The court also remanded the matter back to the PAC to investigate further whether the district violated the OMA by not discussing the terms of the agreement prior to its vote (the court acknowledged that the district did post information about the terms of the agreement on its website). 

You can read more here.

Thursday, November 14, 2013

Parties Settle Housing Discrimination Case Prior to Supreme Court Oral Argument

Mount Holly v. Mount Holly Gardens Citizens in Action, a housing discrimination case that was scheduled for oral argument before the U.S. Supreme Court on December 4th, was settled last night according to the New York Times.  The settlement was approved by the Mount Holly Township Council and results in an increase in the number of homes that will be built and requires a set aside of a certain number of homes for current residents. 
Due to the settlement, the case will be dismissed, leaving open the question whether claims under the Fair Housing Act require proof of intentional discrimination. The lower court (3rd Circuit Court of Appeals) had allowed the case to go to trial under the "disparate-impact" theory. 

Police Officer's Facebook Posts Not Protected Speech

From Strategically Social:  In an unpublished opinion, the 11th Circuit Court of Appeals recently addressed a police officer's lawsuit against the City of Atlanta alleging that the chief failed to promote the officer in retaliation for a comment she posted on Facebook criticizing another officer.  Gresham v. City of Atlanta (11th Cir., October 17, 2013). 
The officer had posted a comment on her personal Facebook page criticizing a fellow officer for interfering in an unethical manner with plaintiff's investigation of a suspect for alleged fraud and financial identity theft.  Although the officer's Facebook page's privacy settings allowed only "friends" to view posts, her comments found their way to the City's police department's office of professional standards.  Plaintiff was investigated for an alleged violation of the department's work rule requiring that any criticism of a fellow officer be directed through official department channels, and not be used to the "disadvantage of the reputation or operation of the Department or any employees."  Plaintiff argued that the reason she was not promoted when eligible was in retaliation for her comments, which were being investigated at the time of departmental promotions.  The City argued that she was not promoted because department policy prohibited any promotions during pending disciplinary investigations.
The district court ruled in favor of the City, and dismissed the officer's Section 1983, First Amendment lawsuit.  The 11th Circuit agreed, applying the four-part Pickering test for employee speech requiring the court to determine whether (1) plaintiff's speech involved a matter of public concern; (2) plaintiff's interest in speaking outweighed the government's legitimate interest in efficient government service; (3) the speech played a substantial part in the government's challenged employment decision.  If plaintiff establishes the first 3 prongs, then she will prevail unless defendants can prove that (4) they would have made the same employment decision even in the absence of protected speech. 
Here, the court determined that the government's interest in avoiding disruption outweighed plaintiff's interest in speaking on this matter.  Furthermore, plaintiff violated a clear departmental rule in commenting on a fellow officer outside of official department channels.  Finally, the court determined that plaintiff's speech interest was not a strong one, and merely reflected "venting her frustration with her superiors."  Thus, the appellate court agreed with the district court's decision to dismiss plaintiff's claims against the City. 

Wednesday, November 13, 2013

Title II of ADA Does Not Cover Employee Discrimination

Title I of the Americans with Disability Act prohibits employment discrimination on the basis of disability.  Title II of the ADA provides that state and local governments may not exclude eligible disabled persons from "participation in" or the "benefits of" governmental "services, programs, or activities" or otherwise discriminate against an eligible disabled person. 
The Seventh Circuit Court of Appeals recently considered the question of whether Title II should apply to employment discrimination cases.  A Chicago police officer filed a lawsuit claiming that the City discriminated against her in terminating her employment in violation of Title II of the ADA.  Two other circuits (9th and 10th circuits) have held that it does not apply  but one circuit (11th) has held that Title II does extend to employment discrimination claims. 
In Brumfield v. Chicago (Nov. 6, 2013), the Seventh Circuit answered the question whether Title II of the ADA should be a supplemental remedy to Title I to cover employment discrimination, joining the 9th and 10th circuits to hold that Title II does not cover disability discrimination in public employment.  The Seventh Circuit stated that the language of Title II made it clear that it did not apply to employment decisions of state and local governments, finding that "employment" was not covered by the "service, program, or activity of a public entity" provision of Title II, nor did an employee fall within the category of "qualified individuals" who could invoke the protection of Title II. 

Tuesday, November 12, 2013

Where Does All The Money Come From?

As the leaves fall from the trees, we are reminded that it is once again time to plan for the annual tax levy.  Most local governments rely on property taxes to fund more than 50% of their operating expenses each year, making the tax levy the most important financial document.  To ensure no one misses the statutory deadlines in the process of approving the tax levy, we have prepared a simple reminder.

First, all taxing bodies in Illinois, regardless of whether they are home rule or subject to the tax cap, need to establish an estimate of the taxes to be levied for corporate and special purposes.  That estimate can be made by motion, resolution, or ordinance, just so long as it is reflected in the minutes of a public meeting and is established at least 20 days prior to the date when the final tax levy will be adopted. 

Second, if a taxing body plans to increase its corporate and special purpose levies by an aggregate amount greater than 105% of the previous year’s extension for corporate and special purposes taxes, a public hearing will need to be ordered and notice of the hearing will need to be published between 7 and 14 days prior to the hearing.  The calculation includes all corporate and special purposes property taxes, including taxes which are exempt from the “tax cap,” but excludes levies for debt service or public building commission leases.  The form of the notice of public hearing is established by law, must be strictly adhered to, and may not be published in the legal or classified section of the newspaper.  When a public hearing is required, it may be held on the same night that the final tax levy ordinance is approved (provided it is more than 20 days after the estimate of levy is declared by the public body).

Finally, all property tax levies must be approved and filed with the County Clerk by not later than the last Tuesday in December.  Because this date often falls in and around the holidays, we recommend our clients confirm the office hours for the County Clerk and file the tax levy early.  So long as your governing board complies with the schedule described above, there is no date which is too early to file a tax levy ordinance.  When the tax levy ordinance is filed, it is frequently a good practice to bring an extra copy so it can be file stamped and serve as your receipt and proof that the ordinance was filed on time.  Failure to file your tax levy before the last Tuesday in December can have catastrophic consequences for your taxing body and may require special legislation to permit an extension of your taxes.

Post Authored by Adam Simon, Ancel Glink

Monday, November 11, 2013

Election Law Targeting Lake County is Unconstitutional

We have written on this blog about the law passed in July of this year that would have transferred the Lake County Clerk's authority over elections to a new election commission.  Last week, we reported on a bill that would have repealed that requirement.  Based on a recent circuit court ruling, however, there may be no need to move forward with the second bill since the Judge ruled that the law was unconstitutional.  County of Lake et al. v. Chief Judge Fred Foreman, et al (Please note that the linked copy of this ruling is courtesy of Lake County's website and is inexplicably missing page 16 - we will update the blog with a complete copy as soon as we can)
On July 30, 2013, Lake County and County Board Chairman Aaron Lawlor filed a lawsuit against the Chief Judge, Illinois State Board of Elections, and others challenging the new law as unconstitutional and seeking declaratory and injunctive relief.   The County alleged that the statute was impermissible special legislation because Lake County is the only county that now, or in the future, would trigger the election commission requirement (the statute applied to any "county with a population of more than 700,000 persons as of the 2010 federal decennial census that borders another state and borders no more than 2 other Illinois counties").  The county also argued that the mandatory imposition of an election commission deprives the voters and the county board of the ability to determine themselves whether a commission is desirable.  The defendants defended the law by arguing that the classification was not special legislation but merely a population-based classification.
Kane County Circuit Court Judge Akemann, appointed to avoid any potential conflict of interest in having a Lake County Court rule on this issue, issued the opinion in this case.  His 18 page written ruling contains a detailed review of case law analyzing the constitutional prohibition on special legislation, and the legality of population-based classifications.  In this case, the court determined that although population classifications are not per se illegal, they must meet a two-prong test established by the Illinois Supreme Court.  Here, the law failed both prongs of the two-part test.  First, the court could not perceive of any rational difference of situation or condition that would support having the law apply only to counties with a population greater than 700,000.  Second, the court could find no rational basis to treat an interior county differently from a county that borders another state.   “There is simply nothing unique to Lake County’s population or geography that necessitates its singling out through a special law when a general law could be applicable." 
As a result, Judge Akemann held that the new law violated the special legislation clause by treating Lake County differently than any other county, and enjoined the Chief Judge and Illinois State Board of Elections from implementing, enforcing, or administering the law. 

Friday, November 8, 2013

Supreme Court Hears Prayer at Town Meetings Case

We previously reported on the blog that the U.S. Supreme Court was going to hear oral argument in the case involving prayer at town board meetings this term.  As we reported before, in Town of Greece v. Galloway, individuals had sued the Town of Greece, N.Y., claiming that the Town Board's practice of opening up its town meetings with a prayer was unconstitutional.  The Second Circuit Court of Appeals had ruled in favor of the plaintiffs, finding the practice unconstitutional and specifically expressing concerns that the majority of the prayers were led by representatives of the Christian faith.  That ruling was appealed to the U.S. Supreme Court.
Yesterday, the Supreme Court finally heard argument from the Town's attorney, an attorney for the federal government, and the attorney for the individuals who had protested the Town's practice.  The Supreme Court justices focused much of their questioning on a 1983 U.S. Supreme Court decision called Marsh v. Chambers.  In that case, the Court upheld a state legislature's practice of opening up legislative sessions with prayer on the basis that the practice of opening sessions with prayer could be traced back to the very first Congress. Some justices questioned whether this previous ruling applied to the Town's practice, and others questioned its continued validity. A few justices expressed concerns about government interfering with local government practices. 
The argument and questioning was lively and sometimes contentious, particularly when the justices questioned the plaintiffs' attorney.  You can read the transcript of the Supreme Court's argument here.  For those who can't get enough, you can read more about the argument and access all of the court filings on SCOTUSblog.
We will keep you posted on this case and update the blog when the Supreme Court issues its decision.

Thursday, November 7, 2013

Responsible Bidder Bill Approved by Senate Committee

HB 924, the bill that would insert a "responsible bidder" provision into the Illinois Prevailing Wage Act, was approved by a 10-5 vote of the Senate Labor and Commerce Committee yesterday.   The bill had passed the House in April. 
If enacted into law, all businesses seeking to bid on public works projects would be required to have an affiliation with a United States Department of Labor apprenticeship program in order to be eligible to work on a project. This bill would affect local governments by resulting in fewer eligible bidders, less competition, and higher costs for public works projects.  The Illinois Municipal League has gone on record as opposing the legislation.  In addition, the Black Chamber of Commerce testified at the Senate committee hearing in opposition to the bill based on the organization's contention that the bill treats minorities unfairly.
We will keep you posted on this bill.

Federal Government Modifies "Use-Or-Lose" Rule for FSA’s

The use-or-lose rule, long a sticking point for employees contemplating participation in flexible spending accounts (also known as FSA's or Section 125 accounts), has become a little more flexible going forward. Now employers offering FSA's can modify their plans to allow for a carryover of up to $500 into the following year, or maintain the grace period which allows employees until March 15th of the following year to use FSA dollars from the previous year. Employees can still contribute a maximum of $2,500 in a year even though they have carried over money from the previous year.

FSA's or Section 125 accounts allow employees to divert wages, on a pre-tax basis, to pay for qualified medical expenses and child care. Until 2005, the IRS rule required that all of the wages diverted to the FSA in a plan year had to be spent by December 31st of that year (or the end of the FSA plan year) otherwise the unused money would be forfeited by the employee. Routinely, as the end of the year approached, employees would stock up on contact lenses, eye glasses and the like so as to not lose their FSA dollars. Worse yet, many employees chose to forego participation because they were unsure of how much or whether they would actually incur medical expenses in the upcoming year.
The IRS granted some relief to the use or lose rule in 2005 when it allowed a grace period of two months and fifteen (15) days, or until March 15th, for employees to use their FSA dollars from the previous year. This new modification allows for employees to save up to $500 of unused FSA contributions for the following year, while still making the maximum allowable contribution for that year into the plan. These modifications only apply to health FSA's and do not modify child care FSA's.
The timing of the IRS modifications means many employers have to act fast to modify their plans if they so choose. Many employers will soon enter or are already in the open enrollment period for FSA election for 2014. Because employers can only offer either the carryover or maintain the grace period, they should carefully consider whether to change their plan. A review of plan usage, or an employee survey may aid employers in reaching this decision. 
Post Authored by Margaret Kostopulos, Ancel Glink

Wednesday, November 6, 2013

Abandoned Property Grants Available for Illinois Municipalities and Counties

Attention Illinois municipalities and counties. The Illinois Housing Development Authority (IHDA) is accepting applications for the Abandoned Properties Program (APP) that provides grants to municipalities and counties for the maintenance or demolition of abandoned residential properties within their jurisdiction.
Grant funds may be used for securing, maintaining, demolishing, or rehabilitating abandoned homes. A list of specific activities allowed as part of securing and maintaining properties may be found at Abandoned Residential Property Municipality Relief Program Rules.
The maximum grant award will be $75,000. Applications will be ranked according to criteria set forth in the application. The grant funds will be distributed throughout the state geographically as determined by statute. The highest ranking applications in each geographic set-aside will be awarded until funds are exhausted.
Applications are available here.

More information on the overall program, process and eligibility can be found by visiting the APP FAQ or by participating in one of the workshops IHDA is hosting, including the following:
Live Workshop:
November 5, 2013, 11:00 am
Illinois Municipal League
500 E. Capitol
Springfield, IL 62701
Lower Level Board Room
Webinar Workshop:
November 22, 2013, 1:00 pm
The Meeting Number is  8884944032.
The access code is 56589648403.
Through your phone, dial 1-888-494-4032, and follow the telephonic prompts. 

Tuesday, November 5, 2013

Bill Would Return Election Authority to Lake County Clerk

A few months ago, we reported on P.A. 98-115, which amended the Illinois Election Code to, among other things, establish a county board of election commissioners in Lake County. The board of election commissioners would assume the county clerk's responsibilities over the administration of elections in Lake County. The bill was controversial, and almost immediately after it became effective, there was a legal challenge to its constitutionality. There was also talk about repeal of the statute.

House Bill 3656, introduced to remove the contested provisions requiring the establishment of the county election commission, unanimously passed out of committee today.  
We will keep you posted on this proposed legislation.

2014 Illinois Municipal Handbook Now Available

We are pleased to report that the 2014 edition of the Illinois Municipal Handbook is now available for purchase from the Illinois Municipal League on its website.
The Illinois Municipal Handbook is the must-have, go-to reference book for municipal officials and municipal attorneys.
Ancel Glink attorney Stewart Diamond was the primary editor of the 2014 edition, which was produced by the Illinois Municipal League and authored and edited by Ancel Glink attorneys on a non-compensated basis.  This edition provides valuable updates on the laws impacting municipalities and municipal officials.
Order your copy now!


Monday, November 4, 2013

Seventh Circuit Upholds Denial of Zoning for Bible Camp

A summer camp operator alleged that the Town of Woodboro and Oneida County violated the camp's constitutional rights and RLUIPA in prohibiting the camp from running a year-round bible camp on residentially zoned property.  The district court ruled in favor of the Town and County, and the camp operator appealed to the U.S. Court of Appeals for the Seventh Circuit.  The Seventh Circuit affirmed, also ruling in favor of the Town and County in Eagle Cove Camp & Conference Center v. Town of Woodboro, (7th Cir. October 30, 2013).
The Town had enacted a land use plan in 1998 that encouraged low density single family residential development along its lake and river-fronts.  In 2009, the Town adopted a comprehensive plan that incorporated these goals.  The zoning around Squash Lake reflects these goals, and all but seven of the properties in that area were zoned for single family uses.  The seven non-residentially zoned lots were grandfathered with pre-existing uses.  Eagle Cove (plaintiff) wanted to construct a bible camp on 34 acres of property they own on Squash Lake. Those parcels are all zoned for residential and/or residential and farming uses. Eagle Cove filed an application to rezone the property to a recreational zoning district to allow the bible camp.  The County denied the rezone petition, and shortly thereafter Eagle Cove sought a conditional use permit to permit the bible camp while maintaining the residential zoning of the property.  The Town recommended that the County deny the CUP because it was not consistent with the goals of the comprehensive plan, and the County agreed, denying the CUP.
Shortly after the denial of the CUP, Eagle Cove filed suit, claiming violations of various constitutional and federal statutes, including RLUIPA, ADA, the Rehabilitation Act. The County and Town filed motion for summary judgment, which the district court granted.
The Seventh Circuit first addressed Eagle Cove's "total exclusion claim" under RLUIPA, finding that the zoning decisions did not preclude Eagle Cove from conducting any religious assembly on the properties, just not in the form of a bible camp. Moreover, Eagle Cove could operate a bible camp in many other parts of the County, just not on this parcel.  Second, the Court rejected Eagle Cove's substantial burden claim under RLUIPA, finding that there were numerous other locations within the County for Eagle Cove to place its bible camp.  The comprehensive plan was a neutral land use regulation, and Eagle Cove does not get a "free pass" or special treatment on the basis of any religious purpose.  Third, the fact that Eagle Cove spent considerable time and money on its various zoning applications does not constitute a substantial burden under RLUIPA. Eagle Cove's "equal terms" claim was also rejected, because the ban on year-round recreational camps applies equally to both religious and secular assemblies.

Friday, November 1, 2013

Court Dismisses 1983 Claims Against School District Relating to Failed Referendum

Defendants sued an Illinois school district alleging the district violated their civil rights in engaging in activities relating to a failed referendum to increase the school district's property tax rate.  Peraica v. Riverside-Brookfield H.S. Dist. 208, 2013 IL App (1st) 122351.  Specifically, the defendants argued that the district engaged in illegal electioneering and that the referendum was misleading and understated the amount of the proposed tax increase.  The circuit court dismissed plaintiff's case, and they appealed. 
On appeal, the appellate court first analyzed the standard for sufficiently alleging a section 1983 claim against a governmental entity, including a requirement that a plaintiff allege that the government (1) had an express policy that, when enforced, causes a constitutional deprivation; (2) had a widespread practice not authorized by law or express policy, but well settled so as to constitute custom or usage; or (3) the plaintiff's injury was caused by a person with final policymaking authority.  The case contains a detailed analysis of the pleading standards for a 1983 case.
The district argued that defendants' complaint failed to allege sufficient facts to support any one of these required allegations.  Plaintiffs conceded that they were not claiming that there was a municipal policy at issue, and the court found that Plaintiffs failed to even attempt to show either widespread practice or that the injury was caused by a final policymaker.  Moreover, the court held that plaintiffs failed to allege a violation of their rights under federal law since their complaint focused on violations of the state election code provisions relating to electioneering, and upheld the circuit court's dismissal.