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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

Tuesday, October 31, 2017

City of Chicago Can Impose Real Estate Transfer Tax on Fannie Mae/Freddie Mac Transactions

The Seventh Circuit Court of Appeals just ruled that state and local taxing bodies can impose real estate transfer taxes on real estate transactions involving Fannie Mae and Freddie Mac. Federal National Mortgage Ass'n v. City of Chicago (7th Cir. Oct. 30, 2017)

The City of Chicago imposes a real estate transfer tax on the transfer of real property within the City. The obligation to pay the tax is on the buyer, not the seller. Chicago also imposes a "supplemental tax" that is paid by the seller unless the seller is exempt under state or federal law, and then it is imposed on the buyer. 

Buyers sued the City of Chicago after the real estate transfer tax was imposed on their purchase of property from Fannie Mae or Freddie Mac. They (and Fannie Mae and Freddie Mac) argued that they were not subject to the tax because Fannie Mae and Freddie Mac were exempt from taxation, so the real estate tax was preempted by federal exemption statutes. The district court agreed with the buyers, but the Seventh Circuit ruled against the buyers and Fannie Mae/Freddie Mac.

The Seventh Circuit rejected the buyers argument that the Supremacy Clause of the U.S. Constitution (providing that any state law that conflicts with federal law is not effective) applied and the real estate transfer tax was preempted by the federal tax exemption provisions. Although the federal statutes do exempt federal entities from local and state taxation, they do not exempt the parties who transact with exempt entities. In this case, the real estate property tax imposed by the City of Chicago was imposed on the buyers (private parties) and not on the sellers (federal agencies), so the federal tax exemption did not apply to the transaction. As a result, the Seventh Circuit held that the City of Chicago was not barred from collecting the real estate taxes from the buyers in these transactions.

Post Authored by Julie Tappendorf

Friday, October 27, 2017

IL Supreme Court Will Hear Two FOIA Appeals

In more FOIA news, the Illinois Supreme Court recently granted Petitions for Leave to Appeal (PLA) in two FOIA cases. The Court will hear Institute for Justice v. Ill. Dept. of Financial and Professional Regulation, and Perry v. Illinois Dept. of Financial and Professional RegulationBoth cases deal with disclosure of documents and the retroactive application of statutes.  

The issue in Institute for Justice is whether complaints regarding licensed cosmetologists and hair braiders are exempt retroactively under Section 4-24 of the Barber, Cosmetology, Esthetics, Hair Braiding and Nail Technology Act. The trial court found that no exemptions applied to the case, while the appellate court found that the Act applied retroactively to prevent disclosure of the complaints.  

The issue in Perry is whether the Civil Administrative Code of Illinois applies retroactively to prohibit disclosure of a complaint against plaintiff’s structural engineer’s license. The appellate court similarly found that the Code could be applied retroactively to prevent release of the records under FOIA.

We will monitor the status of these appeals - check the blog for updates! 

Post Authored by Erin Pell, Ancel Glink

Thursday, October 26, 2017

Court Protective Order "Trumps" FOIA in Recent Case

An Illinois appellate court recently addressed consolidated cases regarding the public disclosure and confidentiality of records from a grand jury investigation. These cases involved two separate FOIA requests to the City of Chicago for records pertaining to the investigation and special prosecution of an assault in 2004.  Both FOIA requests were denied by the City based on a protective order. 

The court ruled in favor of the City, finding that a court protective order "trumps" the disclosure requirements of FOIA. In re Appointment of a Special Prosecutor, 2017 IL App (1st) 161376 (October 20, 2017). The court determined that it was proper for the City to withhold documents because a court order commanded the City to do because as the protective order was issued based on the need for confidentiality.

The court did find, however, that the Special Prosecutor’s attorney fee invoices were releasable under FOIA, subject to redactions.   

Post Authored by Erin Pell, Ancel Glink

Wednesday, October 25, 2017

PAC Finds Law Firm Records Are Public Records Under FOIA

In a recent, non-binding request for review, the PAC found that  law firms that represent units of local government are performing a “governmental function” such that the law firm’s records are considered “public records” under FOIA.  2017 PAC 43089

A requester had filed a FOIA request with a school district, seeking all records mentioning and pertaining to an attorney and her law firm. The district responded, but withheld certain records held by its attorneys under Section 7(2) of FOIA, arguing that the records were not “public records.”  The PAC disagreed with the district, finding that the requested records are “public records” if they directly related to a government function that the law firm has contracted to perform for the district. Although the district argued that the law firm was not performing a governmental function, the PAC rejected that argument, finding that the law firm’s litigation services support the district’s education services.  As a result, the PAC ordered the school district to obtain any responsive records from the law firm and disclose them to the requester.

The PAC’s opinion does not address any exemptions that might apply to this request, such as attorney-client privilege. Presumably, the district can still assert those exemptions before turning over any responsive records as ordered by the PAC. 

Although this is merely an advisory opinion and binding on any other public bodies, it is a good reminder that public bodies should list all possible arguments and exemptions in their FOIA response letters, as well as their responses for requests for review to the PAC, because we never know when the PAC might try to make "new law" in one of its opinions. 

Post Authored by Erin Pell and Julie Tappendorf, Ancel Glink

Tuesday, October 24, 2017

Homeless Shelter Qualified as "Government Use" Under Zoning Code

Recently, a court considered a challenge to a change-in-use permit issued to a county housing authority and homeless shelter, finding that the shelter qualified as a "government use" under the zoning regulations and did not require a conditional use permit to operate. The Housing Authority of the County of Lake v. The Lake County Zoning Board of Appeals, et al. 

A housing authority took over ownership of property that had previously been used as a private assisted living facility.  The authority stopped operating the assisted-living facility, and the property stood vacant for several years.  After submitting a request for proposals for ways to use the vacant property, the housing authority entered into negotiations to lease the property to a not-for-profit organization called PADS. PADS sought to use the property as a transitional homeless shelter for chronically homeless adults.

The housing authority and PADS approached the county to determine what zoning approvals would be necessary for the operation of a homeless support program on the property. If the county classified PADS’ use as “assisted-living,” a conditional use permit was required.  However, if PADS’ use was classified as “government use,” no conditional use permit was necessary.  PADS submitted a change-in-use application to the county to change the use of the property from “vacant government” to “government use-no assembly space,” which would not require a conditional use permit. 

Shortly after the county planning director granted the change-in-use request, several residents appealed the director’s decision to the county’s zoning board of appeals (ZBA).  The county ZBA reversed the director’s decision, finding that the use of the property by PADS was not a “government use,” despite the fact that the housing authority owned the property. 

The court analyzed the county’s unified development ordinance, which classified “government use” as a “building or structure owned or leased by a unit of government and used by the unit of government in exercising its statutory authority.”  The residents argued that, since it was PADS that was using the property, and not the housing authority, the “government use” definition did not apply. 

The court disagreed with the residents' argument, citing the fact that the housing authority still owned the property.  The court also noted that the housing authority was authorized by state statute to contract with private entities to further its statutory goals of providing safe and sanitary housing for the disadvantaged. The court found that PADS’ use of the property to provide housing for homeless adults fit squarely within the housing authority’s statutory goals. 

Based on all of these findings, the court found that the “government use” classification was proper because the property was (1) owned by the housing authority, a unit of government; and (2) used by the housing authority in exercising its statutory authority to contract with private entities, like PADS, in order to further its statutory goals.  As a result, no conditional use permit was required.

Post Authored by Kurt Asprooth, Ancel Glink

Monday, October 23, 2017

Suburbs That Mischaracterize Location of Sales Can Be Sued

A few years ago, the state legislature adopted a statute intended to prohibit municipalities from attempting to “manipulate” the location where retail sales occur for the purpose of diverting sales tax revenue to the municipality.  Section 8-11-21 of the Illinois Municipal Code prohibits municipalities from entering into sales tax rebate agreements with retailers that would result in the payment of sales tax to the municipality if, all other things being equal, the sale tax should have been distributed to another municipality based on the application of the tax allocation rules.

This statute recently came into play in City of Chicago, et al. v. City of Kankakee, et al., 2017 IL App (1st)153531. In that case, Chicago claimed that two suburban communities executed sales tax rebate agreements with out-of-state retailers to falsely characterize transactions as occurring in the suburbs, and  that because of that mischaracterization, these sales were not subject to the state’s “use tax.” The use tax is imposed on the sale of tangible personal property sold by out-of-state retailers that do not have a presence in Illinois where the item is used within Illinois. The use tax is collected by the state and then distributed to Chicago and others based on population and other factors. 

Why does it matter whether a retailer pays a use tax or sales tax?  The tax rate for both sales tax and use tax is 6.25%, so the amount of tax remitted by retailers who are required or allowed to pay each tax is the same.  However, the distribution of the tax receipts by the Illinois Department of Revenue is different for these two taxes.  For the sales tax, the State retains 5% and the remaining 1.25% is distributed to the local county and municipality where the sale occurs.  By contrast, for the use tax, the State retains 5% and the remaining 1.25% is distributed according to the following statutory calculation:  20% goes to Chicago, 10% to the RTA, 0.06% to the Madison County Mass Transit District, $3.15M to the Build Illinois Fund, and the remainder is distributed to more than 200 municipalities according to their proportionate share of the State’s population. 

Once you understand the distinction described above, it is easy to see that Chicago would receive 0.25% of the value of all retail sales from out-of-state retailers if the use tax applies. But, if the sale occurred in one of these two suburbs, Chicago would not share in any of the sales tax because that tax would go directly to the suburb. 

While the ultimate merits of the case have not been decided, the case is important because the appellate court held that Chicago, and the other municipal plaintiffs, could sue these two suburbs directly to seek payment of the share of the use tax to which it (or they) allegedly should have been entitled. We will certainly watch this case as it proceeds and keep you posted.

Post authored by Adam Simon, Ancel Glink

Thursday, October 19, 2017

Upcoming Township Conference

Next month, the Township Officials of Illinois (TOI) hosts its annual conference, this year in Springfield. Many of our attorneys and staff from Ancel Glink will be presenting sessions at the conference, so if you are attending the conference, please stop by to one or more of our sessions (session descriptions below). You can also get more information about the TOI conference in the conference brochure here.

Monday, Nov. 13, 2017, 1:15-2:15 pm

Township Cemeteries in 2017
Featuring Kurt Asprooth, Ancel Glink
Sponsored by Clerks Division
This session will cover the basics of township cemeteries, including the authority of townships to establish and maintain cemeteries, the author­ity of townships to take over control of existing cemeteries, the revenue sources available to support township cemeteries, the statutory systems of township cemetery governance, and the requirements imposed on town­ship cemeteries under the Cemetery Oversight Act.

Technology in Township Government
Featuring Keri-Lyn Krafthefer, Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer
Sponsored by Township Officials of Illinois
Technology marches on and social media is imploding! Should your township participate in social media or avoid it? Do you have the correct policies and procedures in place for your employees regarding technology and for any township social media? Attend this session to find out the best practices

Monday, Nov. 13, 2017, 2:30 – 3:30 pm

Controlling Township Workers Compensation Costs
Featuring Britt Isaly, Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer
Sponsored by Highway Commissioner
When it comes to controlling workers’ compensation costs, the best defense is a good offense. Your township should be prepared to meet any workers’ compensation claim with the right knowledge and foresight to make sure the claim is later defended properly. Some claims will be accepted ones, but for those claims which are suspicious and are disputed, staff members should be ready with witness statements, photographs, and accident forms in order to preserve the facts of the alleged accident. Come hear from a seasoned workers’ compensation attorney, who has been practicing workers’ compensation law for 20 years, discuss steps you can take to help defend the claim from the beginning and control your township’s workers’ compensation costs.

Technology in Township Government
Featuring Keri-Lyn Krafthefer, Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer
Sponsored by Township Officials of Illinois
Technology marches on and social media is imploding! Should your township participate in social media or avoid it? Do you have the correct policies and procedures in place for your employees regarding technology and for any township social media? Attend this session to find out the best practices for technology and to prevent your township from tweeting into trouble.

Best Financial Practices in Township Government
Featuring Robert Porter, Special Projects Director, Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer
Sponsored by Trustees Division
This session is designed to outline the financial practices that every township should be following to maximize financial return to the town­ship and to maximize cost controls for the township. It is a must session for new and not-so new officials that deal with the township budget, levy, audit, and other financial documents and procedures.

Monday, Nov. 13, 2017, 3:45-4:45 pm

Township Procedures 101
Featuring Keri-Lyn Krafthefer, Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer
Sponsored by the Tax Collectors Division
Sometimes, township officials are so busy performing their daily func­tions that they do not have time to keep up on the legal changes regard­ing meeting procedures, financial policies and best practices. This session will review the best practices and policies for township meetings and daily operations.

Tuesday, Nov. 14, 2017, 8:00 – 9:00 am

Best Financial Practices in Township Government
Featuring Robert Porter, Director of Special Projects, Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer
Sponsored by the Trustees Division

This session is designed to outline the financial practices that every township should be following to maximize financial return to the town­ship and to maximize cost controls for the township. It is a must session for new and not-so new officials that deal with the township budget, levy, audit, and other financial documents and procedures.

Friday, October 13, 2017

Ancel Glink Labor Seminar October 26th

Union Organizing and Management Strategy
When: Thursday, October 26, 2017, 9:00 a.m. to 12:00 p.m.
Who: All levels of management, including executive directors, administrators, attorneys, and human resource professionals.
What: Fewer American workers belong to labor unions than at any time since the U.S. government began tracking this statistic. Membership has tumbled even further with the increase of right-to-work laws and litigation over fair share dues. In an effort to boost declining membership, labor unions have set their sights on new sectors, including increased focus on smaller local government units and higher education. Labor unions recently have organized park district employees as well as both resident assistants and adjunct faculty at colleges and universities and further union organizing in these nontraditional sectors is certain.

It is important for an employer to decide its position on union representation as a matter of business strategy, rather than wait until a union has begun an organizing campaign. We believe now is the time for employers to be more aware of potential organizing campaigns and how best to lay the groundwork for implementing a proactive strategy.

Please join us for this informative and educational seminar aimed at providing employers with tips on how to detect potential organizing campaigns, what to do if a campaign begins, and finally, the best ways to respond to a union organizing campaign, including responding to the representation petitions.
How: Seating is limited. Reserve your spot at the breakfast briefing now by calling Kathy Holmes at 312-604-9174 or by making a reservation by email at kholmes@ancelglink.com.

Thursday, October 12, 2017

New Officer-Involved Shooting Drug/Alcohol Testing Law

A recent amendment to the Illinois Police and Community Relations Act is drawing attention from municipalities and police unions alike.  Effective August 25, 2017, the new law provides that every law enforcement agency must adopt and follow a written policy regarding drug and alcohol testing for police officers involved in officer-involved shootings.  As defined by the statute, an “officer-involved shooting” encompasses any case in which “a law enforcement officer discharges his or her firearm, causing injury or death to a person or persons, during the performance of his or her official duties or in the line of duty.”  The amended legislation requires every police department to prepare and enforce a written drug testing policy for instances of officer-involved shootings. Additionally, the amended statute provides that “drug and alcohol testing must be completed as soon as practicable after the officer-involved shooting but no later than the end of the involved officer’s shift or tour of duty.”

The good news is that, other than adopting a policy that states that every officer involved in an officer-involved shooting is to be tested for drugs and alcohol and that such testing must be completed no later than the end of the officer’s shift, there are no other requirements for the policy. Police departments with current drug and alcohol testing policies should add post-shooting situations to the list of events that trigger additional testing. 

Municipalities without police unions can adopt these policies unilaterally.  However, if your municipality has a union, the union may be sending you a request to bargain over the new policy language.  The Illinois Public Labor Relations Act requires employers to bargain with respect to “wages, hours, and other conditions of employment.”  This duty would usually preclude unilateral action by an employer with respect to mandatory subjects of bargaining, including drug and alcohol testing.  Since the new law requires the adoption of a drug and alcohol testing policy to apply to cases of officer-involved shootings, no police union can prevent an employer from adopting an officer-involved shooting policy, or incorporating that component into an existing policy. However, it may be beneficial to have a meeting with the police union to discuss this even though union demands cannot interfere with compliance of the law.

On the other hand, municipalities have the obligation to bargain over the effects or impact of this legislation. As our clients may know, this limits their bargaining obligation to simply the effects of the requirement to create the policy. Some effects or impact issues that police unions will likely raise are the categories and level of drug presence in a sample that is considered to be a positive result (the legislation is silent as to these issues); what kind of test is performed; what to do if the officer is unable due to injury of his own medical condition to report for testing before the end of his or her shift; disciplinary action resulting from positive results; and release of those test results to a defendant, the state, an investigatory agency or board, or the press.  

If you already have a drug and alcohol testing policy, this new law may require you to change it.  If you are unsure whether you need additional language or whether your current language is sufficient, contact us. 

Law enforcement agencies can best minimize any possible adverse consequences of this new law by enforcing its existing general drug and alcohol testing policy strictly and vigorously.  Because an on-duty officer under the influence of illegal (or even legal) drugs or alcohol is a liability risk, lax enforcement of the policy or disciplinary rules relating to the policy cannot be tolerated.  We are able to assist in ensuring that both the general and officer-involved shooting testing policies are as thorough and sound as possible.  The new statute virtually mandates that law enforcement agencies take a new look at their policies, even policies that have created no problems in the past, to be sure that they are adequate to deal with this new challenge.

Also, check out Ancel Glink's labor & employment blog, the Workplace Report where you can read an FAQ about this new law.  New Officer-Involved Shooting Drug and Alcohol Testing Statute Raises More Questions Than It Answers

Post Authored by Don Anderson & Margaret Kostopulos, Ancel Glink

Tuesday, October 10, 2017

Ancel Glink at the ILA Conference This Week!

Attention librarians, the Illinois Library Association's annual conference starts today! We look forward to seeing many of you there, and wanted to give you a heads up on where we will be:

Wednesday, October 11, 2017, noon to 3:00 p.m.
Atlas (Area Training for Librarians and Staff): The Librarian is In
Booth 400, Exhibit Hall
Julie Tappendorf and Erin Pell hope you stop by the Atlas booth in the Exhibit Hall.

Thursday, October 12, 2017, 1:45 p.m. to 2:45 p.m.
South Pavilion 4
Answers to your FOIA Questions Revealed
Erin and Julie will be answering some of the more common (and not-so-common) FOIA questions that library officials and employees encounter, including "Are my emails subject to FOIA?" and "Can someone FOIA our employees' salary and benefit information?" and so much more.

We look forward to seeing you!

Friday, October 6, 2017

5th Annual Local Government Lawyer Program

My local government attorney readers won't want to miss out on the fifth annual local government law program hosted by IICLE. The program will again take place in December, and will include 7 hours of Illinois CLE credit, including 3 hours of professional responsibility credit. Details about the event and registration are below:

IICLE® 5th Annual Local Government Law Institute
December 13, 2017

The interactive format and engaging, expert faculty of the 5th Annual Local Government Law Institute will maximize your learning about hot topics in municipal law, such as PSEBA, zoning, the First Amendment, defending FOIA and OMA complaints, ethical issues concerning who’s the client, and managing expectations and risks concerning sensitive social issues.

Featuring 7 hours of CLE, including 3 hours of Professional Responsibility credit, a lunch panel of the faculty discussing their biggest “lessons learned” and a networking reception (Chicago only), you won’t want to miss this program!

Live Seminar
One North Wacker Conference Center, Chicago, IL

Springfield Simulcast
IICLE® Professional Education Center, Springfield, IL

You can read about all the program details in the brochure found at this link and you can see the agenda and register for the course right online here

Tuesday, October 3, 2017

Court Dismisses Case Against Park District

A woman filed a lawsuit against a park district after she was impaled by a piece of rebar protruding from a railroad tie that was on park property. The park district claimed it was immune from liability, arguing that under the Tort Immunity Act, the railroad tie constituted a “condition” of the park property intended or permitted to be used for recreational purposes. The plaintiff argued that her injuries did not occur on a “trail” within the meaning of the Tort Immunity Act because the Act only applied to “physical” or “natural” conditions.

Section 3-107 of the Tort Immunity Act provides:

Neither a local public entity nor a public employee is liable for an injury caused by a condition of: (a) Any road which provides access to fishing, hunting, or primitive camping, recreational, or scenic areas and which is not a (1) city, town or village street, (2) county, state or federal highway or (3) a township or other road district highway. (b) Any hiking, riding, fishing or hunting trail.

Both the trial and appellate courts ruled in favor of the park district. The courts found that if the legislature meant for the Tort Immunity Act to only apply to trails that were in a “natural” condition, it could have easily added such an exception, noting that “countless numbers of dangerous conditions, both naturally and unnaturally occurring, exist on access roads and trails to which the Tort Immunity Act applies.” The courts further found that the railroad tie was a “condition” of the trail within the meaning of the Tort Immunity Act. As a result, the park district was entitled to absolute immunity from plaintiff’s injuries and the case was dismissed. Colella v. Lombard Park District.

Post Authored by Jessi DeWalt, Ancel Glink 

Monday, October 2, 2017

7th Circuit Upholds Town's Ban on Highway Overpass Signs

The Seventh Circuit Court of Appeals recently considered the validity of a municipality’s ban on signs, flags, and banners on highway overpasses in Luce v.Town of Campbell. In that case, several local activists began placing political signs and banners on highway overpasses and pedestrian bridges, with some of the messages encouraging passing drivers to honk if they supported the activists views. In response, the town enacted a content-neutral ordinance forbidding all signs, flags, and banners on any overpass within the town, and also within 100 feet of the end of any overpass.  In passing this ordinance, the town relied on information presented by the town’s police chief regarding the traffic problems created by these signs and banners.

Upset with the town’s removal of their banners, the activists posted videos online showing the town’s police officers removing individuals who were unfurling a large American flag on an overpass.  In a somewhat bizarre twist, the town’s police chief decided to retaliate against the activists himself by posting allegedly false and defamatory comments online.  When the police chief’s misconduct was discovered, the activists sued both the police chief and the town for violations of the First Amendment, among other claims.

First, the court found that the police chief was not acting under color of state law when he defamed the activists, as these actions were clearly not related to the police chief’s official duties.  As such, the court held that the First Amendment did not apply to the police chief’s actions.  However, the court stated that, due to his misconduct, the police chief’s credibility had been undermined. 

Next, the court then turned to the activists’ claims that the overpass sign ban violated the First Amendment. The court noted that the information the town relied on in passing the ordinance came from the town’s police chief, and that the police chief’s statements could no longer be accepted as truthful. The activists argued that all time, place, and manner restrictions on speech require empirical support. The activists claimed that, with the evidence provided by the police chief discredited, the town’s time, place, and manner regulation prohibiting overpass signs had no empirical support and was therefore invalid.

Nevertheless, the court acknowledged that the Supreme Court has never required empirical evidence for all time, place, and manner restrictions. The court reasoned that, while every time, place, and manner regulation must serve a significant governmental interest, empirical support is not necessary when the governmental interest is obvious. The court found that the town’s ban on signs and banners on overpasses themselves was valid. The court held that the town’s attempt to reduce the incidence of sudden braking on highways due to distracting signs and banners was not irrational or an attempt to suppress speech, even despite the lack empirical data.  The court stated that it “did not take an empirical study” to know that an overhead sign is bound to cause some drivers to slow down to read it, thereby increasing the risk of accidents. So, the 7th Circuit found the town's ban on signs on overpasses constitutional.

However, the court came to a different conclusion on the town’s ban on signs within 100 feet of an overpass. The court cited the fact that this ban prohibited homeowners within 100 feet of an overpass from putting up a small “For Sale” sign or a “Merry Christmas” banner in their front yards. The court did not see any reason why signs that are off the highway and too small to cause drivers to react should be banned.  Because the town had not even attempted to justify this 100 foot rule at all, the court found the 100 foot ban invalid.

This case should serve as a reminder to all municipalities that time, place, and manner restrictions on speech need to be carefully considered before they are enacted, and always in consultation with the municipality’s attorney.

Post Authored by Kurt Asprooth, Ancel Glink