Regulatory Alert

CURRENT PROPOSED STATE OF ILLINOIS RULES AFFECTING SMALL BUSINESS

If any of the following proposed regulations impact your business, let us know!  Click here to submit comments on how the proposed rulemakings will impact your business or industry.   

Following are proposed rules of possible interest to small businesses published in the Illinois Register.  During the comment period, individuals have an opportunity to express their support or opposition to the rule. To submit comments or to learn more about the proposed rules, contact Katy Khayyat at the Department of Commerce and Economic Opportunity Business Information Center via e-mail at Katy.Khayyat@Illinois.gov  or call 800.252.2923 or 217.558.0190. 

To get more information on Illinois Rules and Regulations, how to file a complaint about a burdensome or excessive state rule, go to www.ilsmallbiz.biz/regflex
 

 


The Chief Procurement Officer for the Department of Transportation proposed amendments which will impact small businesses seeking contracts with the Illinois Department of Transportation:
        

The CHIEF PROCUREMENT OFFICER FOR THE DEPARTMENT OF TRANSPORTATION proposed amendments to the Part titled Chief Procurement Officer for the Department of Transportation – Contract Procurement (44 IAC 6; 43 Ill Reg 14490) implementing recent changes to the Procurement Code. The rulemaking expands the jurisdiction of the CPO-DOT to include procurement of construction support services, defined as all equipment, supplies and services necessary to the operation of a construction agency’s construction program, but not including construction related services such as design, layout, inspection, etc. (Currently, the Part applies to construction and construction-related services.)  Conditions for the use of sole source and sole economically feasible source purchasing, and the procedures for determining that such purchases can be made, are added. Definitions and provisions are added for piggyback contracts (cooperative purchasing in which the State accepts the pricing and terms of a contract entered into by another organization, agency or department; another state or its agencies; or the federal government) and no-cost contracts (in which the vendor does not pay or make payments to the State, but charges another entity the State contracted rate for goods or services). A small purchase threshold of $100,000 (below which competitive bidding is not required), adjusted annually for inflation, is established for construction purchases, individual purchases from any one source, and professional and artistic services contracted for a nonrenewable term of no more than 1 year. The notice period for execution of contracts is shortened from 30 to 14 days. Expenditures that exceed the contract price by more than $100,000 (currently, $30,000) require written approval or disapproval from DOT and contract change orders in excess of $100,000 (currently $30,000) must be published in the Procurement Bulletin. Procurement files also must be readily available for review or disclosure under the Freedom of Information Act but must not include trade secrets or other competitively sensitive or proprietary information. Grounds for rejecting a bid during the procurement process now include failure to submit a Disadvantaged Business Enterprise utilization plan if the provisions of the procurement or project require such a plan. Other provisions of this rulemaking address requests for information (RFI), joint purchasing with other governmental entities, electronic systems for accepting and opening bids, goals for small business contracts, and financial disclosure requirements for multiyear contracts. Finally, provisions related to the defunct Target Market Program are repealed.

Bottom Line: The Chief Procurement Officer (CPO) for the Department of Transportation (Department) proposes to amend this Part to incorporate changes to the Procurement Code (Code) from the 100th General Assembly. In addition to those changes, the CPO proposes to add rules to govern additional methods of procurement and source selection such as Joint Purchasing and Piggyback contracts. Other amendments seek to provide clarity and to provide consistency with the Code. This rulemaking also repeals all Sections currently codified under Subpart K because the Target Market Program statute has expired. 

For questions or comments, you may contact Mr. Bill Grunloh, Chief Procurement Officer, Chief Procurement Office Illinois Department of Transportation, 2300 S. Dirksen Parkway, Springfield IL 62764, 217/558-5434.  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility. This rule is open for public comment until February 3, 2020.  

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The Illinois Liquor Control Commission proposed an amendment which will impact manufacturers and distributors of alcoholic liquors:   

The ILLINOIS LIQUOR CONTROL COMMISSION proposed an amendment to the Part titled The Illinois Liquor Control Commission (11 IAC 100; 43 Ill Reg 14571) clarifying how manufacturers or distributors of alcoholic liquors may offer quantity discounting or cooperative purchasing agreements to retailers without violating federal and State laws prohibiting them from offering items “of value” to retailers. Quantity discounting is permitted if its primary purpose is to increase product sales and merchandising to retailers; if it is applied as a price reduction at the time of sale, or as a rebate or credit following the sale; and if the sales incentives are temporary and offered to all similarly situated retailers. The rulemaking also lists criteria for cooperative purchasing agreements and prohibits any party to such an agreement from participating in more than one liquor-related cooperative purchasing agreement. Designated agents who place orders on behalf of participants in a cooperative purchasing agreement must not be compensated directly or indirectly merely for making purchases (though they may be compensated for actual costs incurred, or as a regular employee of one of the parties to the agreement) and cannot have any interest in a manufacturer or distributor. Failure to comply with these criteria will render an agreement void. Definitions of manufacturer, distributor, and retailer for the purposes of applying these rules are added. Recordkeeping requirements for quantity discounts and cooperative purchasing agreements are also included.

Bottom Line:  This rulemaking amends the regulations that implement provisions of the Liquor Control Act of 1934 ("Act") governing "of value" transactions between retailers and manufacturers, distributors and importing distributors. The term, "of value," originates in the Federal Tied House Laws, 27 U.S.C. 205 (a), (b) and (c). The objective of these laws is to provide a clear framework for permissible and prohibited interactions between retailers and manufacturers and distributors in order to promote a competitive alcohol market. The Illinois General Assembly has enacted its own "tied-house" provisions at 235 ILCS 5/6-5, 5/6-6 and 5/6-6.3. This rulemaking implements those provisions. The rules provide that except as allowed by the Act, it is unlawful for any licensed manufacturer, non-resident dealer, distributor, importing distributor or foreign importer ("Industry Member") to furnish, give, or lend money or anything of value. This amendment amends the Section regarding quantity discounting to ensure retail licensees are treated fairly in the purchase of alcoholic product from distributors and manufacturers. Additionally, this amendment makes certain grammatical and style changes, those changes are not substantive changes to the rule. 

For questions or to submit comments, contact Pamela Paziotopoulos, General Counsel, Illinois Liquor Control Commission, 100 W. Randolph St., Suite 7-801 Chicago IL 60601 312/814-1804.  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility. This rule is open for public comment until February 3, 2020.

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The Department of Public Health proposed amendments which will impact nursing homes providing skilled or intermediate care:          

The DEPARTMENT OF PUBLIC HEALTH proposed amendments to the Part titled Skilled Nursing and Intermediate Care Facilities Code (77 IAC 300; 44 Ill Reg 435) implementing provisions of Public Acts 101-10 and 101-217. The rulemaking establishes oversight procedures and penalties for nursing homes that violate minimum staffing requirements or that fail to obtain informed consent from residents prior to administering psychotropic medications. Staffing Requirements The rulemaking clarifies current DPH rules requiring that at least 10% of nursing and personal care time be provided by registered professional nurses (RNs) and another 15% of nursing/personal care time be provided by either RNs or Licensed Practical Nurses, for a total of 25% of care time that must be provided by licensed nurses. The remaining 75% may be provided by other direct care staff, including certified nurse assistants; psychiatric or physical rehabilitation aides; and licensed physical, occupational, speech or respiratory therapists. Minimum staffing ratios are 3.8 hours of nursing/personal care per day for each skilled care resident and 2.5 hours of nursing/personal care per day for each intermediate care resident. The services that constitute skilled care (e.g., administering medication by injection or intravenously) and intermediate care (e.g., administering routine oral medication) are listed. Time spent in meals or breaks, scheduled training, or unpaid clinical nurse aide training shall not be included in staffing ratio calculations. Written work schedules shall be posted at least 10 days in advance and kept on file in paper or electronic format for at least 2 years after the scheduled work period. Procedures for facilities to submit quarterly compliance review data to DPH are outlined. When conducting inspections, surveys and evaluations, DPH will calculate a facility’s direct care staffing based on the finalized working schedule and daily resident census reports for the 2 weeks preceding the first day of the inspection. Facilities that do not meet minimum staffing ratios must post notices on their websites and in prominent locations within the facility (including all public entrances, next to the registration desk, and inside the main lobby). RN Staffing Waivers A facility that has been cited for failure to meet RN staffing requirements may obtain a waiver from those requirements if it demonstrates that it has been unable to hire a sufficient number of RNs, that it has made diligent efforts to recruit RNs (including by offering competitive wages) and that the waiver will not endanger resident health or safety. Facilities with RN staffing waivers must have a physician or RN immediately available by telephone when minimum RN staffing is not on site. Waivers will be reviewed on a quarterly basis and the facility must notify all residents, their guardians or representatives, applicants/ prospective residents, and the Office of the State Long Term Care Ombudsman of the waiver. Facilities that have had major violations or deficiencies within the previous 3 years are not eligible for RN staffing waivers. Penalties During the initial implementation period for this rulemaking (7/1/20 through 9/30/20) no monetary penalties for noncompliance with staffing requirements will be imposed, but DPH will issue written notices of noncompliance and facilities must submit a plan of correction for deficiencies. Monetary penalties will be imposed beginning no later than 1/1/21. For a first violation, the penalty shall be 125% of the cost of wages and benefits for the missing staffing hours, increasing to 150% of wage/benefit costs for the second violation and 200% of wage/benefit costs for third and subsequent violations. Penalties may be adjusted if the deviation from staffing requirements was 10% or less and may be waived entirely if unforeseen circumstances prevented scheduled staff from reporting to work (this exception may be applied no more than 6 days in each quarter). Psychotropic Medications With regard to psychotropic medications, the rulemaking requires the process of securing informed consent in nonemergency situations to include a private discussion of the medication’s risks and benefits, the most likely consequences of taking or not taking the medication, and possible alternatives to the proposed medication, among the resident, the resident’s representative/decision maker and at least one of the following: the resident’s physician; a registered pharmacist other than the dispensing pharmacist for the facility in which the resident lives; or a licensed nurse. Information addressed in this discussion must be given to the resident or decision maker in writing, with provisions in that document for the resident/decision maker to either give or refuse informed consent. The resident/decision maker shall also be advised that informed consent may be withdrawn at any time and that the resident may refuse to take the medication at any time even if informed consent has been given. In an emergency, the facility shall document the situation in detail and present this documentation to the resident and his or her decision maker. Informed consent must be renewed when the type or dosage of the medication changes, when the resident’s care plan changes in a manner that affects the medication prescription, or at least once a year. Dosages in excess of the maximums recommended in pharmacy reference guides shall not be proposed or administered unless the prescriber can state a justifying reason for doing so; dosages in excess of the recommended maximums shall be reviewed on a weekly basis. A resident who refuses to take psychotropic medication cannot be discharged from a facility on that basis unless the facility demonstrates that this refusal places the health and safety of that resident, other residents, facility staff, or visitors at risk. In such cases, documentation of the alleged risk must be presented to the resident/decision maker, DPH and to the Office of the State Long Term Care Ombudsman. No later than 4/10/21, all nursing facilities must implement written procedures for compliance with these informed consent provisions. Violations of any individual’s informed consent that last 7 days or more will carry fines of up to $1,100 per occurrence and, if repeated, reduce the facility’s license to a conditional license. Additionally, any facility that violates informed consent rules will be required to obtain the signatures of two licensed health care professionals on every informed consent form for psychotropic medication.

Bottom Line:  This rulemaking implements amendments to the Nursing Home Care Act contained in PA 101-10. The amendments provide for increased Department oversight, including increased penalties, for facilities licensed under the Act and 77 Ill. Adm. Code 300 in obtaining informed consent from residents prior to administering psychotropic drugs. PA 101-10 and this rulemaking also provide for increased oversight and fines for violations of the minimum staffing ratios in the Act, and for signage in facilities found in violation of the staffing requirements. This rulemaking also implements PA 100-217, which provides for waivers from minimum staffing requirements under certain conditions. The economic effect of this proposed rulemaking is unknown. Therefore, the Department requests any information that would assist in calculating this effect. The Department anticipates adoption of this rulemaking approximately six to nine months after publication of the Notice in the Illinois Register.  Facilities will be required to maintain accurate records of informed consent and of minimum staffing requirements, including quarterly reports to the Department.

For questions or comments, you may contact Erin Conley, DPH, 535 W. Jefferson St., 5th Fl., Springfield IL 62761, 2 1 7 / 7 8 2 - 2 0 4 3, dph.rules@illinois.gov.  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility.    This rule is open for public comment until 2/24/20.

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The Department of Revenue proposed amendments which will impact vehicle dealers that accept trade-ins, and their customers:

The DEPARTMENT OF REVENUE adopted emergency amendments to Retailers’ Occupation Tax (86 IAC 130; 44 Ill Reg 552) and Use Tax (86 IAC 150; 44 Ill Reg 577) both effective 12/27/19 for a maximum of 150 days. Identical proposed rules appear in this week’s Illinois Register at 44 Ill Reg 485 and 487. Both of these emergency and proposed rules implement Public Act 101-31 by limiting the amount of trade-in credit on first division motor vehicles (those carrying 10 or fewer passengers) that can be deducted from the taxable selling price of the sold vehicle to $10,000 effective 1/1/20. Amendments to Part 130 (which concerns the retailer’s tax liability; Part 150 addresses use tax charged to the buyer) additionally clarify that sport utility vehicles (SUVs), all-terrain vehicles (ATVs), off-highway motorcycles, and any motor vehicle that was designed as a passenger vehicle for 10 or fewer passengers, regardless of its current use (e.g., a minivan with the seats removed) are classified as first division motor vehicles. Second division motor vehicles, which are not subject to the trade-in credit limitation, include any vehicle designed to carry more than 10 passengers; vehicles designed or used for living quarters, such as RVs or campers; school buses; ambulances, medical carriers, and hearses; and any vehicle designed to pull or carry property, freight, or cargo (e.g., pickup trucks and other open-bed vehicles, panel/cargo vans). The trade-in credit limitation applies only when one first division vehicle is traded in for another first division vehicle. A credit of more than $10,000 can be applied, but only the first $10,000 can be deducted from the selling price that determines State sales tax. Examples of when the credit limitation does and does not apply, and how it applies to multiple or split trade-in transactions, are included in Part 130.

Bottom Line:  This rulemaking implements the provisions of PA 101-31 that, effective with sales made on or after January 1, 2020, imposes a $10,000 limit on the credit allowed to reduce the taxable selling price when a first division motor vehicle is traded in on the purchase of another motor vehicle.  The $10,000 trade-in credit limit for the trade-in of first division motor vehicles imposed by PA 101-31 and implemented by this rulemaking will apply to any automobile dealerships that is a small business. It will not have a direct impact on small municipalities or not-for-profit corporations.  This rulemaking will require only minor additional reporting, bookkeeping or other procedures related to tracking the trade-in of first division motor vehicles whose value exceeds $10,000 by automobile dealerships. 

For questions or to submit comments, contact Samuel J. Moore Illinois Department of Revenue Legal Services Office 101 West Jefferson Springfield IL 62794 or call 217/782-2844.  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility. This rule is open for public comment until 2/24/2020.

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The Department of Agriculture amendments which will impact operators of pet boarding kennels licensed by the Department of Agriculture:             

The DEPARTMENT OF AGRICULTURE proposed amendments to the Part titled Animal Welfare Act (8 IAC 25; 44 Ill Reg 1745) implementing Public Act 101-210, which requires kennel operators that board cats or dogs to have staff on site whenever cats or dogs are on the premises and to have an operational fire sprinkler or fire alarm system in every building in which cats or dogs are located. If a sprinkler system is used, it must notify local emergency responders when it is activated. If an alarm system is used, it must directly alert local emergency responders or be monitored by a third-party security service that will notify emergency responders. Local fire inspectors may subject boarding kennels to routine inspections and notify DOA if they determine that the facility lacks an alarm or sprinkler system. Kennel operators must certify in their initial license and license renewal applications that they are staffed at all times when cats or dogs are on site and that they have an operational fire alarm or fire sprinkler system. A picture of the alarm or sprinkler system, description of the make and model of the system, and an inspection report or copy of the security service contract must also be submitted.

Bottom Line:  PA 101-210 (effective January 1, 2020), amends the Animal Welfare Act, by creating new regulations for Kennel Operators that have dogs or cats on their premises. Pursuant to the Act, Kennel Operators now must have one of the following while dogs or cats are present: must be staffed at all times; have a fire alarm system; or have a fire sprinkler system.  The safety requirements imposed by PA 101-210 will impact approximately 675 Kennel Operators licensed by the Department of Agriculture. It will not have a direct impact on small municipalities or not-for-profit corporations.  Kennel Operators must certify on an annual basis compliance with the Act and rules.

For questions or comments, you may contact Albert A. Coll Illinois Department of Agriculture, State Fairgrounds, P. O. Box 19281, Springfield IL, 62794-9281, 217/782-5051, fax: 217/785-4505.  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility.    This rule is open for public comment until 3/9/20.      

 

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The Department on Aging proposed amendments which will impact businesses and non-profit agencies seeking to become certified as Community Care Program (CCP) providers:

The DEPARTMENT ON AGING proposed amendments to Community Care Program (89 IAC 240; 44 Ill Reg 1724) clarifying requirements for certification as providers of in-home services, adult day services, emergency home response services or automated medication dispensing services. Agencies seeking certification as adult day service providers must have at least 2 years' experience providing direct social services programming (currently, 2 years' experience in "business operations" providing adult day service). Provider agencies for any service that have not previously been certified or are not in operation at the time they apply for certification, may receive provisional certification for up to 2 years, during which they will be subject to additional DonA oversight. This provisional certification will replace current rule provisions that allow experience exceptions for providers that are accredited by recognized national organizations. Newly established entities may, in lieu of submitting audited financial reports for the last complete fiscal year, submit bank approved business plans with approved financial backing, along with proof that employee tax accounts have been established with the State and with the U.S. Treasury. New for-profit entities backed entirely by individuals may, as an alternative to the bank approved business plan, submit the most recent 2 years of tax returns and documentation of bank approved financial backing for these individuals. An applying entity must show that it has sufficient assets to cover 90 days of operating expenses for the service it will provide, and no more than 30 of those days should be based on a line of credit.

Bottom Line:  This Part is amended in order to propose amendments regarding certification of adult day services (ADS) providers.  Provider agencies under the Community Care Program (CCP) ADS may be affected by this rulemaking.  CCP ADS provider agencies, the Department, and other entities will keep records relating to the ADS.

For questions or to submit comments, contact Paulette Dove Deputy General Counsel, Illinois Department on Aging, One Natural Resources Way, #100 Springfield, IL 62702-1271, or call 217/785-3346.  Emails may be sent to:  Aging.Rulemaking@illinois.gov.  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility.  This rule is open for public comment until 3/9/20.


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The Department of Revenue adopted an emergency amendment and proposed a companion proposed rulemaking which could impact Adult use cannabis sellers:

CANNABIS SALES TAX The DEPARTMENT OF REVENUE adopted an emergency amendment to Retailer's Occupation Tax (86 IAC 130; 44 Ill Reg 2055), effective 1/ 13/20 for a maximum of 180 days under a statutory exemption from the 150-day limit in the Illinois Administrative Procedure Act. A companion proposed rulemaking appears in this week's Illinois Register at 44 Ill Reg 1811. The emergency and proposed rules implement PA 101-593, which clarifies the applicable tax rate for food products that contain or are infused with cannabis for adult use. These products are subject to the adult use cannabis tax rate of 6.25% rather than the 1% sales tax rate normally applied to food purchased for off-premises consumption. Adult use cannabis sellers are affected. Questions/requests for copies/ comments on the proposed rulemaking through 3/9/20: Richard Wolters, DOR, 101 W. Jefferson St., Springfield IL 62794, 217/782-2844.

Bottom Line:  PA 101-593 amends Section 2-10 of the Retailers' Occupation Tax Act. The amendments to Section 2-10 clarify that that food consisting of or infused with adult use cannabis is taxed at the general merchandise rate of 6.25%, not the 1% rate imposed on food for human consumption that is to be consumed off the premises where it is sold. "Adult use cannabis" is defined as cannabis subject to tax under the Cannabis Cultivation Privilege Tax Law and the Cannabis Purchaser Excise Tax Law and does not include cannabis subject to tax under the Compassionate Use of Medical Cannabis Program Act. 

For questions or to submit comments, contact Richard S. Wolters Associate Counsel Illinois Department of Revenue Legal Services Office 101 West Jefferson Springfield IL 62794 217/782-2844.  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility.    This rule is open for public comment until 3/9/20.