Regulatory Alert

    REG ALERT

 

PROPOSED STATE OF ILLINOIS RULES AFFECTING SMALL BUSINESS

The following are proposed rules of possible interest to small businesses published in the Illinois Register.  Individuals have opportunity to express their support or opposition to the rule during the comment period. 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 Department of Revenue proposed an amendment which will impact small businesses and other customers of marketplace facilitators: 

The DEPARTMENT OF REVENUE proposed an amendment to Use Tax (86 IAC 150; 44 Ill Reg 7855) implementing provisions of Public Acts 101-9 and 101-604 concerning the collection of the 6.25% Illinois use tax by marketplace facilitators. A companion emergency rule was effective 12/23/19 for 150 days. Effective 1/1/20, marketplace facilitators must collect and remit use tax on their sales to Illinois customers if, within any 12-month period, they conduct at least 200 transactions with Illinois customers or collect at least $100,000 in gross receipts from Illinois customers. Marketplace facilitators are defined as persons or entities that list or advertise tangible personal property items for sale, collect payment from the customer, and transmit payment to the seller (e.g., Amazon, eBay). Use tax does not apply to entities that provide only advertising and leave financial arrangements to the buyer and seller (e.g., Craigslist); those that merely handle financial transactions (e.g., PayPal); or offer only non-tangible items such as discount coupons (e.g., Groupon). It also does not apply to transactions that are subject to State or local sales taxes (e.g., online food-ordering and delivery services) or to certain specialized online marketplaces. Marketplace facilitators that are or may be subject to use tax must determine on a quarterly basis whether they have met either the gross sales or 200-transaction threshold in the preceding 12 months. Those that do meet this test must begin filing regular use tax returns; those that do not must continue to monitor their Illinois sales quarterly.

Bottom Line:  This regulation implements the provisions of PA 101-9, which added provisions governing collection of the 6.25% Use Tax by a marketplace facilitator for sales made through its marketplace on behalf of marketplace sellers. Beginning January 1, 2020, a marketplace facilitator that meets specific selling thresholds (i.e., the Wayfair thresholds of either 200 transactions or $100,000 of gross receipts) is considered to be the retailer for all sales made through its marketplace on behalf of marketplace sellers, provided that the resulting liability for the marketplace seller would be a Use Tax collection liability. For all such sales, the marketplace facilitator must collect Use Tax and remit it to the Department. The regulations provide key definitions; clarify the scope and nature of the new tax remittance obligation; provide examples of the types of activities that make a person a marketplace facilitator; clarify the responsibilities of marketplace facilitators, as well as of marketplace sellers selling through a marketplace; and reference the new act's hold harmless provisions. Marketplace facilitators sometimes make sales on behalf of marketplace sellers that are subject to Retailers' Occupation Tax (ROT), rather than Use Tax (typically, when a marketplace seller fulfills an order from Illinois inventory). The new law does not consider the marketplace facilitator to be the retailer for such sales, nor does it authorize it to remit ROT for these sales. The marketplace seller, instead, is considered the retailer for these sales and must register and remit ROT to the Department. The rules offer one method that could be used to handle these transactions between a marketplace seller and marketplace facilitator. This new regulation also implements provisions of PA 101-604, that, beginning January 1, 2020, amends the definition of a marketplace facilitator.

Those affected by this rulemaking include small businesses and other customers of marketplace facilitators. Questions/requests for copies/ comments through 6/22/20: Jerilynn Troxell Gorden, DOR, 101 W. Jefferson St., Springfield IL 62794, 217/782-2844.  These rules will remain open for public comment until 6/22/20You may submit comments here. 

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The Department of Public Health proposed amendments which will impact staffing agencies to initiate fingerprint-based criminal history background checks for their clients seeking employment in health care jobs:      

The DEPARTMENT OF PUBLIC HEALTH proposed amendments to Health Care Worker Background Check Code (77 IAC 955; 44 Ill Reg 8151) implementing Public Act 101-176, which allows staffing agencies, workforce intermediaries (organizations that provide job training and employment services) and organizations that provide pro bono legal services to initiate fingerprint-based criminal history background checks for their clients seeking employment in health care jobs. These organizations may also initiate requests for waivers allowing an individual who would otherwise be disqualified from health care employment due to a past criminal conviction to be cleared for employment.

Bottom Line:  This rulemaking implements PA 101-176, which amended the Health Care Worker Background Check Act to allow workforce intermediaries and organizations providing pro bono legal services to initiate a fingerprint-based criminal history records checks for individuals who have disqualifying conditions and who are receiving services from the workforce intermediary or organization. The economic effect of this proposed rulemaking is unknown. Therefore, the Department requests any information that would assist in calculating this effect.

Questions/requests for copies/ comments on the proposed rulemaking through 6/29/20:  Erin Conley Rules Coordinator Division of Legal Services Illinois Department of Public Health Division of Legal Services 535 W. Jefferson St., 5th Floor Springfield IL 62761 217/782-2043 dph.rules@illinois.govThis rulemaking is open until June 29, 2020.  You may submit comments here. 

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The Department of Commerce and Economic Opportunity Public Health proposed a new party by emergency rulemaking which will impact Small businesses and non-profits engaged in public works projects:

The DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY adopted a new Part by emergency rulemaking titled Illinois Works Jobs Program Act (14 IAC 680; 44 Ill Reg 8502) effective 5/8/20 for a maximum of 150 days. An identical proposed amendment appears in the May 22 issue of the Illinois Register at 44 Ill Reg 8470. The emergency and proposed rules implement the Illinois Works Apprenticeship Initiative that is scheduled to begin on 7/1/20. Under this initiative, contractors, subcontractors and grantees undertaking State-funded public works projects with a total cost of $500,000 or more must have apprentices perform at least 10% of the actual or estimated labor hours in each prevailing wage classification. Affected contractors may apply for a waiver from DCEO if this goal cannot be met and DCEO may hold public hearings on these requests.

Bottom Line:  The Illinois Works Apprenticeship Initiative applies to public works projects with an estimated total project costs of $500,000 or more. The program will impact grantees, contractors and subcontractor who receive money from appropriated capital funds for public works projects. For those projects, the goal of the Illinois Apprenticeship Initiative is that apprentices will perform either 10% of the total labor hours actually worked in each prevailing wage classification or 10% of the estimated labor hours in each prevailing wage classification, whichever is less.

Questions/requests for copies/ comments on the proposed rulemaking through 7/6/20:  Jolene Clarke Rules Administrator, Department of Commerce and Economic Opportunity, 500 E. Monroe, Springfield IL 62701, 217/557-1820 or fax: 217/524-3701.  You may email jolene.clarke@illinos.govThis rulemaking is open until July 6, 2020.  You may submit comments here. 

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The Illinois Department of Labor proposed an amendment which will impact small businesses and non-profit entities with joint employment relationships:

The DEPARTMENT OF LABOR proposed an amendment to the Part titled Minimum Wage Law (56 IAC 210; 44 Ill Reg 8472) addressing situations in which one individual is jointly employed by two or more closely associated employers. The rulemaking lists factors to be considered in determining whether a joint employment relationship exists between or among other entities that are associated with a person's main employer. If this is the case, the employee's work in a given period for all the related entities counts as one employment subject to the Minimum Wage Law and all joint employers become liable for any violations of that law. (If the entities are found to be completely independent of one another, the employee is considered to be working separate jobs and each employer may disregard work performed for the other employers.) Factors to be considered include: whether the employee's work benefits the alleged joint employer or is an integral part of the alleged joint employer's business; whether the alleged joint employer has direct or indirect control or influence over the employee's terms or conditions of employment (e.g., work schedule, work quality); whether the alleged joint employer owns or leases the premises where the work is performed or provides tools, equipment or materials used by the employee; and whether the alleged joint employer controls the main employer's operations via contractual obligations, ownership interest, joint management, or economic dependence.

Bottom Line:  Recent action taken by the United States Department of Labor (U.S. DOL) could expose workers to a higher risk of wage theft and give unscrupulous employers a competitive advantage over law abiding employers. The U.S. DOL adopted a new rule on March 16, 2020. This new federal rule abandons over 60 years of precedent by adopting a restrictive four factor test to determine the existence of a joint employer relationship. Illinois has not needed its own rule interpreting joint employment, until now, because the former Fair Labor Standards Act regulation provided reasonable guidance on the issue.

Questions/requests for copies/ comments on the proposed rulemaking through 7/6/20:  Jason Keller Illinois Department of Labor, 900 South Spring St. Springfield, IL 62704 217-782-1706.  You may also email Jason.keller@illinois.govThis rulemaking is open until July 6, 2020.  You may submit comments here. 

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The Department of Children and Family Services proposed amendments which will impact day care homes and centers: 

The DEPARTMENT OF CHILDREN AND FAMILY SERVICES adopted emergency amendments to Licensing Standards for Day Care Homes (89 IAC 406; 44 Ill Reg 10161), Licensing Standards for Day Care Centers (89 IAC 407; 44 Ill Reg 10170) and Licensing Standards for Group Day Care Homes (89 IAC 408; 44 Ill Reg 10184) all effective 5/29/20 for a maximum of 150 days. Identical proposed amendments appear in the June 11 Illinois Register at 44 Ill Reg 10052, 10055 and 10058. The emergency and proposed rules implement DCFS policies for day care homes and centers that are reopening during Phases III and IV of the Restore Illinois pandemic recovery plan. During this period, DCFS licensed day care homes and centers must adhere to additional measures based on Department of Public Health and federal Centers for Disease Control and Prevention guidance, as well as existing DCFS health and safety rules. The additional measures include: daily temperature checks for all caregivers, assistants, children, parents/guardians and persons authorized to drop off or pick up children (anyone with a temperature of 100.4 F or higher, or other symptoms of illness, is excluded from the home or center); caregivers, staff and children age 2 and older who can tolerate face masks must wear masks except when eating, napping or playing outdoors; age groupings are limited to 10 children (8 in day care homes with only one caregiver); licensees must supply face masks or other personal protective equipment to employees and children; CDC handwashing guidelines and other precautions must be posted in visible locations and observed at all times; all equipment must be cleaned and disinfected daily and frequently touched items (e.g., door handles/ knobs, phones, keyboards, toys) cleaned and disinfected hourly; no stuffed animals are permitted; and cribs or cots on which children nap must be at least 6 feet apart or separated by a barrier. Any known or suspected case of COVID-19 or other communicable disease among children, caregivers, staff or others in contact with the home or center must be reported to DCFS and DPH and parents informed. Each licensee must also submit to DCFS an action plan that outlines how these measures will be implemented.

Bottom Line:  Pursuant to the Governor's Executive Order 2020.10, all day care homes and centers were ordered closed in the State of Illinois in order to confront the spread of the novel coronavirus. However, the State is mindful that childcare is a critical service and day care homes and centers may begin reopening under Phase III and Phase IV of Restore Illinois. The day care homes and centers shall comply with standards, except when inconsistent with special requirements throughout these sections.

Questions/requests for copies/ comments on the proposed rulemaking through 7/26/20:  Jeff Osowski, Office of Child and Family Policy, Department of Children and Family Services, 406 E. Monroe, Station #65, Springfield IL, 62701-1498 217/524-1983 TDD: 217/524-3715 fax: 217/557-0692, or you may email:  DCFS.Policy@illinois.govThis rulemaking is open until July 26, 2020.  You may submit comments here.

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The Illinois Gaming Board proposed amendments which will impact small businesses that are licensed as video gaming locations:

The ILLINOIS GAMING BOARD adopted emergency amendments to Video Gaming (General) (11 IAC 1800; 44 Ill Reg 10193) effective 5/27/20 for a maximum of 150 days. An identical proposed rulemaking appears in the June 11 Illinois Register at 44 Ill Reg 10061. The emergency and proposed rulemakings authorize IGB to serve documents, including notices of licensing actions and hearings, upon licensees by e-mail; require licensees and license applicants to accept service by e-mail; and require applicants and licensees to update their designated e-mail addresses at least annually.

Bottom Line:  Section 10-75 of the Administrative Procedure Act (IAPA) [5 ILCS 100/10-75] permits an agency to establish requirements for serving certain notices via e-mail. It authorizes an agency to require any attorney representing a party to a hearing, and any person to the extent they are subject to licensure, permitting or regulation by the agency, to accept service of documents by email. Section 10-75 applies to all administrative proceedings under Section 10-25 (contested cases) and 10-50 (decisions and orders) of the IAPA. In conformity with Section 10-75 of the IAPA, the proposed rulemaking adds a new Section 1800.140 to the Video Gaming (General) Part entitled "Service via E-mail." This new Section establishes, as a condition of application and licensure, consent to receive notices, complaints, letters and orders via e-mail. It provides that each applicant has a duty under Section 1800.220 (Continuing Duty to Report Information) to update e-mail addresses and verify at least annually that an application has an updated e-mail address. An applicant or licensee may provide the Illinois Gaming Board (Board) with up to two additional e-mail addresses that are owned by the licensee, its owner, a video gaming manager, or a person of significant influence or control of the applicant or licensee. Email notices are deemed served on the date of transmission unless all the addresses are undeliverable. If all the e-mail addresses are undeliverable, a notice or letter shall be served by personal carrier or certified U.S. mail, unless the applicant or licensee updates its e-mail address.

The rulemaking also amends several Sections of the Video Gaming (General) Part to authorize e-mail service by the Board. Within Subpart F (Denials of Applications for Licensure), the rulemaking amends Section 1800.615 (Requests for Hearing) and Section 1800.690 (Transmittal of Record and Recommendation to the Board). Within Subpart G ((Disciplinary Actions Against Licensees), the rulemaking amends Section 1800.715 (Notice of Proposed Disciplinary Action Against Licensees), Section 1800.720 (Hearings in Disciplinary Actions), and Section 1800.790 (Transmittal of Record and Recommendation to the Board). In Section 1800.615, the rulemaking authorizes requests for hearings to be made by email, and in Section 1800.720, it authorizes e-mail responses in disciplinary actions.

Questions/requests for copies/ comments on the proposed rulemaking through 7/26/20:  Agostino Lorenzini General Counsel Illinois Gaming Board 160 North LaSalle Street Chicago IL 60601 IGB.RuleComments@igb.illinois.gov .  This rulemaking is open until July 26, 2020.  You may submit comments here. 

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The Department of Agriculture proposed amendments that will impact farmers/growers and agricultural equipment/services businesses that sell, deliver or apply anhydrous ammonia:      

The DEPARTMENT OF AGRICULTURE proposed amendments to the Part titled Anhydrous Ammonia, Low Pressure Nitrogen Solutions, Equipment, Containers, and Storage Facilities (8 IAC 215; 44 Ill Reg 10292) requiring anhydrous ammonia releases equal to or exceeding 100 pounds or 18 gallons within a 24-hour period (reportable quantity) to be reported to local emergency responders and other local, State and federal authorities. The rulemaking also updates the DOA-approved training programs under which persons who handle, transfer, transport or apply anhydrous ammonia may become certified competent attendants. Grower training (currently voluntary) will be mandatory for farmers/growers and persons who handle anhydrous ammonia or maintain equipment for growers, including grower family members, full- or part-time hired help, and others who provide these services at no fee. Competent attendant training may be attendance-based or completed online. Certification of competent attendants based on online training is valid for 90 days and cannot be renewed, while certification based on in-person training is valid for 3 years and is renewable with refresher training. Persons or entities that conduct 90-day online certified competent attendant training must submit to DOA a roster of the individuals trained that includes their company names, home addresses, company addresses and date of training. These programs shall be reapproved by DOA every 3 years. For growers/ farm operators, certified grower training in the properties of ammonia, safe operating practices, and appropriate emergency actions shall be offered at no cost via an attendance-based or online program approved by DOA. Grower certification will be valid for 3 years based on either in-person or online training. Other provisions impose a 25-mph speed limit on tanks being transported on public roads, update requirements for safety equipment and testing of tanks, update incorporated federal regulations, and establish DOA's right to withdraw approval of new technologies/methods of securing hoses based on observed non-performance.

Bottom Line:  These amendments amend the Department's rules to create a training program and to update the rules to reflect current Department policy.

For questions or comments, contact Pamela Harmon, Rulemaking Coordinator, Illinois Department of Agriculture, State Fairgrounds, P. O. Box 19281 Springfield IL, 62794-9281, 217/524-6905, fax: 217/785-4505. You may also email Pamela.Harmon@Illinois.govThis rulemaking is open until August 3, 2020.    

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The Illinois Department of Financial and Professional Regulation proposed a new Part which will impact applicants for cannabis dispensary licenses:    

The DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION proposed a new Part titled Cannabis Regulation and Tax Act (68 IAC 1291; 44 Ill Reg 10343) to replace a Part adopted by an emergency rule that expired on 6/ 5/20. The rule implements provisions of Public Act 101-27 with regard to multiple applicants for available cannabis dispensary licenses in the same region receiving the same application score. A tied applicant organization will be eliminated from consideration if it shares principal officers with other tied applicants. If two or more eligible applicants remain, DFPR will hold a random drawing to determine which applicants will have first, second, etc. right to the available licenses. Unsuccessful applicants who contest the Department's decision are not entitled to an administrative hearing but may seek judicial review of the denial.

Bottom Line:  PA 101-27 created the Cannabis Regulation and Tax Act [410 ILCS 705]. These proposed rules relate to the lottery process if there are ties for the last remaining licenses in a particular BLS region, and also clarify that unsuccessful applicants who wish to file suit against the Department should do so in court rather than first going through the administrative process before going on to court. These proposed rules may potentially change some applicants' behavior in terms of how many applications they submit in a region and directs applicants toward the appropriate venue for relief.

For questions or to submit comments through 8/3/20: Craig Cellini, DFPR, 320 W. Washington St., 3rd Fl., Springfield IL 62786, 217/785-0813, fax 217/ 557-4451.  You may also email Craig.Cellini@Illinois.govThese rules will remain open for public comment until 8/3/20