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
 

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The Secretary of State proposed an amendment which will impact businesses or non-profit entities that offer progressive jackpot video gaming:   

The ILLINOIS GAMING BOARD proposed amendments to Video Gaming (General) (11 IAC 1800; 43 Ill Reg 12767) implementing provisions of Public Act 101-31. Companion emergency rules (43 Ill Reg 11688) were effective 9/26/ 19. The proposed rulemaking creates a new Subpart T governing in-location progressive jackpot games (in which the jackpot escalates with each play until the game is won). Licensed gaming locations shall designate one or more owners or employees to implement the procedures required by these rules. Each terminal operator must employ a person of significant influence or control (e.g., an owner) as its progressive jackpot coordinator to handle all aspects of the progressive jackpot operation, winning or withholding process Each progressive game shall be conducted only within a single video gaming location. If a progressive jackpot of $1,200 or more is won, the video gaming terminal (VGT) shall immediately issue a voucher with the date, time and amount won, identifying the terminal operator and the terminal on which the prize was won, and giving a phone number to call for payment instructions. Terminal operators must pay jackpot winners within 3 days after a win, after retaining any applicable withholdings; no prize or portion thereof may be paid in the form of credits for further play on a VGT. Before operating an in-location progressive jackpot game, a terminal operator must obtain authorization from the Department of Healthcare and Family Services to intercept past-due child support and to access the HFS database of persons with past-due child support subject to withholding. If past-due child support is withheld from a jackpot and remitted to HFS, the terminal operator may additionally claim an administrative fee of 4% of the winnings (up to a maximum of $150). At least one designated owner or employee must be at the gaming location whenever a progressive jackpot game is being played. The winner of a progressive jackpot must present government or military-issued personal identification to the designated owner/employer and must sign a form provided by the terminal operator. Completed progressive jackpot forms, payment receipts/confirmations, gaming tickets, and other related documentation of a progressive jackpot win must be retained for audit and inspection by IGB or its agents for the time period prescribed by the Administrator of IGB.

Bottom Line:  The rulemaking will affect small businesses that are licensed as licensed video gaming locations or terminal operators and that conduct in-location progressive jackpot games in accordance with the provision of this rulemaking.  The rulemaking will require the Illinois Gaming Board to record all progressive jackpots won and amounts deducted for taxes and overdue child support payments, including information as to location, time and amount of each progressive jackpot and corresponding deductions. Terminal operators participating in progressive jackpot play will be required to keep all completed tax forms connected with progressive jackpots, records of communications with the GIPCS system, and documentation of all jackpot withholdings for taxes and overdue child support. Licensed video gaming locations participating in progressive jackpot play will be required to keep copies of all completed progressive jackpot forms.

This rulemaking implements the provisions of Section 20 (c) of the Video Gaming Act as added by PA 101-31 (Senate Bill 690), effective June 28, 2019. The rulemaking does the following: New Section 1800.2010 (In-location Progressive Games) requires all in-location jackpot games to be conducted in accordance with the requirements of the Video Gaming (General) Subpart [11 Ill. Adm. Code 1800] and with approval by the Administrator. New Section 1800.2020 (Optional Nature of In-location Progressive Games) makes the operation of in-location jackpot games optional on the part of both terminal operators and licensed video gaming locations. New Section 1800.2030 (Procedures Within Licensed Video Gaming Locations) sets forth the procedures by which in-location progressive video gaming play shall take place. Provisions of this section are the following:

All in-location progressive games shall be conducted only within a single video gaming location (subsection (a)). A location conducting in-location jackpot games must designate one or more of its owners or employees to implement the procedures set forth in this Section (subsection (b)).  Upon the winning of a jackpot of $1,200 or more, the video gaming terminal on which the jackpot has been won shall immediately issue a voucher with the date, time, amount won, and identity of the video gaming terminal where the jackpot was won. The voucher shall identify the terminal operator and specify a phone number that a patron can call for payment instructions. The voucher shall not be redeemable at any video gaming redemption kiosk. The designated owner or employee of the licensed video gaming location shall require one of several listed, acceptable forms of identification from the progressive jackpot winner (subsection (c)). The designated owner or employee of the licensed video gaming location shall complete and sign a progressive jackpot form previously provided to the location by the terminal operator. It shall be the duty of a terminal operator that has entered into a use agreement with a location where progressive jackpot play takes place to provide these forms in to the location in advance. There shall be three copies of this form, with one copy given to the winner, one copy retained by the location, and one copy provided to the terminal operator. Information on the form will include the name and address of the winning player, identification number from an authorized form of identification as established by subsection (c), date and time the progressive jackpot was won, amount of the progressive jackpot, license number and location of the video gaming terminal on which the progressive jackpot was won, and video gaming ticket number for which payment is made (subsection (d)). In no event shall the winning jackpot, or any portion thereof, be expressed as credits available for play on a video gaming terminal (subsection (e)). All completed progressive jackpot forms, payment receipts or confirmations, progressive gaming tickets, and other related documentation shall be retained for audit and inspection by the Board or its agents for a time period as prescribed by the Administrator (subsection (f)). New Section 1800.2040 (Payments of Progressive Jackpot Amount) requires, in conformity with the underlying statute, that payment of progressive jackpots shall be made within three days of the date of winning. After retaining all applicable withholdings as specified in Section 1800.2050, a terminal operator shall pay the remainder of the progressive jackpot amount to the progressive jackpot winner. Terminal operators must obtain prior approval from the Administrator for all methods of payment.

New Section 1800.2050 (Deductions from Progressive Jackpots) provides the following:  Any terminal operator planning to operate in-location progressive games shall first obtain from the Illinois Department of Healthcare and Family Services (HFS) all necessary permissions and certifications to conduct past-due child support withholdings in accordance with 89 Ill. Adm. Code 160.70 (q), including credentials to access the Gaming Intercept Program Certification System (GIPCS) (subsection (a)). After being presented with a progressive jackpot voucher and a completed progressive jackpot form, the terminal operator shall: 1) confirm that the individual seeking to claim the jackpot winnings is the same individual whose identifying information appears on the progressive jackpot form; 2) complete all necessary tax forms; 3) access the GIPCS system to determine if the winner has a past-due child support obligation; and 4) withhold any past-due child support and remit the required amount to the Division of Child Support Services within HFS in a manner prescribed by HFS (subsection (b)). For the withholding of past-due child support, the terminal operator shall be entitled to an administrative fee of four percent of the total amount of cash winnings paid to the jackpot winner, up to a maximum of $150 (subsection (c)). Only mandatory taxes shall be withheld from a progressive jackpot before the amount due to the Division of Child Support Services and the administrative fee. Voluntary taxes shall be deducted only after mandatory taxes, past-due child support and the administrative fee are withheld. In no event shall the total amount withheld exceed the amount of the progressive jackpot (subsection (d)). If there is withholding for past-due child support, the terminal operator shall provide the progressive jackpot winner with a Notice of Gaming Intercept provided by HFS (subsection (e)). A terminal operator that complies with this Section 1800.2050 shall not be further liable to the progressive jackpot winner or any other individual or entity, other than the Board, for past-due child support amounts or withheld taxes (subsection (f)).

New Section 1800.2060 (Progressive Jackpot Coordinator) provides the following Each terminal operator offering in-play progressive games shall employ a progressive jackpot coordinator and shall disclose this individual to the Administrator (subsection (a)). The progressive jackpot coordinator shall be a person with significant influence or control, as defined in Section 1800.110 (subsection (b)). No terminal operator may offer in-play progressive games until its progressive jackpot coordinator has been disclosed to, and approved by, the Administrator (subsection (c). The progressive jackpot coordinator will facilitate all aspects of the progressive jackpots, including but not limited to: (1) coordinating necessary approvals and credentials; (2) creating and distributing the progressive jackpot form; (3) coordinating with progressive jackpot winners to pay out the jackpot; and (4) ensuring that all payments and withholdings comply with applicable law, including this new subpart (subsection (d)). No provision of the In-Location Progressive Games Subpart (11 Ill. Adm. Code 1800.2010 through 1800.2060) shall be construed to render a terminal operator not subject to discipline for the actions or inactions of a progressive jackpot coordinator whom the terminal operator has employed or who acts at the terminal operator's behest (subsection (e)). 

For questions or comments contact Agostino Lorenzini General Counsel Illinois Gaming Board 160 North LaSalle Street Chicago IL 60601 fax: 312/814-7253 Agostino.lorenzini@igb.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 December 16, 2019. 

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The Department of Revenue proposed amendments which will impact businesses engaged in manufacturing or graphic arts production:

DOR proposed amendments to Retailers’ Occupation Tax (86 IAC 130; 43 Ill Reg 13190), implementing various Public Acts. The rulemaking expands the sales tax exemption for manufacturing machinery and equipment to include items purchased for graphic arts production; updates and explains what items are considered “machinery and equipment” exempt from tax; and establishes a sales tax exemption for items used in the construction and operation of data centers that have been granted certificates of exemption by the Department of Commerce and Economic Opportunity.

Bottom Line:  Section 130.330 is amended in response to legislation that expanded the Manufacturing Machinery and Equipment exemption to include production related tangible personal property purchased on or after July 1, 2019, that is primarily used or consumed in a production related process by a manufacturer in a manufacturing facility in which a manufacturing process takes place or by a graphic arts producer in graphic arts production. PA 101-9, effective July 1, 2019. The definition of production related tangible personal property includes supplies and consumables used in a manufacturing facility including fuels, coolants, solvents, oils, lubricants and adhesives, hand tools, protective apparel, and fire and safety equipment primarily used or consumed within a manufacturing facility in a production related process. Production related tangible personal property also includes all tangible personal property that is primarily used in research and development regardless of use within or without a manufacturing or graphic arts production facility. The new section, Section 130.1957, implements PA 101-31, codified at 35 ILCS 120/2-5(44). PA 101-31 creates an exemption from Retailers' Occupation Tax for data centers that receive a certificate of exemption from the Department of Commerce and Economic Opportunity ("DCEO"). Qualified tangible personal property used in the construction and operation of a data center that has been granted a certificate of exemption by DCEO, whether the tangible personal property is purchased by the owner, operator, or tenant of the data center or by a contractor of the owner, operator, or tenant, is exempt from Retailers' Occupation Tax. 

In Section 130.330, Manufacturers who purchase production related tangible personal property that is primarily used or consumed in a production related process in a manufacturing facility in which a manufacturing process takes place or by a graphic arts producer in graphic arts production. In Section 130.1957, all businesses making retail sales of qualified tangible personal property are affected.

For questions or comments, you may 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 December 30, 2019. 

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The Department of Revenue proposed amendments which will impact businesses that sell cigarettes anywhere in Illinois, or motor fuel in the Lake and Will counties:

DOR proposed amendments to the Part titled County Motor Fuel Tax (86 IAC 695; 43 Ill Reg 13276) implementing PA 101-32. The rulemaking extends the authority to impose county motor fuel taxes to Lake and Will counties (currently, DuPage, Kane, and McHenry counties). The allowable county fuel tax rate is raised from a maximum of 4 cents per gallon to between 4 and 8 cents per gallon, with automatic annual increases tied to inflation. DOR also proposed an amendment to Cigarette Use Tax Act (86 IAC 450; 43 Ill Reg 13266) implementing PA 101-31, which raised the State cigarette tax by $1 per pack.

Bottom Line:  This rulemaking implements the changes to the County Motor Fuel Tax Law [55 ILCS 5/5-1035.1] made by PA 101-32. PA 101-32 expands the authority to impose a tax on persons engaged in the county in the business of selling motor fuel to include Lake and Will Counties (in addition to the existing counties of DuPage, Kane, and McHenry). It also provides that the initial rate imposed may not be less than 4 cents per gallon (previously capped at 4 cents per gallon) and may not exceed 8 cents per gallon. Finally, PA 101-32 provides for automatic annual increases in the tax rate.  

For questions or comments, contact Samuel Moore, 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 December 30, 2019. 

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The Department of Financial and Professional Regulation proposed amendments which will impact wholesale drug distributors and third-party logistics providers:

The DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION proposed amendments to the Part titled Wholesale Drug Distribution Licensing Act (68 IAC 1510; 43 Ill Reg 13160) implementing Public Act 101-420. The Act and this rulemaking extend the licensing, storage, handling and recordkeeping requirements that currently apply to wholesale drug distributors to third-party logistics providers (entities that contract with drug manufacturers to provide or coordinate warehousing, distribution, and other services, without claiming any ownership of the drugs or responsibility for their disposition). Applicants for licensure as third-party logistics providers will be subject to the same liability insurance, bond requirements, license application and annual renewal fees (both $200), and fees for changes of ownership ($200) or changes of name or address ($100) as wholesale distributors.

Bottom Line:  Licensed wholesale drug distributors and applicants, as well as newly eligible third-party logistics providers regulated under the Act may be affected.  This proposed rulemaking implements the statutory change made to Wholesale Drug Distribution Licensing Act in PA 101-420, which creates a license for third-party logistics providers. The changes include the setting forth of licensure requirements for third-party logistics providers, fingerprints and liability insurance requirements, storage and record keeping requirements, and defining change of ownership. This rulemaking also includes technical changes to maintain consistency with Department Acts.  Each applicant for license as a wholesale drug distributor or a third-party logistics provider shall maintain minimum liability insurance for the duration of the license. Additionally, each wholesale drug distributor and third-party logistics provider shall submit a bond or other equivalent means of security in the amount of one hundred thousand dollars ($100,000.00).

For questions or comments, contact Department of Financial and Professional Regulation Attention: Craig Cellini, 320 West Washington, 2nd Floor Springfield IL 62786 217/785-0813 fax: 217/557-4451, or email Craig.Cellini@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 December 30, 2019.

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The Department of Revenue proposed an amendment which will impact retailers and distributors of cigarette products:      

The DEPARTMENT OF REVENUE proposed an amendment to Cigarette Tax Act (86 IAC 440; 43 Ill Reg 13376) implementing the cigarette tax increase in Public Act 101-31. The rulemaking increases the tax from 99 to 149 mills per cigarette ($2.98 per pack of 20 cigarettes) effective 7/1/19. Revenues derived from this tax will be allocated as follows: 4 mills per month to the Common School Fund, not to exceed $9 million per month; an additional 7 mills per month to the Common School Fund (with no limitation); 50 mills per month to the Healthcare Provider Relief Fund; and 50 mills per month to the Capital Projects Fund. The rulemaking also clarifies how cigarette distributors and retailers are to pay tax on cigarettes that were in their possession, but not yet stamped, on 7/1/19, or if they had tax stamps in their possession on 7/1 that had not yet been affixed to cigarette packages.

Bottom Line:  Section 440.10 is amended to implement changes to the Cigarette Tax Act made by PA 101-31. PA 101-31, effective July 1, 2019, increased the tax on cigarettes from 99 mills per cigarette to 149 mills per cigarette ($1.98 per package of 20 cigarettes to $2.98 per package of 20 cigarettes). Pursuant to Section 2 of the Cigarette Tax Act, all moneys received by the Department under the Cigarette Tax Act and the Cigarette Use Tax Act from the additional 50 mills per cigarette tax are payable into the Capital Projects Fund. A floor tax requires a distributor to pay the additional tax to the extent that the volume of affixed and unaffixed stamps in the distributor's possession on July 1, 2019 exceeds the average monthly volume of cigarette stamps purchased by the distributor in calendar year 2018.

For questions or comments, you may 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 January 6, 2020.   

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The Illinois Gaming Board proposed an emergency amendment which will impact licensed video gaming terminal operators and their owners or investors:

The ILLINOIS GAMING BOARD adopted an emergency amendment to Video Gaming (General) (11 IAC 1800; 43 Ill Reg 13464) effective 11/8/19 for a maximum of 150 days. An identical proposed rulemaking appears in the November 22, 2019 edition of the Illinois Register at 43 Ill Reg 13354. (NOTE: JCAR suspended the emergency rule effective 11/12/ 19, but the proposed rulemaking remains open for public comment.) These rulemakings require any transfer of ownership interest in a licensed terminal operator, or in a business entity (other than a publicly traded corporation) that has an interest in a licensed terminal operator, to have Board approval unless all material terms of the prospective transaction were fully disclosed to the Board on or before 11/7/19.

Bottom Line:  Under existing Video Gaming Act rules, and in contrast to the rules governing riverboat and casino gambling, there is no current requirement for Illinois Gaming Board ("IGB" or "Board") approval of the transfer of ownership interests of a terminal operator. Instead, a licensed terminal operator merely has a continuing duty to report sales of ownership interests to the IGB within 21 days after they occur [11 Ill. Adm. Code 1800.220 (Continuing Duty to Report Information)]. Thus, for a period of three weeks following such a sale, the IGB − the State regulator tasked with protecting the safety and integrity of Illinois gaming − is not entitled to any information whatsoever about, and has no ability to intervene in, a sale involving one of its licensees. Such tardy and after-the-fact disclosures create an emergency under IAPA Section 5-45 (a) by impairing public confidence and trust in the credibility and integrity video gaming operations − a statutory requirement under Section 2 (b) of the Illinois Gambling Act [230 ILCS 10/2 (b) as incorporated into the Video Gaming Act by Section 80 of that act [230 ILCS 40/80]. The urgency of closing this gaping loophole is magnified by recent news reports of alleged illegality in the industry.

The present rule rectifies the situation by generally providing that an ownership interest in a terminal operator may only be transferred with leave of the Board, thereby bringing needed transparency, disclosure, oversight, and accountability to the process. First, the rule's pre-transfer disclosure requirement precludes a terminal operator licensee or owner facing probable disciplinary Board action (including license revocation, suspension or nonrenewal) from evading liability from wrongdoing by effectuating a quick ownership or assets transfer without Board knowledge or approval. Without the present rule, such a person, who has acted unethically and in violation of statutory and administrative requirements, can still earn a potentially large profit derived from the license or ownership. Further, the current lack of a prior disclosure requirement regarding transfers of terminal operator ownership and assets means that a person holding an interest in a terminal operator has the opportunity to unload the interest even before the Board is cognizant that a disciplinary situation exists. The current absence of real time Board oversight over terminal operator ownership and asset sales deprives the public of confidence that video gaming business in Illinois operates in an ethical or transparent manner. The present rule, by imposing a prior disclosure requirement upon terminal operator licensees and owners, will enhance public confidence in the integrity of video gaming by providing assurance that those who violate video gaming law will not profit from unethical or illegal conduct.

Second, unregulated transfers of terminal operator ownership and assets will tend to diminish economic competition. Section 25 (i) of the Video Gaming Act [230 ILCS 40/25 (i)] declares that "[t]he Board shall not allow a terminal operator to operate video gaming terminals if the Board determines such operation will result in undue economic concentration". To further the implementation of this statutory directive, the Board has adopted 11 Ill. Adm. Code 1800.440 (Undue Economic Concentration), which establishes criteria for evaluating whether a situation of undue economic concentration exists, and gives the Board "authority to place any restrictions or qualifications on the terms of a terminal operator license that it deems necessary to prevent or eliminate undue economic concentration, including, but not limited to, setting a limit on the maximum amount of use agreements a terminal operator may have" [11 Ill. Adm. Code 1800.440 (d)].

If the Board lacks advance knowledge of terminal operator ownership and asset transfers, it cannot effectively limit these transfers so as to prevent undue economic concentration. This is a real and pressing concern. During State Fiscal Year (FY) 2018, the five largest terminal operators (out of a current total of 75) had combined Net Terminal Income (NTI) amounting to 56.0% of the total NTI of all Illinois terminal operators. The share of total NTI held by these top five terminal operators has been rapidly increasing, as shown below:

FISCAL
YEAR
Percentage of total NTI held by the five largest terminal Operators
201749.2%
201646.6%
201545.1%
201440%
      

If the IGB is provided with advance notification of terminal operator asset transfers, it can act to curb the increasing levels of economic concentration in the industry under its present statutory and regulatory authority. But without such notification, the Board cannot effectively address the concentration trend and protect economic competition in the industry.

Third, the Board's current lack of timely information regarding ownership transfers and asset sales also raises major related concerns pertaining to the financial stability of many terminal operators. Deprived of prior notice, the Board cannot act to prevent sales of use agreements (in which a terminal operator agrees to install and maintain video gaming terminals in a licensed video gaming location) to those terminal operators whose financial circumstances may be precarious and that are therefore unable to handle the additional financial requirements that the sales will bring upon them. Without financial stability within the key terminal operator sector of the video gaming industry, video gaming in Illinois will prove incapable of completely fulfilling its statutory purpose of "assisting economic development and promoting Illinois tourism" [230 ILCS 10/2 (a).]

This rule will provide needed transparency and consistency with respect to terminal operator transactions and ensure that ethical standards are maintained. The very foundation of gaming regulation is knowledge of who holds ownership of gaming interests. Without it, the pyramid of effective regulation tumbles. The present rule will provide both the Board and general public with this knowledge and the accountability and confidence that flow from it.

The rulemaking contains the following specific provisions:

Subparagraph (a) provides that an ownership interest in a licensed terminal operator may only be transferred with leave of the Board unless all material terms of the prospective transaction were fully disclosed to the Board on or before November 7, 2019. Leave of the Board is also required for the transfer of any ownership interest in a business entity (other than a publicly traded company) that has an interest in a licensed terminal operator unless all material terms of the prospective transaction were disclosed to the Board on or before November 7, 2019.

Under subsection (a), the type of information that must be provided to the Board in connection with the acquisition of an ownership interest depends on whether it is a terminal operator or another type of business entity that is seeking to acquire a terminal operator interest. A business entity other than a terminal operator that is seeking to acquire an interest in a terminal operator of less than 100% must complete either a Business Entity or a Personal Disclosure form as appropriate, as well as any other information specifically requested by the Board. If the business entity seeks 100% ownership of a terminal operator, it must complete a terminal operator application. A licensed terminal operator seeking to acquire ownership in another licensed terminal operator must provide any information requested by the Board.

The subsection requires the Board to investigate persons acquiring an ownership interest in a licensed terminal operator, with the costs of the investigation to be borne by the person seeking to acquire the ownership interest.

The Board shall grant leave for a transfer of ownership interest only after it is satisfied that the transaction: Does not adversely affect public confidence and trust in gaming; Does not pose a threat to the public interests of the State or to the security and integrity of video gaming; and Does not discredit or tend to discredit the gaming industry or the State of Illinois.

The subsection establishes standards to guide the Board in deciding whether to grant a transfer of ownership interest among terminal operators. In making this determination, the Board shall consider: Licensing criteria contained in the Video Gaming Act; Section 1800.420 of the video gaming rules (Qualifications for Licensure); and Undue economic concentration.

If the Board denies a transfer of ownership interests, the Board shall issue a Notice of Denial and the denied entity may request a hearing under Subpart F (Denials of Applications for Licensure).

Subsection (b) deals with the transfer of video gaming assets. It provides that, except for equipment, no video gaming asset, including the right to place video gaming terminals at a licensed establishment, may be assigned or transferred to another terminal operator without prior approval from the Administrator.

Subsection (c) establishes standards to be followed by the Administrator in denying a licensed terminal operator's request to transfer or assign a video gaming asset to another licensed terminal operator. The Administrator shall issue such a denial only if the Administrator finds that the request is not in the best interest of gaming in the State. In making this determination, the Administrator shall consider all relevant factors, including but not limited to: Undue economic concentration; Integrity of the State's video gaming industry; and Status of licensee with the Board.

Subsection (d) requires the Administrator to notify the parties in writing whenever he or she denies a request to transfer or assign a video gaming asset.

Finally, subsection (e) provides that following a denial by the Administrator of a request to transfer or assign a video gaming asset, the terminal operator may only transfer or assign the asset with leave from the Board.

For questions or to submit comments, contact Agostino Lorenzini General Counsel Illinois Gaming Board 160 North LaSalle Street Chicago IL 60601 fax: 312/814-7253 Agostino.lorenzini@igb.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 January 6, 2020.   

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The Pollution Control Board proposed amendments which will impact transporters of special waste and empty portable devices or containers:

The POLLUTION CONTROL BOARD proposed amendments to the Part titled Special Waste Hauling (35 IAC 809; 43 Ill Reg 13361) that permit use of an Illinois Environmental Protection Agency prescribed manifest form by haulers of non-hazardous special waste as an alternative to the more burdensome and costly USEPA Uniform Hazardous Waste Manifest (which is still required for hazardous special waste shipments).

Bottom Line:  The proposed amendments are intended to allow Illinois transporters of State-regulated non-hazardous special waste to obtain and use functionally identical manifests to track such waste while avoiding the significant costs and burdens associated with utilization of Unites States Environmental Protection Agency's e-Manifest system.

The Board will accept written public comments on this proposal for a period of at least 45 days after the date of publication in the Illinois Register. Public comments must be filed with the Clerk of the Board. Public comments should reference Docket R19-18 and be addressed to: Clerk's Office. Illinois Pollution Control Board JRTC 100 W. Randolph St., Suite 11-500 Chicago IL 60601.  Public comments may also be filed electronically through the Clerk's Office On-Line (COOL) on the Board's website at pcb.illinois.gov. Interested persons may request copies of the Board's opinion and order in R19-18 by calling the Clerk's office at 312/814-3620 or may download copies from the Board's Web site at pcb.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 January 6, 2020. 

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The Department of Revenue proposed amendments which will impact retailers who sell electronic cigarettes or smoking devices:        

The Department of Revenue proposed amendmentsto the Part titled Tobacco Products Tax Act of 1995 (86 IAC 660; 43 Ill Reg 13687) implementing provisions of Public Act 101-31. The rulemaking adds electronic cigarettes to the list of tobacco products subject to tax. Products included in the definition of electronic cigarettes include vape pens, pipes, hookahs, and any component or part that can be used to construct an electronic nicotine delivery system. Electronic cigarettes do not include products approved by the federal Food and Drug Administration as smoking cessation aids; asthma inhalers; or therapeutic medical cannabis smoking devices sold in licensed dispensaries. Effective 7/1/19, electronic cigarettes are taxed at 15% of the wholesale price and retailers selling electronic cigarettes must obtain a tobacco  VIDEO GAMING retailer or distributor license. Manufacturers of electronic cigarettes must obtain both retailer and distributor licenses if they meet the definition of a distributor. Out of State manufacturers and wholesalers must also register as distributors in Illinois if they have any physical presence in Illinois, such as an office or sales agents operating under their authority. The rulemaking also raises the tax on “little cigars” from 99 to 149 mills per cigar ($1.98 to $2.98 per pack of 20).

Bottom Line:  Sections 660.5 and 660.10 are Amended and Section 660.19 is created to implement changes to Tobacco Products Tax Act of 1995 made by PA 101-31. PA 101-31, effective July 1, 2019, increased the tax on little cigars from 99 mills per little cigar to 149 mills per little cigar ($1.98 per package of 20 little cigars to $2.98 per package of 20 little cigars). All moneys received by the Department under the Tobacco Products Tax Act from the additional 50 mills tax per little cigar are to be paid in accordance with Section 2 of the Cigarette Tax Act. PA 101-31 also defines "electronic cigarettes" and adds electronic cigarettes to the definition of "tobacco products." Beginning July 1, 2019, the tax on electronic cigarettes is at the rate of 15% of the wholesale price of electronic cigarettes sold or otherwise disposed of to consumers. A new Section 660.19 regarding electronic cigarettes is created to respond to changes made by the Act. Because retailers of electronic cigarettes historically have not been subject to regulation, the new section makes it clear that Part 660 applies to distributors and retailers of electronic cigarettes. The new section addresses electronic cigarettes marketed as therapeutic products under the Compassionate Use of Medical Cannabis Program Act, the taxation of components or parts that can be used to build electronic cigarettes, registration of distributors and retailers, and the content of invoices issued by distributors to retailers of electronic cigarettes. 

For questions or comments, you may 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 January 15, 2020.   

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The Illinois Gaming Board proposed an emergency amendment which will impact licensed video gaming locations: 

The Illinois Gaming Board adopted an emergency amendment to Video Gaming (General) (11 IAC 1800; 43 Ill Reg 13785) effective 11/7/19 for a maximum of 150 days. An identical proposed rulemaking appears in the December 2nd Illinois Register at 43 Ill Reg 13488. These rulemakings implement Public Act 101-318, which requires IGB to implement (within 90 days after the PA’s effective date of 8/9/19) rules for undercover compliance checks of licensed video gaming locations to determine whether they are serving alcoholic beverages to persons under 21 or permitting such persons to play video gaming terminals. “Confidential sources” who are 18 or 19 years of age may be used to carry out these investigations. These sources must be of good character, must undergo background checks and must not use disguises, wear beards or moustaches, or alter their appearance in any way. Confidential sources must sign consent and acknowledgement forms (included in the rule) and carry either a valid State ID issued by the Secretary of State or no identification at all. Fraudulent or fictitious ID cards cannot be used in any compliance operation. All confidential sources shall receive orientation training on use of video gaming terminals and on avoiding actions that constitute entrapment. Confidential sources may be paid in compliance with Illinois State Police policy for payment of undercover agents or sources. Funding sources may set specific conditions for expenditure and accounting of funds that the Board must meet before authorizing any disbursement. Funds used for underage compliance checks must be photocopied in advance and kept with the case file and all expenditures (including payment to the confidential source and purchases made by the confidential source) must be preapproved by the detail supervisor. Prior to each detail, a compliance check operation plan must be submitted to and approved by the Board investigator in charge (operations officer). If possible, compliance checks shall be conducted outside of the peak business hours of a licensed video gaming location. A photograph of the confidential source showing his or her appearance and dress shall be taken on each day/night of the operation. Each detail team shall include at least 4 IGB investigators in addition to the confidential source. Procedures for conducting and recording compliance checks and for responding when a violation is found are also included. The goal of these rules is to have IGB investigators visit all licensed video gaming locations in the State according to an annualized schedule that ensures random visitations.

Bottom Line:  Section 1800.2110 establishes the statutory basis for the emergency rulemaking. Section 1800.2120 sets forth program considerations. It requires Illinois Gaming Board (Board) investigators to undertake underage video gaming compliance checks with the goal of visiting all licensed video gaming locations in the State according to an annualized schedule that ensures random visitations. Board investigators may also initiate unscheduled operations based on a review of citizen reports or police complaints. Board investigators shall use operational plans and checklists. They are directed to seek legal advice, as appropriate, from the Board's general counsel. Section 1800.2130 deals with utilization of the confidential sources in underage compliance checks. These confidential sources shall be of good character, have no criminal history and an acceptable driving record. The confidential sources shall be either 18 or 19 years old. They shall be required to sign and understand Youth Participation and Underage Gambling Participant Acknowledgment forms as these are set forth in the exhibits contained in Sections 1800.EXHIBIT A and 1800.EXHIBIT B. Each confidential source shall be photographed to establish physical appearance. Confidential sources shall be searched and allowed to carry only a State ID issued by the Secretary of State or no identification. They shall agree to make all reasonable efforts to be available for hearings or court proceedings. Confidential sources shall receive orientations on utilization of video gaming terminals and on entrapment issues. All service as a confidential source shall be strictly voluntary. 

Section 1800.2140 authorizes confidential sources to be provided with funds issued in compliance with Illinois State Police policy, as well as other funds made available to the Board by means of State appropriations, State or federal agency grants, or other funding sources. Funding sources may impose specific conditions for expenditure and accounting. To assure proper use of the funds, the rule requires the following: photocopying in advance; no expenditures for food; pre-approval of all covert alcohol purchases; pre-approval of all confidential source payment; pre-approval by a detail supervisor of expenditures by a confidential source; and pre-approval of funds for surveillance. Section 1800.2150 establishes operational procedures for underage compliance checks. Operational plans shall be submitted prior to each detail and approved by the Board investigator serving as operations officer. A photograph shall be taken of the confidential source at the time of the compliance check operation showing his or her appearance and dress. This photograph shall be available for hearing, along with an investigator who took the photo or observed it being taken. Board investigators shall be assigned to each detail team, including a detail supervisor, covert investigator, handler of the confidential source, investigator assigned to identify and confront the employee responsible for monitoring the video gaming terminals, and additional investigators serving in a support capacity. The investigator/handler shall direct the confidential source to enter the licensed video gaming location alone after surveillance positions have been taken by the covert investigators. All attempts by the confidential source to gamble shall be monitored. The confidential source shall sit at a video gaming terminal (VGT) and play a minimum bet per hand for a pre-determined number of plays. After these plays have been completed, the confidential source shall obtain a voucher, exit the location, and give the voucher to investigators. Following the compliance check, reports shall be made by the investigators and confidential source. If a violation is found, an investigator shall identify himself or herself to the on-site manager, explain the nature of the violation, ascertain the identity of the employee monitoring the VGTs, and obtain licensee information, photographs, and all other necessary information. If no violation is found, the location shall be notified of this determination within 30 days. Section 1800.2160 addresses reporting and evidence. A separate report shall be generated for each licensed video gaming location found in violation. The report shall set forth details of the compliance operation and indicate whether it was scheduled or unscheduled. Evidence generated during a compliance check that results in a finding of violation shall be marked, transported, copied and secured at headquarters by the designated investigator.

Section 1800.2170 directs investigators engaging in underage compliance checks to comply with the directive in Section 79 of the VGA [230 ILCS 40/79] that they shall exercise their powers, to the fullest extent practicable, in cooperation with local law enforcement officials. Section 79 of the Video Gaming Act is directly relevant here because it is the local law enforcement officials, either city or county, who have primary responsibility to do underage alcohol checks, whereas Illinois Gaming Board investigators are entrusted with underage video gaming checks. Section 1800.EXHIBIT A contains "Exhibit A", the Youth Participation Consent form. Section 1800.EXHIBIT B contains "Exhibit B", the Underage Gambling Participant Acknowledgement Form.

For questions or to submit comments, contact Agostino Lorenzini General Counsel Illinois Gaming Board 160 North LaSalle Street Chicago IL 60601 fax: 312/814-7253 Agostino.lorenzini@igb.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 January 15, 2020.   

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The Office of the State Treasurer proposed amendments which will impact small business and non-profits with 25 or more employees:     

The OFFICE OF THE STATE TREASURER proposed amendments to Secure Choice Savings Plan (74 IAC 721; 43 Ill Reg 14069) updating the Secure Choice Savings Program to reflect recent legislation and other changes. The rulemaking adds traditional IRAs as an option (in addition to Roth IRAs), expands the definition of an employer eligible to participate in the Program to include client employers of professional employer organizations (PEOs; entities that handle personnel management for one or more workers who perform services for a client employer on an ongoing basis, rather than temporarily), and expands the definition of a qualified retirement plan to include Taft-Hartley plans (multi-employer, defined benefit pension plans). For purposes of the Program, wages paid to employees by a PEO on behalf of a client employer shall be deemed to have been paid by the client employer. PEOs shall annually provide the Treasurer with a list of all Illinois client employers with whom they have contracts; the Secure Choice Account Administrator will contact these clients to facilitate enrollment of their employees. For purposes of determining whether an employer has 25 or more employees (thereby making its employees eligible for automatic Program enrollment) total employee count will be based on employer contribution and wage reports submitted to the Department of Employment Security. Entities reporting at least 25 employees for all four quarters of the calendar year will be deemed to have met the 25-employee threshold; if fewer than 25 employees are reported for any quarter, the entity will not meet this threshold. The Illinois Secure Choice Savings Board shall submit its annual report by January 1 of the year following the fiscal year for which the report is made and shall make the report available on the Program website.

Bottom Line:  Businesses and not-for-profits that participate in Secure Choice will be required to facilitate the payroll deduction in the program for each of their employees but will not have any managerial responsibilities.  This rulemaking updates the existing rule to provide guidance on private employment organizations (PEO's) and include Taft-Hartley plans within the definition of a qualified retirement plan. Additionally, this rulemaking makes technical changes, including adding traditional IRAs as an option under the Secure Choice Program pursuant to Senate Bill 1787, which passed the General Assembly on May 23, 2019. 

For questions or comments contact Sara Meek, Office of the State Treasurer, 219 State House, Springfield, IL 62706, 217/524-0530, 217.524.0530 or email SMeek@Illinoistreasurer.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 1/20/20.

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The Chief Procurement Officer for Higher Education proposed an amendment which will impact small businesses seeking procurement contracts with Illinois public higher education institutions:

 

The CHIEF PROCUREMENT OFFICER FOR HIGHER EDUCATION proposed an amendment to the Part titled Chief Procurement Officer for Public Institutions of Higher Education Standard Procurement (44 IAC 4; 43 Ill Reg 13841) clarifying the procedure for adjusting the small purchase threshold (below which competitive bidding is not required; currently, $100,000) for inflation. The rulemaking also clarifies procedures for conducting small purchases and determining whether a contract is under the small purchase limit and eliminates a requirement that universities annually submit their small purchase procurement procedures to the CPO-HE for approval.

Bottom Line:  The Chief Procurement Office for Public Institutions of Higher Education relied on 30 ILCS 500/20-20 to compose the rulemaking. This Section authorizes the small purchase maximum to be modified by rule when recommended by the Procurement Policy Board. A copy of the Board's recommendation is available for review with the Chief Procurement Office for Public Institutions of Higher Education at 401 S. Spring, Room 520 Stratton Office Building, Springfield IL 62706. 

For questions or comments contact Ben Bagby, CPO-HE, 401 South Spring Street, 520 Stratton Building, Springfield, IL 62706, 217.720.1555 or email Ben.Bagby@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 1/20/20.