Taxes & Incentives

(Illinois Register, August 12, 2016)
The Department of Commerce and Economic Opportunity (DCEO) adopted amendments to Enterprise Zones and High Impact Business Programs (14 IAC 520; 40 Ill Reg 6627) effective 7/29/16. The amendments make technical revisions to more accurately reflect scoring of Enterprise Zone applications; allow successfully reapplied zones that expired or terminated solely by operation of law to continue to be eligible for exemptions for up to 5 years; and prescribes provisions for application/compliance for enterprise zone benefits as a certified aircraft maintenance facility.

(Illinois Register, August 12, 2016)
The Department of Commerce and Economic Opportunity (DCEO) adopted amendments to Illinois Promotion Act Programs (14 IAC 510; 40 Ill Reg 6907) effective 7/29/16, implementing Public Act 99-476, creating the Municipal Convention Center and Sports Facility Incentive Grant Program. The intent of the amendments and the Act is to provide grants to offer incentives for the purpose of attracting conventions, meetings and trade shows to some municipal convention centers and attracting sporting events to municipal amateur sports facilities. The amendments details eligible applicants, allocation of appropriations, funding limitations, annual certification and certification supporting documentation.

(Illinois Register, September 23, 2016)
The Department of Revenue (DOR) adopted an amendment to Income Tax (86 Ill Adm Code 100; 40 Ill Reg 6676) effective 9/7/16 that limits the automatic, on request 6-month extension (7 months for corporations) for filing to taxpayers whose returns are due by the fifteenth day of the fourth month after the end of the taxable year (e.g., April 15 for calendar year based returns). Additional extensions are in accord with IRS extensions. Any income tax payer may be affected.

(Illinois Register, September 23, 2016)
The Department of Revenue (DOR) adopted an amendment to Retailers’ Occupation Tax (86 IAC 130; 40 Ill Reg 5853) effective 9/9/16 codifying an Appellate Court ruling in Nokomis Quarry Co. v. Department of Revenue, in which the Court held that machinery and equipment used in extractive activities, such as blasting, may qualify for the manufacturing machinery and equipment exemption from the tax. The exemption applies when blasting is deliberately and systematically performed with specific, desired results, and the process results in a new product of tangible personal property with a different form with new qualities or combinations. The amendment also implements PA 98-583, which excludes from the exemption equipment used in the generation of electricity, to generate or treat natural or artificial gas, or water for sale that is delivered by pipes, pipelines or mains.

(Illinois Register, September 23, 2016)
The Department of Revenue (DOR) adopted an amendment to Use Tax (86 IAC 150; 40 Ill Reg 5877), effective 9/12/16, implementing PA 98- 1089. The rulemaking governs the establishment of nexus for click-through online transactions and details the process that DOR will require in order to rebut the presumption that a retailer is maintaining a place of business in Illinois, thereby subjecting the transaction to the tax.

Business & Regional Development Programs

(Illinois Register, July 29, 2016)
Executive Order 2016-8: Provides that the Department of Central Management Services shall implement recommendations from the State of Illinois 2015 Disparity and Availability Study by: developing a Mentor/Protégé program to foster the development and mentoring of minority and female owned businesses; implementing an electronic contract data collection and monitoring system to track certain data included in State contracts relating to the utilization of minority and female owned businesses; enhancing access to current State-sponsored bonding and financial assistance programs; reviewing the process for placing minority and female owned business participation goals on State contracts using the availability estimates in the 2015 Disparity and Availability Study; implementing procurement forecasts in order to increase minority and female owned businesses’ access to State contracting information; and, where sheltered markets could be an appropriate solution to identified disparities in industry-specific areas, establishing sheltered markets pursuant to the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. Contains other provisions addressing access to State contracting opportunities for minority and female owned businesses. Provides that on July 1 of each year (beginning on July 1, 2017), the Department shall report annually to the Governor and the Chief Procurement Officer on its findings and progress. Contains provisions regarding: severability; savings; and prior executive orders. Effective immediately.

(Illinois Register, July 29, 2016)
Executive Order 2016-9: Rescinds Executive Order 2013-03, dissolving the Millennium Reserve Steering Committee. Reinstates the Millennium Reserve State Agency Task Force created under Executive Order 2013-03. Provides for the composition of the Task Force, for the Director of Natural Resources, or his or her designee, to serve as the chairperson, and for the Department of Natural Resources to provide administrative support for the Task Force. Allows the Task Force to consider the recommendations, action plan, priorities, and priority projects being advanced by the successor organization to the Millennium Reserve Steering Committee and other Millennium Reserve Initiative partners. Provides that the Task Force shall: identify barriers faced by Millennium Reserve Initiative partners to accessing information, technical assistance, and funding from the Task Force’s member agencies; develop sustainable policies and programs to address those barriers within each agency’s mission, authorities, and existing resources; and promote and facilitate public-private partnerships to advance the Millennium Reserve Initiative’s goals. Provides that the Task Force shall issue to the Governor an annual report on June 30, 2017 and a final report on June 30, 2018, after which it shall be dissolved. Contains provisions regarding: the Freedom of Information Act; severability; and savings. Effective immediately.

Workers’ Compensation

(Illinois Register, July 29, 2016)
The Workers’ Compensation Commission (WCC) proposed a new Part titled Electronic Filing (50 IAC 9015; 40 Ill Reg 10191) and proposed amendments to the following 9 Parts: Pre-Arbitration (50 IAC 9020; 40 Ill Reg 10199); Arbitration (50 IAC 9030; 40 Ill Reg 10221); Review (50 IAC 9040; 40 Ill Reg 10237); Oral Arguments (50 IAC 9050; 40 Ill Reg 10252); Judicial Review (50 IAC 9060; 40 Ill Reg 10256); Settlement Contracts and Lump Sum Petitions (50 IAC 9070; 40 Ill Reg 10260); Disciplining of Attorneys; Agents (50 IAC 9090; 40 Ill Reg 10268); Insurance Regulations (50 IAC 9100; 40 Ill Reg 10272); and Miscellaneous (50 IAC 9110; 40 Ill Reg 10307).

The new Part 9015 establishes rules for electronic formatting and filing of documents and administrative procedures by which non-attorney pro se (selfrepresenting) litigants may gain access to the electronic system. Users must first register with the Commission and provide all information required. If a statute, regulation or case law requires information to be in written form, or provides for certain consequences if it is not, an electronic record satisfies that rule of law. Documents must be submitted in the format prescribed by the Commission, or in PDF format directly from the program creating a document, rather than as a scanned image of a paper document. All electronically filed documents shall, as far as possible, be formatted in accordance with this Part. Documents with separate WC numbers must be filed individually. Documents not complying with the Electronic Commerce Security Act or this Part may be rejected. The transmission date and time shall determine the electronic file mark (equivalent to a time stamp on a printed document). By filing a document electronically, the registered user thereby certifies that the document has been checked for and is free of viruses or malware.  Electronic signatures are deemed to satisfy any legal requirement for a signed document. If an electronic filing is not received, the Commission may, upon satisfactory proof, permit the document to be filed again later, effective on the date the filing was first attempted.

Reasons for permitting a subsequent filing may include an error in the transmission that was unknown to the transmitting party; a rejection of the document by the Commission; an erroneous exclusion of a party from the service list; or other technical problems experienced by the filing party.

Part 9020, not revised since 1996, is being updated to address new technology, make stylistic changes, and clarify existing procedures of the Commission. Filing requirements for various documents and pleadings, and other references, are aligned with the provisions in new Part 9015. Documents not filed with all parties shall be considered ex parte communications and disregarded.

The Part 9030 amendments address procedural changes regarding WC arbitration hearings. All cases will now be assigned on a random basis (presently, random assignment occurs only in Cook County). Motions to consolidate a claim and cases re-filed are to be retained by the Arbitrator first assigned to that claim. Requests for a trial may be made by any party at the monthly status call on which the case appears. The Commission must first hold a hearing before issuing orders for taking depositions. The rulemaking clarifies that a proposed decision shall not be considered an admission by a party and shall not be made part of the record. Written decisions shall not contain an Arbitrator’s findings of fact and conclusions of law, separately stated, unless requested by a party.

Part 9040, concerning Petitions for Review, includes the following changes: allows petitions to be filed electronically; makes numerous editing and technical corrections to this Part (last amended in 1990); states that petitions filed under named Sections of the Act shall be assigned to the original hearing Commissioner or the Commissioner assigned to the particular territory where the original hearing was held; states that interrogatories as special findings on review must be filed at the same time as the parties’ Statement of Exceptions (rather than 5 days prior to oral argument); and clarifies that if more than one party files for review, each party may file its own Statement of Exceptions and supporting briefs within 30 days from the Return Date of Review (rather than the date of closing of Proofs on Review).

Amendments to Part 9050 (concerning oral arguments) state that the right to oral argument requires compliance with the provisions for Statements of Exceptions, supporting briefs and abstracts contained in 50 IAC 9040, and make technical changes to the Part, which has not been updated since 1982.

The Part 9060 rulemaking, concerning judicial review of Commission actions, requires a party seeking such review to submit to the court clerk proof that a notice of intent to file for judicial review was filed with the Commission. New provisions require a party seeking review to file a copy of any remanding Order with the Commission within 30 days after receipt of the Order from the reviewing court, with a notice of filing provided to all parties. Upon receipt of such Order, the Commission shall docket the matter for hearing in the same manner as Petitions for Review, and when practical, the case shall be returned to the original Commissioner.

Part 9070 requires 4 settlement contracts to be filed, but only one copy need be provided for each additional case number listed in the settlement contract. Settlement contract forms are available at a website address listed in the rulemaking. The rulemaking removes mandatory reporting requirements regarding injuries to an eye and how dependents of a decedent will be supported. When a settlement contract has been rejected by a Commissioner and re-assigned to an Arbitrator for hearing, no settlement contract may be approved by any Arbitrator. Parties may reserve the right to amend settlement contracts by stipulation and order of a Commissioner to conform to regulatory requirements such as Medicare and Social Security.

In Part 9090, the Commission is striking its provisions regarding attorney discipline and simply referring such cases to the Illinois Attorney Registration and Disciplinary Commission.

The Part 9100 amendments require companies that provide WC insurance benefits to provide for each client the company’s name, FEIN, and description of the company’s business operations in a manner satisfactory to the Commission. In determining whether facilities are adequate for investigation and payment of claims, a new factor is added: whether a current estimate of the expected cost for each claim is established based on facts of each claim, medical information and provisions of the Act. The estimation is not to be trended, based on discounted present value, or actuarially developed. The minimum security for self-insurance programs is $200,000. The termination of an employer’s selfinsurance does not relieve the employer of its responsibility to provide the Commission with security, and security will be released when the Chairman of the Commission determines that the employer has no outstanding liability under the WC or Occupational Diseases Acts. The Commission shall have the right to obtain reimbursement for any compensation obligations paid under the Injured Workers’ Benefit Fund (IWBF) from any employer entity. To qualify for payment from the IBWF, a claimant must file an Application for Adjustment of Claim against the employer and must have named the State Treasurer as exofficio custodian of the IBWF as a party respondent. Two new methods of demonstrating compliance with the Act are added: 1) submitting a copy of a pooling agreement showing employer membership in a licensed group workers’ compensation pool; 2) for a firm that loans employees or supplies workers’ compensation benefits, the firm must submit, for each client, the company’s name, FEIN, address, etc. Procedures for conducting work-stop hearings triggered by an employer’s failure to provide workers’ compensation insurance are also prescribed.

Part 9110 extends from 120 to 365 days the amount of time a worker can be incapacitated before a vocational rehabilitation report is required. Petitions to Suspend Compensation for Failure to Submit to Proper Medical Treatment shall be docketed and set for hearing in the same manner as Petitions for Immediate Hearing in 50 IAC 9020.80.

The changes in policy and procedure in these 10 rulemakings are numerous and may affect small businesses.

(Illinois Register, July 29, 2016)
The Workers’ Compensation Commission (WCC) proposed repeal of the Part titled Freedom of Information Act (2 IAC 2026; 40 Ill Reg 10149) and proposed a new Part titled Access to Records of the Workers’ Compensation Commission (2 IAC 2026; 40 Ill Reg 10168). These rulemakings update Freedom of Information Act (FOIA) procedures by which interested persons may inspect or request copies of the Commission’s public records.