June 5, 2020

State and Local Tax  

This Week 

The June 5  edition of the Illinois Register did not contain any proposed or adopted rulemakings by the Illinois Department of Revenue or the Department of Commerce and Economic Opportunity.

Today's Illinois Register contains a number of objections to, and suspensions of, emergency rulemakings of  the Secretary of State by the Illinois General Assembly's Joint Committee on Administrative Rules (JCAR).  Included among the emergency rules suspended by JCAR are emergency rules amending the Business Corporation Act rules that were published in the May 8 edition of the Illinois Register.

The May 8 emergency rulemaking by the Secretary of State was described as follows:

"This emergency amendment to the emergency rule authorizes the Secretary of State to waive the  approval or disapproval and 10-day notice requirement for paper filings, as well as, waive the 24 hour filing requirement for expedited filings, providing for "within 24 hours, or  as soon as possible thereafter", for the duration of the disaster proclaimed by the Governor in Gubernatorial Proclamation number 2020-038 issued on March 9, 2020, and for a period of 90 days thereafter, filing deadlines for materials required to be filed with the Secretary of State pursuant to Chapter 805 of the Illinois Compiled Statutes."   

The JCAR objection and suspension notice states as follows:

"At its meeting on May 20, 2020, the Joint Committee on Administrative Rules voted to object to and suspend the above-referenced emergency amendment to emergency rule (14 Ill. Adm. Code 150; 44 Ill. Reg. 7944) and to notify the Secretary of State Administrative Code Unit of the Suspension of the emergency rule. The reasons for the Suspension are as follows:

"The rulemaking sets aside statutory timeframes in which SOS is to review, approve and effectuate official paper filings of documents by businesses. During a declared disaster, statutory requirements can be waived pursuant to Executive Order by the Governor, but not by agency rule."

"The suspended emergency rule may not be enforced by the Secretary of State for any reason, nor may the Department file with the Secretary of State Administrative Code Unit any rule having substantially the same purpose and effect as the suspended rule, for as long as the Suspension remains in effect."

I'm a bit perplexed by the JCAR objection and suspension. First, I'm not sure that I agree with the conclusion of JCAR that the Secretary of State lacks the legal authority for an emergency rulemaking suspending and extending the due dates for for certain filings during a pandemic in which their offices were closed because of a stay-at-home order issued by the Governor.  The Secretary's policies about the extension of certain due dates clearly are "rules" as that term is defined by Section 1-70  of the Illinois Administrative Procedure.

Second, in my estimation JCAR has exceeded its authority by suspending the emergency rules.  The Illinois Administrative Procedure Act authorized JCAR to suspend an emergency rule if the rule is found to be objectionable, and the rule constitutes a serious threat the public interest, safety or welfare.  I don't see how an emergency rule extending certain statutory due during a pandemic constitutes a serious threat the public interest, safety or welfare.

Third, I remain of the opinion the portion of the Illinois Administrative Procedure Act that authorizes JCAR to block the filing of proposed rules or suspend emergency rules is constitutionally infirm.  I believe there is a separation of powers issue here.

Fourth, I'm not sure what JCAR is suggesting would have been the proper course of action in this instance.  Should the Secretary of State have not filed emergency rules and issued some sort of bulletin as did the Illinois Department of Revenue when IDOR suspended the income tax return filing and payment deadlines?  Apparently, it was proper for IDOR to suspend filing deadlines by bulletin, but it was improper for the Secretary of State to suspend deadlines by emergency rule.

Finally, I'm not sure where this action by JCAR leaves anyone who was subject to the filing requirements that the Secretary attempted to extend by emergency rulemaking. This latest emergency rulemaking was an emergency amendment of an emergency rule adopted in April 3 edition of the Illinois Register.  

The April 3 emergency rulemaking extended deadlines for materials required to be filed with the Secretary of State on or after March 17, for the duration of the disaster proclaimed by the Governor on March 9 and for a period of 30 days thereafter. 

Court cases

None this week

Tax Tribunal 

No new decisions were issued by the Tribunal this week.  One new case was filed this week.  It is a pro se challenge to a personal liability penalty assessment.