DCEO improperly withheld tax incentive applications under 7(1)(f)

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Dear Mr. Volk and Mr. Seymour:

This determination is issued pursuant to section 9.5(f) of the Freedom of Information Act (FOIA) (5 ILCS 140/9.5(f) (West 2024)). For the reasons that follow, the Public Access Bureau concludes that the Illinois Department of Commerce and Economic Opportunity ( DCEO) improperly withheld the records responsive to Mr. John Volk's February 18, 2025, FOIA request.

On that date, Mr. Volk submitted a FOIA request to DCEO seeking copies of the applications for the Local Journalism Sustainability Tax Incentive Program for nine listed entities, including attachments to the applications. In his request, Mr. Volk noted that DCEO had denied two previous FOIA requests for the same records because it asserted that the applications were not yet approved.

The records in question are preliminary because they contain incomplete information and the impressions and recommendations of the Department and its attorneys. Disclosure of these records, at this time, would therefore reveal the Department' s predecisional deliberative process involved in the creation and enforcement of its policies and would undermine the ability to discuss policy as it is being formed.[ 3]

On February 26, 2025, Mr. Volk submitted the above- referenced Request for Review contesting the denial of his request. Mr. Volk stated: " I'm unclear how those private deliberations would be disclosed by sharing documents the Department received from non- government organizations." 4 On March 3, 2025, this office forwarded a copy of the Request for Review to DCEO and asked it to provide an unredacted copy of the withheld records for this office's confidential review, as well as a detailed explanation of the factual and legal bases for the applicability of section 7(1)(f) of FOIA to the records.

On March 11, 2025, DCEO provided this office with copies of responsive records as well as its written response. On March 12, 2025, this office forwarded a copy of DCEO' s written response to Mr. Volk and notified him of his opportunity to reply; he replied on March 19, 2025.

DETERMINATION

All records in the custody or possession of a public body are presumed to be open to inspection or copying." 5 ILCS 140/1.2 (West 2024); see also Southern Illinoisan v.

Section 7(1)(f) of FOIA exempts from disclosure "[ p]reliminary drafts, notes, recommendations, memoranda and other records in which opinions are expressed, or policies or actions are formulated, except that a specific record or relevant portion of a record shall not be exempt when the record is publicly cited and identified by the head of the public body." The section 7(1)(f) exemption applies to "inter- and intra-agency predecisional and deliberative material." Harwood v. McDonough, 344 Ill. App. 3d 242, 247 (2003). Section 7(1)(f) is intended to protect the communications process and encourage frank and open discussion among agency employees before a final decision is made." ( Emphasis added.) Harwood, 344 Ill. App. 3d at 248. "[ I]n order to be exempt under this provision, the responsive materials must be both (1) inter or intra agency and (2) predecisional and deliberative." ( Emphasis added.) Fisher v. Office of the Illinois Attorney General, 2021 IL App (1st) 200225, ¶ 19; see also Department of Interior v. Klamath Water Users Protective Ass'n, 532 U.S. 1, 8 (2001) ( source of a record must be a Government agency[ ]" to be exempt under the Federal FOIA deliberative process exemption ( 5 U.S.C. § 552(b)(5) (2018)). The section 7(1)(f) exemption encompasses communications between government agencies and outside consultants whose analyses and recommendations ' played essentially the same part in an agency' s process of deliberation as documents prepared by agency personnel might have done.'" Harwood, 344 Ill. App. 3d at 248 quoting Klamath, 532 U.S. at 10 (exemption extends to third party only when " the consultant does not represent an interest of its own, or the interest of any other client, when it advises the agency that hires it.")).

In its response to this office, DCEO argued that Harwood supports its denial because the court determined that a final report the public body relied upon in a decision- making process was considered preliminary for purposes of section 7(1)(f). While Harwood does stand for the proposition that a finalized document may be withheld under section 7(1)(f) if it is a deliberative record generated to inform a public body's decision- making process, the Harwood court's conclusion that the report was exempt hinged on the fact that it was prepared by a consultant which represented the public body's interests rather than any interests of its own or of other clients. Harwood, 344 Ill. App. 3d at 248. Here, in contrast, the tax credit applicants submitted applications to advance their own interests, rather than just to serve the interests of DCEO.

DCEO further argued that section 7(1)(f) of FOIA applies to the withheld records for the following reasons:

Part of the inter-and intra- agency deliberative process involves requesting follow up or additional information in order to determine whether the Application should be approved or denied. Until all the Department' s questions are answered, the decision could tip in either direction toward denial or approval. Depending on the Applicant' s response to these deliberative questions, the Applicant' s submitted documents may change from their initial submission. Therefore, the application materials are not final, until the Department has made a decision on whether to approve or deny the Application. Up until that point, the application is pre- decisional and inter- and intra- agency deliberative material.[ 5]

DCEO provided several examples of additional follow-up with applicants that may be needed and contended that determining the extent to which an application must be supplemented is itself a deliberative process. Although DCEO' s review of applications for completeness and other issues may be a deliberative process and records it generates and circulates internally during that process may fall under section 7(1)(f), the issue in this matter is whether the third-party applications themselves are inter- or intra-agency predecisional and deliberative records.

In reply, Mr. Volk contended that "[ t]here should be no opinions expressed, nor policies or actions formulated within these standard documents submitted from private entities." 6 He also argued that "[ t]he core documents I am requesting are not documents prepared by the State of Illinois but are documents prepared by private entities in the possession of the State." 7 Nonetheless, and although DCEO did not cite this provision, the program terms and conditions of the Local Journalism Sustainability Act (35 ILCS 18/40-25 (West 2024)) provide:

Any documentary materials or data made available or received from an applicant by any agent or employee of the Department are confidential and are not public records to the extent that the materials or data consist of commercial or financial information regarding the operation of, or the production of, the applicant or recipient of any tax credit award under this Act.

Because that provision provides that the " commercial or financial information regarding the operation of, or the production of, the applicant[ ]" is confidential, that information is exempt from disclosure pursuant to section 7(1)(a) of FOIA. 8 This office requests that DCEO disclose the responsive records with such information redacted.

The Public Access Counselor has determined that resolution of this matter does not require the issuance of a binding opinion. This letter shall serve to close this matter. If you have any questions, please contact me at katherine. goldsmith@ilag. gov.

Very truly yours, KATIE GOLDSMITH Assistant Attorney General Public Access Bureau