Rep. Gregory Harris

Filed: 6/29/2017

10000SB0009ham002

LRB100 06347 HLH 27841 a

1 AMENDMENT TO SENATE BILL 9

2 AMENDMENT NO. ______. Amend Senate Bill 9 by replacing

3 everything after the enacting clause with the following:

4 "ARTICLE 1. STATE TAX LIEN REGISTRATION ACT

5 Section 1-1. Short title. This Act may be cited as the

6 State Tax Lien Registration Act. References in this Article to

7 "this Act" mean this Article.

8 Section 1-5. Purpose.

9 (a) The purpose of this Act is to provide a uniform

10 statewide system for filing notices of tax liens that are in

11 favor of or enforced by the Department. The Department shall

12 maintain the system.

13 (b) The scope of this Act is limited to tax liens in real

14 property and personal property, tangible and intangible, of

15 taxpayers or other persons against whom the Department has

10000SB0009ham002

- 2 -

LRB100 06347 HLH 27841 a

1 liens pursuant to law for unpaid final tax liabilities

2 administered by the Department.

3 (c) Nothing in this Act shall be construed to invalidate

4 any lien filed by the Department with a county recorder of

5 deeds prior to the effective date of this Act.

6 Section 1-10. Definitions.

7 "Debtor" means a taxpayer or other person against whom

8 there is an unpaid final tax liability collectible by the

9 Department.

10 "Department" means the Department of Revenue.

11 "Final tax liability" means any State tax, fee, penalty, or

12 interest owed by a person to the Department where the

13 assessment of the liability is not subject to any further

14 timely filed administrative or judicial review.

15 "Last-known address of the debtor" means the address of the

16 debtor appearing in the records of the Department at the time

17 the notice of tax lien is filed in the registry.

18 "Person" means any natural individual, firm, partnership,

19 association, joint stock company, joint adventure, public or

20 private corporation, limited liability company, or a receiver,

21 executor, trustee, guardian or other representative appointed

22 by order of any court.

23 "Registry" or "State Tax Lien Registry" means the public

24 database maintained by the Department wherein tax liens are

25 filed in favor of and enforced by the Department.

10000SB0009ham002

- 3 -

LRB100 06347 HLH 27841 a

1 Section 1-15. Registry established.

2 (a) The Department shall establish and maintain a public

3 database known as the State Tax Lien Registry. If any person

4 neglects or refuses to pay any final tax liability, the

5 Department may file in the registry a notice of tax lien within

6 3 years from the date of the final tax liability.

7 (b) The notice of tax lien file shall include:

8 (1) the name and last-known address of the debtor;

9 (2) the name and address of the Department;

10 (3) the tax lien number assigned to the lien by the

11 Department; and

12 (4) the basis for the tax lien, including, but not

13 limited to, the amount owed by the debtor as of the date of

14 filing in the tax lien registry.

15 Section 1-20. Tax lien perfected.

16 (a) When a notice of tax lien is filed by the Department in

17 the registry, the tax lien is perfected and shall be attached

18 to all of the existing and after-acquired property of the

19 debtor, both real and personal, tangible and intangible, which

20 is located in any and all counties within the State of

21 Illinois.

22 (b) The amount of the tax lien shall be a debt due the

23 State of Illinois and shall remain a lien upon all property and

24 rights to property belonging to the debtor, both real and

10000SB0009ham002

- 4 -

LRB100 06347 HLH 27841 a

1 personal, tangible and intangible, which is located in any and

2 all counties within the State of Illinois. Interest and penalty

3 shall accrue on the tax lien at the same rate and with the same

4 restrictions, if any, as specified by statute for the accrual

5 of interest and penalty for the type of tax or taxes for which

6 the tax lien was issued.

7 Section 1-25. Time period of lien.

8 (a) A notice of tax lien shall be a lien upon the debtor's

9 property located anywhere in the State for a period of 20 years

10 from the date of filing unless it is sooner released by the

11 Department.

12 (b) A notice of release of tax lien filed in the registry

13 shall constitute a release of the tax lien within the

14 Department, the registry, and the county in which the tax lien

15 was previously filed. The information contained on the registry

16 shall be controlling, and the registry shall supersede the

17 records of any county.

18 Section 1-30. Registry format.

19 (a) The Department shall maintain notices of tax liens

20 filed in the registry after the effective date of this Act in

21 its information management system in a form that permits the

22 information to be readily accessible in an electronic form

23 through the Internet and to be reduced to printed form. The

24 electronic and printed form shall include the following

10000SB0009ham002

- 5 -

LRB100 06347 HLH 27841 a

1 information:

2 (1) the name of the taxpayer;

3 (2) the name and address of the Department;

4 (3) the tax lien number assigned to the lien by the

5 Department;

6 (4) the amount of the taxes, penalties, interest, and

7 fees indicated due on the notice of tax lien received from

8 the Department; and

9 (5) the date and time of filing.

10 (b) Information in the registry shall be searchable by name

11 of debtor or by tax lien number. The Department shall not

12 charge for access to information in the registry.

13 (c) The Department is authorized to sell at bulk the

14 information appearing on the tax lien registry. In selling the

15 information, the Department shall adopt rules governing the

16 process by which the information will be sold and the media or

17 method by which it will be available to the purchaser and shall

18 set a price for the information that will at least cover the

19 cost of producing the information. The proceeds from the sale

20 of bulk information shall be retained by the Department and

21 used to cover its cost to produce the information sold and to

22 maintain the registry.

23 (d) Registry information, whether accessed by name of

24 debtor or by tax lien number at no charge, through a bulk sale

25 of information, or by other means, shall not be used for

26 survey, marketing, or solicitation purposes. Survey,

10000SB0009ham002

- 6 -

LRB100 06347 HLH 27841 a

1 marketing, or solicitation purpose does not include any action

2 by the Department or its authorized agent to collect a debt

3 represented by a tax lien appearing in the registry. The

4 Attorney General may bring an action in any court of competent

5 jurisdiction to enjoin the unlawful use of registry information

6 for survey, marketing, or solicitation purposes and to recover

7 the cost of such action, including reasonable attorney's fees.

8 Section 1-35. Rulemaking. The Department may adopt rules in

9 accordance with the Illinois Administrative Procedure Act to

10 enforce the provisions of this Act.

11 Section 1-40. Conflicts. In the event of conflict between

12 this Act and any other law, this Act shall control.

13 ARTICLE 15. REVISED UNIFORM UNCLAIMED PROPERTY ACT

14 ARTICLE 1. GENERAL PROVISIONS

15 Section 15-101. Short title. This Act may be cited as the

16 Revised Uniform Unclaimed Property Act. References in this

17 Article 15 (the Revised Uniform Unclaimed Property Act) to

18 "this Act" mean this Article 15 (the Revised Uniform Unclaimed

19 Property Act).

20 Section 15-102. Definitions. In this Act:

10000SB0009ham002

- 7 -

LRB100 06347 HLH 27841 a

1 (1) "Administrator" means the State Treasurer.

2 (2) "Administrator's agent" means a person with which

3 the administrator contracts to conduct an examination

4 under Article 10 on behalf of the administrator. The term

5 includes an independent contractor of the person and each

6 individual participating in the examination on behalf of

7 the person or contractor.

8 (2.5) "Affiliated group of merchants" means 2 or more

9 affiliated merchants or other persons that are related by

10 common ownership or common corporate control and that share

11 the same name, mark, or logo. The term also applies to 2 or

12 more merchants or other persons that agree among

13 themselves, by contract or otherwise, to redeem cards,

14 codes, or other devices bearing the same name, mark, or

15 logo (other than the mark, logo, or brand of a payment

16 network), for the purchase of goods or services solely at

17 such merchants or persons. However, merchants or other

18 persons are not considered to be affiliated merely because

19 they agree to accept a card that bears the mark, logo, or

20 brand of a payment network.

21 (3) "Apparent owner" means a person whose name appears

22 on the records of a holder as the owner of property held,

23 issued, or owing by the holder.

24 (4) "Business association" means a corporation, joint

25 stock company, investment company, unincorporated

26 association, joint venture, limited liability company,

10000SB0009ham002

- 8 -

LRB100 06347 HLH 27841 a

1 business trust, trust company, land bank, safe deposit

2 company, safekeeping depository, financial organization,

3 insurance company, federally chartered entity, utility,

4 sole proprietorship, or other business entity, whether or

5 not for profit.

6 (5) "Confidential information" means information that

7 is "personal information" under the Personal Information

8 Protection Act, "private information" under the Freedom of

9 Information Act or personal information contained within

10 public records, the disclosure of which would constitute a

11 clearly unwarranted invasion of personal privacy, unless

12 the disclosure is consented to in writing by the individual

13 subjects of the information as provided in the Freedom of

14 Information Act.

15 (6) "Domicile" means:

16 (A) for a corporation, the state of its

17 incorporation;

18 (B) for a business association whose formation

19 requires a filing with a state, other than a

20 corporation, the state of its filing;

21 (C) for a federally chartered entity or an

22 investment company registered under the Investment

23 Company Act of 1940, the state of its home office; and

24 (D) for any other holder, the state of its

25 principal place of business.

26 (7) "Electronic" means relating to technology having

10000SB0009ham002

- 9 -

LRB100 06347 HLH 27841 a

1 electrical, digital, magnetic, wireless, optical,

2 electromagnetic, or similar capabilities.

3 (8) "Electronic mail" means a communication by

4 electronic means which is automatically retained and

5 stored and may be readily accessed or retrieved.

6 (9) "Financial organization" means a bank, savings

7 bank, corporate fiduciary, currency exchange, money

8 transmitter, or credit union.

9 (10) "Game-related digital content" means digital

10 content that exists only in an electronic game or

11 electronic-game platform. The term:

12 (A) includes:

13 (i) game-play currency such as a virtual

14 wallet, even if denominated in United States

15 currency; and

16 (ii) the following if for use or redemption

17 only within the game or platform or another

18 electronic game or electronic-game platform:

19 (I) points sometimes referred to as gems,

20 tokens, gold, and similar names; and

21 (II) digital codes; and

22 (B) does not include an item that the issuer:

23 (i) permits to be redeemed for use outside a

24 game or platform for:

25 (I) money; or

26 (II) goods or services that have more than

10000SB0009ham002

- 10 -

LRB100 06347 HLH 27841 a

1 minimal value; or

2 (ii) otherwise monetizes for use outside a

3 game or platform.

4 (11) "Gift card" means:

5 (A) a stored-value card:

6 (i) issued on a prepaid basis in a specified

7 amount;

8 (ii) the value of which does not expire;

9 (iii) that is not subject to a dormancy,

10 inactivity, or service fee;

11 (iv) that may be decreased in value only by

12 redemption for merchandise, goods, or services

13 upon presentation at a single merchant or an

14 affiliated group of merchants; and

15 (v) that, unless required by law, may not be

16 redeemed for or converted into money or otherwise

17 monetized by the issuer;

18 (B) includes a prepaid commercial mobile radio

19 service, as defined in 47 C.F.R. 20.3, as amended; and

20 (C) does not include a stored-value card issued as

21 in-store credit for returned merchandise.

22 (12) "Holder" means a person obligated to hold for the

23 account of, or to deliver or pay to, the owner, property

24 subject to this Act.

25 (13) "Insurance company" means an association,

26 corporation, or fraternal or mutual-benefit organization,

10000SB0009ham002

- 11 -

LRB100 06347 HLH 27841 a

1 whether or not for profit, engaged in the business of

2 providing life endowments, annuities, or insurance,

3 including accident, burial, casualty, credit-life,

4 contract-performance, dental, disability, fidelity, fire,

5 health, hospitalization, illness, life, malpractice,

6 marine, mortgage, surety, wage-protection, and

7 worker-compensation insurance.

8 (14) "Loyalty card" means a record given without direct

9 monetary consideration under an award, reward, benefit,

10 loyalty, incentive, rebate, or promotional program which

11 may be used or redeemed only to obtain goods or services or

12 a discount on goods or services. The term does not include

13 a record that may be redeemed for money or otherwise

14 monetized by the issuer.

15 (15) "Mineral" means gas, oil, coal, oil shale, other

16 gaseous liquid or solid hydrocarbon, cement material, sand

17 and gravel, road material, building stone, chemical raw

18 material, gemstone, fissionable and nonfissionable ores,

19 colloidal and other clay, steam and other geothermal

20 resources, and any other substance defined as a mineral by

21 law of this State other than this Act.

22 (16) "Mineral proceeds" means an amount payable for

23 extraction, production, or sale of minerals, or, on the

24 abandonment of the amount, an amount that becomes payable

25 after abandonment. The term includes an amount payable:

26 (A) for the acquisition and retention of a mineral

10000SB0009ham002

- 12 -

LRB100 06347 HLH 27841 a

1 lease, including a bonus, royalty, compensatory

2 royalty, shut-in royalty, minimum royalty, and delay

3 rental;

4 (B) for the extraction, production, or sale of

5 minerals, including a net revenue interest, royalty,

6 overriding royalty, extraction payment, and production

7 payment; and

8 (C) under an agreement or option, including a

9 joint-operating agreement, unit agreement, pooling

10 agreement, and farm-out agreement.

11 (17) "Money order" means a payment order for a

12 specified amount of money. The term includes an express

13 money order and a personal money order on which the

14 remitter is the purchaser.

15 (18) "Municipal bond" means a bond or evidence of

16 indebtedness issued by a municipality or other political

17 subdivision of a state.

18 (19) "Net card value" means the original purchase price

19 or original issued value of a stored-value card, plus

20 amounts added to the original price or value, minus amounts

21 used and any service charge, fee, or dormancy charge

22 permitted by law.

23 (20) "Non-freely transferable security" means a

24 security that cannot be delivered to the administrator by

25 the Depository Trust Clearing Corporation or similar

26 custodian of securities providing post-trade clearing and

10000SB0009ham002

- 13 -

LRB100 06347 HLH 27841 a

1 settlement services to financial markets or cannot be

2 delivered because there is no agent to effect transfer. The

3 term includes a worthless security.

4 (21) "Owner" means a person that has a legal,

5 beneficial, or equitable interest in property subject to

6 this Act or the person's legal representative when acting

7 on behalf of the owner. The term includes:

8 (A) a depositor, for a deposit;

9 (B) a beneficiary, for a trust other than a deposit

10 in trust;

11 (C) a creditor, claimant, or payee, for other

12 property; and

13 (D) the lawful bearer of a record that may be used

14 to obtain money, a reward, or a thing of value.

15 (22) "Payroll card" means a record that evidences a

16 payroll-card account as defined in Regulation E, 12 CFR

17 Part 1005, as amended.

18 (23) "Person" means an individual, estate, business

19 association, public corporation, government or

20 governmental subdivision, agency, or instrumentality, or

21 other legal entity whether or not for profit.

22 (24) "Property" means tangible property described in

23 Section 15-201 or a fixed and certain interest in

24 intangible property held, issued, or owed in the course of

25 a holder's business or by a government, governmental

26 subdivision, agency, or instrumentality. The term:

10000SB0009ham002

- 14 -

LRB100 06347 HLH 27841 a

1 (A) includes all income from or increments to the

2 property;

3 (B) includes property referred to as or evidenced

4 by:

5 (i) money, virtual currency, interest, or a

6 dividend, check, draft, deposit, or payroll card;

7 (ii) a credit balance, customer's overpayment,

8 stored-value card, security deposit, refund,

9 credit memorandum, unpaid wage, unused ticket for

10 which the issuer has an obligation to provide a

11 refund, mineral proceeds, or unidentified

12 remittance;

13 (iii) a security except for:

14 (I) a worthless security; or

15 (II) a security that is subject to a lien,

16 legal hold, or restriction evidenced on the

17 records of the holder or imposed by operation

18 of law, if the lien, legal hold, or restriction

19 restricts the holder's or owner's ability to

20 receive, transfer, sell, or otherwise

21 negotiate the security;

22 (iv) a bond, debenture, note, or other

23 evidence of indebtedness;

24 (v) money deposited to redeem a security, make

25 a distribution, or pay a dividend;

26 (vi) an amount due and payable under an annuity

10000SB0009ham002

- 15 -

LRB100 06347 HLH 27841 a

1 contract or insurance policy; and

2 (vii) an amount distributable from a trust or

3 custodial fund established under a plan to provide

4 health, welfare, pension, vacation, severance,

5 retirement, death, stock purchase, profit-sharing,

6 employee-savings, supplemental-unemployment

7 insurance, or a similar benefit; and

8 (C) does not include:

9 (i) game-related digital content;

10 (ii) a loyalty card; or

11 (iii) a gift card.

12 (25) "Putative holder" means a person believed by the

13 administrator to be a holder, until the person pays or

14 delivers to the administrator property subject to this Act

15 or the administrator or a court makes a final determination

16 that the person is or is not a holder.

17 (26) "Record" means information that is inscribed on a

18 tangible medium or that is stored in an electronic or other

19 medium and is retrievable in perceivable form. The phrase

20 "records of the holder" includes records maintained by a

21 third party that has contracted with the holder.

22 (27) "Security" means:

23 (A) a security as defined in Article 8 of the

24 Uniform Commercial Code;

25 (B) a security entitlement as defined in Article 8

26 of the Uniform Commercial Code, including a customer

10000SB0009ham002

- 16 -

LRB100 06347 HLH 27841 a

1 security account held by a registered broker-dealer,

2 to the extent the financial assets held in the security

3 account are not:

4 (i) registered on the books of the issuer in

5 the name of the person for which the broker-dealer

6 holds the assets;

7 (ii) payable to the order of the person; or

8 (iii) specifically indorsed to the person; or

9 (C) an equity interest in a business association

10 not included in subparagraph (A) or (B).

11 (28) "Sign" means, with present intent to authenticate

12 or adopt a record:

13 (A) to execute or adopt a tangible symbol; or

14 (B) to attach to or logically associate with the

15 record an electronic symbol, sound, or process.

16 (29) "State" means a state of the United States, the

17 District of Columbia, the Commonwealth of Puerto Rico, the

18 United States Virgin Islands, or any territory or insular

19 possession subject to the jurisdiction of the United

20 States.

21 (30) "Stored-value card" means a record evidencing a

22 promise made for consideration by the seller or issuer of

23 the record that goods, services, or money will be provided

24 to the owner of the record to the value or amount shown in

25 the record. The term:

26 (A) includes:

10000SB0009ham002

- 17 -

LRB100 06347 HLH 27841 a

1 (i) a record that contains or consists of a

2 microprocessor chip, magnetic strip, or other

3 means for the storage of information, which is

4 prefunded and whose value or amount is decreased on

5 each use and increased by payment of additional

6 consideration; and

7 (ii) a gift card and payroll card; and

8 (B) does not include a loyalty card or game-related

9 digital content.

10 (31) "Utility" means a person that owns or operates for

11 public use a plant, equipment, real property, franchise, or

12 license for the following public services:

13 (A) transmission of communications or information;

14 (B) production, storage, transmission, sale,

15 delivery, or furnishing of electricity, water, steam,

16 or gas; or

17 (C) provision of sewage or septic services, or

18 trash, garbage, or recycling disposal.

19 (32) "Virtual currency" means a digital representation

20 of value used as a medium of exchange, unit of account, or

21 store of value, which does not have legal tender status

22 recognized by the United States. The term does not include:

23 (A) the software or protocols governing the

24 transfer of the digital representation of value;

25 (B) game-related digital content; or

26 (C) a loyalty card or gift card.

10000SB0009ham002

- 18 -

LRB100 06347 HLH 27841 a

1 (33) "Worthless security" means a security whose cost

2 of liquidation and delivery to the administrator would

3 exceed the value of the security on the date a report is

4 due under this Act.

5 Section 15-103. Inapplicability to foreign transaction.

6 This Act does not apply to property held, due, and owing in a

7 foreign country if the transaction out of which the property

8 arose was a foreign transaction.

9 Section 15-104. Rulemaking. The administrator may adopt

10 rules to implement and administer this Act pursuant to the

11 Illinois Administrative Procedure Act.

12 ARTICLE 2. PRESUMPTION OF ABANDONMENT

13 Section 15-201. When property presumed abandoned. Subject

14 to Section 15-210, the following property is presumed abandoned

15 if it is unclaimed by the apparent owner during the period

16 specified below:

17 (1) a traveler's check, 15 years after issuance;

18 (2) a money order, 7 years after issuance;

19 (3) (Blank).

20 (4) a state or municipal bond, bearer bond, or

21 original-issue-discount bond, 3 years after the earliest

22 of the date the bond matures or is called or the obligation

10000SB0009ham002

- 19 -

LRB100 06347 HLH 27841 a

1 to pay the principal of the bond arises;

2 (5) a debt of a business association, 3 years after the

3 obligation to pay arises;

4 (6) a demand, savings, or time deposit, 3 years after

5 the later of maturity or the date of the last indication of

6 interest in the property by the apparent owner, except for

7 a deposit that is automatically renewable, 3 years after

8 its initial date of maturity unless the apparent owner

9 consented in a record on file with the holder to renewal at

10 or about the time of the renewal;

11 (7) money or a credit owed to a customer as a result of

12 a retail business transaction, including an in-store

13 credit for returned merchandise, other than a stored-value

14 card, 3 years after the obligation arose;

15 (8) an amount owed by an insurance company on a life or

16 endowment insurance policy or an annuity contract that has

17 matured or terminated, 3 years after the obligation to pay

18 arose under the terms of the policy or contract or, if a

19 policy or contract for which an amount is owed on proof of

20 death has not matured by proof of the death of the insured

21 or annuitant, as follows:

22 (A) with respect to an amount owed on a life or

23 endowment insurance policy, the earlier of:

24 (i) 3 years after the death of the insured; or

25 (ii) 2 years after the insured has attained, or

26 would have attained if living, the limiting age

10000SB0009ham002

- 20 -

LRB100 06347 HLH 27841 a

1 under the mortality table on which the reserve for

2 the policy is based; and

3 (B) with respect to an amount owed on an annuity

4 contract, 3 years after the death of the annuitant.

5 (9) funds on deposit or held in trust for the

6 prepayment of a funeral or other funeral-related expenses,

7 the earliest of:

8 (A) 2 years after the date of death of the

9 beneficiary;

10 (B) one year after the date the beneficiary has

11 attained, or would have attained if living, the age of

12 105 where the holder does not know whether the

13 beneficiary is deceased;

14 (C) 30 years after the contract for prepayment was

15 executed;

16 (10) property distributable by a business association

17 in the course of dissolution or distributions from the

18 termination of a retirement plan, one year after the

19 property becomes distributable;

20 (11) property held by a court, including property

21 received as proceeds of a class action, 3 years after the

22 property becomes distributable;

23 (12) property held by a government or governmental

24 subdivision, agency, or instrumentality, including

25 municipal bond interest and unredeemed principal under the

26 administration of a paying agent or indenture trustee, 3

10000SB0009ham002

- 21 -

LRB100 06347 HLH 27841 a

1 years after the property becomes distributable;

2 (13) wages, commissions, bonuses, or reimbursements to

3 which an employee is entitled, or other compensation for

4 personal services, including amounts held on a payroll

5 card, one year after the amount becomes payable;

6 (14) a deposit or refund owed to a subscriber by a

7 utility, one year after the deposit or refund becomes

8 payable, except that any capital credits or patronage

9 capital retired, returned, refunded or tendered to a member

10 of an electric cooperative as defined in Section 3.4 of the

11 Electric Supplier Act shall not be subject to, or governed

12 by, any other provisions of this Act, but rather shall be

13 used by the cooperative for the benefit of the general

14 membership of the cooperative; and

15 (15) property not specified in this Section or Sections

16 15-202 through 15-208, the earlier of 3 years after the

17 owner first has a right to demand the property or the

18 obligation to pay or distribute the property arises.

19 Notwithstanding anything to the contrary in this Section

20 15-201, and subject to Section 15-210, a deceased owner cannot

21 indicate interest in his or her property. If the owner is

22 deceased and the abandonment period for the owner's property

23 specified in this Section 15-201 is greater than 2 years, then

24 the property, other than an amount owed by an insurance company

25 on a life or endowment insurance policy or an annuity contract

26 that has matured or terminated, shall instead be presumed

10000SB0009ham002

- 22 -

LRB100 06347 HLH 27841 a

1 abandoned 2 years from the date of the owner's last indication

2 of interest in the property.

3 Section 15-202. When tax-deferred retirement account

4 presumed abandoned.

5 (a) Subject to Section 15-210, property held in a pension

6 account or retirement account that qualifies for tax deferral

7 under the income-tax laws of the United States is presumed

8 abandoned if it is unclaimed by the apparent owner after the

9 later of:

10 (1) 3 years after the following dates:

11 (A) except as in subparagraph (B), the date a

12 communication sent by the holder by first-class United

13 States mail to the apparent owner is returned to the

14 holder undelivered by the United States Postal

15 Service; or

16 (B) if such communication is re-sent within 30 days

17 after the date the first communication is returned

18 undelivered, the date the second communication was

19 returned undelivered by the United States Postal

20 Service; or

21 (2) the earlier of the following dates:

22 (A) 3 years after the date the apparent owner

23 becomes 70.5 years of age, if determinable by the

24 holder; or

25 (B) one year after the date of mandatory

10000SB0009ham002

- 23 -

LRB100 06347 HLH 27841 a

1 distribution following death if the Internal Revenue

2 Code requires distribution to avoid a tax penalty and

3 the holder:

4 (i) receives confirmation of the death of the

5 apparent owner in the ordinary course of its

6 business; or

7 (ii) confirms the death of the apparent owner

8 under subsection (b).

9 (b) If a holder in the ordinary course of its business

10 receives notice or an indication of the death of an apparent

11 owner and subsection (a)(2) applies, the holder shall attempt

12 not later than 90 days after receipt of the notice or

13 indication to confirm whether the apparent owner is deceased.

14 (c) If the holder does not send communications to the

15 apparent owner of an account described in subsection (a) by

16 first-class United States mail on at least an annual basis, the

17 holder shall attempt to confirm the apparent owner's interest

18 in the property by sending the apparent owner an

19 electronic-mail communication not later than 2 years after the

20 apparent owner's last indication of interest in the property.

21 However, the holder promptly shall attempt to contact the

22 apparent owner by first-class United States mail if:

23 (1) the holder does not have information needed to send

24 the apparent owner an electronic mail communication or the

25 holder believes that the apparent owner's electronic mail

26 address in the holder's records is not valid;

10000SB0009ham002

- 24 -

LRB100 06347 HLH 27841 a

1 (2) the holder receives notification that the

2 electronic-mail communication was not received; or

3 (3) the apparent owner does not respond to the

4 electronic-mail communication within 30 days after the

5 communication was sent.

6 (d) If first-class United States mail sent under subsection

7 (c) is returned to the holder undelivered by the United States

8 Postal Service, the property is presumed abandoned 3 years

9 after the later of:

10 (1) except as in paragraph (2), the date a

11 communication to contact the apparent owner sent by

12 first-class United States mail is returned to the holder

13 undelivered;

14 (2) if such communication is re-sent within 30 days

15 after the date the first communication is returned

16 undelivered, the date the second communication was

17 returned undelivered; or

18 (3) the date established by subsection (a)(2).

19 Section 15-203. When other tax-deferred account presumed

20 abandoned.

21 (a) Subject to Section 15-210 and except for property

22 described in Section 15-202, property held in an account or

23 plan, including a health savings account, that qualifies for

24 tax deferral under the income-tax laws of the United States is

25 presumed abandoned if it is unclaimed by the apparent owner 3

10000SB0009ham002

- 25 -

LRB100 06347 HLH 27841 a

1 years after the earlier of:

2 (1) the date, if determinable by the holder, specified

3 in the income-tax laws and regulations of the United States

4 by which distribution of the property must begin to avoid a

5 tax penalty, with no distribution having been made; or

6 (2) 30 years after the date the account was opened.

7 (b) If the owner is deceased, then property subject to this

8 Section is presumed abandoned 2 years from the earliest of:

9 (1) the date of the distribution or attempted

10 distribution of the property;

11 (2) the date of the required distribution as stated in

12 the plan or trust agreement governing the plan; or

13 (3) the date, if determinable by the holder, specified

14 in the income tax laws of the United States by which

15 distribution of the property must begin in order to avoid a

16 tax penalty.

17 Section 15-204. When custodial account for minor presumed

18 abandoned.

19 (a) Subject to Section 15-210, property held in an account

20 established under a state's Uniform Gifts to Minors Act or

21 Uniform Transfers to Minors Act is presumed abandoned if it is

22 unclaimed by or on behalf of the minor on whose behalf the

23 account was opened 3 years after the later of:

24 (1) except as in subparagraph (2), the date a

25 communication sent by the holder by first-class United

10000SB0009ham002

- 26 -

LRB100 06347 HLH 27841 a

1 States mail to the custodian of the minor on whose behalf

2 the account was opened is returned undelivered to the

3 holder by the United States Postal Service;

4 (2) if a communication is re-sent within 30 days after

5 the date the first communication is returned undelivered,

6 the date the second communication was returned

7 undelivered; or

8 (3) the date on which the custodian is required to

9 transfer the property to the minor or the minor's estate in

10 accordance with the Uniform Gifts to Minors Act or Uniform

11 Transfers to Minors Act of the state in which the account

12 was opened.

13 (b) If the holder does not send communications to the

14 custodian of the minor on whose behalf an account described in

15 subsection (a) was opened by first-class United States mail on

16 at least an annual basis, the holder shall attempt to confirm

17 the custodian's interest in the property by sending the

18 custodian an electronic-mail communication not later than 2

19 years after the custodian's last indication of interest in the

20 property. However, the holder promptly shall attempt to contact

21 the custodian by first-class United States mail if:

22 (1) the holder does not have information needed to send

23 the custodian an electronic mail communication or the

24 holder believes that the custodian's electronic-mail

25 address in the holder's records is not valid;

26 (2) the holder receives notification that the

10000SB0009ham002

- 27 -

LRB100 06347 HLH 27841 a

1 electronic-mail communication was not received; or

2 (3) the custodian does not respond to the

3 electronic-mail communication within 30 days after the

4 communication was sent.

5 (c) If first-class United States mail sent under subsection

6 (b) is returned undelivered to the holder by the United States

7 Postal Service, the property is presumed abandoned 3 years

8 after the later of:

9 (1) the date a communication to contact the custodian

10 by first-class United States mail is returned to the holder

11 undelivered by the United States Postal Service; or

12 (2) the date established by subsection (a)(3).

13 (d) Notwithstanding any other provision of this Act, money

14 of a minor deposited pursuant to Section 24-21 of the Probate

15 Act of 1975 shall not be presumed abandoned earlier than 3

16 years after the minor attains legal age. Such money shall be

17 deposited into an account which shall indicate the date of

18 birth of the minor.

19 (e) (Blank).

20 (f) When the property in the account described in

21 subsections (a) or (d) is transferred to the minor on whose

22 behalf an account was opened or to the minor's estate, the

23 property in the account is no longer subject to this Section.

24 Section 15-205. When contents of safe-deposit box presumed

25 abandoned. Tangible property held in a safe-deposit box are

10000SB0009ham002

- 28 -

LRB100 06347 HLH 27841 a

1 presumed abandoned if the property remains unclaimed by the

2 apparent owner 5 years after the expiration of the lease or

3 rental period for the box.

4 Section 15-206. When stored-value card presumed abandoned.

5 (a) Subject to Section 15-210, the net card value of a

6 stored-value card, other than a payroll card or a gift card, is

7 presumed abandoned on the latest of 5 years after:

8 (1) December 31 of the year in which the card is issued

9 or additional funds are deposited into it;

10 (2) the most recent indication of interest in the card

11 by the apparent owner; or

12 (3) a verification or review of the balance by or on

13 behalf of the apparent owner.

14 (b) The amount presumed abandoned in a stored-value card is

15 the net card value at the time it is presumed abandoned.

16 (c) However, if a holder has reported and remitted to the

17 administrator the net card value on a stored-value card

18 presumed abandoned under this Section and the stored-value card

19 does not have an expiration date, then the holder must honor

20 the card on presentation indefinitely and may then request

21 reimbursement from the administrator under Section 605.

22 Section 15-208. When security presumed abandoned.

23 (a) Subject to Section 15-210, a security is presumed

24 abandoned upon the earlier of the following:

10000SB0009ham002

- 29 -

LRB100 06347 HLH 27841 a

1 (1) 3 years after the date a communication sent by the

2 holder by first-class United States mail to the apparent

3 owner is returned to the holder undelivered by the United

4 States Postal Service; however, if such returned

5 communication is re-sent within one month to the apparent

6 owner, the 3-year period does not begin to run until the

7 day the resent item is returned as undeliverable; or

8 (2) 5 years after the date of the apparent owner's last

9 indication of interest in the security.

10 (b) If the holder does not send communications to the

11 apparent owner of a security by first-class United States mail

12 on at least an annual basis, the holder shall attempt to

13 confirm the apparent owner's interest in the security by

14 sending the apparent owner an electronic-mail communication

15 not later than 3 years after the apparent owner's last

16 indication of interest in the security. However, the holder

17 promptly shall attempt to contact the apparent owner by

18 first-class United States mail if:

19 (1) the holder does not have information needed to send

20 the apparent owner an electronic-mail communication or the

21 holder believes that the apparent owner's electronic-mail

22 address in the holder's records is not valid;

23 (2) the holder receives notification that the

24 electronic-mail communication was not received; or

25 (3) the apparent owner does not respond to the

26 electronic-mail communication within 30 days after the

10000SB0009ham002

- 30 -

LRB100 06347 HLH 27841 a

1 communication was sent.

2 (c) If first-class United States mail sent under subsection

3 (b) is returned to the holder undelivered by the United States

4 Postal Service, the security is presumed abandoned in

5 accordance with subsection (a)(2) above.

6 (d) If a holder in the ordinary course of its business

7 receives notice or an indication of the death of an apparent

8 owner, the holder shall attempt not later than 90 days after

9 receipt of the notice or indication to confirm whether the

10 apparent owner is deceased. Notwithstanding the standards set

11 forth in paragraphs (a), (b) and (c), if the holder either

12 receives confirmation of the death of the apparent owner in the

13 ordinary course of its business or confirms the death of the

14 apparent owner under this subsection (d), then, the property

15 shall be presumed abandoned 2 years after the date of death of

16 the owner.

17 Section 15-209. When related property presumed abandoned.

18 At and after the time property is presumed abandoned under this

19 Act, any other property right or interest accrued or accruing

20 from the property and not previously presumed abandoned is also

21 presumed abandoned.

22 Section 15-210. Indication of apparent owner interest in

23 property.

24 (a) The period after which property is presumed abandoned

10000SB0009ham002

- 31 -

LRB100 06347 HLH 27841 a

1 is measured from the later of:

2 (1) the date the property is presumed abandoned under

3 this Article; or

4 (2) the latest indication of interest by the apparent

5 owner in the property.

6 (b) Under this Act, an indication of an apparent owner's

7 interest in property includes:

8 (1) a record communicated by the apparent owner to the

9 holder or agent of the holder concerning the property or

10 the account in which the property is held;

11 (2) an oral communication by the apparent owner to the

12 holder or agent of the holder concerning the property or

13 the account in which the property is held, if the holder or

14 its agent contemporaneously makes and preserves a record of

15 the fact of the apparent owner's communication;

16 (3) presentment of a check or other instrument of

17 payment of a dividend, interest payment, or other

18 distribution, or evidence of receipt of a distribution made

19 by electronic or similar means, with respect to an account,

20 underlying security, or interest in a business

21 association;

22 (4) activity directed by an apparent owner in the

23 account in which the property is held, including accessing

24 the account or information concerning the account, or a

25 direction by the apparent owner to increase, decrease, or

26 otherwise change the amount or type of property held in the

10000SB0009ham002

- 32 -

LRB100 06347 HLH 27841 a

1 account;

2 (5) a deposit into or withdrawal from an account at a

3 financial organization, except for a recurring Automated

4 Clearing House (ACH) debit or credit previously authorized

5 by the apparent owner or an automatic reinvestment of

6 dividends or interest; and

7 (6) subject to subsection (e), payment of a premium on

8 an insurance policy.

9 (c) An action by an agent or other representative of an

10 apparent owner, other than the holder acting as the apparent

11 owner's agent, is presumed to be an action on behalf of the

12 apparent owner.

13 (d) A communication with an apparent owner by a person

14 other than the holder or the holder's representative is not an

15 indication of interest in the property by the apparent owner

16 unless a record of the communication evidences the apparent

17 owner's knowledge of a right to the property.

18 (e) If the insured dies or the insured or beneficiary of an

19 insurance policy otherwise becomes entitled to the proceeds

20 before depletion of the cash surrender value of the policy by

21 operation of an automatic-premium-loan provision or other

22 nonforfeiture provision contained in the policy, the operation

23 does not prevent the policy from maturing or terminating.

24 (f) If the apparent owner has another property with the

25 holder to which Section 201(6) applies, then activity directed

26 by an apparent owner in any other accounts, including loan

10000SB0009ham002

- 33 -

LRB100 06347 HLH 27841 a

1 accounts, at a financial organization holding an inactive

2 account of the apparent owner shall be an indication of

3 interest in all such accounts if:

4 (A) the apparent owner engages in one or more of

5 the following activities:

6 (i) the apparent owner undertakes one or more

7 of the actions described in subsection (b) of this

8 Section regarding any account that appears on a

9 consolidated statement with the inactive account;

10 (ii) the apparent owner increases or decreases

11 the amount of funds in any other account the

12 apparent owner has with the financial

13 organization; or

14 (iii) the apparent owner engages in any other

15 relationship with the financial organization,

16 including payment of any amounts due on a loan; and

17 (B) the foregoing apply so long as the mailing

18 address for the apparent owner in the financial

19 organization's books and records is the same for both

20 the inactive account and the active account.

21 Section 15-211. Knowledge of death of insured or annuitant.

22 (a) In this Section, "death master file" means the United

23 States Social Security Administration Death Master File or

24 other database or service that is at least as comprehensive as

25 the United States Social Security Administration Death Master

10000SB0009ham002

- 34 -

LRB100 06347 HLH 27841 a

1 File for determining that an individual reportedly has died.

2 (b) With respect to a life or endowment insurance policy or

3 annuity contract for which an amount is owed on proof of death,

4 but which has not matured by proof of death of the insured or

5 annuitant, the company has knowledge of the death of an insured

6 or annuitant when:

7 (1) the company receives a death certificate or court

8 order determining that the insured or annuitant has died;

9 (2) the company:

10 (A) receives notice of the death of the insured or

11 annuitant from the administrator or an unclaimed

12 property administrator of another state, a

13 beneficiary, a policy owner, a relative of the insured,

14 a representative under the Probate Act of 1975, or from

15 an executor or other legal representative of the

16 insured's or annuitant's estate; and

17 (B) validates the death of the insured or

18 annuitant;

19 (3) the company conducts a comparison for any purpose

20 between a death master file and the names of some or all of

21 the company's insureds or annuitants, finds a match that

22 provides notice that the insured or annuitant has died; or

23 (4) the administrator or the administrator's agent

24 conducts a comparison for the purpose of finding matches

25 during an examination conducted under Article 10 between a

26 death master file and the names of some or all of the

10000SB0009ham002

- 35 -

LRB100 06347 HLH 27841 a

1 company's insureds or annuitants, finds a match that

2 provides notice that the insured or annuitant has died.

3 (c) The following rules apply under this Section:

4 (1) A death-master-file match under subsection (b)(3)

5 or (4) occurs if the criteria for an exact or partial match

6 are satisfied as provided by either:

7 (A) the Unclaimed Life Insurance Benefits Act or

8 other law of this State other than this Act; or

9 (B) a rule or policy adopted by the Director of the

10 Department of Insurance.

11 (2) The death-master-file match does not constitute

12 proof of death for the purpose of submission to an

13 insurance company of a claim by a beneficiary, annuitant,

14 or owner of the policy or contract for an amount due under

15 an insurance policy or annuity contract.

16 (3) The death-master-file match or validation of the

17 insured's or annuitant's death does not alter the

18 requirements for a beneficiary, annuitant, or owner of the

19 policy or contract to make a claim to receive proceeds

20 under the terms of the policy or contract.

21 (4) An insured or an annuitant is presumed dead if the

22 date of his or her death is indicated by the

23 death-master-file match under either subsection (b)(3) or

24 (b)(4), unless the insurer has competent and substantial

25 evidence that the person is living, including, but not

26 limited to, a contact made by the insurer with the person

10000SB0009ham002

- 36 -

LRB100 06347 HLH 27841 a

1 or his or her legal representative.

2 (d) This Act does not affect the determination of the

3 extent to which an insurance company before the effective date

4 of this Act had knowledge of the death of an insured or

5 annuitant or was required to conduct a death-master-file

6 comparison to determine whether amounts owed by the company on

7 a life or endowment insurance policy or annuity contract were

8 presumed abandoned or unclaimed.

9 Section 15-212. Deposit account for proceeds of insurance

10 policy or annuity contract. If proceeds payable under a life or

11 endowment insurance policy or annuity contract are deposited

12 into an account with check or draft-writing privileges for the

13 beneficiary of the policy or contract and, under a

14 supplementary contract not involving annuity benefits other

15 than death benefits, the proceeds are retained by the insurance

16 company or the financial organization where the account is

17 held, the policy or contract includes the assets in the

18 account.

19 Section 15-213. United States savings bonds.

20 (a) As used in this Section, "United States savings bond"

21 means property, tangible or intangible, in the form of a

22 savings bond issued by the United States Treasury, whether in

23 paper, electronic, or paperless form, along with all proceeds

24 thereof in the possession of the administrator.

10000SB0009ham002

- 37 -

LRB100 06347 HLH 27841 a

1 (b) Notwithstanding any provision of this Act to the

2 contrary, a United States savings bond subject to this Section

3 or held or owing in this State by any person is presumed

4 abandoned when such bond has remained unclaimed and unredeemed

5 for 5 years after its date of final extended maturity.

6 (c) United States savings bonds that are presumed abandoned

7 and unclaimed under subsection (b) shall escheat to the State

8 of Illinois and all property rights and legal title to and

9 ownership of the United States savings bonds, or proceeds from

10 the bonds, including all rights, powers, and privileges of

11 survivorship of any owner, co-owner, or beneficiary, shall vest

12 solely in the State according to the procedure set forth in

13 subsections (d) through (f).

14 (d) Within 180 days after a United States savings bond has

15 been presumed abandoned, in the absence of a claim having been

16 filed with the administrator for the savings bond, the

17 administrator shall commence a civil action in the Circuit

18 Court of Sangamon County for a determination that the United

19 States savings bonds has escheated to the State. The

20 administrator may postpone the bringing of the action until

21 sufficient United States savings bonds have accumulated in the

22 administrator's custody to justify the expense of the

23 proceedings.

24 (e) The administrator shall make service by publication in

25 the civil action in accordance with Sections 2-206 and 2-207 of

26 the Code of Civil Procedure, which shall include the filing

10000SB0009ham002

- 38 -

LRB100 06347 HLH 27841 a

1 with the Circuit Court of Sangamon County of the affidavit

2 required in Section 2-206 of that Code by an employee of the

3 administrator with personal knowledge of the efforts made to

4 contact the owners of United States savings bonds presumed

5 abandoned under this Section. In addition to the diligent

6 inquiries made pursuant to Section 2-206 of the Code of Civil

7 Procedure, the administrator may also utilize additional

8 discretionary means to attempt to provide notice to persons who

9 may own a United States savings bond registered to a person

10 with a last known address in the State of Illinois subject to a

11 civil action pursuant to subsection (d).

12 (f) The owner of a United States savings bond registered to

13 a person with a last known address in the State of Illinois

14 subject to a civil action pursuant to subsection (d) may file a

15 claim for such United States savings bond with either the

16 administrator or by filing a claim in the civil action in the

17 Circuit Court of Sangamon County in which the savings bond

18 registered to that person is at issue prior to the entry of a

19 final judgment by the Circuit Court pursuant to this

20 subsection, and unless the Circuit Court determines that such

21 United States savings bond is not owned by the claimant, then

22 such United States savings bond shall no longer be presumed

23 abandoned. If no person files a claim or appears at the hearing

24 to substantiate a disputed claim or if the court determines

25 that a claimant is not entitled to the property claimed by the

26 claimant, then the court, if satisfied by evidence that the

10000SB0009ham002

- 39 -

LRB100 06347 HLH 27841 a

1 administrator has substantially complied with the laws of this

2 State, shall enter a judgment that the United States savings

3 bonds have escheated to this State, and all property rights and

4 legal title to and ownership of such United States savings

5 bonds or proceeds from such bonds, including all rights,

6 powers, and privileges of survivorship of any owner, co-owner,

7 or beneficiary, shall vest in this State.

8 (g) The administrator shall redeem from the Bureau of the

9 Fiscal Service of the United States Treasury the United States

10 savings bonds escheated to the State and deposit the proceeds

11 from the redemption of United States savings bonds into the

12 Unclaimed Property Trust Fund.

13 (h) Any person making a claim for the United States savings

14 bonds escheated to the State under this subsection, or for the

15 proceeds from such bonds, may file a claim with the

16 administrator. Upon providing sufficient proof of the validity

17 of such person's claim, the administrator may, in his or her

18 sole discretion, pay such claim. If payment has been made to

19 any claimant, no action thereafter may be maintained by any

20 other claimant against the State or any officer thereof for or

21 on account of such funds.

22 ARTICLE 3. RULES FOR TAKING CUSTODY OF PROPERTY PRESUMED

23 ABANDONED

24 Section 15-301. Address of apparent owner to establish

10000SB0009ham002

- 40 -

LRB100 06347 HLH 27841 a

1 priority. In this Article, the following rules apply:

2 (1) The last-known address of an apparent owner is any

3 description, code, or other indication of the location of

4 the apparent owner which identifies the state, even if the

5 description, code, or indication of location is not

6 sufficient to direct the delivery of first-class United

7 States mail to the apparent owner.

8 (2) If the United States postal zip code associated

9 with the apparent owner is for a post office located in

10 this State, this State is deemed to be the state of the

11 last-known address of the apparent owner unless other

12 records associated with the apparent owner specifically

13 identify the physical address of the apparent owner to be

14 in another state.

15 (3) If the address under paragraph (2) is in another

16 state, the other state is deemed to be the state of the

17 last-known address of the apparent owner.

18 (4) The address of the apparent owner of a life or

19 endowment insurance policy or annuity contract or its

20 proceeds is presumed to be the address of the insured or

21 annuitant if a person other than the insured or annuitant

22 is entitled to the amount owed under the policy or contract

23 and the address of the other person is not known by the

24 insurance company and cannot be determined under Section

25 15-302. The address of the apparent owner of other property

26 where ownership vests in a beneficiary upon the death of

10000SB0009ham002

- 41 -

LRB100 06347 HLH 27841 a

1 the owner is presumed to be the address of the now-deceased

2 owner if the address of the beneficiary is not known by the

3 holder and cannot be determined under Section 15-302.

4 Section 15-302. Address of apparent owner in this State.

5 The administrator may take custody of property that is presumed

6 abandoned, whether located in this State, another state, or a

7 foreign country if:

8 (1) the last-known address of the apparent owner in the

9 records of the holder is in this State; or

10 (2) the records of the holder do not reflect the

11 identity or last-known address of the apparent owner, but

12 the administrator has determined that the last-known

13 address of the apparent owner is in this State.

14 Section 15-303. If records show multiple addresses of

15 apparent owner.

16 (a) Except as in subsection (b), if records of a holder

17 reflect multiple addresses for an apparent owner and this State

18 is the state of the most recently recorded address, this State

19 may take custody of property presumed abandoned, whether

20 located in this State or another state.

21 (b) If it appears from records of the holder that the most

22 recently recorded address of the apparent owner under

23 subsection (a) is a temporary address and this State is the

24 state of the next most recently recorded address that is not a

10000SB0009ham002

- 42 -

LRB100 06347 HLH 27841 a

1 temporary address, this State may take custody of the property

2 presumed abandoned.

3 Section 15-304. Holder domiciled in this State.

4 (a) Except as in subsection (b) or Section 15-302 or

5 15-303, the administrator may take custody of property presumed

6 abandoned, whether located in this State, another state, or a

7 foreign country, if the holder is domiciled in this State or is

8 this State or a governmental subdivision, agency, or

9 instrumentality of this State, and

10 (1) another state or foreign country is not entitled to

11 the property because there is no last-known address of the

12 apparent owner or other person entitled to the property in

13 the records of the holder; or

14 (2) the state or foreign country of the last-known

15 address of the apparent owner or other person entitled to

16 the property does not provide for custodial taking of the

17 property.

18 (b) Property is not subject to custody of the administrator

19 under subsection (a) if the property is specifically exempt

20 from custodial taking under the law of this State or the state

21 or foreign country of the last-known address of the apparent

22 owner.

23 (c) If a holder's state of domicile has changed since the

24 time property was presumed abandoned, the holder's state of

25 domicile under this Section is deemed to be the state where the

10000SB0009ham002

- 43 -

LRB100 06347 HLH 27841 a

1 holder was domiciled at the time the property was presumed

2 abandoned.

3 Section 15-305. Custody if transaction took place in this

4 State. Except as in Section 15-302, 15-303, or 15-304, the

5 administrator may take custody of property presumed abandoned

6 whether located in this State or another state if:

7 (1) the transaction out of which the property arose

8 took place in this State;

9 (2) the holder is domiciled in a state that does not

10 provide for the custodial taking of the property, except

11 that if the property is specifically exempt from custodial

12 taking under the law of the state of the holder's domicile,

13 the property is not subject to the custody of the

14 administrator; and

15 (3) the last-known address of the apparent owner or

16 other person entitled to the property is unknown or in a

17 state that does not provide for the custodial taking of the

18 property, except that if the property is specifically

19 exempt from custodial taking under the law of the state of

20 the last-known address, the property is not subject to the

21 custody of the administrator.

22 Section 15-306. Traveler's check, money order, or similar

23 instrument. The administrator may take custody of sums payable

24 on a traveler's check, money order, or similar instrument

10000SB0009ham002

- 44 -

LRB100 06347 HLH 27841 a

1 presumed abandoned to the extent permissible under 12 U.S.C.

2 Sections 2501 through 2503, as amended.

3 Section 15-307. Burden of proof to establish

4 administrator's right to custody. Subject to Article 4 and

5 Section 15-1005, if the administrator asserts a right to

6 custody of unclaimed property and there is a dispute concerning

7 such property, the administrator has the initial burden to

8 prove:

9 (1) the amount of the property;

10 (2) the property is presumed abandoned; and

11 (3) the property is subject to the custody of the

12 administrator.

13 ARTICLE 4. REPORT BY HOLDER

14 Section 15-401. Report required by holder.

15 (a) A holder of property presumed abandoned and subject to

16 the custody of the administrator shall report in a record to

17 the administrator concerning the property. A holder shall

18 report via the internet in a format approved by the

19 administrator, unless the administrator gives a holder

20 specific permission to file a paper report.

21 (b) A holder may contract with a third party to make the

22 report required under subsection (a).

23 (c) Whether or not a holder contracts with a third party

10000SB0009ham002

- 45 -

LRB100 06347 HLH 27841 a

1 under subsection (b), the holder is responsible:

2 (1) to the administrator for the complete, accurate,

3 and timely reporting of property presumed abandoned; and

4 (2) for paying or delivering to the administrator

5 property described in the report.

6 Section 15-402. Content of report.

7 (a) The report required under Section 15-401 must:

8 (1) be signed by or on behalf of the holder and

9 verified as to its completeness and accuracy;

10 (2) if filed electronically, be in a secure format

11 approved by the administrator which protects confidential

12 information of the apparent owner;

13 (3) describe the property;

14 (4) except for a traveler's check, money order, or

15 similar instrument, contain the name, if known, last-known

16 address, if known, and Social Security number or taxpayer

17 identification number, if known or readily ascertainable,

18 of the apparent owner of property with a value of $5 or

19 more;

20 (5) for an amount held or owing under a life or

21 endowment insurance policy, annuity contract, or other

22 property where ownership vests in a beneficiary upon the

23 death of the owner, contain the name and last-known address

24 of the insured, annuitant, or other apparent owner of the

25 policy or contract and of the beneficiary;

10000SB0009ham002

- 46 -

LRB100 06347 HLH 27841 a

1 (6) for property held in or removed from a safe-deposit

2 box, indicate the location of the property, where it may be

3 inspected by the administrator, and any amounts owed to the

4 holder under Section 15-606;

5 (7) contain the commencement date for determining

6 abandonment under Article 2;

7 (8) state that the holder has complied with the notice

8 requirements of Section 15-501;

9 (9) identify property that is a non-freely

10 transferable security and explain why it is a non-freely

11 transferable security; and

12 (10) contain other information the administrator

13 prescribes by rules.

14 (b) A report under Section 15-401 may include in the

15 aggregate items valued under $5 each. If the report includes

16 items in the aggregate valued under $5 each, the administrator

17 may not require the holder to provide the name and address of

18 an apparent owner of an item unless the information is

19 necessary to verify or process a claim in progress by the

20 apparent owner.

21 (c) A report under Section 15-401 may include personal

22 information as defined in Section 15-1401(a) about the apparent

23 owner or the apparent owner's property.

24 (d) If a holder has changed its name while holding property

25 presumed abandoned or is a successor to another person that

26 previously held the property for the apparent owner, the holder

10000SB0009ham002

- 47 -

LRB100 06347 HLH 27841 a

1 must include in the report under Section 15-401 its former name

2 or the name of the previous holder, if any, and the known name

3 and address of each previous holder of the property.

4 Section 15-403. When report to be filed.

5 (a) Except as otherwise provided in subsection (b) and

6 subject to subsection (c), the report under Section 15-401 must

7 be filed before November 1 of each year and cover the 12 months

8 preceding July 1 of that year.

9 (b) Subject to subsection (c), the report under Section

10 15-401 to be filed by business associations, utilities, and

11 life insurance companies must be filed before May 1 of each

12 year for the immediately preceding calendar year.

13 (c) Before the date for filing the report under Section

14 15-401, the holder of property presumed abandoned may request

15 the administrator to extend the time for filing. The

16 administrator may grant an extension. If the extension is

17 granted, the holder may pay or make a partial payment of the

18 amount the holder estimates ultimately will be due. The payment

19 or partial payment terminates accrual of interest on the amount

20 paid.

21 Section 15-404. Retention of records by holder. A holder

22 required to file a report under Section 15-401 shall retain

23 records for 10 years after the later of the date the report was

24 filed or the last date a timely report was due to be filed,

10000SB0009ham002

- 48 -

LRB100 06347 HLH 27841 a

1 unless a shorter period is provided by rule of the

2 administrator. The holder may satisfy the requirement to retain

3 records under this Section through an agent. The records must

4 contain:

5 (1) the information required to be included in the

6 report;

7 (2) the date, place, and nature of the circumstances

8 that gave rise to the property right;

9 (3) the amount or value of the property;

10 (4) the last address of the apparent owner, if known to

11 the holder;

12 (5) sufficient records of items which were not reported

13 as unclaimed, to allow examination to determine whether the

14 holder has complied with the Act; and

15 (6) if the holder sells, issues, or provides to others

16 for sale or issue in this State traveler's checks, money

17 orders, or similar instruments, other than third-party

18 bank checks, on which the holder is directly liable, a

19 record of the instruments while they remain outstanding

20 indicating the state and date of issue.

21 Section 15-405. Property reportable and payable or

22 deliverable absent owner demand. Property is reportable and

23 payable or deliverable under this Act even if the owner fails

24 to make demand or present an instrument or document otherwise

25 required to obtain payment.

10000SB0009ham002

- 49 -

LRB100 06347 HLH 27841 a

1 ARTICLE 5. NOTICE TO APPARENT OWNER OF PROPERTY PRESUMED

2 ABANDONED

3 Section 15-501. Notice to apparent owner by holder.

4 (a) Subject to subsections (b) and (c), the holder of

5 property presumed abandoned shall send to the apparent owner

6 notice by first-class United States mail that complies with

7 Section 15-502 in a format acceptable to the administrator not

8 more than one year nor less than 60 days before filing the

9 report under Section 15-401 if:

10 (1) the holder has in its records an address for the

11 apparent owner which the holder's records do not disclose

12 to be invalid and is sufficient to direct the delivery of

13 first-class United States mail to the apparent owner; and

14 (2) the value of the property is $50 or more.

15 (b) If an apparent owner has consented to receive

16 electronic-mail delivery from the holder, the holder shall send

17 the notice described in subsection (a) both by first-class

18 United States mail to the apparent owner's last-known mailing

19 address and by electronic mail, unless the holder believes that

20 the apparent owner's electronic-mail address is invalid.

21 (c) The holder of securities presumed abandoned under

22 Sections 15-202, 15-203, or 15-208 shall send to the apparent

23 owner notice by certified United States mail that complies with

24 Section 15-502 in a format acceptable to the administrator not

10000SB0009ham002

- 50 -

LRB100 06347 HLH 27841 a

1 less than 60 days before filing the report under Section 15-401

2 if:

3 (1) the holder has in its records an address for the

4 apparent owner which the holder's records do not disclose

5 to be invalid and is sufficient to direct the delivery of

6 United States mail to the apparent owner; and

7 (2) the value of the property is $1,000 or more.

8 The administrator may issue rules allowing a holder to

9 deduct reasonable costs incurred in sending a notice by

10 certified United States mail under this subsection.

11 (d) In addition to other indications of an apparent owner's

12 interest in property pursuant to Section 15-210, a signed

13 return receipt in response to a notice sent pursuant to this

14 Section by certified United States mail shall constitute a

15 record communicated by the apparent owner to the holder

16 concerning the property or the account in which the property is

17 held.

18 Section 15-502. Contents of notice by holder.

19 (a) Notice under Section 15-501 must contain a heading that

20 reads substantially as follows: "Notice. The State of Illinois

21 requires us to notify you that your property may be transferred

22 to the custody of the administrator if you do not contact us

23 before (insert date that is 30 days after the date of this

24 notice)."

25 (b) The notice under Section 15-501 must:

10000SB0009ham002

- 51 -

LRB100 06347 HLH 27841 a

1 (1) identify the nature and, except for property that

2 does not have a fixed value, the value of the property that

3 is the subject of the notice;

4 (2) state that the property will be turned over to the

5 State Treasurer;

6 (3) state that after the property is turned over to the

7 State Treasurer an apparent owner that seeks return of the

8 property may file a claim with the administrator;

9 (4) state that property that is not legal tender of the

10 United States may be sold by the State Treasurer;

11 (5) provide instructions that the apparent owner must

12 follow to prevent the holder from reporting and paying or

13 delivering the property to the State Treasurer; and

14 (6) provide the name, address, and e-mail address or

15 telephone number to contact the holder.

16 (c) The holder may supplement the required information by

17 listing a website where apparent owners may obtain more

18 information about how to prevent the holder from reporting and

19 paying or delivering the property to the State Treasurer.

20 Section 15-503. Notice by administrator.

21 (a) The administrator shall give notice to an apparent

22 owner that property presumed abandoned and appears to be owned

23 by the apparent owner is held by the administrator under this

24 Act.

25 (b) In providing notice under subsection (a), the

10000SB0009ham002

- 52 -

LRB100 06347 HLH 27841 a

1 administrator shall:

2 (1) except as otherwise provided in paragraph (2), send

3 written notice by first-class United States mail to each

4 apparent owner of property valued at $100 or more held by

5 the administrator, unless the administrator determines

6 that a mailing by first-class United States mail would not

7 be received by the apparent owner, and, in the case of a

8 security held in an account for which the apparent owner

9 had consented to receiving electronic mail from the holder,

10 send notice by electronic mail if the electronic-mail

11 address of the apparent owner is known to the administrator

12 instead of by first-class United States mail; or

13 (2) send the notice to the apparent owner's

14 electronic-mail address if the administrator does not have

15 a valid United States mail address for an apparent owner,

16 but has an electronic-mail address that the administrator

17 does not know to be invalid.

18 (c) In addition to the notice under subsection (b), the

19 administrator shall:

20 (1) publish every 6 months in at least one English

21 language newspaper of general circulation in each county in

22 this State notice of property held by the administrator

23 which must include:

24 (A) the total value of property received by the

25 administrator during the preceding 6-month period,

26 taken from the reports under Section 15-401;

10000SB0009ham002

- 53 -

LRB100 06347 HLH 27841 a

1 (B) the total value of claims paid by the

2 administrator during the preceding 6-month period;

3 (C) the Internet web address of the unclaimed

4 property website maintained by the administrator;

5 (D) a telephone number and electronic-mail address

6 to contact the administrator to inquire about or claim

7 property; and

8 (E) a statement that a person may access the

9 Internet by a computer to search for unclaimed property

10 and a computer may be available as a service to the

11 public at a local public library.

12 (2) The administrator shall maintain a website

13 accessible by the public and electronically searchable

14 which contains the names reported to the administrator of

15 apparent owners for whom property is being held by the

16 administrator. The administrator need not list property on

17 such website when: no owner name was reported, a claim has

18 been initiated or is pending for the property, the

19 administrator has made direct contact with the apparent

20 owner of the property, and in other instances where the

21 administrator reasonably believes exclusion of the

22 property is in the best interests of both the State and the

23 owner of the property.

24 (d) The website or database maintained under subsection

25 (c)(2) must include instructions for filing with the

26 administrator a claim to property and a printable claim form

10000SB0009ham002

- 54 -

LRB100 06347 HLH 27841 a

1 with instructions for its use.

2 (e) Tax return identification of apparent owners of

3 abandoned property.

4 (1) At least annually the administrator shall notify

5 the Department of Revenue of the names of persons appearing

6 to be owners of abandoned property under this Section. The

7 administrator shall also provide to the Department of

8 Revenue the social security numbers of the persons, if

9 available.

10 (2) The Department of Revenue shall notify the

11 administrator if any person under subsection (e)(1) has

12 filed an Illinois income tax return and shall provide the

13 administrator with the last known address of the person as

14 it appears in Department of Revenue records, except as

15 prohibited by federal law. The Department of Revenue may

16 also provide additional addresses for the same taxpayer

17 from the records of the Department, except as prohibited by

18 federal law.

19 (3) In order to facilitate the return of property under

20 this subsection, the administrator and the Department of

21 Revenue may enter into an interagency agreement concerning

22 protection of confidential information, data match rules,

23 and other issues.

24 (4) The administrator may deliver, as provided under

25 Section 15-904 of this Act, property or pay the amount

26 owing to a person matched under this Section without the

10000SB0009ham002

- 55 -

LRB100 06347 HLH 27841 a

1 person filing a claim under Section 15-903 of this Act if

2 the following conditions are met:

3 (A) the value of the property that is owed the

4 person is $2,000 or less;

5 (B) the property is not either tangible property or

6 securities;

7 (C) the last known address for the person according

8 to the Department of Revenue records is less than 12

9 months old; and

10 (D) the administrator has evidence sufficient to

11 establish that the person who appears in Department of

12 Revenue records is the owner of the property and the

13 owner currently resides at the last known address from

14 the Department of Revenue.

15 (5) If the value of the property that is owed the

16 person is greater than $2,000, or is tangible property or

17 securities the administrator shall provide notice to the

18 person, informing the person that he or she is the owner of

19 abandoned property held by the State and may file a claim

20 with the administrator for return of the property.

21 (f) The administrator may use additional databases to

22 verify the identity of the person and that the person currently

23 resides at the last known address. The administrator may

24 utilize publicly and commercially available databases to find

25 and update or add information for apparent owners of property

26 held by the administrator.

10000SB0009ham002

- 56 -

LRB100 06347 HLH 27841 a

1 (g) In addition to giving notice under subsection (b),

2 publishing the information under subsection (c)(1) and

3 maintaining the website or database under subsection (c)(2),

4 the administrator may use other printed publication,

5 telecommunication, the Internet, or other media to inform the

6 public of the existence of unclaimed property held by the

7 administrator.

8 Section 15-504. Cooperation among State officers and

9 agencies to locate apparent owner. Unless prohibited by law of

10 this State other than this Act, on request of the

11 administrator, each officer, agency, board, commission,

12 division, and department of this State, any body politic and

13 corporate created by this State for a public purpose, and each

14 political subdivision of this State shall make its books and

15 records available to the administrator and cooperate with the

16 administrator to determine the current address of an apparent

17 owner of property held by the administrator under this Act or

18 to otherwise assist the administrator in the administration of

19 this Act. The administrator may also enter into data sharing

20 agreements to enable such other governmental agencies to

21 provide an additional notice to apparent owners of property

22 held by the administrator.

23 ARTICLE 6. TAKING CUSTODY OF PROPERTY BY ADMINISTRATOR

10000SB0009ham002

- 57 -

LRB100 06347 HLH 27841 a

1 Section 15-601. Definition of good faith. In this Article,

2 payment or delivery of property is made in good faith if a

3 holder:

4 (1) had a reasonable basis for believing, based on the

5 facts then known, that the property was required or

6 permitted to be paid or delivered to the administrator

7 under this Act; or

8 (2) made payment or delivery:

9 (A) in response to a demand by the administrator or

10 administrator's agent; or

11 (B) under a guidance or ruling issued by the

12 administrator which the holder reasonably believed

13 required or permitted the property to be paid or

14 delivered.

15 Section 15-602. Dormancy charge.

16 (a) A holder may deduct a dormancy charge from property

17 required to be paid or delivered to the administrator if:

18 (1) a valid contract between the holder and the

19 apparent owner authorizes imposition of the charge for the

20 apparent owner's failure to claim the property within a

21 specified time; and

22 (2) the holder regularly imposes the charge and

23 regularly does not reverse or otherwise cancel the charge.

24 (b) The amount of the deduction under subsection (a) is

25 limited to an amount that is not unconscionable considering all

10000SB0009ham002

- 58 -

LRB100 06347 HLH 27841 a

1 relevant factors, including the marginal transactional costs

2 incurred by the holder in maintaining the apparent owner's

3 property and any services received by the apparent owner.

4 (c) A holder may not deduct an escheat fee or other charges

5 imposed solely by virtue of property being reported as presumed

6 abandoned.

7 Section 15-603. Payment or delivery of property to

8 administrator.

9 (a) Except as otherwise provided in this Section, on filing

10 a report under Section 15-401, the holder shall pay or deliver

11 to the administrator the property described in the report.

12 (b) If property in a report under Section 15-401 is an

13 automatically renewable deposit and a penalty or forfeiture in

14 the payment of interest would result from paying the deposit to

15 the administrator at the time of the report, the date for

16 payment of the property to the administrator is extended until

17 a penalty or forfeiture no longer would result from payment, if

18 the holder informs the administrator of the extended date.

19 (c) Tangible property in a safe-deposit box may not be

20 delivered to the administrator until a mutually agreed upon

21 date that is no sooner than 60 days after filing the report

22 under Section 15-401.

23 (d) If property reported to the administrator under Section

24 15-401 is a security, the administrator may:

25 (1) make an endorsement, instruction, or entitlement

10000SB0009ham002

- 59 -

LRB100 06347 HLH 27841 a

1 order on behalf of the apparent owner to invoke the duty of

2 the issuer, its transfer agent, or the securities

3 intermediary to transfer the security; or

4 (2) dispose of the security under Section 15-702.

5 (e) If the holder of property reported to the administrator

6 under Section 15-401 is the issuer of a certificated security,

7 the administrator may obtain a replacement certificate in

8 physical or book-entry form under Section 8-405 of the Uniform

9 Commercial Code. An indemnity bond is not required.

10 (f) The administrator shall establish procedures for the

11 registration, issuance, method of delivery, transfer, and

12 maintenance of securities delivered to the administrator by a

13 holder.

14 (g) An issuer, holder, and transfer agent or other person

15 acting in good faith under this Section under instructions of

16 and on behalf of the issuer or holder is not liable to the

17 apparent owner for a claim arising with respect to property

18 after the property has been delivered to the administrator.

19 (h) A holder is not required to deliver to the

20 administrator a security identified by the holder as a

21 non-freely transferable security in a report filed under

22 Section 15-401. If the administrator or holder determines that

23 a security is no longer a non-freely transferable security, the

24 holder shall report and deliver the security on the next

25 regular date prescribed for delivery of securities under this

26 Act. The holder shall make a determination annually whether a

10000SB0009ham002

- 60 -

LRB100 06347 HLH 27841 a

1 security identified in a report filed under Section 15-401 as a

2 non-freely transferable security is no longer a non-freely

3 transferable security.

4 Section 15-604. Effect of payment or delivery of property

5 to administrator.

6 (a) On payment or delivery of property to the administrator

7 under this Act, the administrator as agent for the State

8 assumes custody and responsibility for safekeeping the

9 property. A holder that pays or delivers property to the

10 administrator in good faith and substantially complies with

11 Sections 15-501 and 15-502 is relieved of all liability which

12 thereafter may arise or be made in respect to the property to

13 the extent of the value of the property so paid or delivered.

14 (b) If legal proceedings are instituted by any other state

15 or states in any state or federal court with respect to

16 unclaimed funds or abandoned property previously paid or

17 delivered to the administrator, the holder shall give written

18 notification to the administrator and the Attorney General of

19 this State of such proceedings within 10 days after service of

20 process, or in the alternative at least 10 days before the

21 return date or date on which an answer or similar pleading is

22 due (or any extension thereof secured by the holder). The

23 Attorney General may take such action as he or she deems

24 necessary or expedient to protect the interests of this State.

25 The Attorney General by written notice prior to the return date

10000SB0009ham002

- 61 -

LRB100 06347 HLH 27841 a

1 or date on which an answer or similar pleading is due (or any

2 extension thereof secured by the holder), but in any event in

3 reasonably sufficient time for the holder to comply with the

4 directions received, shall either direct the holder actively to

5 defend in such proceedings or that no defense need be entered

6 in such proceedings. If a direction is received from the

7 Attorney General that the holder need not make a defense, such

8 shall not preclude the holder from entering a defense in its

9 own name if it should so choose. However, any defense made by

10 the holder on its own initiative shall not entitle the holder

11 to reimbursement for legal fees, costs and other expenses as is

12 hereinafter provided in respect to defenses made pursuant to

13 the directions of the Attorney General. If, after the holder

14 has actively defended in such proceedings pursuant to a

15 direction of the Attorney General, or has been notified in

16 writing by the Attorney General that no defense need be made

17 with respect to such funds, a judgment is entered against the

18 holder for any amount paid to the administrator under this Act,

19 the administrator shall, upon being furnished with proof of

20 payment in satisfaction of such judgment, reimburse the holder

21 the amount so paid. The administrator shall also reimburse the

22 holder for any legal fees, costs and other directly related

23 expenses incurred in legal proceedings undertaken pursuant to

24 the direction of the Attorney General.

25 Section 15-605. Recovery of property by holder from

10000SB0009ham002

- 62 -

LRB100 06347 HLH 27841 a

1 administrator.

2 (a) A holder that under this Act pays money to the

3 administrator may file a claim for reimbursement from the

4 administrator of the amount paid if the holder:

5 (1) paid the money in error; or

6 (2) after paying the money to the administrator, paid

7 money to a person the holder reasonably believed entitled

8 to the money.

9 (b) If a claim for reimbursement under subsection (a) is

10 made for a payment made on a negotiable instrument, including a

11 traveler's check, money order, or similar instrument, the

12 holder must submit proof that the instrument was presented and

13 payment was made to a person the holder reasonably believed

14 entitled to payment. The holder may claim reimbursement even if

15 the payment was made to a person whose claim was made after

16 expiration of a period of limitation on the owner's right to

17 receive or recover property, whether specified by contract,

18 statute, or court order.

19 (c) If a holder is reimbursed by the administrator under

20 subsection (a)(2), the holder may also recover from the

21 administrator income or gain under Section 15-607 that would

22 have been paid to the owner if the money had been claimed from

23 the administrator by the owner to the extent the income or gain

24 was paid by the holder to the owner.

25 (d) A holder that under this Act delivers property other

26 than money to the administrator may file a claim for return of

10000SB0009ham002

- 63 -

LRB100 06347 HLH 27841 a

1 the property from the administrator if:

2 (1) the holder delivered the property in error; or

3 (2) the apparent owner has claimed the property from

4 the holder.

5 (e) If a claim for return of property under subsection (d)

6 is made, the holder shall include with the claim evidence

7 sufficient to establish that the apparent owner has claimed the

8 property from the holder or that the property was delivered by

9 the holder to the administrator in error.

10 (f) The administrator may determine that an affidavit

11 submitted by a holder is evidence sufficient to establish that

12 the holder is entitled to reimbursement or to recover property

13 under this Section.

14 (g) A holder is not required to pay a fee or other charge

15 for reimbursement or return of property under this Section.

16 (h) Unless extended for reasonable cause, not later than 90

17 days after a holder's claim is complete the administrator shall

18 allow or deny the claim and give the holder notice in a record

19 of the decision. If a holder fails to provide all the

20 information and documentation requested by the administrator

21 as necessary to establish legal ownership of the property and

22 the claim is inactive for at least 90 days, then the

23 administrator may close the claim without issuing a final

24 decision. However, if the claimant makes a request in writing

25 for a final decision prior to the administrator's closing of

26 the claim, the administrator shall issue a final decision. A

10000SB0009ham002

- 64 -

LRB100 06347 HLH 27841 a

1 claim will be considered complete when a holder has provided

2 all the information and documentation requested by the

3 administrator as necessary to establish legal ownership and

4 such information or documentation is entered into the

5 administrator's unclaimed property system.

6 (i) The claimant may initiate a proceeding under the

7 Illinois Administrative Procedure Act for review of the

8 administrator's decision or the deemed denial under subsection

9 (h) not later than:

10 (1) 30 days following receipt of the notice of the

11 administrator's decision; or

12 (2) 120 days following the filing of a claim under

13 subsection (a) or (d) in the case of a deemed denial under

14 subsection (h).

15 Section 15-606. Property removed from safe-deposit box.

16 Property removed from a safe-deposit box and delivered under

17 this Act to the administrator under this Act is subject to the

18 holder's right to reimbursement for the cost of opening the box

19 and a lien or contract providing reimbursement to the holder

20 for unpaid rent charges for the box. Upon application by the

21 holder, after the sale of the property, and after deducting the

22 expense incurred by the administrator in selling the property,

23 the administrator shall reimburse the holder from the proceeds

24 remaining. The administrator shall promulgate administrative

25 rules concerning the reimbursement process under this Section.

10000SB0009ham002

- 65 -

LRB100 06347 HLH 27841 a

1 Section 15-607. Crediting income or gain to owner's

2 account. If property other than money is delivered to the

3 administrator, the owner is entitled to receive from the

4 administrator income or gain realized or accrued on the

5 property before the property is sold. Interest on money is not

6 payable to an owner for periods where the property is in the

7 possession of the administrator.

8 Section 15-608. Administrator's options as to custody.

9 (a) The administrator may decline to take custody of

10 property reported under Section 15-401 if the administrator

11 determines that:

12 (1) the property has a value less than the estimated

13 expenses of notice and sale of the property; or

14 (2) taking custody of the property would be unlawful.

15 (b) A holder may pay or deliver property to the

16 administrator before the property is presumed abandoned under

17 this Act if the holder:

18 (1) provides the apparent owner of the property any

19 notice required by Section 15-501 and provides the

20 administrator evidence of the holder's compliance with

21 this paragraph;

22 (2) includes with the payment or delivery a report

23 regarding the property conforming to Section 15-402; and

24 (3) first obtains the administrator's consent in a

10000SB0009ham002

- 66 -

LRB100 06347 HLH 27841 a

1 record to accept payment or delivery.

2 (c) A holder's request for the administrator's consent

3 under subsection (b)(3) must be in a record. If the

4 administrator fails to respond to the request not later than 30

5 days after receipt of the request, the administrator is deemed

6 to consent to the payment or delivery of the property and the

7 payment or delivery is considered to have been made in good

8 faith.

9 (d) On payment or delivery of property under subsection

10 (b), the property is presumed abandoned.

11 Section 15-609. Disposition of property having no

12 substantial value; immunity from liability.

13 (a) If the administrator takes custody of property

14 delivered under this Act and later determines that the property

15 has no substantial commercial value or that the cost of

16 disposing of the property will exceed the value of the

17 property, the administrator may return the property to the

18 holder or destroy or otherwise dispose of the property.

19 (b) An action or proceeding may not be commenced against

20 the State, an agency of the State, the administrator, another

21 officer, employee, or agent of the State, or a holder for or

22 because of an act of the administrator under this Section,

23 except for intentional misconduct or malfeasance.

24 Section 15-610. Periods of limitation and repose.

10000SB0009ham002

- 67 -

LRB100 06347 HLH 27841 a

1 (a) Expiration, before, on, or after the effective date of

2 this Act, of a period of limitation on an owner's right to

3 receive or recover property, whether specified by contract,

4 statute, or court order, does not prevent the property from

5 being presumed abandoned or affect the duty of a holder under

6 this Act to file a report or pay or deliver property to the

7 administrator.

8 (b) An action or proceeding may not be maintained by the

9 administrator to enforce this Act in regard to the reporting,

10 delivery, or payment of property more than 10 years after the

11 holder specifically identified the property in a report filed

12 with the administrator or gave express notice to the

13 administrator of a dispute regarding the property. In the

14 absence of such a report or other express notice, the period of

15 limitation is tolled. The period of limitation is also tolled

16 by the filing of a report that is fraudulent.

17 ARTICLE 7. SALE OF PROPERTY BY ADMINISTRATOR

18 Section 15-701. Public sale of property.

19 (a) Subject to Section 15-702, not earlier than 3 years

20 after receipt of property presumed abandoned, the

21 administrator may sell the property.

22 (b) Before selling property under subsection (a), the

23 administrator shall give notice to the public of:

24 (1) the date of the sale; and

10000SB0009ham002

- 68 -

LRB100 06347 HLH 27841 a

1 (2) a reasonable description of the property.

2 (c) A sale under subsection (a) must be to the highest

3 bidder:

4 (1) at public sale at a location in this State which

5 the administrator determines to be the most favorable

6 market for the property;

7 (2) on the Internet; or

8 (3) on another forum the administrator determines is

9 likely to yield the highest net proceeds of sale.

10 (d) The administrator may decline the highest bid at a sale

11 under this Section and reoffer the property for sale if the

12 administrator determines the highest bid is insufficient.

13 (e) If a sale held under this Section is to be conducted

14 other than on the Internet, the administrator must cause to be

15 published at least one notice of the sale, at least 2 weeks but

16 not more than 5 weeks before the sale, in a newspaper of

17 general circulation in the county in which the property is to

18 be sold. For purposes of this subsection, the reasonable

19 description of property to be sold required by subsection (b)

20 above may be satisfied by posting such information on the

21 administrator's website so long as the newspaper notice

22 includes the website address where such information is posted.

23 (f) Property eligible for sale will not be sold when a

24 claim has been filed with the administrator by an apparent

25 owner, heir, or agent. However, upon approval of a claim, the

26 owner, heir or, agent may request the administrator to dispose

10000SB0009ham002

- 69 -

LRB100 06347 HLH 27841 a

1 of the property by sale and remit the net proceeds to the

2 owner, heir, or agent. Upon disapproval of the claim, the

3 administrator may dispose of the property by sale.

4 Section 15-702. Disposal of securities.

5 (a) The administrator may not sell or otherwise liquidate a

6 security until 3 years after the administrator receives the

7 security and gives the apparent owner notice under Section

8 15-503 that the administrator holds the security unless the

9 administrator determines it would be in the best interests of

10 the owner for the sale to occur prior to the expiration of the

11 3-year period after the administrator receives the security and

12 gives the apparent owner notice under Section 15-503. The

13 administrator shall by administrative rule provide examples of

14 situations where it would be in the best interests of the owner

15 for the sale to occur prior to the expiration of the 3-year

16 period.

17 (b) The administrator may not sell a security listed on an

18 established stock exchange for less than the price prevailing

19 on the exchange at the time of sale. The administrator may sell

20 a security not listed on an established exchange by any

21 commercially reasonable method.

22 Section 15-703. Recovery of securities or value by owner.

23 (a) If the administrator sells a security before the

24 expiration of 3 years after delivery of the security to the

10000SB0009ham002

- 70 -

LRB100 06347 HLH 27841 a

1 administrator, an apparent owner that files a valid claim under

2 this Act of ownership of the security before the 3-year period

3 expires is entitled, at the option of the owner, to receive:

4 (1) replacement of the security;

5 (2) the market value of the security at the time the

6 claim is filed, plus dividends, interest, and other

7 increments on the security up to the time the claim is

8 paid; or

9 (3) the net proceeds of the sale of the security, plus

10 dividends, interest, and other increments on the security

11 up to the time the security was sold.

12 (b) Replacement of the security or calculation of market

13 value under subsection (a) must take into account a stock

14 split, reverse stock split, stock dividend, or similar

15 corporate action.

16 (c) A person that makes a valid claim under this Act of

17 ownership of a security after expiration of 3 years after

18 delivery of the security to the administrator is entitled to

19 receive:

20 (1) the security the holder delivered to the

21 administrator, if it is in the custody of the

22 administrator, plus dividends, interest, and other

23 increments on the security up to the time the administrator

24 delivers the security to the person; or

25 (2) the net proceeds of the sale of the security, plus

26 dividends, interest, and other increments on the security

10000SB0009ham002

- 71 -

LRB100 06347 HLH 27841 a

1 up to the time the security was sold.

2 (d) Securities eligible for sale will not be sold when a

3 claim has been filed with the administrator by an apparent

4 owner, heir, or agent. However, upon approval of a claim, the

5 owner, heir or, agent may request the administrator to dispose

6 of the securities by sale and remit the net proceeds to the

7 owner, heir, or agent. Upon disapproval of the claim, the

8 administrator may dispose of the securities by sale.

9 Section 15-704. Purchaser owns property after sale. A

10 purchaser of property at a sale conducted by the administrator

11 under this Act takes the property free of all claims of the

12 owner, a previous holder, or a person claiming through the

13 owner or holder. The administrator shall execute documents

14 necessary to complete the transfer of ownership to the

15 purchaser.

16 Section 15-705. Exceptions to the sale of tangible

17 property. The administrator shall dispose of tangible property

18 identified by this Section in accordance with this Section.

19 (a) Military medals or decorations. The administrator may

20 not sell a medal or decoration awarded for military service in

21 the armed forces of the United States. Instead, the

22 administrator, with the consent of the respective organization

23 under paragraph (1), agency under paragraph (2), or entity

24 under paragraph (3), may deliver a medal or decoration to be

10000SB0009ham002

- 72 -

LRB100 06347 HLH 27841 a

1 held in custody for the owner, to:

2 (1) a military veterans organization qualified under

3 Section 501(c)(19) of the Internal Revenue Code;

4 (2) the agency that awarded the medal or decoration; or

5 (3) a governmental entity.

6 After delivery, the administrator is not responsible for

7 the safekeeping of the medal or decoration.

8 (b) Property with historical value. Property that the

9 administrator reasonably believes may have historical value

10 may be, at his or her discretion, loaned to an accredited

11 museum in the United States where it will be kept until such

12 time as the administrator orders it to be returned to his or

13 her custody.

14 (c) Human remains. If human remains are delivered to the

15 administrator under this Act, the administrator shall deliver

16 those human remains to the coroner of the county in which the

17 human remains were abandoned for disposition under Section

18 3-3034 of the Counties Code. The only human remains that may be

19 delivered to the administrator under this Act and that the

20 administrator may receive are those that are reported and

21 delivered as contents of a safe deposit box.

22 (d) Evidence in a criminal investigation. Property that may

23 have been used in the commission of a crime or that may assist

24 in the investigation of a crime, as determined after consulting

25 with the Department of State Police, shall be delivered to the

26 Department of State Police or other appropriate law enforcement

10000SB0009ham002

- 73 -

LRB100 06347 HLH 27841 a

1 authority to allow law enforcement to determine whether a

2 criminal investigation should take place. Any such property

3 delivered to a law enforcement authority shall be held in

4 accordance with existing statutes and rules related to the

5 gathering, retention, and release of evidence.

6 (e) Firearms.

7 (1) The administrator, in cooperation with the

8 Department of State Police, shall develop a procedure to

9 determine whether a firearm delivered to the administrator

10 under this Act has been stolen or used in the commission of

11 a crime. The Department of State Police shall determine the

12 appropriate disposition of a firearm that has been stolen

13 or used in the commission of a crime. The administrator

14 shall attempt to return a firearm that has not been stolen

15 or used in the commission of a crime to the rightful owner

16 if the Department of State Police determines that the owner

17 may lawfully possess the firearm.

18 (2) If the administrator is unable to return a firearm

19 to its owner, the administrator shall transfer custody of

20 the firearm to the Department of State Police. Legal title

21 to a firearm transferred to the Department of State Police

22 under this subsection (e) is vested in the Department of

23 State Police by operation of law if:

24 (i) the administrator cannot locate the owner of

25 the firearm;

26 (ii) the owner of the firearm may not lawfully

10000SB0009ham002

- 74 -

LRB100 06347 HLH 27841 a

1 possess the firearm;

2 (iii) the apparent owner does not respond to notice

3 published under Section 15-503 of this Act; or

4 (iv) the apparent owner responds to notice

5 published under Section 15-502 and states that he or

6 she no longer claims an interest in the firearm.

7 (3) With respect to a firearm whose title is

8 transferred to the Department of State Police under this

9 subsection (e), the Department of State Police may:

10 (i) retain the firearm for use by the crime

11 laboratory system, for training purposes, or for

12 any other application as deemed appropriate by the

13 Department;

14 (ii) transfer the firearm to the Illinois

15 State Museum if the firearm has historical value;

16 or

17 (iii) destroy the firearm if it is not retained

18 pursuant to subparagraph (i) or transferred

19 pursuant to subparagraph (ii).

20 As used in this subsection, "firearm" has the meaning

21 provided in the Firearm Owners Identification Card Act.

22 ARTICLE 8. ADMINISTRATION OF PROPERTY

23 Section 15-801. Deposit of funds by administrator.

24 (a) Except as otherwise provided in this Section, the

10000SB0009ham002

- 75 -

LRB100 06347 HLH 27841 a

1 administrator shall deposit in the Unclaimed Property Trust

2 Fund all funds received under this Act, including proceeds from

3 the sale of property under Article 7. The administrator may

4 deposit any amount in the Unclaimed Property Trust Fund into

5 the State Pensions Fund during the fiscal year at his or her

6 discretion; however, he or she shall, on April 15 and October

7 15 of each year, deposit any amount in the Unclaimed Property

8 Trust Fund exceeding $2,500,000 into the State Pensions Fund.

9 If on either April 15 or October 15, the administrator

10 determines that a balance of $2,500,000 is insufficient for the

11 prompt payment of unclaimed property claims authorized under

12 this Act, the administrator may retain more than $2,500,000 in

13 the Unclaimed Property Trust Fund in order to ensure the prompt

14 payment of claims. Beginning in State fiscal year 2018, all

15 amounts that are deposited into the State Pensions Fund from

16 the Unclaimed Property Trust Fund shall be apportioned to the

17 designated retirement systems as provided in subsection (c-6)

18 of Section 8.12 of the State Finance Act to reduce their

19 actuarial reserve deficiencies.

20 (b) The administrator shall make prompt payment of claims

21 he or she duly allows as provided for in this Act from the

22 Unclaimed Property Trust Fund. This shall constitute an

23 irrevocable and continuing appropriation of all amounts in the

24 Unclaimed Property Trust Fund necessary to make prompt payment

25 of claims duly allowed by the administrator pursuant to this

26 Act.

10000SB0009ham002

- 76 -

LRB100 06347 HLH 27841 a

1 Section 15-802. Administrator to retain records of

2 property. The administrator shall:

3 (1) record and retain the name and last-known address

4 of each person shown on a report filed under Section 15-401

5 to be the apparent owner of property delivered to the

6 administrator;

7 (2) record and retain the name and last-known address

8 of each insured or annuitant and beneficiary shown on the

9 report;

10 (3) for each policy of insurance or annuity contract

11 listed in the report of an insurance company, record and

12 retain the policy or account number, the name of the

13 company, and the amount due or paid shown on the report;

14 (4) for each apparent owner listed in the report,

15 record and retain the name of the holder that filed the

16 report and the amount due or paid; and

17 (5) maintain records sufficient to indicate the filing

18 of reports required under Section 15-401 and the payment or

19 delivery of property to the administrator under Section

20 15-603.

21 Records created or maintained pursuant to this Section are

22 subject to the requirements of the Illinois State Records Act.

23 Section 15-803. Expenses and service charges of

24 administrator. Before making a deposit of funds received under

10000SB0009ham002

- 77 -

LRB100 06347 HLH 27841 a

1 this Act to the Unclaimed Property Trust Fund, the

2 administrator may deduct expenses incurred in examining

3 records of or collecting property from a putative holder or

4 holder as provided in the State Officers and Employees Money

5 Disposition Act.

6 Section 15-804. Administrator holds property as custodian

7 for owner. Upon the payment or delivery of abandoned property

8 to the administrator, the State shall assume custody and shall

9 be responsible for the safekeeping thereof.

10 ARTICLE 9. CLAIM TO RECOVER PROPERTY FROM ADMINISTRATOR

11 Section 15-901. Claim of another state to recover property.

12 (a) If the administrator knows that property held by the

13 administrator under this Act is subject to a superior claim of

14 another state, the administrator shall:

15 (1) report and pay or deliver the property to the other

16 state; or

17 (2) return the property to the holder so that the

18 holder may pay or deliver the property to the other state.

19 (b) The administrator is not required to enter into an

20 agreement to transfer property to the other state under

21 subsection (a).

22 Section 15-902. Property subject to recovery by another

10000SB0009ham002

- 78 -

LRB100 06347 HLH 27841 a

1 state.

2 (a) Property held under this Act by the administrator is

3 subject to the right of another state to take custody of the

4 property if:

5 (1) the property was paid or delivered to the

6 administrator because the records of the holder did not

7 reflect a last-known address in the other state of the

8 apparent owner and:

9 (A) the other state establishes that the

10 last-known address of the apparent owner or other

11 person entitled to the property was in the other state;

12 or

13 (B) under the law of the other state, the property

14 has become subject to a claim by the other state of

15 abandonment;

16 (2) the records of the holder did not accurately

17 identify the owner of the property, the last-known address

18 of the owner was in another state, and, under the law of

19 the other state, the property has become subject to a claim

20 by the other state of abandonment;

21 (3) the property was subject to the custody of the

22 administrator of this State under Section 15-305 and, under

23 the law of the state of domicile of the holder, the

24 property has become subject to a claim by the state of

25 domicile of the holder of abandonment; or

26 (4) the property:

10000SB0009ham002

- 79 -

LRB100 06347 HLH 27841 a

1 (A) is a sum payable on a traveler's check, money

2 order, or similar instrument that was purchased in the

3 other state and delivered to the administrator under

4 Section 15-306; and

5 (B) under the law of the other state, has become

6 subject to a claim by the other state of abandonment.

7 (b) A claim by another state to recover property under this

8 Section must be presented in a form prescribed by the

9 administrator, unless the administrator waives presentation of

10 the form.

11 (c) The administrator shall decide a claim under this

12 Section not later than 90 days after it is presented. If the

13 administrator determines that the other state is entitled under

14 subsection (a) to custody of the property, the administrator

15 shall allow the claim and pay or deliver the property to the

16 other state.

17 (d) The administrator may require another state, before

18 recovering property under this Section, to agree to indemnify

19 this State and its agents, officers and employees against any

20 liability on a claim to the property.

21 Section 15-903. Claim for property by person claiming to be

22 owner.

23 (a) A person claiming to be the owner of property held

24 under this Act by the administrator or to the proceeds from the

25 sale thereof may file a claim for the property on a form

10000SB0009ham002

- 80 -

LRB100 06347 HLH 27841 a

1 prescribed by the administrator. The claimant must verify the

2 claim as to its completeness and accuracy.

3 (b) The administrator may waive the requirement in

4 subsection (a) and may pay or deliver property directly to a

5 person if:

6 (1) the person receiving the property or payment is

7 shown to be the apparent owner included on a report filed

8 under Section 15-401;

9 (2) the administrator reasonably believes the person

10 is entitled to receive the property or payment; and

11 (3) the property has a value of less than $500.

12 (c) The administrator may change the maximum value in

13 subsection (b) by administrative rule.

14 Section 15-904. When administrator must honor claim for

15 property.

16 (a) The administrator shall pay or deliver property to a

17 claimant under subsection (a) of Section 15-903 if the

18 administrator receives evidence sufficient to establish to the

19 satisfaction of the administrator that the claimant is the

20 owner of the property.

21 (b) A claim will be considered complete when a claimant has

22 provided all the information and documentation requested by the

23 administrator as necessary to establish legal ownership and

24 such information or documentation is entered into the

25 administrator's unclaimed property system. Unless extended for

10000SB0009ham002

- 81 -

LRB100 06347 HLH 27841 a

1 reasonable cause, not later than 90 days after a claim is

2 complete the administrator shall allow or deny the claim and

3 give the claimant notice in a record of the decision. If a

4 claimant fails to provide all the information and documentation

5 requested by the administrator as necessary to establish legal

6 ownership of the property and the claim is inactive for at

7 least 90 days, then the administrator may close the claim

8 without issuing a final decision. However, if the claimant

9 makes a request in writing for a final decision prior to the

10 administrator's closing of the claim, the administrator shall

11 issue a final decision.

12 (c) If the claim is denied or there is insufficient

13 evidence to allow the claim under subsection (b):

14 (1) the administrator shall inform the claimant of the

15 reason for the denial and may specify what additional

16 evidence, if any, is required for the claim to be allowed;

17 (2) the claimant may file an amended claim with the

18 administrator or commence an action under Section 15-906;

19 and

20 (3) the administrator shall consider an amended claim

21 filed under paragraph (2) as an initial claim.

22 Section 15-905. Allowance of claim for property.

23 (a) The administrator shall pay or deliver to the owner the

24 property or pay to the owner the net proceeds of a sale of the

25 property, together with income or gain to which the owner is

10000SB0009ham002

- 82 -

LRB100 06347 HLH 27841 a

1 entitled under Section 15-607. On request of the owner, the

2 administrator may sell or liquidate property and pay the net

3 proceeds to the owner, even if the property had been held by

4 the administrator for less than 3 years or the administrator

5 has not complied with the notice requirements under Section

6 15-503.

7 (b) Property held under this Act by the administrator is

8 subject to offset under Section 10.05 of the State Comptroller

9 Act.

10 Section 15-906. Action by person whose claim is denied. Not

11 later than one year after filing a claim under subsection (a)

12 of Section 15-903, the claimant may commence a contested case

13 pursuant to the Illinois Administrative Procedure Act to

14 establish a claim by the preponderance of the evidence after

15 either receiving notice under subsection (b) of Section 15-903

16 or the claim is deemed denied under subsection (d) of Section

17 15-903.

18 ARTICLE 10. VERIFIED REPORT OF PROPERTY; EXAMINATION OF RECORDS

19 Section 15-1001. Verified report of property. If a person

20 does not file a report required by Section 15-401 or the

21 administrator believes that a person may have filed an

22 inaccurate, incomplete, or false report, the administrator may

23 require the person to file a verified report in a form

10000SB0009ham002

- 83 -

LRB100 06347 HLH 27841 a

1 prescribed by the administrator. The verified report must:

2 (1) state whether the person is holding property

3 reportable under this Act;

4 (2) describe property not previously reported or about

5 which the administrator has inquired;

6 (3) specifically identify property described under

7 paragraph (2) about which there is a dispute whether it is

8 reportable under this Act; and

9 (4) state the amount or value of the property.

10 Section 15-1002. Examination of records to determine

11 compliance. The administrator, at reasonable times and on

12 reasonable notice, may:

13 (1) examine the records of any person to determine

14 whether the person has complied with this Act even if the

15 person believes it is not in possession of any property

16 that must be reported, paid, or delivered under this Act;

17 (2) issue an administrative subpoena requiring the

18 person or agent of the person to make records available for

19 examination; and

20 (3) bring an action seeking judicial enforcement of the

21 subpoena.

22 Section 15-1002.1. Examination of State-regulated

23 financial institutions.

24 (a) Notwithstanding Section 15-1002 of this Act, for any

10000SB0009ham002

- 84 -

LRB100 06347 HLH 27841 a

1 financial organization for which the Department of Financial

2 and Professional Regulation is the primary prudential

3 regulator, the administrator shall not examine such financial

4 institution unless the administrator has consulted with the

5 Secretary of Financial and Professional Regulation and the

6 Department of Financial and Professional Regulation has not

7 examined such financial organization for compliance with this

8 Act within the past 5 years. The Secretary of Financial and

9 Professional Regulation may waive in writing the provisions of

10 this subsection (a) in order to permit the administrator to

11 examine a financial organization or group of financial

12 organizations for compliance with this Act.

13 (b) Nothing in this Section shall be construed to prohibit

14 the administrator from examining a financial organization for

15 which the Department of Financial and Professional Regulation

16 is not the primary prudential regulator. Further, nothing is

17 this Act shall be construed to limit the authority of the

18 Department of Financial and Professional Regulation to examine

19 financial organizations.

20 Section 15-1003. Rules for conducting examination.

21 (a) The administrator shall adopt rules governing

22 procedures and standards for an examination under Section

23 15-1002; the rules may reference any standards concerning

24 unclaimed property examinations promulgated by the National

25 Association of Unclaimed Property Administrators and shall

10000SB0009ham002

- 85 -

LRB100 06347 HLH 27841 a

1 make provisions for multi-state examinations.

2 (b) After the adoption of rules under subsection (a), an

3 examination under Section 15-1002 must be performed under the

4 rules adopted under subsection (a).

5 (c) If a person subject to examination under Section

6 15-1002 has filed the reports required under Section 15-401 and

7 Section 15-1001 and has retained the records required by

8 Section 15-404, the following rules apply:

9 (1) The examination must include a review of the

10 person's records.

11 (2) The examination may not be based on an estimate

12 unless the person expressly consents in a record to the use

13 of an estimate.

14 (3) The person conducting the examination shall

15 consider the evidence presented in good faith by the person

16 in preparing the findings of the examination under Section

17 15-1007.

18 Section 15-1004. Records obtained in examination. Records

19 obtained and records, including work papers, compiled by the

20 administrator in the course of conducting an examination under

21 Section 15-1002:

22 (1) are subject to the confidentiality and security

23 provisions of Article 14 and are exempt from disclosure

24 under the Freedom of Information Act;

25 (2) may be used by the administrator in an action to

10000SB0009ham002

- 86 -

LRB100 06347 HLH 27841 a

1 collect property or otherwise enforce this Act;

2 (3) may be used in a joint examination conducted with

3 another state, the United States, a foreign country or

4 subordinate unit of a foreign country, or any other

5 governmental entity if the governmental entity conducting

6 the examination is legally bound to maintain the

7 confidentiality and security of information obtained from

8 a person subject to examination in a manner substantially

9 equivalent to Article 14;

10 (4) may be disclosed, on request, to the person that

11 administers the unclaimed property law of another state for

12 that state's use in circumstances equivalent to

13 circumstances described in this Article, if the other state

14 is required to maintain the confidentiality and security of

15 information obtained in a manner substantially equivalent

16 to Article 14;

17 (5) must be produced by the administrator under an

18 administrative or judicial subpoena or administrative or

19 court order; and

20 (6) must be produced by the administrator on request of

21 the person subject to the examination in an administrative

22 or judicial proceeding relating to the property.

23 Section 15-1005. Evidence of unpaid debt or undischarged

24 obligation.

25 (a) A record of a putative holder showing an unpaid debt or

10000SB0009ham002

- 87 -

LRB100 06347 HLH 27841 a

1 undischarged obligation is prima facie evidence of the debt or

2 obligation.

3 (b) A putative holder may establish by a preponderance of

4 the evidence that there is no unpaid debt or undischarged

5 obligation for a debt or obligation described in subsection (a)

6 or that the debt or obligation was not, or no longer is, a

7 fixed and certain obligation of the putative holder.

8 (c) A putative holder may overcome prima facie evidence

9 under subsection (a) by establishing by a preponderance of the

10 evidence that a check, draft, or similar instrument was:

11 (1) issued as an unaccepted offer in settlement of an

12 unliquidated amount;

13 (2) issued but later was replaced with another

14 instrument because the earlier instrument was lost or

15 contained an error that was corrected;

16 (3) issued to a party affiliated with the issuer;

17 (4) paid, satisfied, or discharged;

18 (5) issued in error;

19 (6) issued without consideration;

20 (7) issued but there was a failure of consideration;

21 (8) voided not later than 90 days after issuance for a

22 valid business reason set forth in a contemporaneous

23 record; or

24 (9) issued but not delivered to the third-party payee

25 for a sufficient reason recorded within a reasonable time

26 after issuance.

10000SB0009ham002

- 88 -

LRB100 06347 HLH 27841 a

1 (d) In asserting a defense under this Section, and subject

2 to the records retention requirements of Section 15-404, a

3 putative holder may present evidence of a course of dealing

4 between the putative holder and the apparent owner.

5 Section 15-1006. Failure of person examined to retain

6 records. If a person subject to examination under Section

7 15-1002 does not retain the records required by Section 15-404,

8 the administrator may determine the value of property due using

9 a reasonable method of estimation based on all information

10 available to the administrator, including extrapolation and

11 use of statistical sampling when appropriate and necessary,

12 consistent with examination procedures and standards adopted

13 under Section 15-1003. A payment made based on estimation under

14 this Section is a penalty for failure to maintain the records

15 required by Section 15-404 and does not relieve a person from

16 an obligation to report and deliver property to a State in

17 which the holder is domiciled.

18 Section 15-1007. Report to person whose records were

19 examined. At the conclusion of an examination under Section

20 15-1002, unless waived in writing by the person being examined,

21 the administrator shall provide to the person whose records

22 were examined a report that specifies:

23 (1) the work performed;

24 (2) the property types reviewed;

10000SB0009ham002

- 89 -

LRB100 06347 HLH 27841 a

1 (3) the methodology of any estimation technique,

2 extrapolation, or statistical sampling used in conducting

3 the examination;

4 (4) each calculation showing the value of property

5 determined to be due; and

6 (5) the findings of the person conducting the

7 examination.

8 Section 15-1008. Informal conference during examination.

9 (a) If a person subject to examination under Section

10 15-1002 believes the person conducting the examination has made

11 an unreasonable or unauthorized request or is not proceeding

12 expeditiously to complete the examination, the person in a

13 record may request an informal conference with the

14 administrator.

15 (b) If a person in a record requests an informal conference

16 with the administrator, the administrator shall hold the

17 informal conference not later than 30 days after receiving the

18 request. For good cause, and after notice in a record to the

19 person requesting an informal conference, the administrator

20 may extend the time for the holding of an informal conference.

21 The administrator may hold the informal conference in person,

22 by telephone, or by electronic means.

23 (c) If an informal conference is held under subsection (b),

24 not later than 30 days after the conference ends, the

25 administrator shall provide a response to the person that

10000SB0009ham002

- 90 -

LRB100 06347 HLH 27841 a

1 requested the conference.

2 (d) The administrator may deny a request for an informal

3 conference under this Section if the administrator reasonably

4 believes that the request was made in bad faith or primarily to

5 delay the examination. If the administrator denies a request

6 for an informal conference the denial shall be in a record

7 provided to the person requesting the informal conference.

8 Section 15-1009. Administrator's contract with another to

9 conduct examination.

10 (a) The administrator may contract with a person to conduct

11 an examination under this Article. The contract shall be

12 awarded pursuant to a request for proposals issued in

13 compliance with the procurement rules of the administrator.

14 (b) If the administrator contracts with a person under

15 subsection (a):

16 (1) the contract may provide for compensation of the

17 person based on a fixed fee, hourly fee, or contingent fee;

18 (2) a contingent fee arrangement may not provide for a

19 payment that exceeds 15% of the amount or value of property

20 paid or delivered as a result of the examination; and

21 (3) as authorized in the State Officers and Employees

22 Money Disposition Act, the administrator may permit the

23 deduction of fees from property recovered during an

24 examination under this Article prior to depositing funds

25 received under this Act into the Unclaimed Property Trust

10000SB0009ham002

- 91 -

LRB100 06347 HLH 27841 a

1 Fund.

2 (c) A contract under subsection (a) is a public record

3 under the Freedom of Information Act.

4 Section 15-1010. Report by administrator. As part of the

5 report required by Section 15 of the State Treasurer Act, the

6 administrator shall compile and include the following

7 information about property presumed abandoned for the

8 preceding fiscal year for the State:

9 (1) the total amount and value of all property paid or

10 delivered under this Act to the administrator, separated

11 into:

12 (A) the part voluntarily paid or delivered; and

13 (B) the part paid or delivered as a result of an

14 examination under Section 15-1002;

15 (2) the total amount and value of all property paid or

16 delivered by the administrator to persons that made claims

17 for property held by the administrator under this Act;

18 (3) the amounts expended from the State Pensions Fund;

19 and

20 (4) such other information as the administrator

21 believes would be useful or informative.

22 Section 15-1011. Determination of liability for unreported

23 reportable property. If the administrator determines from an

24 examination conducted under Section 15-1002 that a putative

10000SB0009ham002

- 92 -

LRB100 06347 HLH 27841 a

1 holder failed or refused to pay or deliver to the administrator

2 property which is reportable under this Act, the administrator

3 shall issue a determination of the putative holder's liability

4 to pay or deliver and give notice in a record to the putative

5 holder of the determination.

6 ARTICLE 11. DETERMINATION OF LIABILITY; PUTATIVE HOLDER

7 REMEDIES

8 Section 15-1101. Informal conference.

9 (a) Not later than 30 days after receipt of a notice under

10 Section 15-1011, the putative holder may request an informal

11 conference with the administrator to review the determination.

12 Except as otherwise provided in this Section, the administrator

13 may designate an employee to act on behalf of the

14 administrator.

15 (b) If a putative holder makes a timely request under

16 subsection (a) for an informal conference:

17 (1) not later than 30 days after the date of the

18 request, the administrator shall set the time and place of

19 the conference;

20 (2) the administrator shall give the putative holder

21 notice in a record of the time and place of the conference;

22 (3) the conference may be held in person, by telephone,

23 or by electronic means, as determined by the administrator;

24 (4) the request tolls the 90-day period under Sections

10000SB0009ham002

- 93 -

LRB100 06347 HLH 27841 a

1 15-1103 and 15-1104 until notice of a decision under

2 paragraph (7) has been given to the putative holder or the

3 putative holder withdraws the request for the conference;

4 (5) the conference may be postponed, adjourned, and

5 reconvened as the administrator determines appropriate;

6 (6) the administrator or administrator's designee with

7 the approval of the administrator may modify a

8 determination made under Section 15-1011 or withdraw it;

9 and

10 (7) the administrator shall issue a decision in a

11 record and provide a copy of the record to the putative

12 holder and examiner not later than 30 days after the

13 conference ends.

14 (c) A conference under subsection (b) is not an

15 administrative remedy and is not a contested case subject to

16 the Illinois Administrative Procedure Act. An oath is not

17 required and rules of evidence do not apply in the conference.

18 (d) At a conference under subsection (b), the putative

19 holder must be given an opportunity to confer informally with

20 the administrator and the person that examined the records of

21 the putative holder to:

22 (1) discuss the determination made under Section

23 15-1011; and

24 (2) present any issue concerning the validity of the

25 determination.

26 (e) If the administrator fails to act within the period

10000SB0009ham002

- 94 -

LRB100 06347 HLH 27841 a

1 prescribed in subsection (b)(1) or (7), the failure does not

2 affect a right of the administrator, except that interest does

3 not accrue on the amount for which the putative holder was

4 determined to be liable under Section 15-1011 during the period

5 in which the administrator failed to act until the earlier of:

6 (1) the date under Section 15-1103 the putative holder

7 initiates administrative review or files an action under

8 Section 15-1104; or

9 (2) 90 days after the putative holder received notice

10 of the administrator's determination under Section 15-1011

11 if no review was initiated under Section 15-1103 and no

12 action was filed under Section 15-1104.

13 (f) The administrator may hold an informal conference with

14 a putative holder about a determination under Section 15-1011

15 without a request at any time before the putative holder

16 initiates administrative review under Section 15-1102.

17 (g) Interest and penalties under Section 15-1204 continue

18 to accrue on property not reported, paid, or delivered as

19 required by this Act after the initiation, and during the

20 pendency, of an informal conference under this Section.

21 Section 15-1102. Administrative review.

22 (a) Not later than 90 days after receiving notice of the

23 administrator's determination under Section 15-1011, or, if

24 applicable and as provided in Section 15-1101(b)(4), after

25 notice of a decision under 15-1101(b)(7) has been given to the

10000SB0009ham002

- 95 -

LRB100 06347 HLH 27841 a

1 putative holder or the putative holder has withdrawn the

2 request for an informal conference, a putative holder may

3 initiate a contested case under the Illinois Administrative

4 Procedure Act for review of the administrator's determination.

5 (b) A final decision in an administrative proceeding

6 initiated under subsection (a) is subject to judicial review

7 under the Article III of Code of Civil Procedure.

8 ARTICLE 12. ENFORCEMENT BY ADMINISTRATOR

9 Section 15-1201. Judicial action to enforce liability.

10 (a) If a determination under Section 15-1011 becomes final

11 and is not subject to administrative or judicial review, the

12 administrator may commence an action in the Circuit Court of

13 Sangamon County or Cook County, federal court, or in an

14 appropriate court of another state to enforce the determination

15 and secure payment or delivery of past due, unpaid, or

16 undelivered property. The action must be brought not later than

17 5 years after the determination becomes final.

18 (b) In an action under subsection (a), if no court in this

19 State has jurisdiction over the defendant, the administrator

20 may commence an action in any court having jurisdiction over

21 the defendant.

22 Section 15-1202. Interstate and international agreement;

23 cooperation.

10000SB0009ham002

- 96 -

LRB100 06347 HLH 27841 a

1 (a) Subject to subsection (b), the administrator may:

2 (1) exchange information with another state or foreign

3 country relating to property presumed abandoned or

4 relating to the possible existence of property presumed

5 abandoned; and

6 (2) authorize in a record another state or foreign

7 country or a person acting on behalf of the other state or

8 country to examine its records of a putative holder as

9 provided in Article 10.

10 (b) An exchange or examination under subsection (a) may be

11 done only if the state or foreign country has confidentiality

12 and security requirements substantially equivalent to those in

13 Article 14 or agrees in a record to be bound by this State's

14 confidentiality and security requirements.

15 Section 15-1203. Action involving another state or foreign

16 country.

17 (a) The administrator may join another state or foreign

18 country to examine and seek enforcement of this Act against a

19 putative holder.

20 (b) On request of another state or foreign country, the

21 Attorney General may commence an action on behalf of the other

22 state or country to enforce, in this State, the law of the

23 other state or country against a putative holder subject to a

24 claim by the other state or country.

25 (c) The administrator may request the official authorized

10000SB0009ham002

- 97 -

LRB100 06347 HLH 27841 a

1 to enforce the unclaimed property law of another state or

2 foreign country to commence an action to recover property in

3 the other state or country on behalf of the administrator. This

4 state may pay the costs, including reasonable attorney's fees

5 and expenses, incurred by the other state or foreign country in

6 an action under this subsection.

7 (d) The administrator may pursue an action on behalf of

8 this State to recover property subject to this Act but

9 delivered to the custody of another state if the administrator

10 believes the property is subject to the custody of the

11 administrator.

12 (e) At the request of the administrator, the Attorney

13 General may commence an action to recover property on behalf of

14 the administrator in this State, another state, or a foreign

15 country. With the written consent of the Attorney General, the

16 administrator may retain an attorney in this State, another

17 state, or a foreign country to recover property on behalf of

18 the administrator in this State, another state, or a foreign

19 country and may agree to pay attorney's fees based in whole or

20 in part on a fixed fee, hourly fee, or a percentage of the

21 amounts or value of property recovered in the action.

22 (f) Expenses incurred by this State in an action under this

23 Section may be paid from property received under this Act or

24 the net proceeds of the property. Expenses paid to recover

25 property may not be deducted from the amount that is subject to

26 a claim under this Act by the owner.

10000SB0009ham002

- 98 -

LRB100 06347 HLH 27841 a

1 Section 15-1204. Interest and penalty for failure to act in

2 timely manner.

3 (a) A holder that fails to report, pay, or deliver property

4 within the time prescribed by this Act shall pay to the

5 administrator interest at a rate of 1% per month on the

6 property or value of the property from the date the property

7 should have been reported, paid, or delivered to the

8 administrator until the date reported, paid, or delivered.

9 (b) Except as otherwise provided in Section 15-1 or

10 15-1206, the administrator may require a holder that fails to

11 report, pay, or deliver property within the time prescribed by

12 this Act to pay to the administrator, in addition to interest

13 included under subsection (a), a civil penalty of $200 for each

14 day the duty is not performed, up to a cumulative maximum

15 amount of $5,000.

16 (c) A holder who fails to report, pay, or deliver property

17 within the time prescribed by this Act shall not be required to

18 pay interest under subsection (a) above or be subject to

19 penalties under subsection (b) above if the failure to report,

20 pay, or deliver the property was due to lack of knowledge of

21 the death that established the period of abandonment under this

22 Act.

23 Section 15-1205. Other civil penalties.

24 (a) If a holder enters into a contract or other arrangement

10000SB0009ham002

- 99 -

LRB100 06347 HLH 27841 a

1 for the purpose of evading an obligation under this Act or

2 otherwise willfully fails to perform a duty imposed on the

3 holder under this Act, the administrator may require the holder

4 to pay the administrator, in addition to interest as provided

5 in subsection (a) of Section 15-1204, a civil penalty of $1,000

6 for each day the obligation is evaded or the duty is not

7 performed, up to a cumulative maximum amount of $25,000, plus

8 25% of the amount or value of property that should have been

9 but was not reported, paid, or delivered as a result of the

10 evasion or failure to perform.

11 (b) If a holder makes a fraudulent report under this Act,

12 the administrator may require the holder to pay to the

13 administrator, in addition to interest under subsection (a) of

14 Section 15-1204, a civil penalty of $1,000 for each day from

15 the date the report was made until corrected, up to a

16 cumulative maximum of $25,000, plus 25% of the amount or value

17 of any property that should have been reported but was not

18 included in the report or was underreported.

19 Section 15-1206. Waiver of interest and penalty. The

20 administrator:

21 (1) may waive, in whole or in part, interest under

22 subsection (a) of Section 15-1204 and penalties under

23 subsection (b) of Section 15-1204 or Section 15-1; and

24 (2) shall waive a penalty under subsection (b) of

25 Section 15-1204 if the administrator determines that the

10000SB0009ham002

- 100 -

LRB100 06347 HLH 27841 a

1 holder acted in good faith and without negligence.

2 ARTICLE 13. AGREEMENT TO LOCATE PROPERTY OF APPARENT OWNER HELD

3 BY ADMINISTRATOR

4 Section 15-1301. When agreement to locate property

5 enforceable. An agreement by an apparent owner and another

6 person, the primary purpose of which is to locate, deliver,

7 recover, or assist in the location, delivery, or recovery of

8 property held by the administrator, is enforceable only if the

9 agreement:

10 (1) is in a record that clearly states the nature of

11 the property and the services to be provided;

12 (2) is signed by or on behalf of the apparent owner;

13 and

14 (3) states the amount or value of the property

15 reasonably expected to be recovered, computed before and

16 after a fee or other compensation to be paid to the person

17 has been deducted.

18 Section 15-1302. When agreement to locate property void.

19 (a) Subject to subsection (b), an agreement under Section

20 15-1301 is void if it is entered into during the period

21 beginning on the date the property was presumed abandoned under

22 this Act and ending 24 months after the payment or delivery of

23 the property to the administrator.

10000SB0009ham002

- 101 -

LRB100 06347 HLH 27841 a

1 (b) If a provision in an agreement described in Section

2 15-1301 applies to mineral proceeds for which compensation is

3 to be paid to the other person based in whole or in part on a

4 part of the underlying minerals or mineral proceeds not then

5 presumed abandoned, the provision is void regardless of when

6 the agreement was entered into.

7 (c) An agreement under subsection (a) which provides for

8 compensation in an amount that is more than 10% of the amount

9 collected is unenforceable except by the apparent owner.

10 (d) An apparent owner or the administrator may assert that

11 an agreement described in this Section is void on a ground

12 other than it provides for payment of unconscionable

13 compensation.

14 (e) A person attempting to collect a contingent fee for

15 discovering, on behalf of an apparent owner, presumptively

16 abandoned property must be licensed as a private detective

17 pursuant to the Private Detective, Private Alarm, Private

18 Security, Fingerprint Vendor, and Locksmith Act of 2004.

19 (f) This Section does not apply to an apparent owner's

20 agreement with an attorney to pursue a claim for recovery of

21 specifically identified property held by the administrator or

22 to contest the administrator's denial of a claim for recovery

23 of the property.

24 ARTICLE 14. CONFIDENTIALITY AND SECURITY OF INFORMATION

10000SB0009ham002

- 102 -

LRB100 06347 HLH 27841 a

1 Section 15-1401. Confidential information.

2 (a) Except as otherwise provide in this Section,

3 information that is confidential under law of this State other

4 than this Act, another state, or the United States, including

5 "private information" as defined in the Freedom of Information

6 Act and "personal information" as defined in the Personal

7 Information Protection Act, continues to be confidential when

8 disclosed or delivered under this Act to the administrator or

9 administrator's agent.

10 (b) Information provided in reports filed pursuant to

11 Section 15-401, information obtained in the course of an

12 examination pursuant to Section 15-1002, and the database

13 required by Section 15-503 is exempt from disclosure under the

14 Freedom of Information Act.

15 (c) If reasonably necessary to enforce or implement this

16 Act, the administrator or the administrator's agent may

17 disclose confidential information concerning property held by

18 the administrator or the administrator's agent to:

19 (1) an apparent owner or the apparent owner's

20 representative under the Probate Act of 1975, attorney,

21 other legal representative, or relative;

22 (2) the representative under the Probate Act of 1975,

23 other legal representative, relative of a deceased

24 apparent owner, or a person entitled to inherit from the

25 deceased apparent owner;

26 (3) another department or agency of this State or the

10000SB0009ham002

- 103 -

LRB100 06347 HLH 27841 a

1 United States;

2 (4) the person that administers the unclaimed property

3 law of another state, if the other state accords

4 substantially reciprocal privileges to the administrator

5 of this State if the other state is required to maintain

6 the confidentiality and security of information obtained

7 in a manner substantially equivalent to Article 14;

8 (5) a person subject to an examination as required by

9 Section 15-1004; and

10 (6) an agent of the administrator.

11 (b) The administrator may include on the website or in the

12 database the names and addresses of apparent owners of property

13 held by the administrator as provided in Section 15-503. The

14 administrator may include in published notices, printed

15 publications, telecommunications, the Internet, or other media

16 and on the website or in the database additional information

17 concerning the apparent owner's property if the administrator

18 believes the information will assist in identifying and

19 returning property to the owner and does not disclose personal

20 information as defined in the Personal Information Protection

21 Act.

22 (c) The administrator and the administrator's agent may not

23 use confidential information provided to them or in their

24 possession except as expressly authorized by this Act or

25 required by law other than this Act.

10000SB0009ham002

- 104 -

LRB100 06347 HLH 27841 a

1 Section 15-1402. Confidentiality agreement. A person to be

2 examined under Section 15-1002 may require, as a condition of

3 disclosure of the records of the person to be examined, that

4 the administrator or the administrator's agent execute and

5 deliver to the person to be examined a confidentiality

6 agreement that:

7 (1) is in a form that is reasonably satisfactory to the

8 administrator; and

9 (2) requires the person having access to the records to

10 comply with the provisions of this Article applicable to

11 the person.

12 Section 15-1403. No confidential information in notice.

13 Except as otherwise provided in Sections 15-501 and 15-502, a

14 holder is not required under this Act to include confidential

15 information in a notice the holder is required to provide to an

16 apparent owner under this Act.

17 Section 15-1404. Security of information.

18 (a) If a holder is required to include confidential

19 information in a report to the administrator, the information

20 must be provided by a secure means.

21 (b) If confidential information in a record is provided to

22 and maintained by the administrator or administrator's agent as

23 required by this Act, the administrator or agent shall

24 implement and maintain reasonable security measures to protect

10000SB0009ham002

- 105 -

LRB100 06347 HLH 27841 a

1 those records from unauthorized access, acquisition,

2 destruction, use, modification, or disclosure as required by

3 the Personal Information Protection Act. If a State or federal

4 law requires the administrator or agent to provide greater

5 protection to records that contain personal information that

6 are maintained by the administrator or agent and the

7 administrator or agent is in compliance with the provisions of

8 that State or federal law, the administrator or agent is deemed

9 to be in compliance with the provisions of this subsection.

10 (c) If there is any breach of the security of the system

11 data or written material, the administrator and the

12 administrator's agent shall comply with the notice

13 requirements of Section 12 of the Personal Information

14 Protection Act, and shall, if applicable, cooperate with a

15 holder in complying with the notice requirements of Section 10

16 of the Personal Information Protection Act.

17 (d) The administrator and the administrator's agent shall

18 either return in a secure manner or destroy in a manner

19 consistent with the Personal Information Protection Act all

20 confidential information no longer reasonably needed under

21 this Act.

22 ARTICLE 15. MISCELLANEOUS

23 Section 15-1501. Uniformity of application and

24 construction. In applying and construing this uniform Act

10000SB0009ham002

- 106 -

LRB100 06347 HLH 27841 a

1 consideration must be given to the need to promote uniformity

2 of the law with respect to its subject matter among states that

3 enact it.

4 Section 15-1502. Relation to Electronic Signatures in

5 Global and National Commerce Act. This Act modifies, limits, or

6 supersedes the Electronic Signatures in Global and National

7 Commerce Act, 15 U.S.C. Section 7001 et seq., but does not

8 modify, limit, or supersede Section 101(c) of that Act, 15

9 U.S.C. Section 7001(c), or authorize electronic delivery of any

10 of the notices described in Section 103(b) of that Act, 15

11 U.S.C. Section 7003(b).

12 Section 15-1503. Transitional provision.

13 (a) An initial report filed under this Act for property

14 that was not required to be reported before the effective date

15 of this Act, but that is required to be reported under this

16 Act, must include all items of property that would have been

17 presumed abandoned during the 5-year period preceding the

18 effective date of this Act as if this Act had been in effect

19 during that period.

20 (b) This Act does not relieve a holder of a duty that arose

21 before the effective date of this Act to report, pay, or

22 deliver property. Subject to subsection (b) of Section 15-610,

23 a holder that did not comply with the law governing unclaimed

24 property before the effective date of this Act is subject to

10000SB0009ham002

- 107 -

LRB100 06347 HLH 27841 a

1 applicable provisions for enforcement and penalties in effect

2 before the effective date of this Act.

3 Section 15-1504. Severability. If any provision of this Act

4 or its application to any person or circumstance is held

5 invalid, the invalidity does not affect other provisions or

6 applications of this Act which can be given effect without the

7 invalid provision or application, and to this end the

8 provisions of this Act are severable.

9 ARTICLE 17. AMENDATORY PROVISIONS; UNCLAIMED PROPERTY

10 (765 ILCS 1025/Act rep.)

11 Section 17-5. The Uniform Disposition of Unclaimed

12 Property Act is repealed.

13 Section 17-10. The Illinois Administrative Procedure Act

14 is amended by changing Section 1-5 as follows:

15 (5 ILCS 100/1-5) (from Ch. 127, par. 1001-5)

16 Sec. 1-5. Applicability.

17 (a) This Act applies to every agency as defined in this

18 Act. Beginning January 1, 1978, in case of conflict between the

19 provisions of this Act and the Act creating or conferring power

20 on an agency, this Act shall control. If, however, an agency

21 (or its predecessor in the case of an agency that has been

10000SB0009ham002

- 108 -

LRB100 06347 HLH 27841 a

1 consolidated or reorganized) has existing procedures on July 1,

2 1977, specifically for contested cases or licensing, those

3 existing provisions control, except that this exception

4 respecting contested cases and licensing does not apply if the

5 Act creating or conferring power on the agency adopts by

6 express reference the provisions of this Act. Where the Act

7 creating or conferring power on an agency establishes

8 administrative procedures not covered by this Act, those

9 procedures shall remain in effect.

10 (b) The provisions of this Act do not apply to (i)

11 preliminary hearings, investigations, or practices where no

12 final determinations affecting State funding are made by the

13 State Board of Education, (ii) legal opinions issued under

14 Section 2-3.7 of the School Code, (iii) as to State colleges

15 and universities, their disciplinary and grievance

16 proceedings, academic irregularity and capricious grading

17 proceedings, and admission standards and procedures, and (iv)

18 the class specifications for positions and individual position

19 descriptions prepared and maintained under the Personnel Code.

20 Those class specifications shall, however, be made reasonably

21 available to the public for inspection and copying. ~~The~~

22 ~~provisions of this Act do not apply to hearings under Section~~

23 ~~20 of the Uniform Disposition of Unclaimed Property Act.~~

24 (c) Section 5-35 of this Act relating to procedures for

25 rulemaking does not apply to the following:

26 (1) Rules adopted by the Pollution Control Board that,

10000SB0009ham002

- 109 -

LRB100 06347 HLH 27841 a

1 in accordance with Section 7.2 of the Environmental

2 Protection Act, are identical in substance to federal

3 regulations or amendments to those regulations

4 implementing the following: Sections 3001, 3002, 3003,

5 3004, 3005, and 9003 of the Solid Waste Disposal Act;

6 Section 105 of the Comprehensive Environmental Response,

7 Compensation, and Liability Act of 1980; Sections 307(b),

8 307(c), 307(d), 402(b)(8), and 402(b)(9) of the Federal

9 Water Pollution Control Act; Sections 1412(b), 1414(c),

10 1417(a), 1421, and 1445(a) of the Safe Drinking Water Act;

11 and Section 109 of the Clean Air Act.

12 (2) Rules adopted by the Pollution Control Board that

13 establish or amend standards for the emission of

14 hydrocarbons and carbon monoxide from gasoline powered

15 motor vehicles subject to inspection under the Vehicle

16 Emissions Inspection Law of 2005 or its predecessor laws.

17 (3) Procedural rules adopted by the Pollution Control

18 Board governing requests for exceptions under Section 14.2

19 of the Environmental Protection Act.

20 (4) The Pollution Control Board's grant, pursuant to an

21 adjudicatory determination, of an adjusted standard for

22 persons who can justify an adjustment consistent with

23 subsection (a) of Section 27 of the Environmental

24 Protection Act.

25 (4.5) The Pollution Control Board's adoption of

26 time-limited water quality standards under Section 38.5 of

10000SB0009ham002

- 110 -

LRB100 06347 HLH 27841 a

1 the Environmental Protection Act.

2 (5) Rules adopted by the Pollution Control Board that

3 are identical in substance to the regulations adopted by

4 the Office of the State Fire Marshal under clause (ii) of

5 paragraph (b) of subsection (3) of Section 2 of the

6 Gasoline Storage Act.

7 (d) Pay rates established under Section 8a of the Personnel

8 Code shall be amended or repealed pursuant to the process set

9 forth in Section 5-50 within 30 days after it becomes necessary

10 to do so due to a conflict between the rates and the terms of a

11 collective bargaining agreement covering the compensation of

12 an employee subject to that Code.

13 (e) Section 10-45 of this Act shall not apply to any

14 hearing, proceeding, or investigation conducted under Section

15 13-515 of the Public Utilities Act.

16 (f) Article 10 of this Act does not apply to any hearing,

17 proceeding, or investigation conducted by the State Council for

18 the State of Illinois created under Section 3-3-11.05 of the

19 Unified Code of Corrections or by the Interstate Commission for

20 Adult Offender Supervision created under the Interstate

21 Compact for Adult Offender Supervision or by the Interstate

22 Commission for Juveniles created under the Interstate Compact

23 for Juveniles.

24 (g) This Act is subject to the provisions of Article XXI of

25 the Public Utilities Act. To the extent that any provision of

26 this Act conflicts with the provisions of that Article XXI, the

10000SB0009ham002

- 111 -

LRB100 06347 HLH 27841 a

1 provisions of that Article XXI control.

2 (Source: P.A. 98-463, eff. 8-16-13; 99-937, eff. 2-24-17.)

3 Section 17-15. The Freedom of Information Act is amended by

4 changing Section 7.5 as follows:

5 (5 ILCS 140/7.5)

6 Sec. 7.5. Statutory exemptions. To the extent provided for

7 by the statutes referenced below, the following shall be exempt

8 from inspection and copying:

9 (a) All information determined to be confidential

10 under Section 4002 of the Technology Advancement and

11 Development Act.

12 (b) Library circulation and order records identifying

13 library users with specific materials under the Library

14 Records Confidentiality Act.

15 (c) Applications, related documents, and medical

16 records received by the Experimental Organ Transplantation

17 Procedures Board and any and all documents or other records

18 prepared by the Experimental Organ Transplantation

19 Procedures Board or its staff relating to applications it

20 has received.

21 (d) Information and records held by the Department of

22 Public Health and its authorized representatives relating

23 to known or suspected cases of sexually transmissible

24 disease or any information the disclosure of which is

10000SB0009ham002

- 112 -

LRB100 06347 HLH 27841 a

1 restricted under the Illinois Sexually Transmissible

2 Disease Control Act.

3 (e) Information the disclosure of which is exempted

4 under Section 30 of the Radon Industry Licensing Act.

5 (f) Firm performance evaluations under Section 55 of

6 the Architectural, Engineering, and Land Surveying

7 Qualifications Based Selection Act.

8 (g) Information the disclosure of which is restricted

9 and exempted under Section 50 of the Illinois Prepaid

10 Tuition Act.

11 (h) Information the disclosure of which is exempted

12 under the State Officials and Employees Ethics Act, and

13 records of any lawfully created State or local inspector

14 general's office that would be exempt if created or

15 obtained by an Executive Inspector General's office under

16 that Act.

17 (i) Information contained in a local emergency energy

18 plan submitted to a municipality in accordance with a local

19 emergency energy plan ordinance that is adopted under

20 Section 11-21.5-5 of the Illinois Municipal Code.

21 (j) Information and data concerning the distribution

22 of surcharge moneys collected and remitted by wireless

23 carriers under the Wireless Emergency Telephone Safety

24 Act.

25 (k) Law enforcement officer identification information

26 or driver identification information compiled by a law

10000SB0009ham002

- 113 -

LRB100 06347 HLH 27841 a

1 enforcement agency or the Department of Transportation

2 under Section 11-212 of the Illinois Vehicle Code.

3 (l) Records and information provided to a residential

4 health care facility resident sexual assault and death

5 review team or the Executive Council under the Abuse

6 Prevention Review Team Act.

7 (m) Information provided to the predatory lending

8 database created pursuant to Article 3 of the Residential

9 Real Property Disclosure Act, except to the extent

10 authorized under that Article.

11 (n) Defense budgets and petitions for certification of

12 compensation and expenses for court appointed trial

13 counsel as provided under Sections 10 and 15 of the Capital

14 Crimes Litigation Act. This subsection (n) shall apply

15 until the conclusion of the trial of the case, even if the

16 prosecution chooses not to pursue the death penalty prior

17 to trial or sentencing.

18 (o) Information that is prohibited from being

19 disclosed under Section 4 of the Illinois Health and

20 Hazardous Substances Registry Act.

21 (p) Security portions of system safety program plans,

22 investigation reports, surveys, schedules, lists, data, or

23 information compiled, collected, or prepared by or for the

24 Regional Transportation Authority under Section 2.11 of

25 the Regional Transportation Authority Act or the St. Clair

26 County Transit District under the Bi-State Transit Safety

10000SB0009ham002

- 114 -

LRB100 06347 HLH 27841 a

1 Act.

2 (q) Information prohibited from being disclosed by the

3 Personnel Records Review Act.

4 (r) Information prohibited from being disclosed by the

5 Illinois School Student Records Act.

6 (s) Information the disclosure of which is restricted

7 under Section 5-108 of the Public Utilities Act.

8 (t) All identified or deidentified health information

9 in the form of health data or medical records contained in,

10 stored in, submitted to, transferred by, or released from

11 the Illinois Health Information Exchange, and identified

12 or deidentified health information in the form of health

13 data and medical records of the Illinois Health Information

14 Exchange in the possession of the Illinois Health

15 Information Exchange Authority due to its administration

16 of the Illinois Health Information Exchange. The terms

17 "identified" and "deidentified" shall be given the same

18 meaning as in the Health Insurance Portability and

19 Accountability Act of 1996, Public Law 104-191, or any

20 subsequent amendments thereto, and any regulations

21 promulgated thereunder.

22 (u) Records and information provided to an independent

23 team of experts under Brian's Law.

24 (v) Names and information of people who have applied

25 for or received Firearm Owner's Identification Cards under

26 the Firearm Owners Identification Card Act or applied for

10000SB0009ham002

- 115 -

LRB100 06347 HLH 27841 a

1 or received a concealed carry license under the Firearm

2 Concealed Carry Act, unless otherwise authorized by the

3 Firearm Concealed Carry Act; and databases under the

4 Firearm Concealed Carry Act, records of the Concealed Carry

5 Licensing Review Board under the Firearm Concealed Carry

6 Act, and law enforcement agency objections under the

7 Firearm Concealed Carry Act.

8 (w) Personally identifiable information which is

9 exempted from disclosure under subsection (g) of Section

10 19.1 of the Toll Highway Act.

11 (x) Information which is exempted from disclosure

12 under Section 5-1014.3 of the Counties Code or Section

13 8-11-21 of the Illinois Municipal Code.

14 (y) Confidential information under the Adult

15 Protective Services Act and its predecessor enabling

16 statute, the Elder Abuse and Neglect Act, including

17 information about the identity and administrative finding

18 against any caregiver of a verified and substantiated

19 decision of abuse, neglect, or financial exploitation of an

20 eligible adult maintained in the Registry established

21 under Section 7.5 of the Adult Protective Services Act.

22 (z) Records and information provided to a fatality

23 review team or the Illinois Fatality Review Team Advisory

24 Council under Section 15 of the Adult Protective Services

25 Act.

26 (aa) Information which is exempted from disclosure

10000SB0009ham002

- 116 -

LRB100 06347 HLH 27841 a

1 under Section 2.37 of the Wildlife Code.

2 (bb) Information which is or was prohibited from

3 disclosure by the Juvenile Court Act of 1987.

4 (cc) Recordings made under the Law Enforcement

5 Officer-Worn Body Camera Act, except to the extent

6 authorized under that Act.

7 (dd) Information that is prohibited from being

8 disclosed under Section 45 of the Condominium and Common

9 Interest Community Ombudsperson Act.

10 (ee) ~~(dd)~~ Information that is exempted from disclosure

11 under Section 30.1 of the Pharmacy Practice Act.

12 (ff) Information that is exempted from disclosure

13 under the Revised Uniform Unclaimed Property Act.

14 (Source: P.A. 98-49, eff. 7-1-13; 98-63, eff. 7-9-13; 98-756,

15 eff. 7-16-14; 98-1039, eff. 8-25-14; 98-1045, eff. 8-25-14;

16 99-78, eff. 7-20-15; 99-298, eff. 8-6-15; 99-352, eff. 1-1-16;

17 99-642, eff. 7-28-16; 99-776, eff. 8-12-16; 99-863, eff.

18 8-19-16; revised 9-1-16.)

19 Section 17-20. The State Comptroller Act is amended by

20 changing Section 9 as follows:

21 (15 ILCS 405/9) (from Ch. 15, par. 209)

22 Sec. 9. Warrants; vouchers; preaudit.

23 (a) No payment may be made from public funds held by the

24 State Treasurer in or outside of the State treasury, except by

10000SB0009ham002

- 117 -

LRB100 06347 HLH 27841 a

1 warrant drawn by the Comptroller and presented by him to the

2 treasurer to be countersigned except for payments made pursuant

3 to Section 9.03 or 9.05 of this Act.

4 (b) No warrant for the payment of money by the State

5 Treasurer may be drawn by the Comptroller without the

6 presentation of itemized vouchers indicating that the

7 obligation or expenditure is pursuant to law and authorized,

8 and authorizing the Comptroller to order payment.

9 (b-1) An itemized voucher for under $5 that is presented to

10 the Comptroller for payment shall not be paid except through

11 electronic funds transfer. This subsection (b-1) does not apply

12 to (i) vouchers presented by the legislative branch of State

13 government, (ii) vouchers presented by the State Treasurer's

14 Office for the payment of unclaimed property claims authorized

15 under the Revised Uniform ~~Disposition of~~ Unclaimed Property

16 Act, or (iii) vouchers presented by the Department of Revenue

17 for the payment of refunds of taxes administered by the

18 Department.

19 (c) The Comptroller shall examine each voucher required by

20 law to be filed with him and determine whether unencumbered

21 appropriations or unencumbered obligational or expenditure

22 authority other than by appropriation are legally available to

23 incur the obligation or to make the expenditure of public

24 funds. If he determines that unencumbered appropriations or

25 other obligational or expenditure authority are not available

26 from which to incur the obligation or make the expenditure, the

10000SB0009ham002

- 118 -

LRB100 06347 HLH 27841 a

1 Comptroller shall refuse to draw a warrant.

2 (d) The Comptroller shall examine each voucher and all

3 other documentation required to accompany the voucher, and

4 shall ascertain whether the voucher and documentation meet all

5 requirements established by or pursuant to law. If the

6 Comptroller determines that the voucher and documentation do

7 not meet applicable requirements established by or pursuant to

8 law, he shall refuse to draw a warrant. As used in this

9 Section, "requirements established by or pursuant to law"

10 includes statutory enactments and requirements established by

11 rules and regulations adopted pursuant to this Act.

12 (e) Prior to drawing a warrant, the Comptroller may review

13 the voucher, any documentation accompanying the voucher, and

14 any other documentation related to the transaction on file with

15 him, and determine if the transaction is in accordance with the

16 law. If based on his review the Comptroller has reason to

17 believe that such transaction is not in accordance with the

18 law, he shall refuse to draw a warrant.

19 (f) Where the Comptroller refuses to draw a warrant

20 pursuant to this Section, he shall maintain separate records of

21 such transactions.

22 (g) State agencies shall have the principal responsibility

23 for the preaudit of their encumbrances, expenditures, and other

24 transactions as otherwise required by law.

25 (Source: P.A. 97-969, eff. 8-16-12; 97-1142, eff. 12-28-12;

26 98-421, eff. 8-16-13.)

10000SB0009ham002

- 119 -

LRB100 06347 HLH 27841 a

1 Section 17-25. The State Treasurer Act is amended by

2 changing Sections 0.02, 0.03, 0.04, 0.05, and 0.06 as follows:

3 (15 ILCS 505/0.02)

4 Sec. 0.02. Transfer of powers. The rights, powers, duties,

5 and functions vested in the Department of Financial

6 Institutions to administer the Uniform Disposition of

7 Unclaimed Property Act(superseded by the Revised Uniform

8 Unclaimed Property Act) are transferred to the State Treasurer

9 on July 1, 1999; provided, however, that the rights, powers,

10 duties, and functions involving the examination of the records

11 of any person that the State Treasurer has reason to believe

12 has failed to report properly under this Act shall be

13 transferred to the Office of Banks and Real Estate if the

14 person is regulated by the Office of Banks and Real Estate

15 under the Illinois Banking Act, the Corporate Fiduciary Act,

16 the Foreign Banking Office Act, the Illinois Savings and Loan

17 Act of 1985, or the Savings Bank Act and shall be retained by

18 the Department of Financial Institutions if the person is doing

19 business in the State under the supervision of the Department

20 of Financial Institutions, the National Credit Union

21 Administration, the Office of Thrift Supervision, or the

22 Comptroller of the Currency.

23 (Source: P.A. 91-16, eff. 6-4-99.)

10000SB0009ham002

- 120 -

LRB100 06347 HLH 27841 a

1 (15 ILCS 505/0.03)

2 Sec. 0.03. Transfer of personnel.

3 (a) Except as provided in subsection (b), personnel

4 employed by the Department of Financial Institutions on June

5 30, 1999 to perform duties pertaining to the administration of

6 the Uniform Disposition of Unclaimed Property Act(superseded

7 by the Revised Uniform Unclaimed Property Act) are transferred

8 to the State Treasurer on July 1, 1999.

9 (b) In the case of a person employed by the Department of

10 Financial Institutions to perform both duties pertaining to the

11 administration of the Uniform Disposition of Unclaimed

12 Property Act (superseded by the Revised Uniform Unclaimed

13 Property Act)and duties pertaining to a function retained by

14 the Department of Financial Institutions, the State Treasurer,

15 in consultation with the Director of Financial Institutions,

16 shall determine whether to transfer the employee to the Office

17 of the State Treasurer; until this determination has been made,

18 the transfer shall not take effect.

19 (c) The rights of State employees, the State, and its

20 agencies under the Personnel Code and applicable collective

21 bargaining agreements and retirement plans are not affected by

22 this amendatory Act of 1999, except that all positions

23 transferred to the State Treasurer shall be subject to the

24 State Treasurer Employment Code effective July 1, 2000.

25 All transferred employees who are members of collective

26 bargaining units shall retain their seniority, continuous

10000SB0009ham002

- 121 -

LRB100 06347 HLH 27841 a

1 service, salary, and accrued benefits. During the pendency of

2 the existing collective bargaining agreement, the rights

3 provided for under that agreement and memoranda and supplements

4 to that agreement, including but not limited to, the rights of

5 employees performing duties pertaining to the administration

6 of the Uniform Disposition of Unclaimed Property Act

7 (superseded by the Revised Uniform Unclaimed Property Act) to

8 positions in other State agencies and the right of employees in

9 other State agencies covered by the agreement to positions

10 performing duties pertaining to the administration of the

11 Uniform Disposition of Unclaimed Property Act (superseded by

12 the Revised Uniform Unclaimed Property Act), shall not be

13 abridged.

14 The State Treasurer shall continue to honor during their

15 pendency all bargaining agreements in effect at the time of the

16 transfer and to recognize all collective bargaining

17 representatives for the employees who perform or will perform

18 functions transferred by this amendatory Act of 1999. For all

19 purposes with respect to the management of the existing

20 agreement and the negotiation and management of any successor

21 agreements, the State Treasurer shall be deemed to be the

22 employer of employees who perform or will perform functions

23 transferred to the Office of the State Treasurer by this

24 amendatory Act of 1999; provided that the Illinois Department

25 of Central Management Services shall be a party to any

26 grievance or arbitration proceeding held pursuant to the

10000SB0009ham002

- 122 -

LRB100 06347 HLH 27841 a

1 provisions of the collective bargaining agreement which

2 involves the movement of employees from the Office of the State

3 Treasurer to an agency under the jurisdiction of the Governor

4 covered by the agreement.

5 (Source: P.A. 91-16, eff. 6-4-99.)

6 (15 ILCS 505/0.04)

7 Sec. 0.04. Transfer of property.

8 (a) Except as provided in subsection (b), all real and

9 personal property, including but not limited to all books,

10 records, and documents, and all unexpended appropriations and

11 pending business pertaining to the administration of the

12 Uniform Disposition of Unclaimed Property Act(superseded by

13 the Revised Uniform Unclaimed Property Act) shall be

14 transferred and delivered to the State Treasurer effective July

15 1, 1999.

16 (b) In the case of books, records, or documents that

17 pertain both to the administration of the Uniform Disposition

18 of Unclaimed Property Act (superseded by the Revised Uniform

19 Unclaimed Property Act)and to a function retained by the

20 Department of Financial Institutions, the State Treasurer, in

21 consultation with the Director of Financial Institutions,

22 shall determine whether the books, records, or documents shall

23 be transferred, copied, or left with the Department of

24 Financial Institutions; until this determination has been

25 made, the transfer shall not take effect.

10000SB0009ham002

- 123 -

LRB100 06347 HLH 27841 a

1 In the case of property or an unexpended appropriation that

2 pertains both to the administration of the Uniform Disposition

3 of Unclaimed Property Act (superseded by the Revised Uniform

4 Unclaimed Property Act)and to a function retained by the

5 Department of Financial Institutions, the State Treasurer, in

6 consultation with the Director of Financial Institutions,

7 shall determine whether the property or unexpended

8 appropriation shall be transferred, divided, or left with the

9 Department of Financial Institutions; until this determination

10 has been made (and, in the case of an unexpended appropriation,

11 notice of the determination has been filed with the State

12 Comptroller), the transfer shall not take effect.

13 (Source: P.A. 91-16, eff. 6-4-99.)

14 (15 ILCS 505/0.05)

15 Sec. 0.05. Rules and standards.

16 (a) The rules and standards of the Department of Financial

17 Institutions that are in effect on June 30, 1999 and pertain to

18 the administration of the Uniform Disposition of Unclaimed

19 Property Act (superseded by the Revised Uniform Unclaimed

20 Property Act)shall become the rules and standards of the State

21 Treasurer on July 1, 1999 and shall continue in effect until

22 amended or repealed by the State Treasurer.

23 (b) Any rules pertaining to the administration of the

24 Uniform Disposition of Unclaimed Property Act(superseded by

25 the Revised Uniform Unclaimed Property Act) that have been

10000SB0009ham002

- 124 -

LRB100 06347 HLH 27841 a

1 proposed by the Department of Financial Institutions but have

2 not taken effect or been finally adopted by June 30, 1999 shall

3 become proposed rules of the State Treasurer on July 1, 1999,

4 and any rulemaking procedures that have already been completed

5 by the Department of Financial Institutions need not be

6 repeated.

7 (c) As soon as practical after July 1, 1999, the State

8 Treasurer shall revise and clarify the rules transferred to it

9 under this amendatory Act of 1999 to reflect the reorganization

10 of rights, powers, duties, and functions effected by this

11 amendatory Act of 1999 using the procedures for recodification

12 of rules available under the Illinois Administrative Procedure

13 Act, except that existing title, part, and section numbering

14 for the affected rules may be retained.

15 (d) As soon as practical after July 1, 1999, the Office of

16 Banks and Real Estate and the Office of the State Treasurer

17 shall jointly promulgate rules to reflect the transfer of

18 examination functions to the Office of Banks and Real Estate

19 under this amendatory Act of 1999 using the procedures

20 available under the Illinois Administrative Procedure Act.

21 (e) As soon as practical after July 1, 1999, the Department

22 of Financial Institutions and the Office of the State Treasurer

23 shall jointly promulgate rules to reflect the retention of

24 examination functions by the Department of Financial

25 Institutions under this amendatory Act of 1999 using the

26 procedures available under the Illinois Administrative

10000SB0009ham002

- 125 -

LRB100 06347 HLH 27841 a

1 Procedure Act.

2 (Source: P.A. 91-16, eff. 6-4-99.)

3 (15 ILCS 505/0.06)

4 Sec. 0.06. Savings provisions.

5 (a) The rights, powers, duties, and functions transferred

6 to the State Treasurer or the Commissioner of Banks and Real

7 Estate by this amendatory Act of 1999 shall be vested in and

8 exercised by the State Treasurer or the Commissioner of Banks

9 and Real Estate subject to the provisions of this amendatory

10 Act of 1999. An act done by the State Treasurer or the

11 Commissioner of Banks and Real Estate or an officer, employee,

12 or agent of the State Treasurer or the Commissioner of Banks

13 and Real Estate in the exercise of the transferred rights,

14 powers, duties, or functions shall have the same legal effect

15 as if done by the Department of Financial Institutions or an

16 officer, employee, or agent of the Department of Financial

17 Institutions prior to the effective date of this amendatory Act

18 of 1999.

19 (b) The transfer of rights, powers, duties, and functions

20 to the State Treasurer or the Commissioner of Banks and Real

21 Estate under this amendatory Act of 1999 does not invalidate

22 any previous action taken by or in respect to the Department of

23 Financial Institutions or its officers, employees, or agents.

24 References to the Department of Financial Institutions or its

25 officers, employees or agents in any document, contract,

10000SB0009ham002

- 126 -

LRB100 06347 HLH 27841 a

1 agreement, or law shall, in appropriate contexts, be deemed to

2 refer to the State Treasurer or the Commissioner of Banks and

3 Real Estate or the officers, employees, or agents of the State

4 Treasurer or the Commissioner of Banks and Real Estate.

5 (c) The transfer of rights, powers, duties, and functions

6 from the Department of Financial Institutions to the State

7 Treasurer or the Commissioner of Banks and Real Estate under

8 this amendatory Act of 1999 does not affect the rights,

9 obligations, or duties of any other person or entity, including

10 any civil or criminal penalties applicable thereto, arising out

11 of those transferred rights, powers, duties, and functions.

12 (d) With respect to matters that pertain to a right, power,

13 duty, or function transferred to the State Treasurer under this

14 amendatory Act of 1999:

15 (1) Beginning July 1, 1999, any report or notice that

16 was previously required to be made or given by any person

17 to the Department of Financial Institutions or any of its

18 officers, employees, or agents under the Uniform

19 Disposition of Unclaimed Property Act (superseded by the

20 Revised Uniform Unclaimed Property Act) or rules

21 promulgated pursuant to that Act shall be made or given in

22 the same manner to the State Treasurer or his or her

23 appropriate officer, employee, or agent.

24 (2) Beginning July 1, 1999, any document that was

25 previously required to be furnished or served by any person

26 to or upon the Department of Financial Institutions or any

10000SB0009ham002

- 127 -

LRB100 06347 HLH 27841 a

1 of its officers, employees, or agents under the Uniform

2 Disposition of Unclaimed Property Act (superseded by the

3 Revised Uniform Unclaimed Property Act) or rules

4 promulgated pursuant to that Act shall be furnished or

5 served in the same manner to or upon the State Treasurer or

6 his or her appropriate officer, employee, or agent.

7 (e) This amendatory Act of 1999 does not affect any act

8 done, ratified, or canceled, any right occurring or

9 established, or any action or proceeding had or commenced in an

10 administrative, civil, or criminal cause before July 1, 1999.

11 Any such action or proceeding that pertains to the Uniform

12 Disposition of Unclaimed Property Act(superseded by the

13 Revised Uniform Unclaimed Property Act) or rules promulgated

14 pursuant to that Act and that is pending on that date may be

15 prosecuted, defended, or continued by the State Treasurer.

16 (Source: P.A. 91-16, eff. 6-4-99.)

17 Section 17-30. The Financial Institutions Code is amended

18 by changing Sections 7 and 18.1 as follows:

19 (20 ILCS 1205/7) (from Ch. 17, par. 108)

20 Sec. 7. The provisions of "The Illinois Administrative

21 Procedure Act", as now or hereafter amended, are hereby

22 expressly adopted and incorporated herein as though a part of

23 this Act, and shall apply to all administrative rules and

24 procedures of the Director and the Department of Financial

10000SB0009ham002

- 128 -

LRB100 06347 HLH 27841 a

1 Institutions under this Act, except that the provisions of the

2 Administrative Procedure Act regarding contested cases shall

3 not apply to actions of the Director under Section 15.1 of "An

4 Act in relation to the definition, licensing and regulation of

5 community currency exchanges and ambulatory currency

6 exchanges, and the operators and employees thereof, and to make

7 an appropriation therefor, and to provide penalties and

8 remedies for the violation thereof", approved June 30, 1943, as

9 amended, or Sections 8 and 61 of "The Illinois Credit Union

10 Act"~~, or to hearings under Section 20 of the "Uniform~~

11 ~~Disposition of Unclaimed Property Act"~~.

12 (Source: P.A. 81-329.)

13 (20 ILCS 1205/18.1)

14 Sec. 18.1. Transfer of administration of Uniform

15 Disposition of Unclaimed Property Act to State Treasurer. The

16 rights, powers, duties, and functions vested in the Department

17 of Financial Institutions to administer the Uniform

18 Disposition of Unclaimed Property Act (superseded by the

19 Revised Uniform Unclaimed Property Act) are transferred to the

20 State Treasurer on July 1, 1999 in accordance with Sections

21 0.02 through 0.06 of the State Treasurer Act; provided,

22 however, that the rights, powers, duties, and functions

23 involving the examination of the records of any person that the

24 State Treasurer has reason to believe has failed to report

25 properly under this Act shall be transferred to the Office of

10000SB0009ham002

- 129 -

LRB100 06347 HLH 27841 a

1 Banks and Real Estate if the person is regulated by the Office

2 of Banks and Real Estate under the Illinois Banking Act, the

3 Corporate Fiduciary Act, the Foreign Banking Office Act, the

4 Illinois Savings and Loan Act of 1985, or the Savings Bank Act

5 and shall be retained by the Department of Financial

6 Institutions if the person is doing business in the State under

7 the supervision of the Department of Financial Institutions,

8 the National Credit Union Administration, the Office of Thrift

9 Supervision, or the Comptroller of the Currency.

10 (Source: P.A. 91-16, eff. 6-4-99.)

11 Section 17-35. The State Finance Act is amended by changing

12 Sections 6b-1 and 8.12 as follows:

13 (30 ILCS 105/6b-1) (from Ch. 127, par. 142b1)

14 Sec. 6b-1. There shall be paid into the State Pensions Fund

15 the funds and proceeds from the sale of abandoned property as

16 provided in ~~Section 18 of~~theRevised Uniform ~~"Uniform~~

17 ~~Disposition of~~ Unclaimed Property Act~~", enacted by the~~

18 ~~Seventy-second General Assembly~~.

19 (Source: Laws 1961, p. 3423.)

20 (30 ILCS 105/8.12) (from Ch. 127, par. 144.12)

21 Sec. 8.12. State Pensions Fund.

22 (a) The moneys in the State Pensions Fund shall be used

23 exclusively for the administration of theRevised Uniform

10000SB0009ham002

- 130 -

LRB100 06347 HLH 27841 a

1 ~~Disposition of~~Unclaimed Property Act and for the expenses

2 incurred by the Auditor General for administering the

3 provisions of Section 2-8.1 of the Illinois State Auditing Act

4 and for operational expenses of the Office of the State

5 Treasurer and for the funding of the unfunded liabilities of

6 the designated retirement systems. Beginning in State fiscal

7 year 2018, payments to the designated retirement systems under

8 this Section shall be in addition to, and not in lieu of, any

9 State contributions required under the Illinois Pension Code.

10 "Designated retirement systems" means:

11 (1) the State Employees' Retirement System of

12 Illinois;

13 (2) the Teachers' Retirement System of the State of

14 Illinois;

15 (3) the State Universities Retirement System;

16 (4) the Judges Retirement System of Illinois; and

17 (5) the General Assembly Retirement System.

18 (b) Each year the General Assembly may make appropriations

19 from the State Pensions Fund for the administration of the

20 Revised Uniform ~~Disposition of~~Unclaimed Property Act.

21 ~~Each month, the Commissioner of the Office of Banks and~~

22 ~~Real Estate shall certify to the State Treasurer the actual~~

23 ~~expenditures that the Office of Banks and Real Estate incurred~~

24 ~~conducting unclaimed property examinations under the Uniform~~

25 ~~Disposition of Unclaimed Property Act during the immediately~~

26 ~~preceding month. Within a reasonable time following the~~

10000SB0009ham002

- 131 -

LRB100 06347 HLH 27841 a

1 ~~acceptance of such certification by the State Treasurer, the~~

2 ~~State Treasurer shall pay from its appropriation from the State~~

3 ~~Pensions Fund to the Bank and Trust Company Fund, the Savings~~

4 ~~Bank Regulatory Fund, and the Residential Finance Regulatory~~

5 ~~Fund an amount equal to the expenditures incurred by each Fund~~

6 ~~for that month.~~

7 ~~Each month, the Director of Financial Institutions shall~~

8 ~~certify to the State Treasurer the actual expenditures that the~~

9 ~~Department of Financial Institutions incurred conducting~~

10 ~~unclaimed property examinations under the Uniform Disposition~~

11 ~~of Unclaimed Property Act during the immediately preceding~~

12 ~~month. Within a reasonable time following the acceptance of~~

13 ~~such certification by the State Treasurer, the State Treasurer~~

14 ~~shall pay from its appropriation from the State Pensions Fund~~

15 ~~to the Financial Institution Fund and the Credit Union Fund an~~

16 ~~amount equal to the expenditures incurred by each Fund for that~~

17 ~~month.~~

18 (c) As soon as possible after the effective date of this

19 amendatory Act of the 93rd General Assembly, the General

20 Assembly shall appropriate from the State Pensions Fund (1) to

21 the State Universities Retirement System the amount certified

22 under Section 15-165 during the prior year, (2) to the Judges

23 Retirement System of Illinois the amount certified under

24 Section 18-140 during the prior year, and (3) to the General

25 Assembly Retirement System the amount certified under Section

26 2-134 during the prior year as part of the required State

10000SB0009ham002

- 132 -

LRB100 06347 HLH 27841 a

1 contributions to each of those designated retirement systems;

2 except that amounts appropriated under this subsection (c) in

3 State fiscal year 2005 shall not reduce the amount in the State

4 Pensions Fund below $5,000,000. If the amount in the State

5 Pensions Fund does not exceed the sum of the amounts certified

6 in Sections 15-165, 18-140, and 2-134 by at least $5,000,000,

7 the amount paid to each designated retirement system under this

8 subsection shall be reduced in proportion to the amount

9 certified by each of those designated retirement systems.

10 (c-5) For fiscal years 2006 through 2017, the General

11 Assembly shall appropriate from the State Pensions Fund to the

12 State Universities Retirement System the amount estimated to be

13 available during the fiscal year in the State Pensions Fund;

14 provided, however, that the amounts appropriated under this

15 subsection (c-5) shall not reduce the amount in the State

16 Pensions Fund below $5,000,000.

17 (c-6) For fiscal year 2018 and each fiscal year thereafter,

18 as soon as may be practical after any money is deposited into

19 the State Pensions Fund from the Unclaimed Property Trust Fund,

20 the State Treasurer shall apportion the deposited amount among

21 the designated retirement systems as defined in subsection (a)

22 to reduce their actuarial reserve deficiencies. The State

23 Comptroller and State Treasurer shall pay the apportioned

24 amounts to the designated retirement systems to fund the

25 unfunded liabilities of the designated retirement systems. The

26 amount apportioned to each designated retirement system shall

10000SB0009ham002

- 133 -

LRB100 06347 HLH 27841 a

1 constitute a portion of the amount estimated to be available

2 for appropriation from the State Pensions Fund that is the same

3 as that retirement system's portion of the total actual reserve

4 deficiency of the systems, as determined annually by the

5 Governor's Office of Management and Budget at the request of

6 the State Treasurer. The amounts apportioned under this

7 subsection shall not reduce the amount in the State Pensions

8 Fund below $5,000,000.

9 (d) The Governor's Office of Management and Budget shall

10 determine the individual and total reserve deficiencies of the

11 designated retirement systems. For this purpose, the

12 Governor's Office of Management and Budget shall utilize the

13 latest available audit and actuarial reports of each of the

14 retirement systems and the relevant reports and statistics of

15 the Public Employee Pension Fund Division of the Department of

16 Insurance.

17 (d-1) As soon as practicable after the effective date of

18 this amendatory Act of the 93rd General Assembly, the

19 Comptroller shall direct and the Treasurer shall transfer from

20 the State Pensions Fund to the General Revenue Fund, as funds

21 become available, a sum equal to the amounts that would have

22 been paid from the State Pensions Fund to the Teachers'

23 Retirement System of the State of Illinois, the State

24 Universities Retirement System, the Judges Retirement System

25 of Illinois, the General Assembly Retirement System, and the

26 State Employees' Retirement System of Illinois after the

10000SB0009ham002

- 134 -

LRB100 06347 HLH 27841 a

1 effective date of this amendatory Act during the remainder of

2 fiscal year 2004 to the designated retirement systems from the

3 appropriations provided for in this Section if the transfers

4 provided in Section 6z-61 had not occurred. The transfers

5 described in this subsection (d-1) are to partially repay the

6 General Revenue Fund for the costs associated with the bonds

7 used to fund the moneys transferred to the designated

8 retirement systems under Section 6z-61.

9 (e) The changes to this Section made by this amendatory Act

10 of 1994 shall first apply to distributions from the Fund for

11 State fiscal year 1996.

12 (Source: P.A. 98-24, eff. 6-19-13; 98-463, eff. 8-16-13;

13 98-674, eff. 6-30-14; 98-1081, eff. 1-1-15; 99-8, eff. 7-9-15;

14 99-78, eff. 7-20-15; 99-523, eff. 6-30-16.)

15 Section 17-40. The State Officers and Employees Money

16 Disposition Act is amended by changing Section 2 as follows:

17 (30 ILCS 230/2) (from Ch. 127, par. 171)

18 Sec. 2. Accounts of money received; payment into State

19 treasury.

20 (a) Every officer, board, commission, commissioner,

21 department, institution, arm or agency brought within the

22 provisions of this Act by Section 1 shall keep in proper books

23 a detailed itemized account of all moneys received for or on

24 behalf of the State of Illinois, showing the date of receipt,

10000SB0009ham002

- 135 -

LRB100 06347 HLH 27841 a

1 the payor, and purpose and amount, and the date and manner of

2 disbursement as hereinafter provided, and, unless a different

3 time of payment is expressly provided by law or by rules or

4 regulations promulgated under subsection (b) of this Section,

5 shall pay into the State treasury the gross amount of money so

6 received on the day of actual physical receipt with respect to

7 any single item of receipt exceeding $10,000, within 24 hours

8 of actual physical receipt with respect to an accumulation of

9 receipts of $10,000 or more, or within 48 hours of actual

10 physical receipt with respect to an accumulation of receipts

11 exceeding $500 but less than $10,000, disregarding holidays,

12 Saturdays and Sundays, after the receipt of same, without any

13 deduction on account of salaries, fees, costs, charges,

14 expenses or claims of any description whatever; provided that:

15 (1) the provisions of (i) Section 2505-475 of the

16 Department of Revenue Law (20 ILCS 2505/2505-475), (ii) any

17 specific taxing statute authorizing a claim for credit

18 procedure instead of the actual making of refunds, (iii)

19 Section 505 of the Illinois Controlled Substances Act, (iv)

20 Section 85 of the Methamphetamine Control and Community

21 Protection Act, authorizing the Director of State Police to

22 dispose of forfeited property, which includes the sale and

23 disposition of the proceeds of the sale of forfeited

24 property, and the Department of Central Management

25 Services to be reimbursed for costs incurred with the sales

26 of forfeited vehicles, boats or aircraft and to pay to bona

10000SB0009ham002

- 136 -

LRB100 06347 HLH 27841 a

1 fide or innocent purchasers, conditional sales vendors or

2 mortgagees of such vehicles, boats or aircraft their

3 interest in such vehicles, boats or aircraft, and (v)

4 Section 6b-2 of the State Finance Act, establishing

5 procedures for handling cash receipts from the sale of

6 pari-mutuel wagering tickets, shall not be deemed to be in

7 conflict with the requirements of this Section;

8 (2) any fees received by the State Registrar of Vital

9 Records pursuant to the Vital Records Act which are

10 insufficient in amount may be returned by the Registrar as

11 provided in that Act;

12 (3) any fees received by the Department of Public

13 Health under the Food Handling Regulation Enforcement Act

14 that are submitted for renewal of an expired food service

15 sanitation manager certificate may be returned by the

16 Director as provided in that Act;

17 (3.5) the State Treasurer may permit the deduction of

18 fees by third-party unclaimed property examiners from the

19 property recovered by the examiners for the State of

20 Illinois during examinations of holders located outside

21 the State under which the Office of the Treasurer has

22 agreed to pay for the examinations based upon a percentage,

23 ~~set by rule by the State Treasurer~~in accordance with the

24 Revised Uniform Unclaimed Property ~~Illinois Administrative~~

25 ~~Procedure~~Act, of the property recovered during the

26 examination; and

10000SB0009ham002

- 137 -

LRB100 06347 HLH 27841 a

1 (4) if the amount of money received does not exceed

2 $500, such money may be retained and need not be paid into

3 the State treasury until the total amount of money so

4 received exceeds $500, or until the next succeeding 1st or

5 15th day of each month (or until the next business day if

6 these days fall on Sunday or a holiday), whichever is

7 earlier, at which earlier time such money shall be paid

8 into the State treasury, except that if a local bank or

9 savings and loan association account has been authorized by

10 law, any balances shall be paid into the State treasury on

11 Monday of each week if more than $500 is to be deposited in

12 any fund.

13 Single items of receipt exceeding $10,000 received after 2 p.m.

14 on a working day may be deemed to have been received on the

15 next working day for purposes of fulfilling the requirement

16 that the item be deposited on the day of actual physical

17 receipt.

18 No money belonging to or left for the use of the State

19 shall be expended or applied except in consequence of an

20 appropriation made by law and upon the warrant of the State

21 Comptroller. However, payments made by the Comptroller to

22 persons by direct deposit need not be made upon the warrant of

23 the Comptroller, but if not made upon a warrant, shall be made

24 in accordance with Section 9.02 of the State Comptroller Act.

25 All moneys so paid into the State treasury shall, unless

26 required by some statute to be held in the State treasury in a

10000SB0009ham002

- 138 -

LRB100 06347 HLH 27841 a

1 separate or special fund, be covered into the General Revenue

2 Fund in the State treasury. Moneys received in the form of

3 checks, drafts or similar instruments shall be properly

4 endorsed, if necessary, and delivered to the State Treasurer

5 for collection. The State Treasurer shall remit such collected

6 funds to the depositing officer, board, commission,

7 commissioner, department, institution, arm or agency by

8 Treasurers Draft or through electronic funds transfer. The

9 draft or notification of the electronic funds transfer shall be

10 provided to the State Comptroller to allow deposit into the

11 appropriate fund.

12 (b) Different time periods for the payment of public funds

13 into the State treasury or to the State Treasurer, in excess of

14 the periods established in subsection (a) of this Section, but

15 not in excess of 30 days after receipt of such funds, may be

16 established and revised from time to time by rules or

17 regulations promulgated jointly by the State Treasurer and the

18 State Comptroller in accordance with the Illinois

19 Administrative Procedure Act. The different time periods

20 established by rule or regulation under this subsection may

21 vary according to the nature and amounts of the funds received,

22 the locations at which the funds are received, whether

23 compliance with the deposit requirements specified in

24 subsection (a) of this Section would be cost effective, and

25 such other circumstances and conditions as the promulgating

26 authorities consider to be appropriate. The Treasurer and the

10000SB0009ham002

- 139 -

LRB100 06347 HLH 27841 a

1 Comptroller shall review all such different time periods

2 established pursuant to this subsection every 2 years from the

3 establishment thereof and upon such review, unless it is

4 determined that it is economically unfeasible for the agency to

5 comply with the provisions of subsection (a), shall repeal such

6 different time period.

7 (Source: P.A. 94-556, eff. 9-11-05.)

8 Section 17-45. The Counties Code is amended by changing

9 Section 3-3034 as follows:

10 (55 ILCS 5/3-3034) (from Ch. 34, par. 3-3034)

11 Sec. 3-3034. Disposition of body. After the inquest the

12 coroner may deliver the body or human remains of the deceased

13 to the family of the deceased or, if there are no family

14 members to accept the body or the remains, then to friends of

15 the deceased, if there be any, but if not, the coroner shall

16 cause the body or the remains to be decently buried, cremated,

17 or donated for medical science purposes, the expenses to be

18 paid from the property of the deceased, if there is sufficient,

19 if not, by the county. The coroner may not approve the

20 cremation or donation of the body if it is necessary to

21 preserve the body for law enforcement purposes. If the State

22 Treasurer, pursuant to the Revised Uniform ~~Disposition of~~

23 Unclaimed Property Act, delivers human remains to the coroner,

24 the coroner shall cause the human remains to be disposed of as

10000SB0009ham002

- 140 -

LRB100 06347 HLH 27841 a

1 provided in this Section. If the police department of any

2 municipality or county investigates abandoned cremated

3 remains, determines that they are human remains, and cannot

4 locate the owner of the remains, then the police shall deliver

5 the remains to the coroner, and the coroner shall cause the

6 remains to be disposed of as provided in this Section.

7 (Source: P.A. 96-1339, eff. 7-27-10; 97-679, eff. 2-6-12.)

8 Section 17-50. The Illinois Banking Act is amended by

9 changing Sections 48, 48.1, 48.3, and 65 as follows:

10 (205 ILCS 5/48)

11 Sec. 48. Secretary's powers; duties. The Secretary shall

12 have the powers and authority, and is charged with the duties

13 and responsibilities designated in this Act, and a State bank

14 shall not be subject to any other visitorial power other than

15 as authorized by this Act, except those vested in the courts,

16 or upon prior consultation with the Secretary, a foreign bank

17 regulator with an appropriate supervisory interest in the

18 parent or affiliate of a state bank. In the performance of the

19 Secretary's duties:

20 (1) The Commissioner shall call for statements from all

21 State banks as provided in Section 47 at least one time

22 during each calendar quarter.

23 (2) (a) The Commissioner, as often as the Commissioner

24 shall deem necessary or proper, and no less frequently than

10000SB0009ham002

- 141 -

LRB100 06347 HLH 27841 a

1 18 months following the preceding examination, shall

2 appoint a suitable person or persons to make an examination

3 of the affairs of every State bank, except that for every

4 eligible State bank, as defined by regulation, the

5 Commissioner in lieu of the examination may accept on an

6 alternating basis the examination made by the eligible

7 State bank's appropriate federal banking agency pursuant

8 to Section 111 of the Federal Deposit Insurance Corporation

9 Improvement Act of 1991, provided the appropriate federal

10 banking agency has made such an examination. A person so

11 appointed shall not be a stockholder or officer or employee

12 of any bank which that person may be directed to examine,

13 and shall have powers to make a thorough examination into

14 all the affairs of the bank and in so doing to examine any

15 of the officers or agents or employees thereof on oath and

16 shall make a full and detailed report of the condition of

17 the bank to the Commissioner. In making the examination the

18 examiners shall include an examination of the affairs of

19 all the affiliates of the bank, as defined in subsection

20 (b) of Section 35.2 of this Act, or subsidiaries of the

21 bank as shall be necessary to disclose fully the conditions

22 of the subsidiaries or affiliates, the relations between

23 the bank and the subsidiaries or affiliates and the effect

24 of those relations upon the affairs of the bank, and in

25 connection therewith shall have power to examine any of the

26 officers, directors, agents, or employees of the

10000SB0009ham002

- 142 -

LRB100 06347 HLH 27841 a

1 subsidiaries or affiliates on oath. After May 31, 1997, the

2 Commissioner may enter into cooperative agreements with

3 state regulatory authorities of other states to provide for

4 examination of State bank branches in those states, and the

5 Commissioner may accept reports of examinations of State

6 bank branches from those state regulatory authorities.

7 These cooperative agreements may set forth the manner in

8 which the other state regulatory authorities may be

9 compensated for examinations prepared for and submitted to

10 the Commissioner.

11 (b) After May 31, 1997, the Commissioner is authorized

12 to examine, as often as the Commissioner shall deem

13 necessary or proper, branches of out-of-state banks. The

14 Commissioner may establish and may assess fees to be paid

15 to the Commissioner for examinations under this subsection

16 (b). The fees shall be borne by the out-of-state bank,

17 unless the fees are borne by the state regulatory authority

18 that chartered the out-of-state bank, as determined by a

19 cooperative agreement between the Commissioner and the

20 state regulatory authority that chartered the out-of-state

21 bank.

22 (2.1) Pursuant to paragraph (a) of subsection (6) of

23 this Section, the Secretary shall adopt rules that ensure

24 consistency and due process in the examination process. The

25 Secretary may also establish guidelines that (i) define the

26 scope of the examination process and (ii) clarify

10000SB0009ham002

- 143 -

LRB100 06347 HLH 27841 a

1 examination items to be resolved. The rules, formal

2 guidance, interpretive letters, or opinions furnished to

3 State banks by the Secretary may be relied upon by the

4 State banks.

5 (2.5) Whenever any State bank, any subsidiary or

6 affiliate of a State bank, or after May 31, 1997, any

7 branch of an out-of-state bank causes to be performed, by

8 contract or otherwise, any bank services for itself,

9 whether on or off its premises:

10 (a) that performance shall be subject to

11 examination by the Commissioner to the same extent as

12 if services were being performed by the bank or, after

13 May 31, 1997, branch of the out-of-state bank itself on

14 its own premises; and

15 (b) the bank or, after May 31, 1997, branch of the

16 out-of-state bank shall notify the Commissioner of the

17 existence of a service relationship. The notification

18 shall be submitted with the first statement of

19 condition (as required by Section 47 of this Act) due

20 after the making of the service contract or the

21 performance of the service, whichever occurs first.

22 The Commissioner shall be notified of each subsequent

23 contract in the same manner.

24 For purposes of this subsection (2.5), the term "bank

25 services" means services such as sorting and posting of

26 checks and deposits, computation and posting of interest

10000SB0009ham002

- 144 -

LRB100 06347 HLH 27841 a

1 and other credits and charges, preparation and mailing of

2 checks, statements, notices, and similar items, or any

3 other clerical, bookkeeping, accounting, statistical, or

4 similar functions performed for a State bank, including but

5 not limited to electronic data processing related to those

6 bank services.

7 (3) The expense of administering this Act, including

8 the expense of the examinations of State banks as provided

9 in this Act, shall to the extent of the amounts resulting

10 from the fees provided for in paragraphs (a), (a-2), and

11 (b) of this subsection (3) be assessed against and borne by

12 the State banks:

13 (a) Each bank shall pay to the Secretary a Call

14 Report Fee which shall be paid in quarterly

15 installments equal to one-fourth of the sum of the

16 annual fixed fee of $800, plus a variable fee based on

17 the assets shown on the quarterly statement of

18 condition delivered to the Secretary in accordance

19 with Section 47 for the preceding quarter according to

20 the following schedule: 16� per $1,000 of the first

21 $5,000,000 of total assets, 15� per $1,000 of the next

22 $20,000,000 of total assets, 13� per $1,000 of the next

23 $75,000,000 of total assets, 9� per $1,000 of the next

24 $400,000,000 of total assets, 7� per $1,000 of the next

25 $500,000,000 of total assets, and 5� per $1,000 of all

26 assets in excess of $1,000,000,000, of the State bank.

10000SB0009ham002

- 145 -

LRB100 06347 HLH 27841 a

1 The Call Report Fee shall be calculated by the

2 Secretary and billed to the banks for remittance at the

3 time of the quarterly statements of condition provided

4 for in Section 47. The Secretary may require payment of

5 the fees provided in this Section by an electronic

6 transfer of funds or an automatic debit of an account

7 of each of the State banks. In case more than one

8 examination of any bank is deemed by the Secretary to

9 be necessary in any examination frequency cycle

10 specified in subsection 2(a) of this Section, and is

11 performed at his direction, the Secretary may assess a

12 reasonable additional fee to recover the cost of the

13 additional examination~~; provided, however, that an~~

14 ~~examination conducted at the request of the State~~

15 ~~Treasurer pursuant to the Uniform Disposition of~~

16 ~~Unclaimed Property Act shall not be deemed to be an~~

17 ~~additional examination under this Section~~. In lieu of

18 the method and amounts set forth in this paragraph (a)

19 for the calculation of the Call Report Fee, the

20 Secretary may specify by rule that the Call Report Fees

21 provided by this Section may be assessed semiannually

22 or some other period and may provide in the rule the

23 formula to be used for calculating and assessing the

24 periodic Call Report Fees to be paid by State banks.

25 (a-1) If in the opinion of the Commissioner an

26 emergency exists or appears likely, the Commissioner

10000SB0009ham002

- 146 -

LRB100 06347 HLH 27841 a

1 may assign an examiner or examiners to monitor the

2 affairs of a State bank with whatever frequency he

3 deems appropriate, including but not limited to a daily

4 basis. The reasonable and necessary expenses of the

5 Commissioner during the period of the monitoring shall

6 be borne by the subject bank. The Commissioner shall

7 furnish the State bank a statement of time and expenses

8 if requested to do so within 30 days of the conclusion

9 of the monitoring period.

10 (a-2) On and after January 1, 1990, the reasonable

11 and necessary expenses of the Commissioner during

12 examination of the performance of electronic data

13 processing services under subsection (2.5) shall be

14 borne by the banks for which the services are provided.

15 An amount, based upon a fee structure prescribed by the

16 Commissioner, shall be paid by the banks or, after May

17 31, 1997, branches of out-of-state banks receiving the

18 electronic data processing services along with the

19 Call Report Fee assessed under paragraph (a) of this

20 subsection (3).

21 (a-3) After May 31, 1997, the reasonable and

22 necessary expenses of the Commissioner during

23 examination of the performance of electronic data

24 processing services under subsection (2.5) at or on

25 behalf of branches of out-of-state banks shall be borne

26 by the out-of-state banks, unless those expenses are

10000SB0009ham002

- 147 -

LRB100 06347 HLH 27841 a

1 borne by the state regulatory authorities that

2 chartered the out-of-state banks, as determined by

3 cooperative agreements between the Commissioner and

4 the state regulatory authorities that chartered the

5 out-of-state banks.

6 (b) "Fiscal year" for purposes of this Section 48

7 is defined as a period beginning July 1 of any year and

8 ending June 30 of the next year. The Commissioner shall

9 receive for each fiscal year, commencing with the

10 fiscal year ending June 30, 1987, a contingent fee

11 equal to the lesser of the aggregate of the fees paid

12 by all State banks under paragraph (a) of subsection

13 (3) for that year, or the amount, if any, whereby the

14 aggregate of the administration expenses, as defined

15 in paragraph (c), for that fiscal year exceeds the sum

16 of the aggregate of the fees payable by all State banks

17 for that year under paragraph (a) of subsection (3),

18 plus any amounts transferred into the Bank and Trust

19 Company Fund from the State Pensions Fund for that

20 year, plus all other amounts collected by the

21 Commissioner for that year under any other provision of

22 this Act, plus the aggregate of all fees collected for

23 that year by the Commissioner under the Corporate

24 Fiduciary Act, excluding the receivership fees

25 provided for in Section 5-10 of the Corporate Fiduciary

26 Act, and the Foreign Banking Office Act. The aggregate

10000SB0009ham002

- 148 -

LRB100 06347 HLH 27841 a

1 amount of the contingent fee thus arrived at for any

2 fiscal year shall be apportioned amongst, assessed

3 upon, and paid by the State banks and foreign banking

4 corporations, respectively, in the same proportion

5 that the fee of each under paragraph (a) of subsection

6 (3), respectively, for that year bears to the aggregate

7 for that year of the fees collected under paragraph (a)

8 of subsection (3). The aggregate amount of the

9 contingent fee, and the portion thereof to be assessed

10 upon each State bank and foreign banking corporation,

11 respectively, shall be determined by the Commissioner

12 and shall be paid by each, respectively, within 120

13 days of the close of the period for which the

14 contingent fee is computed and is payable, and the

15 Commissioner shall give 20days' ~~days~~ advance notice of

16 the amount of the contingent fee payable by the State

17 bank and of the date fixed by the Commissioner for

18 payment of the fee.

19 (c) The "administration expenses" for any fiscal

20 year shall mean the ordinary and contingent expenses

21 for that year incident to making the examinations

22 provided for by, and for otherwise administering, this

23 Act, the Corporate Fiduciary Act, excluding the

24 expenses paid from the Corporate Fiduciary

25 Receivership account in the Bank and Trust Company

26 Fund, the Foreign Banking Office Act, the Electronic

10000SB0009ham002

- 149 -

LRB100 06347 HLH 27841 a

1 Fund Transfer Act, and the Illinois Bank Examiners'

2 Education Foundation Act, including all salaries and

3 other compensation paid for personal services rendered

4 for the State by officers or employees of the State,

5 including the Commissioner and the Deputy

6 Commissioners, communication equipment and services,

7 office furnishings, surety bond premiums, and travel

8 expenses of those officers and employees, employees,

9 expenditures or charges for the acquisition,

10 enlargement or improvement of, or for the use of, any

11 office space, building, or structure, or expenditures

12 for the maintenance thereof or for furnishing heat,

13 light, or power with respect thereto, all to the extent

14 that those expenditures are directly incidental to

15 such examinations or administration. The Commissioner

16 shall not be required by paragraphs (c) or (d-1) of

17 this subsection (3) to maintain in any fiscal year's

18 budget appropriated reserves for accrued vacation and

19 accrued sick leave that is required to be paid to

20 employees of the Commissioner upon termination of

21 their service with the Commissioner in an amount that

22 is more than is reasonably anticipated to be necessary

23 for any anticipated turnover in employees, whether due

24 to normal attrition or due to layoffs, terminations, or

25 resignations.

26 (d) The aggregate of all fees collected by the

10000SB0009ham002

- 150 -

LRB100 06347 HLH 27841 a

1 Secretary under this Act, the Corporate Fiduciary Act,

2 or the Foreign Banking Office Act on and after July 1,

3 1979, shall be paid promptly after receipt of the same,

4 accompanied by a detailed statement thereof, into the

5 State treasury and shall be set apart in a special fund

6 to be known as the "Bank and Trust Company Fund",

7 except as provided in paragraph (c) of subsection (11)

8 of this Section. All earnings received from

9 investments of funds in the Bank and Trust Company Fund

10 shall be deposited in the Bank and Trust Company Fund

11 and may be used for the same purposes as fees deposited

12 in that Fund. The amount from time to time deposited

13 into the Bank and Trust Company Fund shall be used: (i)

14 to offset the ordinary administrative expenses of the

15 Secretary as defined in this Section or (ii) as a

16 credit against fees under paragraph (d-1) of this

17 subsection (3). Nothing in this amendatory Act of 1979

18 shall prevent continuing the practice of paying

19 expenses involving salaries, retirement, social

20 security, and State-paid insurance premiums of State

21 officers by appropriations from the General Revenue

22 Fund. However, the General Revenue Fund shall be

23 reimbursed for those payments made on and after July 1,

24 1979, by an annual transfer of funds from the Bank and

25 Trust Company Fund. Moneys in the Bank and Trust

26 Company Fund may be transferred to the Professions

10000SB0009ham002

- 151 -

LRB100 06347 HLH 27841 a

1 Indirect Cost Fund, as authorized under Section

2 2105-300 of the Department of Professional Regulation

3 Law of the Civil Administrative Code of Illinois.

4 Notwithstanding provisions in the State Finance

5 Act, as now or hereafter amended, or any other law to

6 the contrary, the sum of $18,788,847 shall be

7 transferred from the Bank and Trust Company Fund to the

8 Financial Institutions Settlement of 2008 Fund on the

9 effective date of this amendatory Act of the 95th

10 General Assembly, or as soon thereafter as practical.

11 Notwithstanding provisions in the State Finance

12 Act, as now or hereafter amended, or any other law to

13 the contrary, the Governor may, during any fiscal year

14 through January 10, 2011, from time to time direct the

15 State Treasurer and Comptroller to transfer a

16 specified sum not exceeding 10% of the revenues to be

17 deposited into the Bank and Trust Company Fund during

18 that fiscal year from that Fund to the General Revenue

19 Fund in order to help defray the State's operating

20 costs for the fiscal year. Notwithstanding provisions

21 in the State Finance Act, as now or hereafter amended,

22 or any other law to the contrary, the total sum

23 transferred during any fiscal year through January 10,

24 2011, from the Bank and Trust Company Fund to the

25 General Revenue Fund pursuant to this provision shall

26 not exceed during any fiscal year 10% of the revenues

10000SB0009ham002

- 152 -

LRB100 06347 HLH 27841 a

1 to be deposited into the Bank and Trust Company Fund

2 during that fiscal year. The State Treasurer and

3 Comptroller shall transfer the amounts designated

4 under this Section as soon as may be practicable after

5 receiving the direction to transfer from the Governor.

6 (d-1) Adequate funds shall be available in the Bank

7 and Trust Company Fund to permit the timely payment of

8 administration expenses. In each fiscal year the total

9 administration expenses shall be deducted from the

10 total fees collected by the Commissioner and the

11 remainder transferred into the Cash Flow Reserve

12 Account, unless the balance of the Cash Flow Reserve

13 Account prior to the transfer equals or exceeds

14 one-fourth of the total initial appropriations from

15 the Bank and Trust Company Fund for the subsequent

16 year, in which case the remainder shall be credited to

17 State banks and foreign banking corporations and

18 applied against their fees for the subsequent year. The

19 amount credited to each State bank and foreign banking

20 corporation shall be in the same proportion as the Call

21 Report Fees paid by each for the year bear to the total

22 Call Report Fees collected for the year. If, after a

23 transfer to the Cash Flow Reserve Account is made or if

24 no remainder is available for transfer, the balance of

25 the Cash Flow Reserve Account is less than one-fourth

26 of the total initial appropriations for the subsequent

10000SB0009ham002

- 153 -

LRB100 06347 HLH 27841 a

1 year and the amount transferred is less than 5% of the

2 total Call Report Fees for the year, additional amounts

3 needed to make the transfer equal to 5% of the total

4 Call Report Fees for the year shall be apportioned

5 amongst, assessed upon, and paid by the State banks and

6 foreign banking corporations in the same proportion

7 that the Call Report Fees of each, respectively, for

8 the year bear to the total Call Report Fees collected

9 for the year. The additional amounts assessed shall be

10 transferred into the Cash Flow Reserve Account. For

11 purposes of this paragraph (d-1), the calculation of

12 the fees collected by the Commissioner shall exclude

13 the receivership fees provided for in Section 5-10 of

14 the Corporate Fiduciary Act.

15 (e) The Commissioner may upon request certify to

16 any public record in his keeping and shall have

17 authority to levy a reasonable charge for issuing

18 certifications of any public record in his keeping.

19 (f) In addition to fees authorized elsewhere in

20 this Act, the Commissioner may, in connection with a

21 review, approval, or provision of a service, levy a

22 reasonable charge to recover the cost of the review,

23 approval, or service.

24 (4) Nothing contained in this Act shall be construed to

25 limit the obligation relative to examinations and reports

26 of any State bank, deposits in which are to any extent

10000SB0009ham002

- 154 -

LRB100 06347 HLH 27841 a

1 insured by the United States or any agency thereof, nor to

2 limit in any way the powers of the Commissioner with

3 reference to examinations and reports of that bank.

4 (5) The nature and condition of the assets in or

5 investment of any bonus, pension, or profit sharing plan

6 for officers or employees of every State bank or, after May

7 31, 1997, branch of an out-of-state bank shall be deemed to

8 be included in the affairs of that State bank or branch of

9 an out-of-state bank subject to examination by the

10 Commissioner under the provisions of subsection (2) of this

11 Section, and if the Commissioner shall find from an

12 examination that the condition of or operation of the

13 investments or assets of the plan is unlawful, fraudulent,

14 or unsafe, or that any trustee has abused his trust, the

15 Commissioner shall, if the situation so found by the

16 Commissioner shall not be corrected to his satisfaction

17 within 60 days after the Commissioner has given notice to

18 the board of directors of the State bank or out-of-state

19 bank of his findings, report the facts to the Attorney

20 General who shall thereupon institute proceedings against

21 the State bank or out-of-state bank, the board of directors

22 thereof, or the trustees under such plan as the nature of

23 the case may require.

24 (6) The Commissioner shall have the power:

25 (a) To promulgate reasonable rules for the purpose

26 of administering the provisions of this Act.

10000SB0009ham002

- 155 -

LRB100 06347 HLH 27841 a

1 (a-5) To impose conditions on any approval issued

2 by the Commissioner if he determines that the

3 conditions are necessary or appropriate. These

4 conditions shall be imposed in writing and shall

5 continue in effect for the period prescribed by the

6 Commissioner.

7 (b) To issue orders against any person, if the

8 Commissioner has reasonable cause to believe that an

9 unsafe or unsound banking practice has occurred, is

10 occurring, or is about to occur, if any person has

11 violated, is violating, or is about to violate any law,

12 rule, or written agreement with the Commissioner, or

13 for the purpose of administering the provisions of this

14 Act and any rule promulgated in accordance with this

15 Act.

16 (b-1) To enter into agreements with a bank

17 establishing a program to correct the condition of the

18 bank or its practices.

19 (c) To appoint hearing officers to execute any of

20 the powers granted to the Commissioner under this

21 Section for the purpose of administering this Act and

22 any rule promulgated in accordance with this Act and

23 otherwise to authorize, in writing, an officer or

24 employee of the Office of Banks and Real Estate to

25 exercise his powers under this Act.

26 (d) To subpoena witnesses, to compel their

10000SB0009ham002

- 156 -

LRB100 06347 HLH 27841 a

1 attendance, to administer an oath, to examine any

2 person under oath, and to require the production of any

3 relevant books, papers, accounts, and documents in the

4 course of and pursuant to any investigation being

5 conducted, or any action being taken, by the

6 Commissioner in respect of any matter relating to the

7 duties imposed upon, or the powers vested in, the

8 Commissioner under the provisions of this Act or any

9 rule promulgated in accordance with this Act.

10 (e) To conduct hearings.

11 (7) Whenever, in the opinion of the Secretary, any

12 director, officer, employee, or agent of a State bank or

13 any subsidiary or bank holding company of the bank or,

14 after May 31, 1997, of any branch of an out-of-state bank

15 or any subsidiary or bank holding company of the bank shall

16 have violated any law, rule, or order relating to that bank

17 or any subsidiary or bank holding company of the bank,

18 shall have obstructed or impeded any examination or

19 investigation by the Secretary, shall have engaged in an

20 unsafe or unsound practice in conducting the business of

21 that bank or any subsidiary or bank holding company of the

22 bank, or shall have violated any law or engaged or

23 participated in any unsafe or unsound practice in

24 connection with any financial institution or other

25 business entity such that the character and fitness of the

26 director, officer, employee, or agent does not assure

10000SB0009ham002

- 157 -

LRB100 06347 HLH 27841 a

1 reasonable promise of safe and sound operation of the State

2 bank, the Secretary may issue an order of removal. If, in

3 the opinion of the Secretary, any former director, officer,

4 employee, or agent of a State bank or any subsidiary or

5 bank holding company of the bank, prior to the termination

6 of his or her service with that bank or any subsidiary or

7 bank holding company of the bank, violated any law, rule,

8 or order relating to that State bank or any subsidiary or

9 bank holding company of the bank, obstructed or impeded any

10 examination or investigation by the Secretary, engaged in

11 an unsafe or unsound practice in conducting the business of

12 that bank or any subsidiary or bank holding company of the

13 bank, or violated any law or engaged or participated in any

14 unsafe or unsound practice in connection with any financial

15 institution or other business entity such that the

16 character and fitness of the director, officer, employee,

17 or agent would not have assured reasonable promise of safe

18 and sound operation of the State bank, the Secretary may

19 issue an order prohibiting that person from further service

20 with a bank or any subsidiary or bank holding company of

21 the bank as a director, officer, employee, or agent. An

22 order issued pursuant to this subsection shall be served

23 upon the director, officer, employee, or agent. A copy of

24 the order shall be sent to each director of the bank

25 affected by registered mail. A copy of the order shall also

26 be served upon the bank of which he is a director, officer,

10000SB0009ham002

- 158 -

LRB100 06347 HLH 27841 a

1 employee, or agent, whereupon he shall cease to be a

2 director, officer, employee, or agent of that bank. The

3 Secretary may institute a civil action against the

4 director, officer, or agent of the State bank or, after May

5 31, 1997, of the branch of the out-of-state bank against

6 whom any order provided for by this subsection (7) of this

7 Section 48 has been issued, and against the State bank or,

8 after May 31, 1997, out-of-state bank, to enforce

9 compliance with or to enjoin any violation of the terms of

10 the order. Any person who has been the subject of an order

11 of removal or an order of prohibition issued by the

12 Secretary under this subsection or Section 5-6 of the

13 Corporate Fiduciary Act may not thereafter serve as

14 director, officer, employee, or agent of any State bank or

15 of any branch of any out-of-state bank, or of any corporate

16 fiduciary, as defined in Section 1-5.05 of the Corporate

17 Fiduciary Act, or of any other entity that is subject to

18 licensure or regulation by the Division of Banking unless

19 the Secretary has granted prior approval in writing.

20 For purposes of this paragraph (7), "bank holding

21 company" has the meaning prescribed in Section 2 of the

22 Illinois Bank Holding Company Act of 1957.

23 (8) The Commissioner may impose civil penalties of up

24 to $100,000 against any person for each violation of any

25 provision of this Act, any rule promulgated in accordance

26 with this Act, any order of the Commissioner, or any other

10000SB0009ham002

- 159 -

LRB100 06347 HLH 27841 a

1 action which in the Commissioner's discretion is an unsafe

2 or unsound banking practice.

3 (9) The Commissioner may impose civil penalties of up

4 to $100 against any person for the first failure to comply

5 with reporting requirements set forth in the report of

6 examination of the bank and up to $200 for the second and

7 subsequent failures to comply with those reporting

8 requirements.

9 (10) All final administrative decisions of the

10 Commissioner hereunder shall be subject to judicial review

11 pursuant to the provisions of the Administrative Review

12 Law. For matters involving administrative review, venue

13 shall be in either Sangamon County or Cook County.

14 (11) The endowment fund for the Illinois Bank

15 Examiners' Education Foundation shall be administered as

16 follows:

17 (a) (Blank).

18 (b) The Foundation is empowered to receive

19 voluntary contributions, gifts, grants, bequests, and

20 donations on behalf of the Illinois Bank Examiners'

21 Education Foundation from national banks and other

22 persons for the purpose of funding the endowment of the

23 Illinois Bank Examiners' Education Foundation.

24 (c) The aggregate of all special educational fees

25 collected by the Secretary and property received by the

26 Secretary on behalf of the Illinois Bank Examiners'

10000SB0009ham002

- 160 -

LRB100 06347 HLH 27841 a

1 Education Foundation under this subsection (11) on or

2 after June 30, 1986, shall be either (i) promptly paid

3 after receipt of the same, accompanied by a detailed

4 statement thereof, into the State Treasury and shall be

5 set apart in a special fund to be known as "The

6 Illinois Bank Examiners' Education Fund" to be

7 invested by either the Treasurer of the State of

8 Illinois in the Public Treasurers' Investment Pool or

9 in any other investment he is authorized to make or by

10 the Illinois State Board of Investment as the State

11 Banking Board of Illinois may direct or (ii) deposited

12 into an account maintained in a commercial bank or

13 corporate fiduciary in the name of the Illinois Bank

14 Examiners' Education Foundation pursuant to the order

15 and direction of the Board of Trustees of the Illinois

16 Bank Examiners' Education Foundation.

17 (12) (Blank).

18 (13) The Secretary may borrow funds from the General

19 Revenue Fund on behalf of the Bank and Trust Company Fund

20 if the Director of Banking certifies to the Governor that

21 there is an economic emergency affecting banking that

22 requires a borrowing to provide additional funds to the

23 Bank and Trust Company Fund. The borrowed funds shall be

24 paid back within 3 years and shall not exceed the total

25 funding appropriated to the Agency in the previous year.

26 (14) In addition to the fees authorized in this Act,

10000SB0009ham002

- 161 -

LRB100 06347 HLH 27841 a

1 the Secretary may assess reasonable receivership fees

2 against any State bank that does not maintain insurance

3 with the Federal Deposit Insurance Corporation. All fees

4 collected under this subsection (14) shall be paid into the

5 Non-insured Institutions Receivership account in the Bank

6 and Trust Company Fund, as established by the Secretary.

7 The fees assessed under this subsection (14) shall provide

8 for the expenses that arise from the administration of the

9 receivership of any such institution required to pay into

10 the Non-insured Institutions Receivership account, whether

11 pursuant to this Act, the Corporate Fiduciary Act, the

12 Foreign Banking Office Act, or any other Act that requires

13 payments into the Non-insured Institutions Receivership

14 account. The Secretary may establish by rule a reasonable

15 manner of assessing fees under this subsection (14).

16 (Source: P.A. 98-784, eff. 7-24-14; 99-39, eff. 1-1-16.)

17 (205 ILCS 5/48.1) (from Ch. 17, par. 360)

18 Sec. 48.1. Customer financial records; confidentiality.

19 (a) For the purpose of this Section, the term "financial

20 records" means any original, any copy, or any summary of:

21 (1) a document granting signature authority over a

22 deposit or account;

23 (2) a statement, ledger card or other record on any

24 deposit or account, which shows each transaction in or with

25 respect to that account;

10000SB0009ham002

- 162 -

LRB100 06347 HLH 27841 a

1 (3) a check, draft or money order drawn on a bank or

2 issued and payable by a bank; or

3 (4) any other item containing information pertaining

4 to any relationship established in the ordinary course of a

5 bank's business between a bank and its customer, including

6 financial statements or other financial information

7 provided by the customer.

8 (b) This Section does not prohibit:

9 (1) The preparation, examination, handling or

10 maintenance of any financial records by any officer,

11 employee or agent of a bank having custody of the records,

12 or the examination of the records by a certified public

13 accountant engaged by the bank to perform an independent

14 audit.

15 (2) The examination of any financial records by, or the

16 furnishing of financial records by a bank to, any officer,

17 employee or agent of (i) the Commissioner of Banks and Real

18 Estate, (ii) after May 31, 1997, a state regulatory

19 authority authorized to examine a branch of a State bank

20 located in another state, (iii) the Comptroller of the

21 Currency, (iv) the Federal Reserve Board, or (v) the

22 Federal Deposit Insurance Corporation for use solely in the

23 exercise of his duties as an officer, employee, or agent.

24 (3) The publication of data furnished from financial

25 records relating to customers where the data cannot be

26 identified to any particular customer or account.

10000SB0009ham002

- 163 -

LRB100 06347 HLH 27841 a

1 (4) The making of reports or returns required under

2 Chapter 61 of the Internal Revenue Code of 1986.

3 (5) Furnishing information concerning the dishonor of

4 any negotiable instrument permitted to be disclosed under

5 the Uniform Commercial Code.

6 (6) The exchange in the regular course of business of

7 (i) credit information between a bank and other banks or

8 financial institutions or commercial enterprises, directly

9 or through a consumer reporting agency or (ii) financial

10 records or information derived from financial records

11 between a bank and other banks or financial institutions or

12 commercial enterprises for the purpose of conducting due

13 diligence pursuant to a purchase or sale involving the bank

14 or assets or liabilities of the bank.

15 (7) The furnishing of information to the appropriate

16 law enforcement authorities where the bank reasonably

17 believes it has been the victim of a crime.

18 (8) The furnishing of information under the Revised

19 Uniform ~~Disposition of~~Unclaimed Property Act.

20 (9) The furnishing of information under the Illinois

21 Income Tax Act and the Illinois Estate and

22 Generation-Skipping Transfer Tax Act.

23 (10) The furnishing of information under the federal

24 Currency and Foreign Transactions Reporting Act Title 31,

25 United States Code, Section 1051 et seq.

26 (11) The furnishing of information under any other

10000SB0009ham002

- 164 -

LRB100 06347 HLH 27841 a

1 statute that by its terms or by regulations promulgated

2 thereunder requires the disclosure of financial records

3 other than by subpoena, summons, warrant, or court order.

4 (12) The furnishing of information about the existence

5 of an account of a person to a judgment creditor of that

6 person who has made a written request for that information.

7 (13) The exchange in the regular course of business of

8 information between commonly owned banks in connection

9 with a transaction authorized under paragraph (23) of

10 Section 5 and conducted at an affiliate facility.

11 (14) The furnishing of information in accordance with

12 the federal Personal Responsibility and Work Opportunity

13 Reconciliation Act of 1996. Any bank governed by this Act

14 shall enter into an agreement for data exchanges with a

15 State agency provided the State agency pays to the bank a

16 reasonable fee not to exceed its actual cost incurred. A

17 bank providing information in accordance with this item

18 shall not be liable to any account holder or other person

19 for any disclosure of information to a State agency, for

20 encumbering or surrendering any assets held by the bank in

21 response to a lien or order to withhold and deliver issued

22 by a State agency, or for any other action taken pursuant

23 to this item, including individual or mechanical errors,

24 provided the action does not constitute gross negligence or

25 willful misconduct. A bank shall have no obligation to

26 hold, encumber, or surrender assets until it has been

10000SB0009ham002

- 165 -

LRB100 06347 HLH 27841 a

1 served with a subpoena, summons, warrant, court or

2 administrative order, lien, or levy.

3 (15) The exchange in the regular course of business of

4 information between a bank and any commonly owned affiliate

5 of the bank, subject to the provisions of the Financial

6 Institutions Insurance Sales Law.

7 (16) The furnishing of information to law enforcement

8 authorities, the Illinois Department on Aging and its

9 regional administrative and provider agencies, the

10 Department of Human Services Office of Inspector General,

11 or public guardians: (i) upon subpoena by the investigatory

12 entity or the guardian, or (ii) if there is suspicion by

13 the bank that a customer who is an elderly person or person

14 with a disability has been or may become the victim of

15 financial exploitation. For the purposes of this item (16),

16 the term: (i) "elderly person" means a person who is 60 or

17 more years of age, (ii) "disabled person" means a person

18 who has or reasonably appears to the bank to have a

19 physical or mental disability that impairs his or her

20 ability to seek or obtain protection from or prevent

21 financial exploitation, and (iii) "financial exploitation"

22 means tortious or illegal use of the assets or resources of

23 an elderly or disabled person, and includes, without

24 limitation, misappropriation of the elderly or disabled

25 person's assets or resources by undue influence, breach of

26 fiduciary relationship, intimidation, fraud, deception,

10000SB0009ham002

- 166 -

LRB100 06347 HLH 27841 a

1 extortion, or the use of assets or resources in any manner

2 contrary to law. A bank or person furnishing information

3 pursuant to this item (16) shall be entitled to the same

4 rights and protections as a person furnishing information

5 under the Adult Protective Services Act and the Illinois

6 Domestic Violence Act of 1986.

7 (17) The disclosure of financial records or

8 information as necessary to effect, administer, or enforce

9 a transaction requested or authorized by the customer, or

10 in connection with:

11 (A) servicing or processing a financial product or

12 service requested or authorized by the customer;

13 (B) maintaining or servicing a customer's account

14 with the bank; or

15 (C) a proposed or actual securitization or

16 secondary market sale (including sales of servicing

17 rights) related to a transaction of a customer.

18 Nothing in this item (17), however, authorizes the sale

19 of the financial records or information of a customer

20 without the consent of the customer.

21 (18) The disclosure of financial records or

22 information as necessary to protect against actual or

23 potential fraud, unauthorized transactions, claims, or

24 other liability.

25 (19)(a) The disclosure of financial records or

26 information related to a private label credit program

10000SB0009ham002

- 167 -

LRB100 06347 HLH 27841 a

1 between a financial institution and a private label party

2 in connection with that private label credit program. Such

3 information is limited to outstanding balance, available

4 credit, payment and performance and account history,

5 product references, purchase information, and information

6 related to the identity of the customer.

7 (b)(1) For purposes of this paragraph (19) of

8 subsection (b) of Section 48.1, a "private label credit

9 program" means a credit program involving a financial

10 institution and a private label party that is used by a

11 customer of the financial institution and the private label

12 party primarily for payment for goods or services sold,

13 manufactured, or distributed by a private label party.

14 (2) For purposes of this paragraph (19) of subsection

15 (b) of Section 48.1, a "private label party" means, with

16 respect to a private label credit program, any of the

17 following: a retailer, a merchant, a manufacturer, a trade

18 group, or any such person's affiliate, subsidiary, member,

19 agent, or service provider.

20 (c) Except as otherwise provided by this Act, a bank may

21 not disclose to any person, except to the customer or his duly

22 authorized agent, any financial records or financial

23 information obtained from financial records relating to that

24 customer of that bank unless:

25 (1) the customer has authorized disclosure to the

26 person;

10000SB0009ham002

- 168 -

LRB100 06347 HLH 27841 a

1 (2) the financial records are disclosed in response to

2 a lawful subpoena, summons, warrant, citation to discover

3 assets, or court order which meets the requirements of

4 subsection (d) of this Section; or

5 (3) the bank is attempting to collect an obligation

6 owed to the bank and the bank complies with the provisions

7 of Section 2I of the Consumer Fraud and Deceptive Business

8 Practices Act.

9 (d) A bank shall disclose financial records under paragraph

10 (2) of subsection (c) of this Section under a lawful subpoena,

11 summons, warrant, citation to discover assets, or court order

12 only after the bank mails a copy of the subpoena, summons,

13 warrant, citation to discover assets, or court order to the

14 person establishing the relationship with the bank, if living,

15 and, otherwise his personal representative, if known, at his

16 last known address by first class mail, postage prepaid, unless

17 the bank is specifically prohibited from notifying the person

18 by order of court or by applicable State or federal law. A bank

19 shall not mail a copy of a subpoena to any person pursuant to

20 this subsection if the subpoena was issued by a grand jury

21 under the Statewide Grand Jury Act.

22 (e) Any officer or employee of a bank who knowingly and

23 willfully furnishes financial records in violation of this

24 Section is guilty of a business offense and, upon conviction,

25 shall be fined not more than $1,000.

26 (f) Any person who knowingly and willfully induces or

10000SB0009ham002

- 169 -

LRB100 06347 HLH 27841 a

1 attempts to induce any officer or employee of a bank to

2 disclose financial records in violation of this Section is

3 guilty of a business offense and, upon conviction, shall be

4 fined not more than $1,000.

5 (g) A bank shall be reimbursed for costs that are

6 reasonably necessary and that have been directly incurred in

7 searching for, reproducing, or transporting books, papers,

8 records, or other data of a customer required or requested to

9 be produced pursuant to a lawful subpoena, summons, warrant,

10 citation to discover assets, or court order. The Commissioner

11 shall determine the rates and conditions under which payment

12 may be made.

13 (Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15.)

14 (205 ILCS 5/48.3) (from Ch. 17, par. 360.2)

15 Sec. 48.3. Disclosure of reports of examinations and

16 confidential supervisory information; limitations.

17 (a) Any report of examination, visitation, or

18 investigation prepared by the Commissioner under this Act, the

19 Electronic Fund Transfer Act, the Corporate Fiduciary Act, the

20 Illinois Bank Holding Company Act of 1957, and the Foreign

21 Banking Office Act, any report of examination, visitation, or

22 investigation prepared by the state regulatory authority of

23 another state that examines a branch of an Illinois State bank

24 in that state, any document or record prepared or obtained in

25 connection with or relating to any examination, visitation, or

10000SB0009ham002

- 170 -

LRB100 06347 HLH 27841 a

1 investigation, and any record prepared or obtained by the

2 Commissioner to the extent that the record summarizes or

3 contains information derived from any report, document, or

4 record described in this subsection shall be deemed

5 "confidential supervisory information". Confidential

6 supervisory information shall not include any information or

7 record routinely prepared by a bank or other financial

8 institution and maintained in the ordinary course of business

9 or any information or record that is required to be made

10 publicly available pursuant to State or federal law or rule.

11 Confidential supervisory information shall be the property of

12 the Commissioner and shall only be disclosed under the

13 circumstances and for the purposes set forth in this Section.

14 The Commissioner may disclose confidential supervisory

15 information only under the following circumstances:

16 (1) The Commissioner may furnish confidential

17 supervisory information to the Board of Governors of the

18 Federal Reserve System, the federal reserve bank of the

19 federal reserve district in which the State bank is located

20 or in which the parent or other affiliate of the State bank

21 is located, any official or examiner thereof duly

22 accredited for the purpose, or any other state regulator,

23 federal regulator, or in the case of a foreign bank

24 possessing a certificate of authority pursuant to the

25 Foreign Banking Office Act or a license pursuant to the

26 Foreign Bank Representative Office Act, the bank regulator

10000SB0009ham002

- 171 -

LRB100 06347 HLH 27841 a

1 in the country where the foreign bank is chartered, that

2 the Commissioner determines to have an appropriate

3 regulatory interest. Nothing contained in this Act shall be

4 construed to limit the obligation of any member State bank

5 to comply with the requirements relative to examinations

6 and reports of the Federal Reserve Act and of the Board of

7 Governors of the Federal Reserve System or the federal

8 reserve bank of the federal reserve district in which the

9 bank is located, nor to limit in any way the powers of the

10 Commissioner with reference to examinations and reports.

11 (2) The Commissioner may furnish confidential

12 supervisory information to the United States, any agency

13 thereof that has insured a bank's deposits in whole or in

14 part, or any official or examiner thereof duly accredited

15 for the purpose. Nothing contained in this Act shall be

16 construed to limit the obligation relative to examinations

17 and reports of any State bank, deposits in which are to any

18 extent insured by the United States, any agency thereof,

19 nor to limit in any way the powers of the Commissioner with

20 reference to examination and reports of such bank.

21 (3) The Commissioner may furnish confidential

22 supervisory information to the appropriate law enforcement

23 authorities when the Commissioner reasonably believes a

24 bank, which the Commissioner has caused to be examined, has

25 been a victim of a crime.

26 (4) The Commissioner may furnish confidential

10000SB0009ham002

- 172 -

LRB100 06347 HLH 27841 a

1 supervisory information relating to a bank or other

2 financial institution, which the Commissioner has caused

3 to be examined, to be sent to the administrator of the

4 Revised Uniform ~~Disposition of~~ Unclaimed Property Act.

5 (5) The Commissioner may furnish confidential

6 supervisory information relating to a bank or other

7 financial institution, which the Commissioner has caused

8 to be examined, relating to its performance of obligations

9 under the Illinois Income Tax Act and the Illinois Estate

10 and Generation-Skipping Transfer Tax Act to the Illinois

11 Department of Revenue.

12 (6) The Commissioner may furnish confidential

13 supervisory information relating to a bank or other

14 financial institution, which the Commissioner has caused

15 to be examined, under the federal Currency and Foreign

16 Transactions Reporting Act, Title 31, United States Code,

17 Section 1051 et seq.

18 (6.5) The Commissioner may furnish confidential

19 supervisory information to any other agency or entity that

20 the Commissioner determines to have a legitimate

21 regulatory interest.

22 (7) The Commissioner may furnish confidential

23 supervisory information under any other statute that by its

24 terms or by regulations promulgated thereunder requires

25 the disclosure of financial records other than by subpoena,

26 summons, warrant, or court order.

10000SB0009ham002

- 173 -

LRB100 06347 HLH 27841 a

1 (8) At the request of the affected bank or other

2 financial institution, the Commissioner may furnish

3 confidential supervisory information relating to a bank or

4 other financial institution, which the Commissioner has

5 caused to be examined, in connection with the obtaining of

6 insurance coverage or the pursuit of an insurance claim for

7 or on behalf of the bank or other financial institution;

8 provided that, when possible, the Commissioner shall

9 disclose only relevant information while maintaining the

10 confidentiality of financial records not relevant to such

11 insurance coverage or claim and, when appropriate, may

12 delete identifying data relating to any person or

13 individual.

14 (9) The Commissioner may furnish a copy of a report of

15 any examination performed by the Commissioner of the

16 condition and affairs of any electronic data processing

17 entity to the banks serviced by the electronic data

18 processing entity.

19 (10) In addition to the foregoing circumstances, the

20 Commissioner may, but is not required to, furnish

21 confidential supervisory information under the same

22 circumstances authorized for the bank or financial

23 institution pursuant to subsection (b) of this Section,

24 except that the Commissioner shall provide confidential

25 supervisory information under circumstances described in

26 paragraph (3) of subsection (b) of this Section only upon

10000SB0009ham002

- 174 -

LRB100 06347 HLH 27841 a

1 the request of the bank or other financial institution.

2 (b) A bank or other financial institution or its officers,

3 agents, and employees may disclose confidential supervisory

4 information only under the following circumstances:

5 (1) to the board of directors of the bank or other

6 financial institution, as well as the president,

7 vice-president, cashier, and other officers of the bank or

8 other financial institution to whom the board of directors

9 may delegate duties with respect to compliance with

10 recommendations for action, and to the board of directors

11 of a bank holding company that owns at least 80% of the

12 outstanding stock of the bank or other financial

13 institution;

14 (2) to attorneys for the bank or other financial

15 institution and to a certified public accountant engaged by

16 the State bank or financial institution to perform an

17 independent audit provided that the attorney or certified

18 public accountant shall not permit the confidential

19 supervisory information to be further disseminated;

20 (3) to any person who seeks to acquire a controlling

21 interest in, or who seeks to merge with, the bank or

22 financial institution, provided that all attorneys,

23 certified public accountants, officers, agents, or

24 employees of that person shall agree to be bound to respect

25 the confidentiality of the confidential supervisory

26 information and to not further disseminate the information

10000SB0009ham002

- 175 -

LRB100 06347 HLH 27841 a

1 therein contained;

2 (4) (blank); or

3 (5) to the bank's insurance company in relation to an

4 insurance claim or the effort by the bank to procure

5 insurance coverage, provided that, when possible, the bank

6 shall disclose only information that is relevant to the

7 insurance claim or that is necessary to procure the

8 insurance coverage, while maintaining the confidentiality

9 of financial information pertaining to customers. When

10 appropriate, the bank may delete identifying data relating

11 to any person.

12 The disclosure of confidential supervisory information by

13 a bank or other financial institution pursuant to this

14 subsection (b) and the disclosure of information to the

15 Commissioner or other regulatory agency in connection with any

16 examination, visitation, or investigation shall not constitute

17 a waiver of any legal privilege otherwise available to the bank

18 or other financial institution with respect to the information.

19 (c) (1) Notwithstanding any other provision of this Act or

20 any other law, confidential supervisory information shall be

21 the property of the Commissioner and shall be privileged from

22 disclosure to any person except as provided in this Section. No

23 person in possession of confidential supervisory information

24 may disclose that information for any reason or under any

25 circumstances not specified in this Section without the prior

26 authorization of the Commissioner. Any person upon whom a

10000SB0009ham002

- 176 -

LRB100 06347 HLH 27841 a

1 demand for production of confidential supervisory information

2 is made, whether by subpoena, order, or other judicial or

3 administrative process, must withhold production of the

4 confidential supervisory information and must notify the

5 Commissioner of the demand, at which time the Commissioner is

6 authorized to intervene for the purpose of enforcing the

7 limitations of this Section or seeking the withdrawal or

8 termination of the attempt to compel production of the

9 confidential supervisory information.

10 (2) Any request for discovery or disclosure of confidential

11 supervisory information, whether by subpoena, order, or other

12 judicial or administrative process, shall be made to the

13 Commissioner, and the Commissioner shall determine within 15

14 days whether to disclose the information pursuant to procedures

15 and standards that the Commissioner shall establish by rule. If

16 the Commissioner determines that such information will not be

17 disclosed, the Commissioner's decision shall be subject to

18 judicial review under the provisions of the Administrative

19 Review Law, and venue shall be in either Sangamon County or

20 Cook County.

21 (3) Any court order that compels disclosure of confidential

22 supervisory information may be immediately appealed by the

23 Commissioner, and the order shall be automatically stayed

24 pending the outcome of the appeal.

25 (d) If any officer, agent, attorney, or employee of a bank

26 or financial institution knowingly and willfully furnishes

10000SB0009ham002

- 177 -

LRB100 06347 HLH 27841 a

1 confidential supervisory information in violation of this

2 Section, the Commissioner may impose a civil monetary penalty

3 up to $1,000 for the violation against the officer, agent,

4 attorney, or employee.

5 (Source: P.A. 90-301, eff. 8-1-97; 91-201, eff. 1-1-00.)

6 (205 ILCS 5/65) (from Ch. 17, par. 377)

7 Sec. 65. Dividends; dissolution. From time to time during a

8 receivership other than a receivership conducted by the Federal

9 Deposit Insurance Corporation, the Commissioner shall make and

10 pay from monies of the bank a ratable dividend on all claims as

11 may be proved to his or her satisfaction or adjudicated by the

12 court. Claims so proven or adjudicated shall bear interest at

13 the rate of 3% per annum from the date of the appointment of

14 the receiver to the date of payment, but all dividends on a

15 claim shall be applied first to principal. In computing the

16 amount of any dividend to be paid, if the Commissioner deems it

17 desirable in the interests of economy of administration and to

18 the interest of the bank and its creditors, he or she may pay

19 up to the amount of $10 of each claim or unpaid portion thereof

20 in full. As the proceeds of the assets of the bank are

21 collected in the course of liquidation, the Commissioner shall

22 make and pay further dividends on all claims previously proven

23 or adjudicated. After one year from the entry of a judgment of

24 dissolution, all unclaimed dividends shall be remitted to the

25 State Treasurer in accordance with the Revised Uniform

10000SB0009ham002

- 178 -

LRB100 06347 HLH 27841 a

1 Unclaimed Property Act ~~"Uniform Disposition of Unclaimed~~

2 ~~Property Act"~~, as now or hereafter amended, together with a

3 list of all unpaid claimants, their last known addresses and

4 the amounts unpaid.

5 (Source: P.A. 91-16, eff. 7-1-99.)

6 Section 17-55. The Savings Bank Act is amended by changing

7 Sections 4013, 9012, and 10090 as follows:

8 (205 ILCS 205/4013) (from Ch. 17, par. 7304-13)

9 Sec. 4013. Access to books and records; communication with

10 members and shareholders.

11 (a) Every member or shareholder shall have the right to

12 inspect books and records of the savings bank that pertain to

13 his accounts. Otherwise, the right of inspection and

14 examination of the books and records shall be limited as

15 provided in this Act, and no other person shall have access to

16 the books and records nor shall be entitled to a list of the

17 members or shareholders.

18 (b) For the purpose of this Section, the term "financial

19 records" means any original, any copy, or any summary of (1) a

20 document granting signature authority over a deposit or

21 account; (2) a statement, ledger card, or other record on any

22 deposit or account that shows each transaction in or with

23 respect to that account; (3) a check, draft, or money order

24 drawn on a savings bank or issued and payable by a savings

10000SB0009ham002

- 179 -

LRB100 06347 HLH 27841 a

1 bank; or (4) any other item containing information pertaining

2 to any relationship established in the ordinary course of a

3 savings bank's business between a savings bank and its

4 customer, including financial statements or other financial

5 information provided by the member or shareholder.

6 (c) This Section does not prohibit:

7 (1) The preparation, examination, handling, or

8 maintenance of any financial records by any officer,

9 employee, or agent of a savings bank having custody of

10 records or examination of records by a certified public

11 accountant engaged by the savings bank to perform an

12 independent audit.

13 (2) The examination of any financial records by, or the

14 furnishing of financial records by a savings bank to, any

15 officer, employee, or agent of the Commissioner of Banks

16 and Real Estate or the federal depository institution

17 regulator for use solely in the exercise of his duties as

18 an officer, employee, or agent.

19 (3) The publication of data furnished from financial

20 records relating to members or holders of capital where the

21 data cannot be identified to any particular member,

22 shareholder, or account.

23 (4) The making of reports or returns required under

24 Chapter 61 of the Internal Revenue Code of 1986.

25 (5) Furnishing information concerning the dishonor of

26 any negotiable instrument permitted to be disclosed under

10000SB0009ham002

- 180 -

LRB100 06347 HLH 27841 a

1 the Uniform Commercial Code.

2 (6) The exchange in the regular course of business of

3 (i) credit information between a savings bank and other

4 savings banks or financial institutions or commercial

5 enterprises, directly or through a consumer reporting

6 agency or (ii) financial records or information derived

7 from financial records between a savings bank and other

8 savings banks or financial institutions or commercial

9 enterprises for the purpose of conducting due diligence

10 pursuant to a purchase or sale involving the savings bank

11 or assets or liabilities of the savings bank.

12 (7) The furnishing of information to the appropriate

13 law enforcement authorities where the savings bank

14 reasonably believes it has been the victim of a crime.

15 (8) The furnishing of information pursuant to the

16 Revised Uniform ~~Disposition of~~ Unclaimed Property Act.

17 (9) The furnishing of information pursuant to the

18 Illinois Income Tax Act and the Illinois Estate and

19 Generation-Skipping Transfer Tax Act.

20 (10) The furnishing of information pursuant to the

21 federal ~~"~~Currency and Foreign Transactions Reporting Act~~"~~,

22 (Title 31, United States Code, Section 1051 et seq.).

23 (11) The furnishing of information pursuant to any

24 other statute which by its terms or by regulations

25 promulgated thereunder requires the disclosure of

26 financial records other than by subpoena, summons,

10000SB0009ham002

- 181 -

LRB100 06347 HLH 27841 a

1 warrant, or court order.

2 (12) The furnishing of information in accordance with

3 the federal Personal Responsibility and Work Opportunity

4 Reconciliation Act of 1996. Any savings bank governed by

5 this Act shall enter into an agreement for data exchanges

6 with a State agency provided the State agency pays to the

7 savings bank a reasonable fee not to exceed its actual cost

8 incurred. A savings bank providing information in

9 accordance with this item shall not be liable to any

10 account holder or other person for any disclosure of

11 information to a State agency, for encumbering or

12 surrendering any assets held by the savings bank in

13 response to a lien or order to withhold and deliver issued

14 by a State agency, or for any other action taken pursuant

15 to this item, including individual or mechanical errors,

16 provided the action does not constitute gross negligence or

17 willful misconduct. A savings bank shall have no obligation

18 to hold, encumber, or surrender assets until it has been

19 served with a subpoena, summons, warrant, court or

20 administrative order, lien, or levy.

21 (13) The furnishing of information to law enforcement

22 authorities, the Illinois Department on Aging and its

23 regional administrative and provider agencies, the

24 Department of Human Services Office of Inspector General,

25 or public guardians: (i) upon subpoena by the investigatory

26 entity or the guardian, or (ii) if there is suspicion by

10000SB0009ham002

- 182 -

LRB100 06347 HLH 27841 a

1 the savings bank that a customer who is an elderly person

2 or person with a disability has been or may become the

3 victim of financial exploitation. For the purposes of this

4 item (13), the term: (i) "elderly person" means a person

5 who is 60 or more years of age, (ii) "person with a

6 disability" means a person who has or reasonably appears to

7 the savings bank to have a physical or mental disability

8 that impairs his or her ability to seek or obtain

9 protection from or prevent financial exploitation, and

10 (iii) "financial exploitation" means tortious or illegal

11 use of the assets or resources of an elderly person or

12 person with a disability, and includes, without

13 limitation, misappropriation of the assets or resources of

14 the elderly person or person with a disability by undue

15 influence, breach of fiduciary relationship, intimidation,

16 fraud, deception, extortion, or the use of assets or

17 resources in any manner contrary to law. A savings bank or

18 person furnishing information pursuant to this item (13)

19 shall be entitled to the same rights and protections as a

20 person furnishing information under the Adult Protective

21 Services Act and the Illinois Domestic Violence Act of

22 1986.

23 (14) The disclosure of financial records or

24 information as necessary to effect, administer, or enforce

25 a transaction requested or authorized by the member or

26 holder of capital, or in connection with:

10000SB0009ham002

- 183 -

LRB100 06347 HLH 27841 a

1 (A) servicing or processing a financial product or

2 service requested or authorized by the member or holder

3 of capital;

4 (B) maintaining or servicing an account of a member

5 or holder of capital with the savings bank; or

6 (C) a proposed or actual securitization or

7 secondary market sale (including sales of servicing

8 rights) related to a transaction of a member or holder

9 of capital.

10 Nothing in this item (14), however, authorizes the sale

11 of the financial records or information of a member or

12 holder of capital without the consent of the member or

13 holder of capital.

14 (15) The exchange in the regular course of business of

15 information between a savings bank and any commonly owned

16 affiliate of the savings bank, subject to the provisions of

17 the Financial Institutions Insurance Sales Law.

18 (16) The disclosure of financial records or

19 information as necessary to protect against or prevent

20 actual or potential fraud, unauthorized transactions,

21 claims, or other liability.

22 (17)(a) The disclosure of financial records or

23 information related to a private label credit program

24 between a financial institution and a private label party

25 in connection with that private label credit program. Such

26 information is limited to outstanding balance, available

10000SB0009ham002

- 184 -

LRB100 06347 HLH 27841 a

1 credit, payment and performance and account history,

2 product references, purchase information, and information

3 related to the identity of the customer.

4 (b)(1) For purposes of this paragraph (17) of

5 subsection (c) of Section 4013, a "private label credit

6 program" means a credit program involving a financial

7 institution and a private label party that is used by a

8 customer of the financial institution and the private label

9 party primarily for payment for goods or services sold,

10 manufactured, or distributed by a private label party.

11 (2) For purposes of this paragraph (17) of subsection

12 (c) of Section 4013, a "private label party" means, with

13 respect to a private label credit program, any of the

14 following: a retailer, a merchant, a manufacturer, a trade

15 group, or any such person's affiliate, subsidiary, member,

16 agent, or service provider.

17 (d) A savings bank may not disclose to any person, except

18 to the member or holder of capital or his duly authorized

19 agent, any financial records relating to that member or

20 shareholder of the savings bank unless:

21 (1) the member or shareholder has authorized

22 disclosure to the person; or

23 (2) the financial records are disclosed in response to

24 a lawful subpoena, summons, warrant, citation to discover

25 assets, or court order that meets the requirements of

26 subsection (e) of this Section.

10000SB0009ham002

- 185 -

LRB100 06347 HLH 27841 a

1 (e) A savings bank shall disclose financial records under

2 subsection (d) of this Section pursuant to a lawful subpoena,

3 summons, warrant, citation to discover assets, or court order

4 only after the savings bank mails a copy of the subpoena,

5 summons, warrant, citation to discover assets, or court order

6 to the person establishing the relationship with the savings

7 bank, if living, and otherwise, his personal representative, if

8 known, at his last known address by first class mail, postage

9 prepaid, unless the savings bank is specifically prohibited

10 from notifying the person by order of court.

11 (f) Any officer or employee of a savings bank who knowingly

12 and willfully furnishes financial records in violation of this

13 Section is guilty of a business offense and, upon conviction,

14 shall be fined not more than $1,000.

15 (g) Any person who knowingly and willfully induces or

16 attempts to induce any officer or employee of a savings bank to

17 disclose financial records in violation of this Section is

18 guilty of a business offense and, upon conviction, shall be

19 fined not more than $1,000.

20 (h) If any member or shareholder desires to communicate

21 with the other members or shareholders of the savings bank with

22 reference to any question pending or to be presented at an

23 annual or special meeting, the savings bank shall give that

24 person, upon request, a statement of the approximate number of

25 members or shareholders entitled to vote at the meeting and an

26 estimate of the cost of preparing and mailing the

10000SB0009ham002

- 186 -

LRB100 06347 HLH 27841 a

1 communication. The requesting member shall submit the

2 communication to the Commissioner who, upon finding it to be

3 appropriate and truthful, shall direct that it be prepared and

4 mailed to the members upon the requesting member's or

5 shareholder's payment or adequate provision for payment of the

6 expenses of preparation and mailing.

7 (i) A savings bank shall be reimbursed for costs that are

8 necessary and that have been directly incurred in searching

9 for, reproducing, or transporting books, papers, records, or

10 other data of a customer required to be reproduced pursuant to

11 a lawful subpoena, warrant, citation to discover assets, or

12 court order.

13 (j) Notwithstanding the provisions of this Section, a

14 savings bank may sell or otherwise make use of lists of

15 customers' names and addresses. All other information

16 regarding a customer's account is ~~are~~subject to the disclosure

17 provisions of this Section. At the request of any customer,

18 that customer's name and address shall be deleted from any list

19 that is to be sold or used in any other manner beyond

20 identification of the customer's accounts.

21 (Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15; revised

22 9-14-16.)

23 (205 ILCS 205/9012) (from Ch. 17, par. 7309-12)

24 Sec. 9012. Disclosure of reports of examinations and

25 confidential supervisory information; limitations.

10000SB0009ham002

- 187 -

LRB100 06347 HLH 27841 a

1 (a) Any report of examination, visitation, or

2 investigation prepared by the Commissioner under this Act, any

3 report of examination, visitation, or investigation prepared

4 by the state regulatory authority of another state that

5 examines a branch of an Illinois State savings bank in that

6 state, any document or record prepared or obtained in

7 connection with or relating to any examination, visitation, or

8 investigation, and any record prepared or obtained by the

9 Commissioner to the extent that the record summarizes or

10 contains information derived from any report, document, or

11 record described in this subsection shall be deemed

12 confidential supervisory information. "Confidential

13 supervisory information" shall not include any information or

14 record routinely prepared by a savings bank and maintained in

15 the ordinary course of business or any information or record

16 that is required to be made publicly available pursuant to

17 State or federal law or rule. Confidential supervisory

18 information shall be the property of the Commissioner and shall

19 only be disclosed under the circumstances and for the purposes

20 set forth in this Section.

21 The Commissioner may disclose confidential supervisory

22 information only under the following circumstances:

23 (1) The Commissioner may furnish confidential

24 supervisory information to federal and state depository

25 institution regulators, or any official or examiner

26 thereof duly accredited for the purpose. Nothing contained

10000SB0009ham002

- 188 -

LRB100 06347 HLH 27841 a

1 in this Act shall be construed to limit the obligation of

2 any savings bank to comply with the requirements relative

3 to examinations and reports nor to limit in any way the

4 powers of the Commissioner relative to examinations and

5 reports.

6 (2) The Commissioner may furnish confidential

7 supervisory information to the United States or any agency

8 thereof that to any extent has insured a savings bank's

9 deposits, or any official or examiner thereof duly

10 accredited for the purpose. Nothing contained in this Act

11 shall be construed to limit the obligation relative to

12 examinations and reports of any savings bank in which

13 deposits are to any extent insured by the United States or

14 any agency thereof nor to limit in any way the powers of

15 the Commissioner with reference to examination and reports

16 of the savings bank.

17 (3) The Commissioner may furnish confidential

18 supervisory information to the appropriate law enforcement

19 authorities when the Commissioner reasonably believes a

20 savings bank, which the Commissioner has caused to be

21 examined, has been a victim of a crime.

22 (4) The Commissioner may furnish confidential

23 supervisory information related to a savings bank, which

24 the Commissioner has caused to be examined, to the

25 administrator of the RevisedUniform~~Disposition of~~

26 Unclaimed Property Act.

10000SB0009ham002

- 189 -

LRB100 06347 HLH 27841 a

1 (5) The Commissioner may furnish confidential

2 supervisory information relating to a savings bank, which

3 the Commissioner has caused to be examined, relating to its

4 performance of obligations under the Illinois Income Tax

5 Act and the Illinois Estate and Generation-Skipping

6 Transfer Tax Act to the Illinois Department of Revenue.

7 (6) The Commissioner may furnish confidential

8 supervisory information relating to a savings bank, which

9 the Commissioner has caused to be examined, under the

10 federal Currency and Foreign Transactions Reporting Act,

11 31 United States Code, Section 1051 et seq.

12 (7) The Commissioner may furnish confidential

13 supervisory information to any other agency or entity that

14 the Commissioner determines to have a legitimate

15 regulatory interest.

16 (8) The Commissioner may furnish confidential

17 supervisory information as otherwise permitted or required

18 by this Act and may furnish confidential supervisory

19 information under any other statute that by its terms or by

20 regulations promulgated thereunder requires the disclosure

21 of financial records other than by subpoena, summons,

22 warrant, or court order.

23 (9) At the request of the affected savings bank, the

24 Commissioner may furnish confidential supervisory

25 information relating to the savings bank, which the

26 Commissioner has caused to be examined, in connection with

10000SB0009ham002

- 190 -

LRB100 06347 HLH 27841 a

1 the obtaining of insurance coverage or the pursuit of an

2 insurance claim for or on behalf of the savings bank;

3 provided that, when possible, the Commissioner shall

4 disclose only relevant information while maintaining the

5 confidentiality of financial records not relevant to such

6 insurance coverage or claim and, when appropriate, may

7 delete identifying data relating to any person.

8 (10) The Commissioner may furnish a copy of a report of

9 any examination performed by the Commissioner of the

10 condition and affairs of any electronic data processing

11 entity to the savings banks serviced by the electronic data

12 processing entity.

13 (11) In addition to the foregoing circumstances, the

14 Commissioner may, but is not required to, furnish

15 confidential supervisory information under the same

16 circumstances authorized for the savings bank pursuant to

17 subsection (b) of this Section, except that the

18 Commissioner shall provide confidential supervisory

19 information under circumstances described in paragraph (3)

20 of subsection (b) of this Section only upon the request of

21 the savings bank.

22 (b) A savings bank or its officers, agents, and employees

23 may disclose confidential supervisory information only under

24 the following circumstances:

25 (1) to the board of directors of the savings bank, as

26 well as the president, vice-president, cashier, and other

10000SB0009ham002

- 191 -

LRB100 06347 HLH 27841 a

1 officers of the savings bank to whom the board of directors

2 may delegate duties with respect to compliance with

3 recommendations for action, and to the board of directors

4 of a savings bank holding company that owns at least 80% of

5 the outstanding stock of the savings bank or other

6 financial institution.

7 (2) to attorneys for the savings bank and to a

8 certified public accountant engaged by the savings bank to

9 perform an independent audit; provided that the attorney or

10 certified public accountant shall not permit the

11 confidential supervisory information to be further

12 disseminated.

13 (3) to any person who seeks to acquire a controlling

14 interest in, or who seeks to merge with, the savings bank;

15 provided that the person shall agree to be bound to respect

16 the confidentiality of the confidential supervisory

17 information and to not further disseminate the information

18 other than to attorneys, certified public accountants,

19 officers, agents, or employees of that person who likewise

20 shall agree to be bound to respect the confidentiality of

21 the confidential supervisory information and to not

22 further disseminate the information.

23 (4) to the savings bank's insurance company, if the

24 supervisory information contains information that is

25 otherwise unavailable and is strictly necessary to

26 obtaining insurance coverage or pursuing an insurance

10000SB0009ham002

- 192 -

LRB100 06347 HLH 27841 a

1 claim for or on behalf of the savings bank; provided that,

2 when possible, the savings bank shall disclose only

3 information that is relevant to obtaining insurance

4 coverage or pursuing an insurance claim, while maintaining

5 the confidentiality of financial information pertaining to

6 customers; and provided further that, when appropriate,

7 the savings bank may delete identifying data relating to

8 any person.

9 The disclosure of confidential supervisory information by

10 a savings bank pursuant to this subsection (b) and the

11 disclosure of information to the Commissioner or other

12 regulatory agency in connection with any examination,

13 visitation, or investigation shall not constitute a waiver of

14 any legal privilege otherwise available to the savings bank

15 with respect to the information.

16 (c) (1) Notwithstanding any other provision of this Act or

17 any other law, confidential supervisory information shall be

18 the property of the Commissioner and shall be privileged from

19 disclosure to any person except as provided in this Section. No

20 person in possession of confidential supervisory information

21 may disclose that information for any reason or under any

22 circumstances not specified in this Section without the prior

23 authorization of the Commissioner. Any person upon whom a

24 demand for production of confidential supervisory information

25 is made, whether by subpoena, order, or other judicial or

26 administrative process, must withhold production of the

10000SB0009ham002

- 193 -

LRB100 06347 HLH 27841 a

1 confidential supervisory information and must notify the

2 Commissioner of the demand, at which time the Commissioner is

3 authorized to intervene for the purpose of enforcing the

4 limitations of this Section or seeking the withdrawal or

5 termination of the attempt to compel production of the

6 confidential supervisory information.

7 (2) Any request for discovery or disclosure of confidential

8 supervisory information, whether by subpoena, order, or other

9 judicial or administrative process, shall be made to the

10 Commissioner, and the Commissioner shall determine within 15

11 days whether to disclose the information pursuant to procedures

12 and standards that the Commissioner shall establish by rule. If

13 the Commissioner determines that such information will not be

14 disclosed, the Commissioner's decision shall be subject to

15 judicial review under the provisions of the Administrative

16 Review Law, and venue shall be in either Sangamon County or

17 Cook County.

18 (3) Any court order that compels disclosure of confidential

19 supervisory information may be immediately appealed by the

20 Commissioner, and the order shall be automatically stayed

21 pending the outcome of the appeal.

22 (d) If any officer, agent, attorney, or employee of a

23 savings bank knowingly and willfully furnishes confidential

24 supervisory information in violation of this Section, the

25 Commissioner may impose a civil monetary penalty up to $1,000

26 for the violation against the officer, agent, attorney, or

10000SB0009ham002

- 194 -

LRB100 06347 HLH 27841 a

1 employee.

2 (e) Subject to the limits of this Section, the

3 Commissioner also may promulgate regulations to set procedures

4 and standards for disclosure of the following items:

5 (1) All fixed orders and opinions made in cases of

6 appeals of the Commissioner's actions.

7 (2) Statements of policy and interpretations adopted

8 by the Commissioner's office, but not otherwise made

9 public.

10 (3) Nonconfidential portions of application files,

11 including applications for new charters. The Commissioner

12 shall specify by rule as to what part of the files are

13 confidential.

14 (4) Quarterly reports of income, deposits, and

15 financial condition.

16 (Source: P.A. 93-271, eff. 7-22-03.)

17 (205 ILCS 205/10090)

18 Sec. 10090. Dividends; dissolution. From time to time

19 during a receivership other than a receivership conducted by

20 the Federal Deposit Insurance Corporation, the Secretary shall

21 make and pay from moneys of the savings bank a ratable dividend

22 on all claims as may be proved to his or her satisfaction or

23 adjudicated by the court. Claims so proven or adjudicated shall

24 bear interest at the rate of 3% per annum from the date of the

25 appointment of the receiver to the date of payment, but all

10000SB0009ham002

- 195 -

LRB100 06347 HLH 27841 a

1 dividends on a claim shall be applied first to principal. In

2 computing the amount of any dividend to be paid, if the

3 Secretary deems it desirable in the interests of economy of

4 administration and to the interest of the savings bank and its

5 creditors, he or she may pay up to the amount of $10 of each

6 claim or unpaid portion thereof in full. As the proceeds of the

7 assets of the savings bank are collected in the course of

8 liquidation, the Secretary shall make and pay further dividends

9 on all claims previously proven or adjudicated. After one year

10 from the entry of a judgment of dissolution, all unclaimed

11 dividends shall be remitted to the State Treasurer in

12 accordance with the Revised Uniform ~~Disposition of~~ Unclaimed

13 Property Act, as now or hereafter amended, together with a list

14 of all unpaid claimants, their last known addresses and the

15 amounts unpaid.

16 (Source: P.A. 96-1365, eff. 7-28-10.)

17 Section 17-60. The Illinois Credit Union Act is amended by

18 changing Sections 10 and 62 as follows:

19 (205 ILCS 305/10) (from Ch. 17, par. 4411)

20 Sec. 10. Credit union records; member financial records.

21 (1) A credit union shall establish and maintain books,

22 records, accounting systems and procedures which accurately

23 reflect its operations and which enable the Department to

24 readily ascertain the true financial condition of the credit

10000SB0009ham002

- 196 -

LRB100 06347 HLH 27841 a

1 union and whether it is complying with this Act.

2 (2) A photostatic or photographic reproduction of any

3 credit union records shall be admissible as evidence of

4 transactions with the credit union.

5 (3)(a) For the purpose of this Section, the term "financial

6 records" means any original, any copy, or any summary of (1) a

7 document granting signature authority over an account, (2) a

8 statement, ledger card or other record on any account which

9 shows each transaction in or with respect to that account, (3)

10 a check, draft or money order drawn on a financial institution

11 or other entity or issued and payable by or through a financial

12 institution or other entity, or (4) any other item containing

13 information pertaining to any relationship established in the

14 ordinary course of business between a credit union and its

15 member, including financial statements or other financial

16 information provided by the member.

17 (b) This Section does not prohibit:

18 (1) The preparation, examination, handling or

19 maintenance of any financial records by any officer,

20 employee or agent of a credit union having custody of such

21 records, or the examination of such records by a certified

22 public accountant engaged by the credit union to perform an

23 independent audit.

24 (2) The examination of any financial records by or the

25 furnishing of financial records by a credit union to any

26 officer, employee or agent of the Department, the National

10000SB0009ham002

- 197 -

LRB100 06347 HLH 27841 a

1 Credit Union Administration, Federal Reserve board or any

2 insurer of share accounts for use solely in the exercise of

3 his duties as an officer, employee or agent.

4 (3) The publication of data furnished from financial

5 records relating to members where the data cannot be

6 identified to any particular customer of account.

7 (4) The making of reports or returns required under

8 Chapter 61 of the Internal Revenue Code of 1954.

9 (5) Furnishing information concerning the dishonor of

10 any negotiable instrument permitted to be disclosed under

11 the Uniform Commercial Code.

12 (6) The exchange in the regular course of business of

13 (i) credit information between a credit union and other

14 credit unions or financial institutions or commercial

15 enterprises, directly or through a consumer reporting

16 agency or (ii) financial records or information derived

17 from financial records between a credit union and other

18 credit unions or financial institutions or commercial

19 enterprises for the purpose of conducting due diligence

20 pursuant to a merger or a purchase or sale of assets or

21 liabilities of the credit union.

22 (7) The furnishing of information to the appropriate

23 law enforcement authorities where the credit union

24 reasonably believes it has been the victim of a crime.

25 (8) The furnishing of information pursuant to the

26 Revised Uniform ~~Disposition of~~ Unclaimed Property Act.

10000SB0009ham002

- 198 -

LRB100 06347 HLH 27841 a

1 (9) The furnishing of information pursuant to the

2 Illinois Income Tax Act and the Illinois Estate and

3 Generation-Skipping Transfer Tax Act.

4 (10) The furnishing of information pursuant to the

5 federal "Currency and Foreign Transactions Reporting Act",

6 Title 31, United States Code, Section 1051 et sequentia.

7 (11) The furnishing of information pursuant to any

8 other statute which by its terms or by regulations

9 promulgated thereunder requires the disclosure of

10 financial records other than by subpoena, summons, warrant

11 or court order.

12 (12) The furnishing of information in accordance with

13 the federal Personal Responsibility and Work Opportunity

14 Reconciliation Act of 1996. Any credit union governed by

15 this Act shall enter into an agreement for data exchanges

16 with a State agency provided the State agency pays to the

17 credit union a reasonable fee not to exceed its actual cost

18 incurred. A credit union providing information in

19 accordance with this item shall not be liable to any

20 account holder or other person for any disclosure of

21 information to a State agency, for encumbering or

22 surrendering any assets held by the credit union in

23 response to a lien or order to withhold and deliver issued

24 by a State agency, or for any other action taken pursuant

25 to this item, including individual or mechanical errors,

26 provided the action does not constitute gross negligence or

10000SB0009ham002

- 199 -

LRB100 06347 HLH 27841 a

1 willful misconduct. A credit union shall have no obligation

2 to hold, encumber, or surrender assets until it has been

3 served with a subpoena, summons, warrant, court or

4 administrative order, lien, or levy.

5 (13) The furnishing of information to law enforcement

6 authorities, the Illinois Department on Aging and its

7 regional administrative and provider agencies, the

8 Department of Human Services Office of Inspector General,

9 or public guardians: (i) upon subpoena by the investigatory

10 entity or the guardian, or (ii) if there is suspicion by

11 the credit union that a member who is an elderly person or

12 person with a disability has been or may become the victim

13 of financial exploitation. For the purposes of this item

14 (13), the term: (i) "elderly person" means a person who is

15 60 or more years of age, (ii) "person with a disability"

16 means a person who has or reasonably appears to the credit

17 union to have a physical or mental disability that impairs

18 his or her ability to seek or obtain protection from or

19 prevent financial exploitation, and (iii) "financial

20 exploitation" means tortious or illegal use of the assets

21 or resources of an elderly person or person with a

22 disability, and includes, without limitation,

23 misappropriation of the elderly or disabled person's

24 assets or resources by undue influence, breach of fiduciary

25 relationship, intimidation, fraud, deception, extortion,

26 or the use of assets or resources in any manner contrary to

10000SB0009ham002

- 200 -

LRB100 06347 HLH 27841 a

1 law. A credit union or person furnishing information

2 pursuant to this item (13) shall be entitled to the same

3 rights and protections as a person furnishing information

4 under the Adult Protective Services Act and the Illinois

5 Domestic Violence Act of 1986.

6 (14) The disclosure of financial records or

7 information as necessary to effect, administer, or enforce

8 a transaction requested or authorized by the member, or in

9 connection with:

10 (A) servicing or processing a financial product or

11 service requested or authorized by the member;

12 (B) maintaining or servicing a member's account

13 with the credit union; or

14 (C) a proposed or actual securitization or

15 secondary market sale (including sales of servicing

16 rights) related to a transaction of a member.

17 Nothing in this item (14), however, authorizes the sale

18 of the financial records or information of a member without

19 the consent of the member.

20 (15) The disclosure of financial records or

21 information as necessary to protect against or prevent

22 actual or potential fraud, unauthorized transactions,

23 claims, or other liability.

24 (16)(a) The disclosure of financial records or

25 information related to a private label credit program

26 between a financial institution and a private label party

10000SB0009ham002

- 201 -

LRB100 06347 HLH 27841 a

1 in connection with that private label credit program. Such

2 information is limited to outstanding balance, available

3 credit, payment and performance and account history,

4 product references, purchase information, and information

5 related to the identity of the customer.

6 (b)(1) For purposes of this paragraph (16) of

7 subsection (b) of Section 10, a "private label credit

8 program" means a credit program involving a financial

9 institution and a private label party that is used by a

10 customer of the financial institution and the private label

11 party primarily for payment for goods or services sold,

12 manufactured, or distributed by a private label party.

13 (2) For purposes of this paragraph (16) of subsection

14 (b) of Section 10, a "private label party" means, with

15 respect to a private label credit program, any of the

16 following: a retailer, a merchant, a manufacturer, a trade

17 group, or any such person's affiliate, subsidiary, member,

18 agent, or service provider.

19 (c) Except as otherwise provided by this Act, a credit

20 union may not disclose to any person, except to the member or

21 his duly authorized agent, any financial records relating to

22 that member of the credit union unless:

23 (1) the member has authorized disclosure to the person;

24 (2) the financial records are disclosed in response to

25 a lawful subpoena, summons, warrant, citation to discover

26 assets, or court order that meets the requirements of

10000SB0009ham002

- 202 -

LRB100 06347 HLH 27841 a

1 subparagraph (d) of this Section; or

2 (3) the credit union is attempting to collect an

3 obligation owed to the credit union and the credit union

4 complies with the provisions of Section 2I of the Consumer

5 Fraud and Deceptive Business Practices Act.

6 (d) A credit union shall disclose financial records under

7 subparagraph (c)(2) of this Section pursuant to a lawful

8 subpoena, summons, warrant, citation to discover assets, or

9 court order only after the credit union mails a copy of the

10 subpoena, summons, warrant, citation to discover assets, or

11 court order to the person establishing the relationship with

12 the credit union, if living, and otherwise his personal

13 representative, if known, at his last known address by first

14 class mail, postage prepaid unless the credit union is

15 specifically prohibited from notifying the person by order of

16 court or by applicable State or federal law. In the case of a

17 grand jury subpoena, a credit union shall not mail a copy of a

18 subpoena to any person pursuant to this subsection if the

19 subpoena was issued by a grand jury under the Statewide Grand

20 Jury Act or notifying the person would constitute a violation

21 of the federal Right to Financial Privacy Act of 1978.

22 (e)(1) Any officer or employee of a credit union who

23 knowingly and wilfully furnishes financial records in

24 violation of this Section is guilty of a business offense and

25 upon conviction thereof shall be fined not more than $1,000.

26 (2) Any person who knowingly and wilfully induces or

10000SB0009ham002

- 203 -

LRB100 06347 HLH 27841 a

1 attempts to induce any officer or employee of a credit union to

2 disclose financial records in violation of this Section is

3 guilty of a business offense and upon conviction thereof shall

4 be fined not more than $1,000.

5 (f) A credit union shall be reimbursed for costs which are

6 reasonably necessary and which have been directly incurred in

7 searching for, reproducing or transporting books, papers,

8 records or other data of a member required or requested to be

9 produced pursuant to a lawful subpoena, summons, warrant,

10 citation to discover assets, or court order. The Secretary and

11 the Director may determine, by rule, the rates and conditions

12 under which payment shall be made. Delivery of requested

13 documents may be delayed until final reimbursement of all costs

14 is received.

15 (Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15.)

16 (205 ILCS 305/62) (from Ch. 17, par. 4463)

17 Sec. 62. Liquidation.

18 (1) A credit union may elect to dissolve voluntarily and

19 liquidate its affairs in the manner prescribed in this Section.

20 (2) The board of directors shall adopt a resolution

21 recommending the credit union be dissolved voluntarily, and

22 directing that the question of liquidating be submitted to the

23 members.

24 (3) Within 10 days after the board of directors decides to

25 submit the question of liquidation to the members, the chairman

10000SB0009ham002

- 204 -

LRB100 06347 HLH 27841 a

1 or president shall notify the Secretary thereof, in writing,

2 setting forth the reasons for the proposed action. Within 10

3 days after the members act on the question of liquidation, the

4 chairman or president shall notify the Secretary, in writing,

5 as to whether or not the members approved the proposed

6 liquidation. The Secretary then must determine whether this

7 Section has been complied with and if his decision is

8 favorable, he shall prepare a certificate to the effect that

9 this Section has been complied with, a copy of which will be

10 retained by the Department and the other copy forwarded to the

11 credit union. The certificate must be filed with the recorder

12 or if there is no recorder, in the office of the county clerk

13 of the county or counties in which the credit union is

14 operating, whereupon the credit union must cease operations

15 except for the purpose of its liquidation.

16 (4) As soon as the board of directors passes a resolution

17 to submit the question of liquidation to the members, payment

18 on shares, withdrawal of shares, making any transfer of shares

19 to loans and interest, making investments of any kind and

20 granting loans shall be suspended pending action by members. On

21 approval by the members of such proposal, all such operations

22 shall be permanently discontinued. The necessary expenses of

23 operating shall, however, continue to be paid on authorization

24 of the board of directors or the liquidating agent during the

25 period of liquidation.

26 (5) For a credit union to enter voluntary liquidation, it

10000SB0009ham002

- 205 -

LRB100 06347 HLH 27841 a

1 must be approved by affirmative vote of the members owning a

2 majority of the shares entitled to vote, in person or by proxy,

3 at a regular or special meeting of the members. Notice, in

4 writing, shall be given to each member, by first class mail, at

5 least 10 days prior to such meeting. If liquidation is

6 approved, the board of directors shall appoint a liquidating

7 agent for the purpose of conserving and collecting the assets,

8 closing the affairs of the credit union and distributing the

9 assets as required by this Act.

10 (6) A liquidating credit union shall continue in existence

11 for the purpose of discharging its debts, collecting and

12 distributing its assets, and doing all acts required in order

13 to terminate its operations and may sue and be sued for the

14 purpose of enforcing such debts and obligations until its

15 affairs are fully adjusted.

16 (7) Subject to such rules and regulations as the Secretary

17 may promulgate, the liquidating agent shall use the assets of

18 the credit union to pay; first, expenses incidental to

19 liquidating including any surety bond that may be required;

20 then, liabilities of the credit union; then special classes of

21 shares. The remaining assets shall then be distributed to the

22 members proportionately to the dollar value of the shares held

23 by each member in relation to the total dollar value of all

24 shares outstanding as of the date the dissolution was voted.

25 (8) As soon as the liquidating agent determines that all

26 assets as to which there is a reasonable expectancy of sale or

10000SB0009ham002

- 206 -

LRB100 06347 HLH 27841 a

1 transfer have been liquidated and distributed as set forth in

2 this Section, he shall execute a certificate of dissolution on

3 a form prescribed by the Department and file the same, together

4 with all pertinent books and records of the liquidating credit

5 union with the Department, whereupon such credit union shall be

6 dissolved. The liquidating agent must, within 3 years after

7 issuance of a certificate by the Secretary referred to in

8 Subsection (3) of this Section, discharge the debts of the

9 credit union, collect and distribute its assets and do all

10 other acts required to wind up its business.

11 (9) If the Secretary determines that the liquidating agent

12 has failed to make reasonable progress in the liquidating of

13 the credit union's affairs and distribution of its assets or

14 has violated this Act, the Secretary may take possession and

15 control of the credit union and remove the liquidating agent

16 and appoint a liquidating agent to complete the liquidation

17 under his direction and control. The Secretary shall fill any

18 vacancy caused by the resignation, death, illness, removal,

19 desertion or incapacity to function of the liquidating agent.

20 (10) Any funds representing unclaimed dividends and shares

21 in liquidation and remaining in the hands of the board of

22 directors or the liquidating agent at the end of the

23 liquidation must be deposited by them, together with all books

24 and papers of the credit union, with the State Treasurer in

25 compliance with the Revised Uniform ~~Disposition of~~ Unclaimed

26 Property Act~~, approved August 17, 1961, as amended~~.

10000SB0009ham002

- 207 -

LRB100 06347 HLH 27841 a

1 (Source: P.A. 97-133, eff. 1-1-12.)

2 Section 17-65. The Currency Exchange Act is amended by

3 changing Sections 15.1b and 19.3 as follows:

4 (205 ILCS 405/15.1b) (from Ch. 17, par. 4827)

5 Sec. 15.1b. Liquidation; distribution; priority. The

6 General Assembly finds and declares that community currency

7 exchanges provide important and vital services to Illinois

8 citizens. The General Assembly also finds that in providing

9 such services, community currency exchanges transact extensive

10 business involving check cashing and the writing of money

11 orders in communities in which banking services are generally

12 unavailable. It is therefore declared to be the policy of this

13 State that customers who receive these services must be

14 protected from insolvencies of currency exchanges and

15 interruptions of services. To carry out this policy and to

16 insure that customers of community currency exchanges are

17 protected in the event it is determined that a community

18 currency exchange in receivership should be liquidated in

19 accordance with Section 15.1a of this Act, the Secretary shall

20 make a distribution of moneys collected by the receiver in the

21 following order of priority: First, allowed claims for the

22 actual necessary expenses of the receivership of the community

23 currency exchange being liquidated, including (a) reasonable

24 receiver fees and receiver's attorney's fees approved by the

10000SB0009ham002

- 208 -

LRB100 06347 HLH 27841 a

1 Secretary, (b) all expenses of any preliminary or other

2 examinations into the condition of the community currency

3 exchange or receivership, (c) all expenses incurred by the

4 Secretary which are incident to possession and control of any

5 property or records of the community currency exchange, and (d)

6 reasonable expenses incurred by the Secretary as the result of

7 business agreements or contractual arrangements necessary to

8 insure that the services of the community currency exchanges

9 are delivered to the community without interruption. Said

10 business agreements or contractual arrangements may include,

11 but are not limited to, agreements made by the Secretary, or by

12 the Receiver with the approval of the Secretary, with banks,

13 money order companies, bonding companies and other types of

14 financial institutions; Second, allowed claims by a purchaser

15 of money orders issued on demand of the community currency

16 exchange being liquidated; Third, allowed claims arising by

17 virtue of and to the extent of the amount a utility customer

18 deposits with the community currency exchange being liquidated

19 which are not remitted to the utility company; Fourth, allowed

20 claims arising by virtue of and to the extent of the amount

21 paid by a purchaser of Illinois license plates, vehicle

22 stickers sold for State and municipal governments in Illinois,

23 and temporary Illinois registration permits purchased at the

24 currency exchange being liquidated; Fifth, allowed unsecured

25 claims for wages or salaries, excluding vacation, severance and

26 sick leave pay earned by employee earned within 90 days prior

10000SB0009ham002

- 209 -

LRB100 06347 HLH 27841 a

1 to the appointment of a Receiver; Sixth, secured claims;

2 Seventh, allowed unsecured claims of any tax, and interest and

3 penalty on the tax; Eighth, allowed unsecured claims other than

4 a kind specified in paragraph one, two and three of this

5 Section, filed with the Secretary within the time the Secretary

6 fixes for filing claims; Ninth, allowed unsecured claims, other

7 than a kind specified in paragraphs one, two and three of this

8 Section filed with the Secretary after the time fixed for

9 filing claims by the Secretary; Tenth, allowed creditor claims

10 asserted by an owner, member, or stockholder of the community

11 currency exchange in liquidation; Eleventh, after one year from

12 the final dissolution of the currency exchange, all assets not

13 used to satisfy allowed claims shall be distributed pro rata to

14 the owner, owners, members, or stockholders of the currency

15 exchange.

16 The Secretary shall pay all claims of equal priority

17 according to the schedule set out above, and shall not pay

18 claims of lower priority until all higher priority claims are

19 satisfied. If insufficient assets are available to meet all

20 claims of equal priority, those assets shall be distributed pro

21 rata among those claims. All unclaimed assets of a currency

22 exchange shall be deposited with the Secretary to be paid out

23 by him when proper claims therefor are presented to the

24 Secretary. If there are funds remaining after the conclusion of

25 a receivership of an abandoned currency exchange, the remaining

26 funds shall be considered unclaimed property and remitted to

10000SB0009ham002

- 210 -

LRB100 06347 HLH 27841 a

1 the State Treasurer under the Revised Uniform ~~Disposition of~~

2 Unclaimed Property Act.

3 (Source: P.A. 97-315, eff. 1-1-12.)

4 (205 ILCS 405/19.3) (from Ch. 17, par. 4838)

5 Sec. 19.3. (A) The General Assembly hereby finds and

6 declares: community currency exchanges and ambulatory currency

7 exchanges provide important and vital services to Illinois

8 citizens. In so doing, they transact extensive business

9 involving check cashing and the writing of money orders in

10 communities in which banking services are generally

11 unavailable. Customers of currency exchanges who receive these

12 services must be protected from being charged unreasonable and

13 unconscionable rates for cashing checks and purchasing money

14 orders. The Illinois Department of Financial and Professional

15 Regulation has the responsibility for regulating the

16 operations of currency exchanges and has the expertise to

17 determine reasonable maximum rates to be charged for check

18 cashing and money order purchases. Therefore, it is in the

19 public interest, convenience, welfare and good to have the

20 Department establish reasonable maximum rate schedules for

21 check cashing and the issuance of money orders and to require

22 community and ambulatory currency exchanges to prominently

23 display to the public the fees charged for all services. The

24 Secretary shall review, each year, the cost of operation of the

25 Currency Exchange Section and the revenue generated from

10000SB0009ham002

- 211 -

LRB100 06347 HLH 27841 a

1 currency exchange examinations and report to the General

2 Assembly if the need exists for an increase in the fees

3 mandated by this Act to maintain the Currency Exchange Section

4 at a fiscally self-sufficient level. The Secretary shall

5 include in such report the total amount of funds remitted to

6 the State and delivered to the State Treasurer by currency

7 exchanges pursuant to the RevisedUniform~~Disposition of~~

8 Unclaimed Property Act.

9 (B) The Secretary shall, by rules adopted in accordance

10 with the Illinois Administrative Procedure Act, expeditiously

11 formulate and issue schedules of reasonable maximum rates which

12 can be charged for check cashing and writing of money orders by

13 community currency exchanges and ambulatory currency

14 exchanges.

15 (1) In determining the maximum rate schedules for the

16 purposes of this Section the Secretary shall take into

17 account:

18 (a) Rates charged in the past for the cashing of

19 checks and the issuance of money orders by community

20 and ambulatory currency exchanges.

21 (b) Rates charged by banks or other business

22 entities for rendering the same or similar services and

23 the factors upon which those rates are based.

24 (c) The income, cost and expense of the operation

25 of currency exchanges.

26 (d) Rates charged by currency exchanges or other

10000SB0009ham002

- 212 -

LRB100 06347 HLH 27841 a

1 similar entities located in other states for the same

2 or similar services and the factors upon which those

3 rates are based.

4 (e) Rates charged by the United States Postal

5 Service for the issuing of money orders and the factors

6 upon which those rates are based.

7 (f) A reasonable profit for a currency exchange

8 operation.

9 (2)(a) The schedule of reasonable maximum rates

10 established pursuant to this Section may be modified by the

11 Secretary from time to time pursuant to rules adopted in

12 accordance with the Illinois Administrative Procedure Act.

13 (b) Upon the filing of a verified petition setting

14 forth allegations demonstrating reasonable cause to

15 believe that the schedule of maximum rates previously

16 issued and promulgated should be adjusted, the Secretary

17 shall expeditiously:

18 (i) reject the petition if it fails to demonstrate

19 reasonable cause to believe that an adjustment is

20 necessary; or

21 (ii) conduct such hearings, in accordance with

22 this Section, as may be necessary to determine whether

23 the petition should be granted in whole or in part.

24 (c) No petition may be filed pursuant to subparagraph

25 (a) of paragraph (2) of subsection (B) unless:

26 (i) at least nine months have expired since the

10000SB0009ham002

- 213 -

LRB100 06347 HLH 27841 a

1 last promulgation of schedules of maximum rates; and

2 (ii) at least one-fourth of all community currency

3 exchange licensees join in a petition or, in the case

4 of ambulatory currency exchanges, a licensee or

5 licensees authorized to serve at least 100 locations

6 join in a petition.

7 (3) Any currency exchange may charge lower fees than

8 those of the applicable maximum fee schedule after filing

9 with the Secretary a schedule of fees it proposes to use.

10 (Source: P.A. 97-315, eff. 1-1-12.)

11 Section 17-70. The Corporate Fiduciary Act is amended by

12 changing Section 6-14 as follows:

13 (205 ILCS 620/6-14) (from Ch. 17, par. 1556-14)

14 Sec. 6-14. From time to time during receivership the

15 Commissioner shall make and pay from monies of the corporate

16 fiduciary a ratable dividend on all claims as may be proved to

17 his or her satisfaction or adjudicated by the court. After one

18 year from the entry of a judgment of dissolution, all unclaimed

19 dividends shall be remitted to the State Treasurer in

20 accordance with the RevisedUniform~~Disposition of~~ Unclaimed

21 Property Act, as now or hereafter amended, together with a list

22 of all unpaid claimants, their last known addresses and the

23 amounts unpaid.

24 (Source: P.A. 91-16, eff. 7-1-99.)

10000SB0009ham002

- 214 -

LRB100 06347 HLH 27841 a

1 Section 17-75. The Transmitters of Money Act is amended by

2 changing Section 30 as follows:

3 (205 ILCS 657/30)

4 Sec. 30. Surety bond.

5 (a) An applicant for a license shall post and a licensee

6 must maintain with the Director a bond or bonds issued by

7 corporations qualified to do business as surety companies in

8 this State.

9 (b) The applicant or licensee shall post a bond in the

10 amount of the greater of $100,000 or an amount equal to the

11 daily average of outstanding payment instruments for the

12 preceding 12 months or operational history, whichever is

13 shorter, up to a maximum amount of $2,000,000. When the amount

14 of the required bond exceeds $1,000,000, the applicant or

15 licensee may, in the alternative, post a bond in the amount of

16 $1,000,000 plus a dollar for dollar increase in the net worth

17 of the applicant or licensee over and above the amount required

18 in Section 20, up to a total amount of $2,000,000.

19 (c) The bond must be in a form satisfactory to the Director

20 and shall run to the State of Illinois for the benefit of any

21 claimant against the applicant or licensee with respect to the

22 receipt, handling, transmission, and payment of money by the

23 licensee or authorized seller in connection with the licensed

24 operations. A claimant damaged by a breach of the conditions of

10000SB0009ham002

- 215 -

LRB100 06347 HLH 27841 a

1 a bond shall have a right to action upon the bond for damages

2 suffered thereby and may bring suit directly on the bond, or

3 the Director may bring suit on behalf of the claimant.

4 (d) (Blank).

5 (e) (Blank).

6 (f) After receiving a license, the licensee must maintain

7 the required bond plus net worth (if applicable) until 5 years

8 after it ceases to do business in this State unless all

9 outstanding payment instruments are eliminated or the

10 provisions under the RevisedUniform~~Disposition of~~ Unclaimed

11 Property Act have become operative and are adhered to by the

12 licensee. Notwithstanding this provision, however, the amount

13 required to be maintained may be reduced to the extent that the

14 amount of the licensee's payment instruments outstanding in

15 this State are reduced.

16 (g) If the Director at any time reasonably determines that

17 the required bond is insecure, deficient in amount, or

18 exhausted in whole or in part, he may in writing require the

19 filing of a new or supplemental bond in order to secure

20 compliance with this Act and may demand compliance with the

21 requirement within 30 days following service on the licensee.

22 (Source: P.A. 92-400, eff. 1-1-02.)

23 Section 17-80. The Adverse Claims to Deposit Accounts Act

24 is amended by changing Section 10 as follows:

10000SB0009ham002

- 216 -

LRB100 06347 HLH 27841 a

1 (205 ILCS 700/10)

2 Sec. 10. Application of Act. This Act shall not preempt:

3 (1) the Revised Uniform ~~Disposition of~~ Unclaimed Property

4 Act, nor shall any provision of this Act be construed to

5 relieve any holder, including a financial institution, from

6 reporting and remitting all unclaimed property, including

7 deposit accounts, under the Revised Uniform ~~Disposition of~~

8 Unclaimed Property Act;

9 (2) the Uniform Commercial Code, nor shall any provision of

10 this Act be construed as affecting the rights of a person with

11 respect to a deposit account under the Uniform Commercial Code;

12 (3) the provisions of Section 2-1402 of the Code of Civil

13 Procedure, nor shall any provision of this Act be construed as

14 affecting the rights of a person with respect to a deposit

15 account under Section 2-1402 of the Code of Civil Procedure;

16 (4) the provisions of Part 7 of Article II of the Code of

17 Civil Procedure, nor shall any provision of this Act be

18 construed as affecting the rights of a person with respect to a

19 deposit account under the provisions of Part 7 of Article II of

20 the Code of Civil Procedure;

21 (5) the provisions of Article XXV of the Probate Act of

22 1975, nor shall any provision of this Act be construed as

23 affecting the rights of a person with respect to a deposit

24 account under the provisions of Article XXV of the Probate Act

25 of 1975; or

26 (6) the Safety Deposit Box Opening Act, nor shall any

10000SB0009ham002

- 217 -

LRB100 06347 HLH 27841 a

1 provision of this Act be construed as affecting the rights of a

2 person with respect to a deposit account under the Safety

3 Deposit Box Opening Act.

4 (Source: P.A. 89-601, eff. 8-2-96.)

5 Section 17-85. The Illinois Insurance Code is amended by

6 changing Section 210 as follows:

7 (215 ILCS 5/210) (from Ch. 73, par. 822)

8 Sec. 210. Distribution of assets; priorities; unpaid

9 dividends.

10 (1) Any time after the last day fixed for the filing of

11 proofs of claims in the liquidation of a company, the court

12 may, upon the application of the Director authorize him to

13 declare out of the funds remaining in his hands, one or more

14 dividends upon all claims allowed in accordance with the

15 priorities established in Section 205.

16 (2) Where there has been no adjudication of insolvency, the

17 Director shall pay all allowed claims in full in accordance

18 with the priorities set forth in Section 205. The director

19 shall not be chargeable for any assets so distributed to any

20 claimant who has failed to file a proper proof of claim before

21 such distribution has been made.

22 (3) When subsequent to an adjudication of insolvency,

23 pursuant to Section 208, a surplus is found to exist after the

24 payment in full of all allowed claims falling within the

10000SB0009ham002

- 218 -

LRB100 06347 HLH 27841 a

1 priorities set forth in paragraphs (a), (b), (c), (d), (e), (f)

2 and (g) of subsection (1) of Section 205 and which have been

3 duly filed prior to the last date fixed for the filing thereof,

4 and after the setting aside of a reserve for all additional

5 costs and expenses of the proceeding, the court shall set a new

6 date for the filing of claims. After the expiration of the new

7 date, all allowed claims filed on or before said new date

8 together with all previously allowed claims falling within the

9 priorities set forth in paragraphs (h) and (i) of subsection

10 (1) of Section 205 shall be paid in accordance with the

11 priorities set forth in Section 205.

12 (4) Dividends remaining unclaimed or unpaid in the hands of

13 the Director for 6 months after the final order of distribution

14 may be by him deposited in one or more savings and loan

15 associations, State or national banks, trust companies or

16 savings banks to the credit of the Director, whomsoever he may

17 be, in trust for the person entitled thereto, but no such

18 person shall be entitled to any interest upon such deposit. All

19 such deposits shall be entitled to priority of payment in case

20 of the insolvency or voluntary or involuntary liquidation of

21 the depositary on an equality with any other priority given by

22 the banking law. Any such funds together with interest, if any,

23 paid or credited thereon, remaining and unclaimed in the hands

24 of the Director in Trust after 2 years shall be presumed

25 abandoned and reported and delivered to the State Treasurer and

26 become subject to the provisions of the RevisedUniform

10000SB0009ham002

- 219 -

LRB100 06347 HLH 27841 a

1 ~~Disposition of~~ Unclaimed Property Act.

2 (Source: P.A. 91-16, eff. 7-1-99.)

3 Section 17-90. The Unclaimed Life Insurance Benefits Act is

4 amended by changing Sections 5, 15, and 20 as follows:

5 (215 ILCS 185/5)

6 Sec. 5. Purpose. This Act shall require recognition of the

7 Revised Uniform ~~Disposition of~~ Unclaimed Property Act and

8 require the complete and proper disclosure, transparency, and

9 accountability relating to any method of payment for life

10 insurance, annuity, or retained asset agreement death

11 benefits.

12 (Source: P.A. 99-893, eff. 1-1-17.)

13 (215 ILCS 185/15)

14 Sec. 15. Insurer conduct.

15 (a) An insurer shall initially perform a comparison of its

16 insureds', annuitants', and retained asset account holders'

17 in-force policies, annuity contracts, and retained asset

18 accounts by using the full Death Master File. The initial

19 comparison shall be completed on or before December 31, 2017,

20 unless extended by the Department pursuant to administrative

21 rule. Thereafter, an insurer shall perform a comparison on at

22 least a semi-annual basis using the Death Master File update

23 files for comparisons to identify potential matches of its

10000SB0009ham002

- 220 -

LRB100 06347 HLH 27841 a

1 insureds, annuitants, and retained asset account holders. In

2 the event that one of the insurer's lines of business conducts

3 a search for matches of its insureds, annuitants, and retained

4 asset account holders against the Death Master File at

5 intervals more frequently than semi-annually, then all lines of

6 the insurer's business shall conduct searches for matches

7 against the Death Master File with the same frequency.

8 An insured, an annuitant, or a retained asset account

9 holder is presumed dead if the date of his or her death is

10 indicated by the comparison required in this subsection (a),

11 unless the insurer has competent and substantial evidence that

12 the person is living, including, but not limited to, a contact

13 made by the insurer with the person or his or her legal

14 representative.

15 For those potential matches identified as a result of a

16 Death Master File match, the insurer shall within 120 days

17 after the date of death notice, if the insurer has not been

18 contacted by a beneficiary, determine whether benefits are due

19 in accordance with the applicable policy or contract and, if

20 benefits are due in accordance with the applicable policy or

21 contract:

22 (1) use good faith efforts, which shall be documented

23 by the insurer, to locate the beneficiary or beneficiaries;

24 the Department shall establish by administrative rule

25 minimum standards for what constitutes good faith efforts

26 to locate a beneficiary, which shall include: (A) searching

10000SB0009ham002

- 221 -

LRB100 06347 HLH 27841 a

1 insurer records; (B) the appropriate use of First Class

2 United States mail, e-mail addresses, and telephone calls;

3 and (C) reasonable efforts by insurers to obtain updated

4 contact information for the beneficiary or beneficiaries;

5 good faith efforts shall not include additional attempts to

6 contact the beneficiary at an address already confirmed not

7 to be current; and

8 (2) provide the appropriate claims forms or

9 instructions to the beneficiary or beneficiaries to make a

10 claim, including the need to provide an official death

11 certificate if applicable under the policy or annuity

12 contract.

13 (b) Insurers shall implement procedures to account for the

14 following when conducting searches of the Death Master File:

15 (1) common nicknames, initials used in lieu of a first

16 or middle name, use of a middle name, compound first and

17 middle names, and interchanged first and middle names;

18 (2) compound last names, maiden or married names, and

19 hyphens, blank spaces, or apostrophes in last names;

20 (3) transposition of the "month" and "date" portions of

21 the date of birth; and

22 (4) incomplete social security numbers.

23 (c) To the extent permitted by law, an insurer may disclose

24 the minimum necessary personal information about the insured,

25 annuity owner, retained asset account holder, or beneficiary to

26 a person whom the insurer reasonably believes may be able to

10000SB0009ham002

- 222 -

LRB100 06347 HLH 27841 a

1 assist the insurer with locating the beneficiary or a person

2 otherwise entitled to payment of the claims proceeds.

3 (d) An insurer or its service provider shall not charge any

4 beneficiary or other authorized representative for any fees or

5 costs associated with a Death Master File search or

6 verification of a Death Master File match conducted pursuant to

7 this Act.

8 (e) The benefits from a policy, annuity contract, or a

9 retained asset account, plus any applicable accrued interest,

10 shall first be payable to the designated beneficiaries or

11 owners and, in the event the beneficiaries or owners cannot be

12 found, shall be reported and delivered to the State Treasurer

13 pursuant to the Revised Uniform ~~Disposition of~~ Unclaimed

14 Property Act. Nothing in this subsection (e) is intended to

15 alter the amounts reportable under the existing provisions of

16 the Revised Uniform ~~Disposition of~~ Unclaimed Property Act or to

17 allow the imposition of additional statutory interest under

18 Article XIV of the Illinois Insurance Code.

19 (f) Failure to meet any requirement of this Section with

20 such frequency as to constitute a general business practice is

21 a violation of Section 424 of the Illinois Insurance Code.

22 Nothing in this Section shall be construed to create or imply a

23 private cause of action for a violation of this Section.

24 (Source: P.A. 99-893, eff. 1-1-17.)

25 (215 ILCS 185/20)

10000SB0009ham002

- 223 -

LRB100 06347 HLH 27841 a

1 Sec. 20. Revised Uniform ~~Disposition of~~ Unclaimed Property

2 Act. Nothing in this Act shall be construed to amend, modify,

3 or supersede the Revised Uniform ~~Disposition of~~ Unclaimed

4 Property Act, including the authority of the State Treasurer to

5 examine the records of any person if the State Treasurer has

6 reason to believe that such person has failed to report

7 property that should have been reported pursuant to the Revised

8 Uniform ~~Disposition of~~ Unclaimed Property Act.

9 (Source: P.A. 99-893, eff. 1-1-17.)

10 Section 17-95. The Real Estate License Act of 2000 is

11 amended by changing Section 20-20 as follows:

12 (225 ILCS 454/20-20)

13 (Section scheduled to be repealed on January 1, 2020)

14 Sec. 20-20. Grounds for discipline.

15 (a) The Department may refuse to issue or renew a license,

16 may place on probation, suspend, or revoke any license,

17 reprimand, or take any other disciplinary or non-disciplinary

18 action as the Department may deem proper and impose a fine not

19 to exceed $25,000 upon any licensee or applicant under this Act

20 or any person who holds himself or herself out as an applicant

21 or licensee or against a licensee in handling his or her own

22 property, whether held by deed, option, or otherwise, for any

23 one or any combination of the following causes:

24 (1) Fraud or misrepresentation in applying for, or

10000SB0009ham002

- 224 -

LRB100 06347 HLH 27841 a

1 procuring, a license under this Act or in connection with

2 applying for renewal of a license under this Act.

3 (2) The conviction of or plea of guilty or plea of nolo

4 contendere to a felony or misdemeanor in this State or any

5 other jurisdiction; or the entry of an administrative

6 sanction by a government agency in this State or any other

7 jurisdiction. Action taken under this paragraph (2) for a

8 misdemeanor or an administrative sanction is limited to a

9 misdemeanor or administrative sanction that has as an

10 essential element dishonesty or fraud or involves larceny,

11 embezzlement, or obtaining money, property, or credit by

12 false pretenses or by means of a confidence game.

13 (3) Inability to practice the profession with

14 reasonable judgment, skill, or safety as a result of a

15 physical illness, including, but not limited to,

16 deterioration through the aging process or loss of motor

17 skill, or a mental illness or disability.

18 (4) Practice under this Act as a licensee in a retail

19 sales establishment from an office, desk, or space that is

20 not separated from the main retail business by a separate

21 and distinct area within the establishment.

22 (5) Having been disciplined by another state, the

23 District of Columbia, a territory, a foreign nation, or a

24 governmental agency authorized to impose discipline if at

25 least one of the grounds for that discipline is the same as

26 or the equivalent of one of the grounds for which a

10000SB0009ham002

- 225 -

LRB100 06347 HLH 27841 a

1 licensee may be disciplined under this Act. A certified

2 copy of the record of the action by the other state or

3 jurisdiction shall be prima facie evidence thereof.

4 (6) Engaging in the practice of real estate brokerage

5 without a license or after the licensee's license was

6 expired or while the license was inoperative.

7 (7) Cheating on or attempting to subvert the Real

8 Estate License Exam or continuing education exam.

9 (8) Aiding or abetting an applicant to subvert or cheat

10 on the Real Estate License Exam or continuing education

11 exam administered pursuant to this Act.

12 (9) Advertising that is inaccurate, misleading, or

13 contrary to the provisions of the Act.

14 (10) Making any substantial misrepresentation or

15 untruthful advertising.

16 (11) Making any false promises of a character likely to

17 influence, persuade, or induce.

18 (12) Pursuing a continued and flagrant course of

19 misrepresentation or the making of false promises through

20 licensees, employees, agents, advertising, or otherwise.

21 (13) Any misleading or untruthful advertising, or

22 using any trade name or insignia of membership in any real

23 estate organization of which the licensee is not a member.

24 (14) Acting for more than one party in a transaction

25 without providing written notice to all parties for whom

26 the licensee acts.

10000SB0009ham002

- 226 -

LRB100 06347 HLH 27841 a

1 (15) Representing or attempting to represent a broker

2 other than the sponsoring broker.

3 (16) Failure to account for or to remit any moneys or

4 documents coming into his or her possession that belong to

5 others.

6 (17) Failure to maintain and deposit in a special

7 account, separate and apart from personal and other

8 business accounts, all escrow moneys belonging to others

9 entrusted to a licensee while acting as a broker, escrow

10 agent, or temporary custodian of the funds of others or

11 failure to maintain all escrow moneys on deposit in the

12 account until the transactions are consummated or

13 terminated, except to the extent that the moneys, or any

14 part thereof, shall be:

15 (A) disbursed prior to the consummation or

16 termination (i) in accordance with the written

17 direction of the principals to the transaction or their

18 duly authorized agents, (ii) in accordance with

19 directions providing for the release, payment, or

20 distribution of escrow moneys contained in any written

21 contract signed by the principals to the transaction or

22 their duly authorized agents, or (iii) pursuant to an

23 order of a court of competent jurisdiction; or

24 (B) deemed abandoned and transferred to the Office

25 of the State Treasurer to be handled as unclaimed

26 property pursuant to the Revised Uniform ~~Disposition~~

10000SB0009ham002

- 227 -

LRB100 06347 HLH 27841 a

1 ~~of~~ Unclaimed Property Act. Escrow moneys may be deemed

2 abandoned under this subparagraph (B) only: (i) in the

3 absence of disbursement under subparagraph (A); (ii)

4 in the absence of notice of the filing of any claim in

5 a court of competent jurisdiction; and (iii) if 6

6 months have elapsed after the receipt of a written

7 demand for the escrow moneys from one of the principals

8 to the transaction or the principal's duly authorized

9 agent.

10 The account shall be noninterest bearing, unless the

11 character of the deposit is such that payment of interest

12 thereon is otherwise required by law or unless the

13 principals to the transaction specifically require, in

14 writing, that the deposit be placed in an interest bearing

15 account.

16 (18) Failure to make available to the Department all

17 escrow records and related documents maintained in

18 connection with the practice of real estate within 24 hours

19 of a request for those documents by Department personnel.

20 (19) Failing to furnish copies upon request of

21 documents relating to a real estate transaction to a party

22 who has executed that document.

23 (20) Failure of a sponsoring broker to timely provide

24 information, sponsor cards, or termination of licenses to

25 the Department.

26 (21) Engaging in dishonorable, unethical, or

10000SB0009ham002

- 228 -

LRB100 06347 HLH 27841 a

1 unprofessional conduct of a character likely to deceive,

2 defraud, or harm the public.

3 (22) Commingling the money or property of others with

4 his or her own money or property.

5 (23) Employing any person on a purely temporary or

6 single deal basis as a means of evading the law regarding

7 payment of commission to nonlicensees on some contemplated

8 transactions.

9 (24) Permitting the use of his or her license as a

10 broker to enable a leasing agent or unlicensed person to

11 operate a real estate business without actual

12 participation therein and control thereof by the broker.

13 (25) Any other conduct, whether of the same or a

14 different character from that specified in this Section,

15 that constitutes dishonest dealing.

16 (26) Displaying a "for rent" or "for sale" sign on any

17 property without the written consent of an owner or his or

18 her duly authorized agent or advertising by any means that

19 any property is for sale or for rent without the written

20 consent of the owner or his or her authorized agent.

21 (27) Failing to provide information requested by the

22 Department, or otherwise respond to that request, within 30

23 days of the request.

24 (28) Advertising by means of a blind advertisement,

25 except as otherwise permitted in Section 10-30 of this Act.

26 (29) Offering guaranteed sales plans, as defined in

10000SB0009ham002

- 229 -

LRB100 06347 HLH 27841 a

1 clause (A) of this subdivision (29), except to the extent

2 hereinafter set forth:

3 (A) A "guaranteed sales plan" is any real estate

4 purchase or sales plan whereby a licensee enters into a

5 conditional or unconditional written contract with a

6 seller, prior to entering into a brokerage agreement

7 with the seller, by the terms of which a licensee

8 agrees to purchase a property of the seller within a

9 specified period of time at a specific price in the

10 event the property is not sold in accordance with the

11 terms of a brokerage agreement to be entered into

12 between the sponsoring broker and the seller.

13 (B) A licensee offering a guaranteed sales plan

14 shall provide the details and conditions of the plan in

15 writing to the party to whom the plan is offered.

16 (C) A licensee offering a guaranteed sales plan

17 shall provide to the party to whom the plan is offered

18 evidence of sufficient financial resources to satisfy

19 the commitment to purchase undertaken by the broker in

20 the plan.

21 (D) Any licensee offering a guaranteed sales plan

22 shall undertake to market the property of the seller

23 subject to the plan in the same manner in which the

24 broker would market any other property, unless the

25 agreement with the seller provides otherwise.

26 (E) The licensee cannot purchase seller's property

10000SB0009ham002

- 230 -

LRB100 06347 HLH 27841 a

1 until the brokerage agreement has ended according to

2 its terms or is otherwise terminated.

3 (F) Any licensee who fails to perform on a

4 guaranteed sales plan in strict accordance with its

5 terms shall be subject to all the penalties provided in

6 this Act for violations thereof and, in addition, shall

7 be subject to a civil fine payable to the party injured

8 by the default in an amount of up to $25,000.

9 (30) Influencing or attempting to influence, by any

10 words or acts, a prospective seller, purchaser, occupant,

11 landlord, or tenant of real estate, in connection with

12 viewing, buying, or leasing real estate, so as to promote

13 or tend to promote the continuance or maintenance of

14 racially and religiously segregated housing or so as to

15 retard, obstruct, or discourage racially integrated

16 housing on or in any street, block, neighborhood, or

17 community.

18 (31) Engaging in any act that constitutes a violation

19 of any provision of Article 3 of the Illinois Human Rights

20 Act, whether or not a complaint has been filed with or

21 adjudicated by the Human Rights Commission.

22 (32) Inducing any party to a contract of sale or lease

23 or brokerage agreement to break the contract of sale or

24 lease or brokerage agreement for the purpose of

25 substituting, in lieu thereof, a new contract for sale or

26 lease or brokerage agreement with a third party.

10000SB0009ham002

- 231 -

LRB100 06347 HLH 27841 a

1 (33) Negotiating a sale, exchange, or lease of real

2 estate directly with any person if the licensee knows that

3 the person has an exclusive brokerage agreement with

4 another broker, unless specifically authorized by that

5 broker.

6 (34) When a licensee is also an attorney, acting as the

7 attorney for either the buyer or the seller in the same

8 transaction in which the licensee is acting or has acted as

9 a managing broker or broker.

10 (35) Advertising or offering merchandise or services

11 as free if any conditions or obligations necessary for

12 receiving the merchandise or services are not disclosed in

13 the same advertisement or offer. These conditions or

14 obligations include without limitation the requirement

15 that the recipient attend a promotional activity or visit a

16 real estate site. As used in this subdivision (35), "free"

17 includes terms such as "award", "prize", "no charge", "free

18 of charge", "without charge", and similar words or phrases

19 that reasonably lead a person to believe that he or she may

20 receive or has been selected to receive something of value,

21 without any conditions or obligations on the part of the

22 recipient.

23 (36) Disregarding or violating any provision of the

24 Land Sales Registration Act of 1989, the Illinois Real

25 Estate Time-Share Act, or the published rules promulgated

26 by the Department to enforce those Acts.

10000SB0009ham002

- 232 -

LRB100 06347 HLH 27841 a

1 (37) Violating the terms of a disciplinary order issued

2 by the Department.

3 (38) Paying or failing to disclose compensation in

4 violation of Article 10 of this Act.

5 (39) Requiring a party to a transaction who is not a

6 client of the licensee to allow the licensee to retain a

7 portion of the escrow moneys for payment of the licensee's

8 commission or expenses as a condition for release of the

9 escrow moneys to that party.

10 (40) Disregarding or violating any provision of this

11 Act or the published rules promulgated by the Department to

12 enforce this Act or aiding or abetting any individual,

13 partnership, registered limited liability partnership,

14 limited liability company, or corporation in disregarding

15 any provision of this Act or the published rules

16 promulgated by the Department to enforce this Act.

17 (41) Failing to provide the minimum services required

18 by Section 15-75 of this Act when acting under an exclusive

19 brokerage agreement.

20 (42) Habitual or excessive use or addiction to alcohol,

21 narcotics, stimulants, or any other chemical agent or drug

22 that results in a managing broker, broker, or leasing

23 agent's inability to practice with reasonable skill or

24 safety.

25 (43) Enabling, aiding, or abetting an auctioneer, as

26 defined in the Auction License Act, to conduct a real

10000SB0009ham002

- 233 -

LRB100 06347 HLH 27841 a

1 estate auction in a manner that is in violation of this

2 Act.

3 (b) The Department may refuse to issue or renew or may

4 suspend the license of any person who fails to file a return,

5 pay the tax, penalty or interest shown in a filed return, or

6 pay any final assessment of tax, penalty, or interest, as

7 required by any tax Act administered by the Department of

8 Revenue, until such time as the requirements of that tax Act

9 are satisfied in accordance with subsection (g) of Section

10 2105-15 of the Civil Administrative Code of Illinois.

11 (c) The Department shall deny a license or renewal

12 authorized by this Act to a person who has defaulted on an

13 educational loan or scholarship provided or guaranteed by the

14 Illinois Student Assistance Commission or any governmental

15 agency of this State in accordance with item (5) of subsection

16 (a) of Section 2105-15 of the Civil Administrative Code of

17 Illinois.

18 (d) In cases where the Department of Healthcare and Family

19 Services (formerly Department of Public Aid) has previously

20 determined that a licensee or a potential licensee is more than

21 30 days delinquent in the payment of child support and has

22 subsequently certified the delinquency to the Department may

23 refuse to issue or renew or may revoke or suspend that person's

24 license or may take other disciplinary action against that

25 person based solely upon the certification of delinquency made

26 by the Department of Healthcare and Family Services in

10000SB0009ham002

- 234 -

LRB100 06347 HLH 27841 a

1 accordance with item (5) of subsection (a) of Section 2105-15

2 of the Civil Administrative Code of Illinois.

3 (e) In enforcing this Section, the Department or Board upon

4 a showing of a possible violation may compel an individual

5 licensed to practice under this Act, or who has applied for

6 licensure under this Act, to submit to a mental or physical

7 examination, or both, as required by and at the expense of the

8 Department. The Department or Board may order the examining

9 physician to present testimony concerning the mental or

10 physical examination of the licensee or applicant. No

11 information shall be excluded by reason of any common law or

12 statutory privilege relating to communications between the

13 licensee or applicant and the examining physician. The

14 examining physicians shall be specifically designated by the

15 Board or Department. The individual to be examined may have, at

16 his or her own expense, another physician of his or her choice

17 present during all aspects of this examination. Failure of an

18 individual to submit to a mental or physical examination, when

19 directed, shall be grounds for suspension of his or her license

20 until the individual submits to the examination if the

21 Department finds, after notice and hearing, that the refusal to

22 submit to the examination was without reasonable cause.

23 If the Department or Board finds an individual unable to

24 practice because of the reasons set forth in this Section, the

25 Department or Board may require that individual to submit to

26 care, counseling, or treatment by physicians approved or

10000SB0009ham002

- 235 -

LRB100 06347 HLH 27841 a

1 designated by the Department or Board, as a condition, term, or

2 restriction for continued, reinstated, or renewed licensure to

3 practice; or, in lieu of care, counseling, or treatment, the

4 Department may file, or the Board may recommend to the

5 Department to file, a complaint to immediately suspend, revoke,

6 or otherwise discipline the license of the individual. An

7 individual whose license was granted, continued, reinstated,

8 renewed, disciplined or supervised subject to such terms,

9 conditions, or restrictions, and who fails to comply with such

10 terms, conditions, or restrictions, shall be referred to the

11 Secretary for a determination as to whether the individual

12 shall have his or her license suspended immediately, pending a

13 hearing by the Department.

14 In instances in which the Secretary immediately suspends a

15 person's license under this Section, a hearing on that person's

16 license must be convened by the Department within 30 days after

17 the suspension and completed without appreciable delay. The

18 Department and Board shall have the authority to review the

19 subject individual's record of treatment and counseling

20 regarding the impairment to the extent permitted by applicable

21 federal statutes and regulations safeguarding the

22 confidentiality of medical records.

23 An individual licensed under this Act and affected under

24 this Section shall be afforded an opportunity to demonstrate to

25 the Department or Board that he or she can resume practice in

26 compliance with acceptable and prevailing standards under the

10000SB0009ham002

- 236 -

LRB100 06347 HLH 27841 a

1 provisions of his or her license.

2 (Source: P.A. 98-553, eff. 1-1-14; 98-756, eff. 7-16-14;

3 99-227, eff. 8-3-15.)

4 Section 17-100. The Code of Criminal Procedure of 1963 is

5 amended by changing Section 110-17 as follows:

6 (725 ILCS 5/110-17) (from Ch. 38, par. 110-17)

7 Sec. 110-17. Unclaimed Bail Deposits. Notwithstanding the

8 provisions of the Revised Uniform ~~Disposition of~~ Unclaimed

9 Property Act, any sum of money deposited by any person to

10 secure his release from custody which remains unclaimed by the

11 person entitled to its return for 3 years after the conditions

12 of the bail bond have been performed and the accused has been

13 discharged from all obligations in the cause shall be presumed

14 to be abandoned.

15 (a) The clerk of the circuit court, as soon thereafter as

16 practicable, shall cause notice to be published once, in

17 English, in a newspaper or newspapers of general circulation in

18 the county wherein the deposit of bond was received.

19 (b) The published notice shall be entitled "Notice of

20 Persons Appearing to be Owners of Abandoned Property" and shall

21 contain:

22 (1) The names, in alphabetical order, of persons to

23 whom the notice is directed.

24 (2) A statement that information concerning the amount

10000SB0009ham002

- 237 -

LRB100 06347 HLH 27841 a

1 of the property may be obtained by any persons possessing

2 an interest in the property by making an inquiry at the

3 office of the clerk of the circuit court at a location

4 designated by him.

5 (3) A statement that if proof of claim is not presented

6 by the owner to the clerk of the circuit court and if the

7 owner's right to receive the property is not established to

8 the satisfaction of the clerk of the court within 65 days

9 from the date of the published notice, the abandoned

10 property will be placed in the custody of the treasurer of

11 the county, not later than 85 days after such publication,

12 to whom all further claims must thereafter be directed. If

13 the claim is established as aforesaid and after deducting

14 an amount not to exceed $20 to cover the cost of notice

15 publication and related clerical expenses, the clerk of the

16 court shall make payment to the person entitled thereto.

17 (4) The clerk of the circuit court is not required to

18 publish in such notice any items of less than $100 unless

19 he deems such publication in the public interest.

20 (c) Any clerk of the circuit court who has caused notice to

21 be published as provided by this Section shall, within 20 days

22 after the time specified in this Section for claiming the

23 property from the clerk of the court, pay or deliver to the

24 treasurer of the county having jurisdiction of the offense,

25 whether the bond was taken there or any other county, all sums

26 deposited as specified in this section less such amounts as may

10000SB0009ham002

- 238 -

LRB100 06347 HLH 27841 a

1 have been returned to the persons whose rights to receive the

2 sums deposited have been established to the satisfaction of the

3 clerk of the circuit court. Any clerk of the circuit court who

4 transfers such sums to the county treasury including sums

5 deposited by persons whose names are not required to be set

6 forth in the published notice aforesaid, is relieved of all

7 liability for such sums as have been transferred as unclaimed

8 bail deposits or any claim which then exists or which

9 thereafter may arise or be made in respect to such sums.

10 (d) The treasurer of the county shall keep just and true

11 accounts of all moneys paid into the treasury, and if any

12 person appears within 5 years after the deposit of moneys by

13 the clerk of the circuit court and claims any money paid into

14 the treasury, he shall file a claim therefor on the form

15 prescribed by the treasurer of the county who shall consider

16 any claim filed under this Act and who may, in his discretion,

17 hold a hearing and receive evidence concerning it. The

18 treasurer of the county shall prepare a finding and the

19 decision in writing on each hearing, stating the substance of

20 any evidence heard by him, his findings of fact in respect

21 thereto, and the reasons for his decision. The decision shall

22 be a public record.

23 (e) All claims which are not filed within the 5 year period

24 shall be forever barred.

25 (Source: P.A. 85-768.)

10000SB0009ham002

- 239 -

LRB100 06347 HLH 27841 a

1 Section 17-105. The Probate Act of 1975 is amended by

2 changing Sections 2-1 and 2-2 as follows:

3 (755 ILCS 5/2-1) (from Ch. 110 1/2, par. 2-1)

4 Sec. 2-1. Rules of descent and distribution. The intestate

5 real and personal estate of a resident decedent and the

6 intestate real estate in this State of a nonresident decedent,

7 after all just claims against his estate are fully paid,

8 descends and shall be distributed as follows:

9 (a) If there is a surviving spouse and also a descendant of

10 the decedent: 1/2 of the entire estate to the surviving spouse

11 and 1/2 to the decedent's descendants per stirpes.

12 (b) If there is no surviving spouse but a descendant of the

13 decedent: the entire estate to the decedent's descendants per

14 stirpes.

15 (c) If there is a surviving spouse but no descendant of the

16 decedent: the entire estate to the surviving spouse.

17 (d) If there is no surviving spouse or descendant but a

18 parent, brother, sister or descendant of a brother or sister of

19 the decedent: the entire estate to the parents, brothers and

20 sisters of the decedent in equal parts, allowing to the

21 surviving parent if one is dead a double portion and to the

22 descendants of a deceased brother or sister per stirpes the

23 portion which the deceased brother or sister would have taken

24 if living.

25 (e) If there is no surviving spouse, descendant, parent,

10000SB0009ham002

- 240 -

LRB100 06347 HLH 27841 a

1 brother, sister or descendant of a brother or sister of the

2 decedent but a grandparent or descendant of a grandparent of

3 the decedent: (1) 1/2 of the entire estate to the decedent's

4 maternal grandparents in equal parts or to the survivor of

5 them, or if there is none surviving, to their descendants per

6 stirpes, and (2) 1/2 of the entire estate to the decedent's

7 paternal grandparents in equal parts or to the survivor of

8 them, or if there is none surviving, to their descendants per

9 stirpes. If there is no surviving paternal grandparent or

10 descendant of a paternal grandparent, but a maternal

11 grandparent or descendant of a maternal grandparent of the

12 decedent: the entire estate to the decedent's maternal

13 grandparents in equal parts or to the survivor of them, or if

14 there is none surviving, to their descendants per stirpes. If

15 there is no surviving maternal grandparent or descendant of a

16 maternal grandparent, but a paternal grandparent or descendant

17 of a paternal grandparent of the decedent: the entire estate to

18 the decedent's paternal grandparents in equal parts or to the

19 survivor of them, or if there is none surviving, to their

20 descendants per stirpes.

21 (f) If there is no surviving spouse, descendant, parent,

22 brother, sister, descendant of a brother or sister or

23 grandparent or descendant of a grandparent of the decedent: (1)

24 1/2 of the entire estate to the decedent's maternal

25 great-grandparents in equal parts or to the survivor of them,

26 or if there is none surviving, to their descendants per

10000SB0009ham002

- 241 -

LRB100 06347 HLH 27841 a

1 stirpes, and (2) 1/2 of the entire estate to the decedent's

2 paternal great-grandparents in equal parts or to the survivor

3 of them, or if there is none surviving, to their descendants

4 per stirpes. If there is no surviving paternal

5 great-grandparent or descendant of a paternal

6 great-grandparent, but a maternal great-grandparent or

7 descendant of a maternal great-grandparent of the decedent: the

8 entire estate to the decedent's maternal great-grandparents in

9 equal parts or to the survivor of them, or if there is none

10 surviving, to their descendants per stirpes. If there is no

11 surviving maternal great-grandparent or descendant of a

12 maternal great-grandparent, but a paternal great-grandparent

13 or descendant of a paternal great-grandparent of the decedent:

14 the entire estate to the decedent's paternal

15 great-grandparents in equal parts or to the survivor of them,

16 or if there is none surviving, to their descendants per

17 stirpes.

18 (g) If there is no surviving spouse, descendant, parent,

19 brother, sister, descendant of a brother or sister,

20 grandparent, descendant of a grandparent, great-grandparent or

21 descendant of a great-grandparent of the decedent: the entire

22 estate in equal parts to the nearest kindred of the decedent in

23 equal degree (computing by the rules of the civil law) and

24 without representation.

25 (h) If there is no surviving spouse and no known kindred of

26 the decedent: the real estate escheats to the county in which

10000SB0009ham002

- 242 -

LRB100 06347 HLH 27841 a

1 it is located; the personal estate physically located within

2 this State and the personal estate physically located or held

3 outside this State which is the subject of ancillary

4 administration of an estate being administered within this

5 State escheats to the county of which the decedent was a

6 resident, or, if the decedent was not a resident of this State,

7 to the county in which it is located; all other personal

8 property of the decedent of every class and character, wherever

9 situate, or the proceeds thereof, shall escheat to this State

10 and be delivered to the State Treasurer pursuant to theRevised

11 Uniform ~~Disposition of~~ Unclaimed Property Act.

12 In no case is there any distinction between the kindred of

13 the whole and the half blood.

14 (Source: P.A. 91-16, eff. 7-1-99.)

15 (755 ILCS 5/2-2) (from Ch. 110 1/2, par. 2-2)

16 Sec. 2-2. Children born out of wedlock. The intestate real

17 and personal estate of a resident decedent who was a child born

18 out of wedlock at the time of death and the intestate real

19 estate in this State of a nonresident decedent who was a child

20 born out of wedlock at the time of death, after all just claims

21 against his estate are fully paid, descends and shall be

22 distributed as provided in Section 2-1, subject to Section

23 2-6.5 of this Act, if both parents are eligible parents. As

24 used in this Section, "eligible parent" means a parent of the

25 decedent who, during the decedent's lifetime, acknowledged the

10000SB0009ham002

- 243 -

LRB100 06347 HLH 27841 a

1 decedent as the parent's child, established a parental

2 relationship with the decedent, and supported the decedent as

3 the parent's child. "Eligible parents" who are in arrears of in

4 excess of one year's child support obligations shall not

5 receive any property benefit or other interest of the decedent

6 unless and until a court of competent jurisdiction makes a

7 determination as to the effect on the deceased of the arrearage

8 and allows a reduced benefit. In no event shall the reduction

9 of the benefit or other interest be less than the amount of

10 child support owed for the support of the decedent at the time

11 of death. The court's considerations shall include but are not

12 limited to the considerations in subsections (1) through (3) of

13 Section 2-6.5 of this Act.

14 If neither parent is an eligible parent, the intestate real

15 and personal estate of a resident decedent who was a child born

16 out of wedlock at the time of death and the intestate real

17 estate in this State of a nonresident decedent who was a child

18 born out of wedlock at the time of death, after all just claims

19 against his or her estate are fully paid, descends and shall be

20 distributed as provided in Section 2-1, but the parents of the

21 decedent shall be treated as having predeceased the decedent.

22 If only one parent is an eligible parent, the intestate

23 real and personal estate of a resident decedent who was a child

24 born out of wedlock at the time of death and the intestate real

25 estate in this State of a nonresident decedent who was a child

26 born out of wedlock at the time of death, after all just claims

10000SB0009ham002

- 244 -

LRB100 06347 HLH 27841 a

1 against his or her estate are fully paid, subject to Section

2 2-6.5 of this Act, descends and shall be distributed as

3 follows:

4 (a) If there is a surviving spouse and also a descendant of

5 the decedent: 1/2 of the entire estate to the surviving spouse

6 and 1/2 to the decedent's descendants per stirpes.

7 (b) If there is no surviving spouse but a descendant of the

8 decedent: the entire estate to the decedent's descendants per

9 stirpes.

10 (c) If there is a surviving spouse but no descendant of the

11 decedent: the entire estate to the surviving spouse.

12 (d) If there is no surviving spouse or descendant but the

13 eligible parent or a descendant of the eligible parent of the

14 decedent: the entire estate to the eligible parent and the

15 eligible parent's descendants, allowing 1/2 to the eligible

16 parent and 1/2 to the eligible parent's descendants per

17 stirpes.

18 (e) If there is no surviving spouse, descendant, eligible

19 parent, or descendant of the eligible parent of the decedent,

20 but a grandparent on the eligible parent's side of the family

21 or descendant of such grandparent of the decedent: the entire

22 estate to the decedent's grandparents on the eligible parent's

23 side of the family in equal parts, or to the survivor of them,

24 or if there is none surviving, to their descendants per

25 stirpes.

26 (f) If there is no surviving spouse, descendant, eligible

10000SB0009ham002

- 245 -

LRB100 06347 HLH 27841 a

1 parent, descendant of the eligible parent, grandparent on the

2 eligible parent's side of the family, or descendant of such

3 grandparent of the decedent: the entire estate to the

4 decedent's great-grandparents on the eligible parent's side of

5 the family in equal parts or to the survivor of them, or if

6 there is none surviving, to their descendants per stirpes.

7 (g) If there is no surviving spouse, descendant, eligible

8 parent, descendant of the eligible parent, grandparent on the

9 eligible parent's side of the family, descendant of such

10 grandparent, great-grandparent on the eligible parent's side

11 of the family, or descendant of such great-grandparent of the

12 decedent: the entire estate in equal parts to the nearest

13 kindred of the eligible parent of the decedent in equal degree

14 (computing by the rules of the civil law) and without

15 representation.

16 (h) If there is no surviving spouse, descendant, or

17 eligible parent of the decedent and no known kindred of the

18 eligible parent of the decedent: the real estate escheats to

19 the county in which it is located; the personal estate

20 physically located within this State and the personal estate

21 physically located or held outside this State which is the

22 subject of ancillary administration within this State escheats

23 to the county of which the decedent was a resident or, if the

24 decedent was not a resident of this State, to the county in

25 which it is located; all other personal property of the

26 decedent of every class and character, wherever situate, or the

10000SB0009ham002

- 246 -

LRB100 06347 HLH 27841 a

1 proceeds thereof, shall escheat to this State and be delivered

2 to the State Treasurer of this State pursuant to theRevised

3 Uniform ~~Disposition of~~ Unclaimed Property Act.

4 For purposes of inheritance, the changes made by this

5 amendatory Act of 1998 apply to all decedents who die on or

6 after the effective date of this amendatory Act of 1998. For

7 the purpose of determining the property rights of any person

8 under any instrument, the changes made by this amendatory Act

9 of 1998 apply to all instruments executed on or after the

10 effective date of this amendatory Act of 1998.

11 A child born out of wedlock is heir of his mother and of

12 any maternal ancestor and of any person from whom his mother

13 might have inherited, if living; and the descendants of a

14 person who was a child born out of wedlock shall represent such

15 person and take by descent any estate which the parent would

16 have taken, if living. If a decedent has acknowledged paternity

17 of a child born out of wedlock or if during his lifetime or

18 after his death a decedent has been adjudged to be the father

19 of a child born out of wedlock, that person is heir of his

20 father and of any paternal ancestor and of any person from whom

21 his father might have inherited, if living; and the descendants

22 of a person who was a child born out of wedlock shall represent

23 that person and take by descent any estate which the parent

24 would have taken, if living. If during his lifetime the

25 decedent was adjudged to be the father of a child born out of

26 wedlock by a court of competent jurisdiction, an authenticated

10000SB0009ham002

- 247 -

LRB100 06347 HLH 27841 a

1 copy of the judgment is sufficient proof of the paternity; but

2 in all other cases paternity must be proved by clear and

3 convincing evidence. A person who was a child born out of

4 wedlock whose parents intermarry and who is acknowledged by the

5 father as the father's child is a lawful child of the father.

6 After a child born out of wedlock is adopted, that person's

7 relationship to his or her adopting and natural parents shall

8 be governed by Section 2-4 of this Act. For purposes of

9 inheritance, the changes made by this amendatory Act of 1997

10 apply to all decedents who die on or after January 1, 1998. For

11 the purpose of determining the property rights of any person

12 under any instrument, the changes made by this amendatory Act

13 of 1997 apply to all instruments executed on or after January

14 1, 1998.

15 (Source: P.A. 94-229, eff. 1-1-06.)

16 Section 17-110. The Sale of Unclaimed Property Act is

17 amended by changing Section 3 as follows:

18 (770 ILCS 90/3) (from Ch. 141, par. 3)

19 Sec. 3. All persons other than common carriers having a

20 lien on personal property, by virtue of the Innkeepers Lien Act

21 or for more than $2,000 by virtue of the Labor and Storage Lien

22 Act may enforce the lien by a sale of the property, on giving

23 to the owner thereof, if he and his residence be known to the

24 person having such lien, 30 days' notice by certified mail, in

10000SB0009ham002

- 248 -

LRB100 06347 HLH 27841 a

1 writing of the time and place of such sale, and if the owner or

2 his place of residence be unknown to the person having such

3 lien, then upon his filing his affidavit to that effect with

4 the clerk of the circuit court in the county where such

5 property is situated; notice of the sale may be given by

6 publishing the same once in each week for 3 successive weeks in

7 some newspaper of general circulation published in the county,

8 and out of the proceeds of the sale all costs and charges for

9 advertising and making the same, and the amount of the lien

10 shall be paid, and the surplus, if any, shall be paid to the

11 owner of the property or, if not claimed by said owner, such

12 surplus, if any, shall be disposed under the Revised Uniform

13 ~~Disposition of~~ Unclaimed Property Act. All sales pursuant to

14 this Section must be public and conducted in a commercially

15 reasonable manner so as to maximize the net proceeds of the

16 sale. Conformity to the requirements of this Act shall be a

17 perpetual bar to any action against such lienor by any person

18 for the recovery of such chattels or the value thereof or any

19 damages growing out of the failure of such person to receive

20 such chattels.

21 (Source: P.A. 87-206.)

22 Section 17-115. The Business Corporation Act of 1983 is

23 amended by changing Section 12.70 as follows:

24 (805 ILCS 5/12.70) (from Ch. 32, par. 12.70)

10000SB0009ham002

- 249 -

LRB100 06347 HLH 27841 a

1 Sec. 12.70. Deposit of amount due certain shareholders.

2 Upon the distribution of the assets of a corporation among its

3 shareholders, the distributive portion to which a shareholder

4 would be entitled who is unknown orcannot ~~can not~~ be found, or

5 who is under disability and there is no person legally

6 competent to receive such distributive portion, shall be

7 presumed abandoned and reported and delivered to the State

8 Treasurer and become subject to the provision of the Revised

9 Uniform~~Disposition of~~ Unclaimed Property Act. In the event

10 such distribution is ~~be~~made other than in cash, such

11 distributive portion of the assets shall be reduced to cash

12 before being so reported and delivered.

13 (Source: P.A. 91-16, eff. 7-1-99.)

14 Section 17-120. The General Not For Profit Corporation Act

15 of 1986 is amended by changing Section 112.70 as follows:

16 (805 ILCS 105/112.70) (from Ch. 32, par. 112.70)

17 Sec. 112.70. Deposit of amount due. Upon the distribution

18 of the assets of a corporation, the distributive portion to

19 which a person would be entitled who is unknown or cannot be

20 found, or who is under disability and there is no person

21 legally competent to receive such distributive portion, shall

22 be presumed abandoned and reported and delivered to the State

23 Treasurer and become subject to the Revised~~provision of the~~

24 Uniform ~~Disposition of~~Unclaimed Property Act. In the event

10000SB0009ham002

- 250 -

LRB100 06347 HLH 27841 a

1 such distribution is ~~be~~made other than in cash, such

2 distributive portion of the assets shall be reduced to cash

3 before being so reported and delivered.

4 (Source: P.A. 91-16, eff. 7-1-99.)

5 ARTICLE 20. AMENDATORY PROVISIONS; INCOME TAX

6 Section 15-5. The Illinois Income Tax Act is amended by

7 changing Sections 201, 202.5, 203, 204, 208, 212, 901, and 1501

8 and by adding Section 225 as follows:

9 (35 ILCS 5/201) (from Ch. 120, par. 2-201)

10 Sec. 201. Tax Imposed.

11 (a) In general. A tax measured by net income is hereby

12 imposed on every individual, corporation, trust and estate for

13 each taxable year ending after July 31, 1969 on the privilege

14 of earning or receiving income in or as a resident of this

15 State. Such tax shall be in addition to all other occupation or

16 privilege taxes imposed by this State or by any municipal

17 corporation or political subdivision thereof.

18 (b) Rates. The tax imposed by subsection (a) of this

19 Section shall be determined as follows, except as adjusted by

20 subsection (d-1):

21 (1) In the case of an individual, trust or estate, for

22 taxable years ending prior to July 1, 1989, an amount equal

23 to 2 1/2% of the taxpayer's net income for the taxable

10000SB0009ham002

- 251 -

LRB100 06347 HLH 27841 a

1 year.

2 (2) In the case of an individual, trust or estate, for

3 taxable years beginning prior to July 1, 1989 and ending

4 after June 30, 1989, an amount equal to the sum of (i) 2

5 1/2% of the taxpayer's net income for the period prior to

6 July 1, 1989, as calculated under Section 202.3, and (ii)

7 3% of the taxpayer's net income for the period after June

8 30, 1989, as calculated under Section 202.3.

9 (3) In the case of an individual, trust or estate, for

10 taxable years beginning after June 30, 1989, and ending

11 prior to January 1, 2011, an amount equal to 3% of the

12 taxpayer's net income for the taxable year.

13 (4) In the case of an individual, trust, or estate, for

14 taxable years beginning prior to January 1, 2011, and

15 ending after December 31, 2010, an amount equal to the sum

16 of (i) 3% of the taxpayer's net income for the period prior

17 to January 1, 2011, as calculated under Section 202.5, and

18 (ii) 5% of the taxpayer's net income for the period after

19 December 31, 2010, as calculated under Section 202.5.

20 (5) In the case of an individual, trust, or estate, for

21 taxable years beginning on or after January 1, 2011, and

22 ending prior to January 1, 2015, an amount equal to 5% of

23 the taxpayer's net income for the taxable year.

24 (5.1) In the case of an individual, trust, or estate,

25 for taxable years beginning prior to January 1, 2015, and

26 ending after December 31, 2014, an amount equal to the sum

10000SB0009ham002

- 252 -

LRB100 06347 HLH 27841 a

1 of (i) 5% of the taxpayer's net income for the period prior

2 to January 1, 2015, as calculated under Section 202.5, and

3 (ii) 3.75% of the taxpayer's net income for the period

4 after December 31, 2014, as calculated under Section 202.5.

5 (5.2) In the case of an individual, trust, or estate,

6 for taxable years beginning on or after January 1, 2015,

7 and ending prior to July 1, 2017 ~~January 1, 2025~~, an amount

8 equal to 3.75% of the taxpayer's net income for the taxable

9 year.

10 (5.3) In the case of an individual, trust, or estate,

11 for taxable years beginning prior to July 1, 2017 ~~January~~

12 ~~1, 2025~~, and ending after June 30, 2017 ~~December 31, 2024~~,

13 an amount equal to the sum of (i) 3.75% of the taxpayer's

14 net income for the period prior to July 1, 2017 ~~January 1,~~

15 ~~2025~~, as calculated under Section 202.5, and (ii) 4.95%

16 ~~3.25%~~ of the taxpayer's net income for the period after

17 June 30, 2017 ~~December 31, 2024~~, as calculated under

18 Section 202.5.

19 (5.4) In the case of an individual, trust, or estate,

20 for taxable years beginning on or after July 1, 2017

21 ~~January 1, 2025~~, an amount equal to 4.95% ~~3.25%~~ of the

22 taxpayer's net income for the taxable year.

23 (6) In the case of a corporation, for taxable years

24 ending prior to July 1, 1989, an amount equal to 4% of the

25 taxpayer's net income for the taxable year.

26 (7) In the case of a corporation, for taxable years

10000SB0009ham002

- 253 -

LRB100 06347 HLH 27841 a

1 beginning prior to July 1, 1989 and ending after June 30,

2 1989, an amount equal to the sum of (i) 4% of the

3 taxpayer's net income for the period prior to July 1, 1989,

4 as calculated under Section 202.3, and (ii) 4.8% of the

5 taxpayer's net income for the period after June 30, 1989,

6 as calculated under Section 202.3.

7 (8) In the case of a corporation, for taxable years

8 beginning after June 30, 1989, and ending prior to January

9 1, 2011, an amount equal to 4.8% of the taxpayer's net

10 income for the taxable year.

11 (9) In the case of a corporation, for taxable years

12 beginning prior to January 1, 2011, and ending after

13 December 31, 2010, an amount equal to the sum of (i) 4.8%

14 of the taxpayer's net income for the period prior to

15 January 1, 2011, as calculated under Section 202.5, and

16 (ii) 7% of the taxpayer's net income for the period after

17 December 31, 2010, as calculated under Section 202.5.

18 (10) In the case of a corporation, for taxable years

19 beginning on or after January 1, 2011, and ending prior to

20 January 1, 2015, an amount equal to 7% of the taxpayer's

21 net income for the taxable year.

22 (11) In the case of a corporation, for taxable years

23 beginning prior to January 1, 2015, and ending after

24 December 31, 2014, an amount equal to the sum of (i) 7% of

25 the taxpayer's net income for the period prior to January

26 1, 2015, as calculated under Section 202.5, and (ii) 5.25%

10000SB0009ham002

- 254 -

LRB100 06347 HLH 27841 a

1 of the taxpayer's net income for the period after December

2 31, 2014, as calculated under Section 202.5.

3 (12) In the case of a corporation, for taxable years

4 beginning on or after January 1, 2015, and ending prior to

5 July 1, 2017 ~~January 1, 2025~~, an amount equal to 5.25% of

6 the taxpayer's net income for the taxable year.

7 (13) In the case of a corporation, for taxable years

8 beginning prior to July 1, 2017 ~~January 1, 2025~~, and ending

9 after June 30, 2017 ~~December 31, 2024~~, an amount equal to

10 the sum of (i) 5.25% of the taxpayer's net income for the

11 period prior to July 1, 2017 ~~January 1, 2025~~, as calculated

12 under Section 202.5, and (ii) 7% ~~4.8%~~ of the taxpayer's net

13 income for the period after June 30, 2017 ~~December 31,~~

14 ~~2024~~, as calculated under Section 202.5.

15 (14) In the case of a corporation, for taxable years

16 beginning on or after July 1, 2017 ~~January 1, 2025~~, an

17 amount equal to 7% ~~4.8%~~ of the taxpayer's net income for

18 the taxable year.

19 The rates under this subsection (b) are subject to the

20 provisions of Section 201.5.

21 (c) Personal Property Tax Replacement Income Tax.

22 Beginning on July 1, 1979 and thereafter, in addition to such

23 income tax, there is also hereby imposed the Personal Property

24 Tax Replacement Income Tax measured by net income on every

25 corporation (including Subchapter S corporations), partnership

26 and trust, for each taxable year ending after June 30, 1979.

10000SB0009ham002

- 255 -

LRB100 06347 HLH 27841 a

1 Such taxes are imposed on the privilege of earning or receiving

2 income in or as a resident of this State. The Personal Property

3 Tax Replacement Income Tax shall be in addition to the income

4 tax imposed by subsections (a) and (b) of this Section and in

5 addition to all other occupation or privilege taxes imposed by

6 this State or by any municipal corporation or political

7 subdivision thereof.

8 (d) Additional Personal Property Tax Replacement Income

9 Tax Rates. The personal property tax replacement income tax

10 imposed by this subsection and subsection (c) of this Section

11 in the case of a corporation, other than a Subchapter S

12 corporation and except as adjusted by subsection (d-1), shall

13 be an additional amount equal to 2.85% of such taxpayer's net

14 income for the taxable year, except that beginning on January

15 1, 1981, and thereafter, the rate of 2.85% specified in this

16 subsection shall be reduced to 2.5%, and in the case of a

17 partnership, trust or a Subchapter S corporation shall be an

18 additional amount equal to 1.5% of such taxpayer's net income

19 for the taxable year.

20 (d-1) Rate reduction for certain foreign insurers. In the

21 case of a foreign insurer, as defined by Section 35A-5 of the

22 Illinois Insurance Code, whose state or country of domicile

23 imposes on insurers domiciled in Illinois a retaliatory tax

24 (excluding any insurer whose premiums from reinsurance assumed

25 are 50% or more of its total insurance premiums as determined

26 under paragraph (2) of subsection (b) of Section 304, except

10000SB0009ham002

- 256 -

LRB100 06347 HLH 27841 a

1 that for purposes of this determination premiums from

2 reinsurance do not include premiums from inter-affiliate

3 reinsurance arrangements), beginning with taxable years ending

4 on or after December 31, 1999, the sum of the rates of tax

5 imposed by subsections (b) and (d) shall be reduced (but not

6 increased) to the rate at which the total amount of tax imposed

7 under this Act, net of all credits allowed under this Act,

8 shall equal (i) the total amount of tax that would be imposed

9 on the foreign insurer's net income allocable to Illinois for

10 the taxable year by such foreign insurer's state or country of

11 domicile if that net income were subject to all income taxes

12 and taxes measured by net income imposed by such foreign

13 insurer's state or country of domicile, net of all credits

14 allowed or (ii) a rate of zero if no such tax is imposed on such

15 income by the foreign insurer's state of domicile. For the

16 purposes of this subsection (d-1), an inter-affiliate includes

17 a mutual insurer under common management.

18 (1) For the purposes of subsection (d-1), in no event

19 shall the sum of the rates of tax imposed by subsections

20 (b) and (d) be reduced below the rate at which the sum of:

21 (A) the total amount of tax imposed on such foreign

22 insurer under this Act for a taxable year, net of all

23 credits allowed under this Act, plus

24 (B) the privilege tax imposed by Section 409 of the

25 Illinois Insurance Code, the fire insurance company

26 tax imposed by Section 12 of the Fire Investigation

10000SB0009ham002

- 257 -

LRB100 06347 HLH 27841 a

1 Act, and the fire department taxes imposed under

2 Section 11-10-1 of the Illinois Municipal Code,

3 equals 1.25% for taxable years ending prior to December 31,

4 2003, or 1.75% for taxable years ending on or after

5 December 31, 2003, of the net taxable premiums written for

6 the taxable year, as described by subsection (1) of Section

7 409 of the Illinois Insurance Code. This paragraph will in

8 no event increase the rates imposed under subsections (b)

9 and (d).

10 (2) Any reduction in the rates of tax imposed by this

11 subsection shall be applied first against the rates imposed

12 by subsection (b) and only after the tax imposed by

13 subsection (a) net of all credits allowed under this

14 Section other than the credit allowed under subsection (i)

15 has been reduced to zero, against the rates imposed by

16 subsection (d).

17 This subsection (d-1) is exempt from the provisions of

18 Section 250.

19 (e) Investment credit. A taxpayer shall be allowed a credit

20 against the Personal Property Tax Replacement Income Tax for

21 investment in qualified property.

22 (1) A taxpayer shall be allowed a credit equal to .5%

23 of the basis of qualified property placed in service during

24 the taxable year, provided such property is placed in

25 service on or after July 1, 1984. There shall be allowed an

26 additional credit equal to .5% of the basis of qualified

10000SB0009ham002

- 258 -

LRB100 06347 HLH 27841 a

1 property placed in service during the taxable year,

2 provided such property is placed in service on or after

3 July 1, 1986, and the taxpayer's base employment within

4 Illinois has increased by 1% or more over the preceding

5 year as determined by the taxpayer's employment records

6 filed with the Illinois Department of Employment Security.

7 Taxpayers who are new to Illinois shall be deemed to have

8 met the 1% growth in base employment for the first year in

9 which they file employment records with the Illinois

10 Department of Employment Security. The provisions added to

11 this Section by Public Act 85-1200 (and restored by Public

12 Act 87-895) shall be construed as declaratory of existing

13 law and not as a new enactment. If, in any year, the

14 increase in base employment within Illinois over the

15 preceding year is less than 1%, the additional credit shall

16 be limited to that percentage times a fraction, the

17 numerator of which is .5% and the denominator of which is

18 1%, but shall not exceed .5%. The investment credit shall

19 not be allowed to the extent that it would reduce a

20 taxpayer's liability in any tax year below zero, nor may

21 any credit for qualified property be allowed for any year

22 other than the year in which the property was placed in

23 service in Illinois. For tax years ending on or after

24 December 31, 1987, and on or before December 31, 1988, the

25 credit shall be allowed for the tax year in which the

26 property is placed in service, or, if the amount of the

10000SB0009ham002

- 259 -

LRB100 06347 HLH 27841 a

1 credit exceeds the tax liability for that year, whether it

2 exceeds the original liability or the liability as later

3 amended, such excess may be carried forward and applied to

4 the tax liability of the 5 taxable years following the

5 excess credit years if the taxpayer (i) makes investments

6 which cause the creation of a minimum of 2,000 full-time

7 equivalent jobs in Illinois, (ii) is located in an

8 enterprise zone established pursuant to the Illinois

9 Enterprise Zone Act and (iii) is certified by the

10 Department of Commerce and Community Affairs (now

11 Department of Commerce and Economic Opportunity) as

12 complying with the requirements specified in clause (i) and

13 (ii) by July 1, 1986. The Department of Commerce and

14 Community Affairs (now Department of Commerce and Economic

15 Opportunity) shall notify the Department of Revenue of all

16 such certifications immediately. For tax years ending

17 after December 31, 1988, the credit shall be allowed for

18 the tax year in which the property is placed in service,

19 or, if the amount of the credit exceeds the tax liability

20 for that year, whether it exceeds the original liability or

21 the liability as later amended, such excess may be carried

22 forward and applied to the tax liability of the 5 taxable

23 years following the excess credit years. The credit shall

24 be applied to the earliest year for which there is a

25 liability. If there is credit from more than one tax year

26 that is available to offset a liability, earlier credit

10000SB0009ham002

- 260 -

LRB100 06347 HLH 27841 a

1 shall be applied first.

2 (2) The term "qualified property" means property

3 which:

4 (A) is tangible, whether new or used, including

5 buildings and structural components of buildings and

6 signs that are real property, but not including land or

7 improvements to real property that are not a structural

8 component of a building such as landscaping, sewer

9 lines, local access roads, fencing, parking lots, and

10 other appurtenances;

11 (B) is depreciable pursuant to Section 167 of the

12 Internal Revenue Code, except that "3-year property"

13 as defined in Section 168(c)(2)(A) of that Code is not

14 eligible for the credit provided by this subsection

15 (e);

16 (C) is acquired by purchase as defined in Section

17 179(d) of the Internal Revenue Code;

18 (D) is used in Illinois by a taxpayer who is

19 primarily engaged in manufacturing, or in mining coal

20 or fluorite, or in retailing, or was placed in service

21 on or after July 1, 2006 in a River Edge Redevelopment

22 Zone established pursuant to the River Edge

23 Redevelopment Zone Act; and

24 (E) has not previously been used in Illinois in

25 such a manner and by such a person as would qualify for

26 the credit provided by this subsection (e) or

10000SB0009ham002

- 261 -

LRB100 06347 HLH 27841 a

1 subsection (f).

2 (3) For purposes of this subsection (e),

3 "manufacturing" means the material staging and production

4 of tangible personal property by procedures commonly

5 regarded as manufacturing, processing, fabrication, or

6 assembling which changes some existing material into new

7 shapes, new qualities, or new combinations. For purposes of

8 this subsection (e) the term "mining" shall have the same

9 meaning as the term "mining" in Section 613(c) of the

10 Internal Revenue Code. For purposes of this subsection (e),

11 the term "retailing" means the sale of tangible personal

12 property for use or consumption and not for resale, or

13 services rendered in conjunction with the sale of tangible

14 personal property for use or consumption and not for

15 resale. For purposes of this subsection (e), "tangible

16 personal property" has the same meaning as when that term

17 is used in the Retailers' Occupation Tax Act, and, for

18 taxable years ending after December 31, 2008, does not

19 include the generation, transmission, or distribution of

20 electricity.

21 (4) The basis of qualified property shall be the basis

22 used to compute the depreciation deduction for federal

23 income tax purposes.

24 (5) If the basis of the property for federal income tax

25 depreciation purposes is increased after it has been placed

26 in service in Illinois by the taxpayer, the amount of such

10000SB0009ham002

- 262 -

LRB100 06347 HLH 27841 a

1 increase shall be deemed property placed in service on the

2 date of such increase in basis.

3 (6) The term "placed in service" shall have the same

4 meaning as under Section 46 of the Internal Revenue Code.

5 (7) If during any taxable year, any property ceases to

6 be qualified property in the hands of the taxpayer within

7 48 months after being placed in service, or the situs of

8 any qualified property is moved outside Illinois within 48

9 months after being placed in service, the Personal Property

10 Tax Replacement Income Tax for such taxable year shall be

11 increased. Such increase shall be determined by (i)

12 recomputing the investment credit which would have been

13 allowed for the year in which credit for such property was

14 originally allowed by eliminating such property from such

15 computation and, (ii) subtracting such recomputed credit

16 from the amount of credit previously allowed. For the

17 purposes of this paragraph (7), a reduction of the basis of

18 qualified property resulting from a redetermination of the

19 purchase price shall be deemed a disposition of qualified

20 property to the extent of such reduction.

21 (8) Unless the investment credit is extended by law,

22 the basis of qualified property shall not include costs

23 incurred after December 31, 2018, except for costs incurred

24 pursuant to a binding contract entered into on or before

25 December 31, 2018.

26 (9) Each taxable year ending before December 31, 2000,

10000SB0009ham002

- 263 -

LRB100 06347 HLH 27841 a

1 a partnership may elect to pass through to its partners the

2 credits to which the partnership is entitled under this

3 subsection (e) for the taxable year. A partner may use the

4 credit allocated to him or her under this paragraph only

5 against the tax imposed in subsections (c) and (d) of this

6 Section. If the partnership makes that election, those

7 credits shall be allocated among the partners in the

8 partnership in accordance with the rules set forth in

9 Section 704(b) of the Internal Revenue Code, and the rules

10 promulgated under that Section, and the allocated amount of

11 the credits shall be allowed to the partners for that

12 taxable year. The partnership shall make this election on

13 its Personal Property Tax Replacement Income Tax return for

14 that taxable year. The election to pass through the credits

15 shall be irrevocable.

16 For taxable years ending on or after December 31, 2000,

17 a partner that qualifies its partnership for a subtraction

18 under subparagraph (I) of paragraph (2) of subsection (d)

19 of Section 203 or a shareholder that qualifies a Subchapter

20 S corporation for a subtraction under subparagraph (S) of

21 paragraph (2) of subsection (b) of Section 203 shall be

22 allowed a credit under this subsection (e) equal to its

23 share of the credit earned under this subsection (e) during

24 the taxable year by the partnership or Subchapter S

25 corporation, determined in accordance with the

26 determination of income and distributive share of income

10000SB0009ham002

- 264 -

LRB100 06347 HLH 27841 a

1 under Sections 702 and 704 and Subchapter S of the Internal

2 Revenue Code. This paragraph is exempt from the provisions

3 of Section 250.

4 (f) Investment credit; Enterprise Zone; River Edge

5 Redevelopment Zone.

6 (1) A taxpayer shall be allowed a credit against the

7 tax imposed by subsections (a) and (b) of this Section for

8 investment in qualified property which is placed in service

9 in an Enterprise Zone created pursuant to the Illinois

10 Enterprise Zone Act or, for property placed in service on

11 or after July 1, 2006, a River Edge Redevelopment Zone

12 established pursuant to the River Edge Redevelopment Zone

13 Act. For partners, shareholders of Subchapter S

14 corporations, and owners of limited liability companies,

15 if the liability company is treated as a partnership for

16 purposes of federal and State income taxation, there shall

17 be allowed a credit under this subsection (f) to be

18 determined in accordance with the determination of income

19 and distributive share of income under Sections 702 and 704

20 and Subchapter S of the Internal Revenue Code. The credit

21 shall be .5% of the basis for such property. The credit

22 shall be available only in the taxable year in which the

23 property is placed in service in the Enterprise Zone or

24 River Edge Redevelopment Zone and shall not be allowed to

25 the extent that it would reduce a taxpayer's liability for

26 the tax imposed by subsections (a) and (b) of this Section

10000SB0009ham002

- 265 -

LRB100 06347 HLH 27841 a

1 to below zero. For tax years ending on or after December

2 31, 1985, the credit shall be allowed for the tax year in

3 which the property is placed in service, or, if the amount

4 of the credit exceeds the tax liability for that year,

5 whether it exceeds the original liability or the liability

6 as later amended, such excess may be carried forward and

7 applied to the tax liability of the 5 taxable years

8 following the excess credit year. The credit shall be

9 applied to the earliest year for which there is a

10 liability. If there is credit from more than one tax year

11 that is available to offset a liability, the credit

12 accruing first in time shall be applied first.

13 (2) The term qualified property means property which:

14 (A) is tangible, whether new or used, including

15 buildings and structural components of buildings;

16 (B) is depreciable pursuant to Section 167 of the

17 Internal Revenue Code, except that "3-year property"

18 as defined in Section 168(c)(2)(A) of that Code is not

19 eligible for the credit provided by this subsection

20 (f);

21 (C) is acquired by purchase as defined in Section

22 179(d) of the Internal Revenue Code;

23 (D) is used in the Enterprise Zone or River Edge

24 Redevelopment Zone by the taxpayer; and

25 (E) has not been previously used in Illinois in

26 such a manner and by such a person as would qualify for

10000SB0009ham002

- 266 -

LRB100 06347 HLH 27841 a

1 the credit provided by this subsection (f) or

2 subsection (e).

3 (3) The basis of qualified property shall be the basis

4 used to compute the depreciation deduction for federal

5 income tax purposes.

6 (4) If the basis of the property for federal income tax

7 depreciation purposes is increased after it has been placed

8 in service in the Enterprise Zone or River Edge

9 Redevelopment Zone by the taxpayer, the amount of such

10 increase shall be deemed property placed in service on the

11 date of such increase in basis.

12 (5) The term "placed in service" shall have the same

13 meaning as under Section 46 of the Internal Revenue Code.

14 (6) If during any taxable year, any property ceases to

15 be qualified property in the hands of the taxpayer within

16 48 months after being placed in service, or the situs of

17 any qualified property is moved outside the Enterprise Zone

18 or River Edge Redevelopment Zone within 48 months after

19 being placed in service, the tax imposed under subsections

20 (a) and (b) of this Section for such taxable year shall be

21 increased. Such increase shall be determined by (i)

22 recomputing the investment credit which would have been

23 allowed for the year in which credit for such property was

24 originally allowed by eliminating such property from such

25 computation, and (ii) subtracting such recomputed credit

26 from the amount of credit previously allowed. For the

10000SB0009ham002

- 267 -

LRB100 06347 HLH 27841 a

1 purposes of this paragraph (6), a reduction of the basis of

2 qualified property resulting from a redetermination of the

3 purchase price shall be deemed a disposition of qualified

4 property to the extent of such reduction.

5 (7) There shall be allowed an additional credit equal

6 to 0.5% of the basis of qualified property placed in

7 service during the taxable year in a River Edge

8 Redevelopment Zone, provided such property is placed in

9 service on or after July 1, 2006, and the taxpayer's base

10 employment within Illinois has increased by 1% or more over

11 the preceding year as determined by the taxpayer's

12 employment records filed with the Illinois Department of

13 Employment Security. Taxpayers who are new to Illinois

14 shall be deemed to have met the 1% growth in base

15 employment for the first year in which they file employment

16 records with the Illinois Department of Employment

17 Security. If, in any year, the increase in base employment

18 within Illinois over the preceding year is less than 1%,

19 the additional credit shall be limited to that percentage

20 times a fraction, the numerator of which is 0.5% and the

21 denominator of which is 1%, but shall not exceed 0.5%.

22 (g) (Blank).

23 (h) Investment credit; High Impact Business.

24 (1) Subject to subsections (b) and (b-5) of Section 5.5

25 of the Illinois Enterprise Zone Act, a taxpayer shall be

26 allowed a credit against the tax imposed by subsections (a)

10000SB0009ham002

- 268 -

LRB100 06347 HLH 27841 a

1 and (b) of this Section for investment in qualified

2 property which is placed in service by a Department of

3 Commerce and Economic Opportunity designated High Impact

4 Business. The credit shall be .5% of the basis for such

5 property. The credit shall not be available (i) until the

6 minimum investments in qualified property set forth in

7 subdivision (a)(3)(A) of Section 5.5 of the Illinois

8 Enterprise Zone Act have been satisfied or (ii) until the

9 time authorized in subsection (b-5) of the Illinois

10 Enterprise Zone Act for entities designated as High Impact

11 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and

12 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone

13 Act, and shall not be allowed to the extent that it would

14 reduce a taxpayer's liability for the tax imposed by

15 subsections (a) and (b) of this Section to below zero. The

16 credit applicable to such investments shall be taken in the

17 taxable year in which such investments have been completed.

18 The credit for additional investments beyond the minimum

19 investment by a designated high impact business authorized

20 under subdivision (a)(3)(A) of Section 5.5 of the Illinois

21 Enterprise Zone Act shall be available only in the taxable

22 year in which the property is placed in service and shall

23 not be allowed to the extent that it would reduce a

24 taxpayer's liability for the tax imposed by subsections (a)

25 and (b) of this Section to below zero. For tax years ending

26 on or after December 31, 1987, the credit shall be allowed

10000SB0009ham002

- 269 -

LRB100 06347 HLH 27841 a

1 for the tax year in which the property is placed in

2 service, or, if the amount of the credit exceeds the tax

3 liability for that year, whether it exceeds the original

4 liability or the liability as later amended, such excess

5 may be carried forward and applied to the tax liability of

6 the 5 taxable years following the excess credit year. The

7 credit shall be applied to the earliest year for which

8 there is a liability. If there is credit from more than one

9 tax year that is available to offset a liability, the

10 credit accruing first in time shall be applied first.

11 Changes made in this subdivision (h)(1) by Public Act

12 88-670 restore changes made by Public Act 85-1182 and

13 reflect existing law.

14 (2) The term qualified property means property which:

15 (A) is tangible, whether new or used, including

16 buildings and structural components of buildings;

17 (B) is depreciable pursuant to Section 167 of the

18 Internal Revenue Code, except that "3-year property"

19 as defined in Section 168(c)(2)(A) of that Code is not

20 eligible for the credit provided by this subsection

21 (h);

22 (C) is acquired by purchase as defined in Section

23 179(d) of the Internal Revenue Code; and

24 (D) is not eligible for the Enterprise Zone

25 Investment Credit provided by subsection (f) of this

26 Section.

10000SB0009ham002

- 270 -

LRB100 06347 HLH 27841 a

1 (3) The basis of qualified property shall be the basis

2 used to compute the depreciation deduction for federal

3 income tax purposes.

4 (4) If the basis of the property for federal income tax

5 depreciation purposes is increased after it has been placed

6 in service in a federally designated Foreign Trade Zone or

7 Sub-Zone located in Illinois by the taxpayer, the amount of

8 such increase shall be deemed property placed in service on

9 the date of such increase in basis.

10 (5) The term "placed in service" shall have the same

11 meaning as under Section 46 of the Internal Revenue Code.

12 (6) If during any taxable year ending on or before

13 December 31, 1996, any property ceases to be qualified

14 property in the hands of the taxpayer within 48 months

15 after being placed in service, or the situs of any

16 qualified property is moved outside Illinois within 48

17 months after being placed in service, the tax imposed under

18 subsections (a) and (b) of this Section for such taxable

19 year shall be increased. Such increase shall be determined

20 by (i) recomputing the investment credit which would have

21 been allowed for the year in which credit for such property

22 was originally allowed by eliminating such property from

23 such computation, and (ii) subtracting such recomputed

24 credit from the amount of credit previously allowed. For

25 the purposes of this paragraph (6), a reduction of the

26 basis of qualified property resulting from a

10000SB0009ham002

- 271 -

LRB100 06347 HLH 27841 a

1 redetermination of the purchase price shall be deemed a

2 disposition of qualified property to the extent of such

3 reduction.

4 (7) Beginning with tax years ending after December 31,

5 1996, if a taxpayer qualifies for the credit under this

6 subsection (h) and thereby is granted a tax abatement and

7 the taxpayer relocates its entire facility in violation of

8 the explicit terms and length of the contract under Section

9 18-183 of the Property Tax Code, the tax imposed under

10 subsections (a) and (b) of this Section shall be increased

11 for the taxable year in which the taxpayer relocated its

12 facility by an amount equal to the amount of credit

13 received by the taxpayer under this subsection (h).

14 (i) Credit for Personal Property Tax Replacement Income

15 Tax. For tax years ending prior to December 31, 2003, a credit

16 shall be allowed against the tax imposed by subsections (a) and

17 (b) of this Section for the tax imposed by subsections (c) and

18 (d) of this Section. This credit shall be computed by

19 multiplying the tax imposed by subsections (c) and (d) of this

20 Section by a fraction, the numerator of which is base income

21 allocable to Illinois and the denominator of which is Illinois

22 base income, and further multiplying the product by the tax

23 rate imposed by subsections (a) and (b) of this Section.

24 Any credit earned on or after December 31, 1986 under this

25 subsection which is unused in the year the credit is computed

26 because it exceeds the tax liability imposed by subsections (a)

10000SB0009ham002

- 272 -

LRB100 06347 HLH 27841 a

1 and (b) for that year (whether it exceeds the original

2 liability or the liability as later amended) may be carried

3 forward and applied to the tax liability imposed by subsections

4 (a) and (b) of the 5 taxable years following the excess credit

5 year, provided that no credit may be carried forward to any

6 year ending on or after December 31, 2003. This credit shall be

7 applied first to the earliest year for which there is a

8 liability. If there is a credit under this subsection from more

9 than one tax year that is available to offset a liability the

10 earliest credit arising under this subsection shall be applied

11 first.

12 If, during any taxable year ending on or after December 31,

13 1986, the tax imposed by subsections (c) and (d) of this

14 Section for which a taxpayer has claimed a credit under this

15 subsection (i) is reduced, the amount of credit for such tax

16 shall also be reduced. Such reduction shall be determined by

17 recomputing the credit to take into account the reduced tax

18 imposed by subsections (c) and (d). If any portion of the

19 reduced amount of credit has been carried to a different

20 taxable year, an amended return shall be filed for such taxable

21 year to reduce the amount of credit claimed.

22 (j) Training expense credit. Beginning with tax years

23 ending on or after December 31, 1986 and prior to December 31,

24 2003, a taxpayer shall be allowed a credit against the tax

25 imposed by subsections (a) and (b) under this Section for all

26 amounts paid or accrued, on behalf of all persons employed by

10000SB0009ham002

- 273 -

LRB100 06347 HLH 27841 a

1 the taxpayer in Illinois or Illinois residents employed outside

2 of Illinois by a taxpayer, for educational or vocational

3 training in semi-technical or technical fields or semi-skilled

4 or skilled fields, which were deducted from gross income in the

5 computation of taxable income. The credit against the tax

6 imposed by subsections (a) and (b) shall be 1.6% of such

7 training expenses. For partners, shareholders of subchapter S

8 corporations, and owners of limited liability companies, if the

9 liability company is treated as a partnership for purposes of

10 federal and State income taxation, there shall be allowed a

11 credit under this subsection (j) to be determined in accordance

12 with the determination of income and distributive share of

13 income under Sections 702 and 704 and subchapter S of the

14 Internal Revenue Code.

15 Any credit allowed under this subsection which is unused in

16 the year the credit is earned may be carried forward to each of

17 the 5 taxable years following the year for which the credit is

18 first computed until it is used. This credit shall be applied

19 first to the earliest year for which there is a liability. If

20 there is a credit under this subsection from more than one tax

21 year that is available to offset a liability the earliest

22 credit arising under this subsection shall be applied first. No

23 carryforward credit may be claimed in any tax year ending on or

24 after December 31, 2003.

25 (k) Research and development credit. For tax years ending

26 after July 1, 1990 and prior to December 31, 2003, and

10000SB0009ham002

- 274 -

LRB100 06347 HLH 27841 a

1 beginning again for tax years ending on or after December 31,

2 2004, and ending prior to January 1, 2022 ~~January 1, 2016~~, a

3 taxpayer shall be allowed a credit against the tax imposed by

4 subsections (a) and (b) of this Section for increasing research

5 activities in this State. The credit allowed against the tax

6 imposed by subsections (a) and (b) shall be equal to 6 1/2% of

7 the qualifying expenditures for increasing research activities

8 in this State. For partners, shareholders of subchapter S

9 corporations, and owners of limited liability companies, if the

10 liability company is treated as a partnership for purposes of

11 federal and State income taxation, there shall be allowed a

12 credit under this subsection to be determined in accordance

13 with the determination of income and distributive share of

14 income under Sections 702 and 704 and subchapter S of the

15 Internal Revenue Code.

16 For purposes of this subsection, "qualifying expenditures"

17 means the qualifying expenditures as defined for the federal

18 credit for increasing research activities which would be

19 allowable under Section 41 of the Internal Revenue Code and

20 which are conducted in this State, "qualifying expenditures for

21 increasing research activities in this State" means the excess

22 of qualifying expenditures for the taxable year in which

23 incurred over qualifying expenditures for the base period,

24 "qualifying expenditures for the base period" means the average

25 of the qualifying expenditures for each year in the base

26 period, and "base period" means the 3 taxable years immediately

10000SB0009ham002

- 275 -

LRB100 06347 HLH 27841 a

1 preceding the taxable year for which the determination is being

2 made.

3 Any credit in excess of the tax liability for the taxable

4 year may be carried forward. A taxpayer may elect to have the

5 unused credit shown on its final completed return carried over

6 as a credit against the tax liability for the following 5

7 taxable years or until it has been fully used, whichever occurs

8 first; provided that no credit earned in a tax year ending

9 prior to December 31, 2003 may be carried forward to any year

10 ending on or after December 31, 2003.

11 If an unused credit is carried forward to a given year from

12 2 or more earlier years, that credit arising in the earliest

13 year will be applied first against the tax liability for the

14 given year. If a tax liability for the given year still

15 remains, the credit from the next earliest year will then be

16 applied, and so on, until all credits have been used or no tax

17 liability for the given year remains. Any remaining unused

18 credit or credits then will be carried forward to the next

19 following year in which a tax liability is incurred, except

20 that no credit can be carried forward to a year which is more

21 than 5 years after the year in which the expense for which the

22 credit is given was incurred.

23 No inference shall be drawn from this amendatory Act of the

24 91st General Assembly in construing this Section for taxable

25 years beginning before January 1, 1999.

26 It is the intent of the General Assembly that the research

10000SB0009ham002

- 276 -

LRB100 06347 HLH 27841 a

1 and development credit under this subsection (k) shall apply

2 continuously for all tax years ending on or after December 31,

3 2004 and ending prior to January 1, 2022, including, but not

4 limited to, the period beginning on January 1, 2016 and ending

5 on the effective date of this amendatory Act of the 100th

6 General Assembly. All actions taken in reliance on the

7 continuation of the credit under this subsection (k) by any

8 taxpayer are hereby validated.

9 (l) Environmental Remediation Tax Credit.

10 (i) For tax years ending after December 31, 1997 and on

11 or before December 31, 2001, a taxpayer shall be allowed a

12 credit against the tax imposed by subsections (a) and (b)

13 of this Section for certain amounts paid for unreimbursed

14 eligible remediation costs, as specified in this

15 subsection. For purposes of this Section, "unreimbursed

16 eligible remediation costs" means costs approved by the

17 Illinois Environmental Protection Agency ("Agency") under

18 Section 58.14 of the Environmental Protection Act that were

19 paid in performing environmental remediation at a site for

20 which a No Further Remediation Letter was issued by the

21 Agency and recorded under Section 58.10 of the

22 Environmental Protection Act. The credit must be claimed

23 for the taxable year in which Agency approval of the

24 eligible remediation costs is granted. The credit is not

25 available to any taxpayer if the taxpayer or any related

26 party caused or contributed to, in any material respect, a

10000SB0009ham002

- 277 -

LRB100 06347 HLH 27841 a

1 release of regulated substances on, in, or under the site

2 that was identified and addressed by the remedial action

3 pursuant to the Site Remediation Program of the

4 Environmental Protection Act. After the Pollution Control

5 Board rules are adopted pursuant to the Illinois

6 Administrative Procedure Act for the administration and

7 enforcement of Section 58.9 of the Environmental

8 Protection Act, determinations as to credit availability

9 for purposes of this Section shall be made consistent with

10 those rules. For purposes of this Section, "taxpayer"

11 includes a person whose tax attributes the taxpayer has

12 succeeded to under Section 381 of the Internal Revenue Code

13 and "related party" includes the persons disallowed a

14 deduction for losses by paragraphs (b), (c), and (f)(1) of

15 Section 267 of the Internal Revenue Code by virtue of being

16 a related taxpayer, as well as any of its partners. The

17 credit allowed against the tax imposed by subsections (a)

18 and (b) shall be equal to 25% of the unreimbursed eligible

19 remediation costs in excess of $100,000 per site, except

20 that the $100,000 threshold shall not apply to any site

21 contained in an enterprise zone as determined by the

22 Department of Commerce and Community Affairs (now

23 Department of Commerce and Economic Opportunity). The

24 total credit allowed shall not exceed $40,000 per year with

25 a maximum total of $150,000 per site. For partners and

26 shareholders of subchapter S corporations, there shall be

10000SB0009ham002

- 278 -

LRB100 06347 HLH 27841 a

1 allowed a credit under this subsection to be determined in

2 accordance with the determination of income and

3 distributive share of income under Sections 702 and 704 and

4 subchapter S of the Internal Revenue Code.

5 (ii) A credit allowed under this subsection that is

6 unused in the year the credit is earned may be carried

7 forward to each of the 5 taxable years following the year

8 for which the credit is first earned until it is used. The

9 term "unused credit" does not include any amounts of

10 unreimbursed eligible remediation costs in excess of the

11 maximum credit per site authorized under paragraph (i).

12 This credit shall be applied first to the earliest year for

13 which there is a liability. If there is a credit under this

14 subsection from more than one tax year that is available to

15 offset a liability, the earliest credit arising under this

16 subsection shall be applied first. A credit allowed under

17 this subsection may be sold to a buyer as part of a sale of

18 all or part of the remediation site for which the credit

19 was granted. The purchaser of a remediation site and the

20 tax credit shall succeed to the unused credit and remaining

21 carry-forward period of the seller. To perfect the

22 transfer, the assignor shall record the transfer in the

23 chain of title for the site and provide written notice to

24 the Director of the Illinois Department of Revenue of the

25 assignor's intent to sell the remediation site and the

26 amount of the tax credit to be transferred as a portion of

10000SB0009ham002

- 279 -

LRB100 06347 HLH 27841 a

1 the sale. In no event may a credit be transferred to any

2 taxpayer if the taxpayer or a related party would not be

3 eligible under the provisions of subsection (i).

4 (iii) For purposes of this Section, the term "site"

5 shall have the same meaning as under Section 58.2 of the

6 Environmental Protection Act.

7 (m) Education expense credit. Beginning with tax years

8 ending after December 31, 1999, a taxpayer who is the custodian

9 of one or more qualifying pupils shall be allowed a credit

10 against the tax imposed by subsections (a) and (b) of this

11 Section for qualified education expenses incurred on behalf of

12 the qualifying pupils. The credit shall be equal to 25% of

13 qualified education expenses, but in no event may the total

14 credit under this subsection claimed by a family that is the

15 custodian of qualifying pupils exceed (i) $500 for tax years

16 ending prior to December 31, 2017, and (ii) $750 for tax years

17 ending on or after December 31, 2017. In no event shall a

18 credit under this subsection reduce the taxpayer's liability

19 under this Act to less than zero.Notwithstanding any other

20 provision of law, for taxable years beginning on or after

21 January 1, 2017, no taxpayer may claim a credit under this

22 subsection (m) if the taxpayer's adjusted gross income for the

23 taxable year exceeds (i) $500,000, in the case of spouses

24 filing a joint federal tax return or (ii) $250,000, in the case

25 of all other taxpayers. This subsection is exempt from the

26 provisions of Section 250 of this Act.

10000SB0009ham002

- 280 -

LRB100 06347 HLH 27841 a

1 For purposes of this subsection:

2 "Qualifying pupils" means individuals who (i) are

3 residents of the State of Illinois, (ii) are under the age of

4 21 at the close of the school year for which a credit is

5 sought, and (iii) during the school year for which a credit is

6 sought were full-time pupils enrolled in a kindergarten through

7 twelfth grade education program at any school, as defined in

8 this subsection.

9 "Qualified education expense" means the amount incurred on

10 behalf of a qualifying pupil in excess of $250 for tuition,

11 book fees, and lab fees at the school in which the pupil is

12 enrolled during the regular school year.

13 "School" means any public or nonpublic elementary or

14 secondary school in Illinois that is in compliance with Title

15 VI of the Civil Rights Act of 1964 and attendance at which

16 satisfies the requirements of Section 26-1 of the School Code,

17 except that nothing shall be construed to require a child to

18 attend any particular public or nonpublic school to qualify for

19 the credit under this Section.

20 "Custodian" means, with respect to qualifying pupils, an

21 Illinois resident who is a parent, the parents, a legal

22 guardian, or the legal guardians of the qualifying pupils.

23 (n) River Edge Redevelopment Zone site remediation tax

24 credit.

25 (i) For tax years ending on or after December 31, 2006,

26 a taxpayer shall be allowed a credit against the tax

10000SB0009ham002

- 281 -

LRB100 06347 HLH 27841 a

1 imposed by subsections (a) and (b) of this Section for

2 certain amounts paid for unreimbursed eligible remediation

3 costs, as specified in this subsection. For purposes of

4 this Section, "unreimbursed eligible remediation costs"

5 means costs approved by the Illinois Environmental

6 Protection Agency ("Agency") under Section 58.14a of the

7 Environmental Protection Act that were paid in performing

8 environmental remediation at a site within a River Edge

9 Redevelopment Zone for which a No Further Remediation

10 Letter was issued by the Agency and recorded under Section

11 58.10 of the Environmental Protection Act. The credit must

12 be claimed for the taxable year in which Agency approval of

13 the eligible remediation costs is granted. The credit is

14 not available to any taxpayer if the taxpayer or any

15 related party caused or contributed to, in any material

16 respect, a release of regulated substances on, in, or under

17 the site that was identified and addressed by the remedial

18 action pursuant to the Site Remediation Program of the

19 Environmental Protection Act. Determinations as to credit

20 availability for purposes of this Section shall be made

21 consistent with rules adopted by the Pollution Control

22 Board pursuant to the Illinois Administrative Procedure

23 Act for the administration and enforcement of Section 58.9

24 of the Environmental Protection Act. For purposes of this

25 Section, "taxpayer" includes a person whose tax attributes

26 the taxpayer has succeeded to under Section 381 of the

10000SB0009ham002

- 282 -

LRB100 06347 HLH 27841 a

1 Internal Revenue Code and "related party" includes the

2 persons disallowed a deduction for losses by paragraphs

3 (b), (c), and (f)(1) of Section 267 of the Internal Revenue

4 Code by virtue of being a related taxpayer, as well as any

5 of its partners. The credit allowed against the tax imposed

6 by subsections (a) and (b) shall be equal to 25% of the

7 unreimbursed eligible remediation costs in excess of

8 $100,000 per site.

9 (ii) A credit allowed under this subsection that is

10 unused in the year the credit is earned may be carried

11 forward to each of the 5 taxable years following the year

12 for which the credit is first earned until it is used. This

13 credit shall be applied first to the earliest year for

14 which there is a liability. If there is a credit under this

15 subsection from more than one tax year that is available to

16 offset a liability, the earliest credit arising under this

17 subsection shall be applied first. A credit allowed under

18 this subsection may be sold to a buyer as part of a sale of

19 all or part of the remediation site for which the credit

20 was granted. The purchaser of a remediation site and the

21 tax credit shall succeed to the unused credit and remaining

22 carry-forward period of the seller. To perfect the

23 transfer, the assignor shall record the transfer in the

24 chain of title for the site and provide written notice to

25 the Director of the Illinois Department of Revenue of the

26 assignor's intent to sell the remediation site and the

10000SB0009ham002

- 283 -

LRB100 06347 HLH 27841 a

1 amount of the tax credit to be transferred as a portion of

2 the sale. In no event may a credit be transferred to any

3 taxpayer if the taxpayer or a related party would not be

4 eligible under the provisions of subsection (i).

5 (iii) For purposes of this Section, the term "site"

6 shall have the same meaning as under Section 58.2 of the

7 Environmental Protection Act.

8 (o) For each of taxable years during the Compassionate Use

9 of Medical Cannabis Pilot Program, a surcharge is imposed on

10 all taxpayers on income arising from the sale or exchange of

11 capital assets, depreciable business property, real property

12 used in the trade or business, and Section 197 intangibles of

13 an organization registrant under the Compassionate Use of

14 Medical Cannabis Pilot Program Act. The amount of the surcharge

15 is equal to the amount of federal income tax liability for the

16 taxable year attributable to those sales and exchanges. The

17 surcharge imposed does not apply if:

18 (1) the medical cannabis cultivation center

19 registration, medical cannabis dispensary registration, or

20 the property of a registration is transferred as a result

21 of any of the following:

22 (A) bankruptcy, a receivership, or a debt

23 adjustment initiated by or against the initial

24 registration or the substantial owners of the initial

25 registration;

26 (B) cancellation, revocation, or termination of

10000SB0009ham002

- 284 -

LRB100 06347 HLH 27841 a

1 any registration by the Illinois Department of Public

2 Health;

3 (C) a determination by the Illinois Department of

4 Public Health that transfer of the registration is in

5 the best interests of Illinois qualifying patients as

6 defined by the Compassionate Use of Medical Cannabis

7 Pilot Program Act;

8 (D) the death of an owner of the equity interest in

9 a registrant;

10 (E) the acquisition of a controlling interest in

11 the stock or substantially all of the assets of a

12 publicly traded company;

13 (F) a transfer by a parent company to a wholly

14 owned subsidiary; or

15 (G) the transfer or sale to or by one person to

16 another person where both persons were initial owners

17 of the registration when the registration was issued;

18 or

19 (2) the cannabis cultivation center registration,

20 medical cannabis dispensary registration, or the

21 controlling interest in a registrant's property is

22 transferred in a transaction to lineal descendants in which

23 no gain or loss is recognized or as a result of a

24 transaction in accordance with Section 351 of the Internal

25 Revenue Code in which no gain or loss is recognized.

26 (Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,

10000SB0009ham002

- 285 -

LRB100 06347 HLH 27841 a

1 eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,

2 eff. 7-16-14.)

3 (35 ILCS 5/202.5)

4 Sec. 202.5. Net income attributable to the period beginning

5 prior to the first day of a month and ending after the last day

6 of the preceding month ~~January 1 of any year and ending after~~

7 ~~December 31 of the preceding year~~.

8 (a) In general. With respect to the taxable year of a

9 taxpayer beginning prior to the first day of a month and ending

10 after the last day of the preceding month ~~January 1 of any year~~

11 ~~and ending after December 31 of the preceding year~~, net income

12 for the period after the last day of the preceding month

13 ~~December 31 of the preceding year~~, is that amount that bears

14 the same ratio to the taxpayer's net income for the entire

15 taxable year as the number of days in that taxable year after

16 the last day of the preceding month ~~December 31~~ bears to the

17 total number of days in that taxable year, and the net income

18 for the period prior to the first day of the month ~~January 1~~ is

19 that amount that bears the same ratio to the taxpayer's net

20 income for the entire taxable year as the number of days in

21 that taxable year prior to the first day of the month ~~January 1~~

22 bears to the total number of days in that taxable year.

23 (b) Election to attribute income and deduction items

24 specifically to the respective portions of a taxable year prior

25 to the first day of a month and ending after the last day of the

10000SB0009ham002

- 286 -

LRB100 06347 HLH 27841 a

1 preceding month ~~January 1 of any year and after December 31 of~~

2 ~~the preceding year~~. In the case of a taxpayer with a taxable

3 year beginning prior to the first day of a month and ending

4 after the last day of the preceding month ~~January 1 of any year~~

5 ~~and ending after December 31 of the preceding year~~, the

6 taxpayer may elect, instead of the procedure established in

7 subsection (a) of this Section, to determine net income on a

8 specific accounting basis for the 2 portions of the taxable

9 year:

10 (1) from the beginning of the taxable year through the

11 last day of that apportionment period ~~December 31~~; and

12 (2) from the first day of the next apportionment period

13 ~~January 1~~ through the end of the taxable year.

14 The election provided by this subsection must be made in

15 the form and manner that the Department requires by rule, and

16 must be made no later than the due date (including any

17 extensions thereof) for the filing of the return for the

18 taxable year, and is irrevocable.

19 (c) If the taxpayer elects specific accounting under

20 subsection (b):

21 (1) there shall be taken into account in computing base

22 income for each of the 2 portions of the taxable year only

23 those items earned, received, paid, incurred or accrued in

24 each such period;

25 (2) for purposes of apportioning business income of the

26 taxpayer, the provisions in Article 3 shall be applied on

10000SB0009ham002

- 287 -

LRB100 06347 HLH 27841 a

1 the basis of the taxpayer's full taxable year, without

2 regard to this Section;

3 (3) the exemption provided by Section 204 shall be

4 divided between the respective periods in amounts which

5 bear the same ratio to the total exemption allowable under

6 Section 204 (determined without regard to this Section) as

7 the total number of days in each period bears to the total

8 number of days in the taxable year;

9 (4) for purposes of this subsection, net income may not

10 be negative for either of the two portions of the taxable

11 year and positive for the other; if net income for one

12 portion of the taxable year would be positive and net

13 income for the other portion would otherwise be negative,

14 the net income for the entire taxable year shall be

15 attributed to the portion of the taxable year with positive

16 net income and the net income for the other portion of the

17 taxable year shall be zero; and

18 (5) the net loss carryforward deduction for the taxable

19 year under Section 207 may not exceed combined net income

20 of both portions of the taxable year, and shall be used

21 against the net income of the portion of the taxable year

22 from the beginning of the taxable year through the last day

23 of the preceding month ~~December 31~~ before any remaining

24 amount is used against the net income of the latter portion

25 of the taxable year.

26 (Source: P.A. 96-1496, eff. 1-13-11.)

10000SB0009ham002

- 288 -

LRB100 06347 HLH 27841 a

1 (35 ILCS 5/203) (from Ch. 120, par. 2-203)

2 Sec. 203. Base income defined.

3 (a) Individuals.

4 (1) In general. In the case of an individual, base

5 income means an amount equal to the taxpayer's adjusted

6 gross income for the taxable year as modified by paragraph

7 (2).

8 (2) Modifications. The adjusted gross income referred

9 to in paragraph (1) shall be modified by adding thereto the

10 sum of the following amounts:

11 (A) An amount equal to all amounts paid or accrued

12 to the taxpayer as interest or dividends during the

13 taxable year to the extent excluded from gross income

14 in the computation of adjusted gross income, except

15 stock dividends of qualified public utilities

16 described in Section 305(e) of the Internal Revenue

17 Code;

18 (B) An amount equal to the amount of tax imposed by

19 this Act to the extent deducted from gross income in

20 the computation of adjusted gross income for the

21 taxable year;

22 (C) An amount equal to the amount received during

23 the taxable year as a recovery or refund of real

24 property taxes paid with respect to the taxpayer's

25 principal residence under the Revenue Act of 1939 and

10000SB0009ham002

- 289 -

LRB100 06347 HLH 27841 a

1 for which a deduction was previously taken under

2 subparagraph (L) of this paragraph (2) prior to July 1,

3 1991, the retrospective application date of Article 4

4 of Public Act 87-17. In the case of multi-unit or

5 multi-use structures and farm dwellings, the taxes on

6 the taxpayer's principal residence shall be that

7 portion of the total taxes for the entire property

8 which is attributable to such principal residence;

9 (D) An amount equal to the amount of the capital

10 gain deduction allowable under the Internal Revenue

11 Code, to the extent deducted from gross income in the

12 computation of adjusted gross income;

13 (D-5) An amount, to the extent not included in

14 adjusted gross income, equal to the amount of money

15 withdrawn by the taxpayer in the taxable year from a

16 medical care savings account and the interest earned on

17 the account in the taxable year of a withdrawal

18 pursuant to subsection (b) of Section 20 of the Medical

19 Care Savings Account Act or subsection (b) of Section

20 20 of the Medical Care Savings Account Act of 2000;

21 (D-10) For taxable years ending after December 31,

22 1997, an amount equal to any eligible remediation costs

23 that the individual deducted in computing adjusted

24 gross income and for which the individual claims a

25 credit under subsection (l) of Section 201;

26 (D-15) For taxable years 2001 and thereafter, an

10000SB0009ham002

- 290 -

LRB100 06347 HLH 27841 a

1 amount equal to the bonus depreciation deduction taken

2 on the taxpayer's federal income tax return for the

3 taxable year under subsection (k) of Section 168 of the

4 Internal Revenue Code;

5 (D-16) If the taxpayer sells, transfers, abandons,

6 or otherwise disposes of property for which the

7 taxpayer was required in any taxable year to make an

8 addition modification under subparagraph (D-15), then

9 an amount equal to the aggregate amount of the

10 deductions taken in all taxable years under

11 subparagraph (Z) with respect to that property.

12 If the taxpayer continues to own property through

13 the last day of the last tax year for which the

14 taxpayer may claim a depreciation deduction for

15 federal income tax purposes and for which the taxpayer

16 was allowed in any taxable year to make a subtraction

17 modification under subparagraph (Z), then an amount

18 equal to that subtraction modification.

19 The taxpayer is required to make the addition

20 modification under this subparagraph only once with

21 respect to any one piece of property;

22 (D-17) An amount equal to the amount otherwise

23 allowed as a deduction in computing base income for

24 interest paid, accrued, or incurred, directly or

25 indirectly, (i) for taxable years ending on or after

26 December 31, 2004, to a foreign person who would be a

10000SB0009ham002

- 291 -

LRB100 06347 HLH 27841 a

1 member of the same unitary business group but for the

2 fact that foreign person's business activity outside

3 the United States is 80% or more of the foreign

4 person's total business activity and (ii) for taxable

5 years ending on or after December 31, 2008, to a person

6 who would be a member of the same unitary business

7 group but for the fact that the person is prohibited

8 under Section 1501(a)(27) from being included in the

9 unitary business group because he or she is ordinarily

10 required to apportion business income under different

11 subsections of Section 304. The addition modification

12 required by this subparagraph shall be reduced to the

13 extent that dividends were included in base income of

14 the unitary group for the same taxable year and

15 received by the taxpayer or by a member of the

16 taxpayer's unitary business group (including amounts

17 included in gross income under Sections 951 through 964

18 of the Internal Revenue Code and amounts included in

19 gross income under Section 78 of the Internal Revenue

20 Code) with respect to the stock of the same person to

21 whom the interest was paid, accrued, or incurred.

22 This paragraph shall not apply to the following:

23 (i) an item of interest paid, accrued, or

24 incurred, directly or indirectly, to a person who

25 is subject in a foreign country or state, other

26 than a state which requires mandatory unitary

10000SB0009ham002

- 292 -

LRB100 06347 HLH 27841 a

1 reporting, to a tax on or measured by net income

2 with respect to such interest; or

3 (ii) an item of interest paid, accrued, or

4 incurred, directly or indirectly, to a person if

5 the taxpayer can establish, based on a

6 preponderance of the evidence, both of the

7 following:

8 (a) the person, during the same taxable

9 year, paid, accrued, or incurred, the interest

10 to a person that is not a related member, and

11 (b) the transaction giving rise to the

12 interest expense between the taxpayer and the

13 person did not have as a principal purpose the

14 avoidance of Illinois income tax, and is paid

15 pursuant to a contract or agreement that

16 reflects an arm's-length interest rate and

17 terms; or

18 (iii) the taxpayer can establish, based on

19 clear and convincing evidence, that the interest

20 paid, accrued, or incurred relates to a contract or

21 agreement entered into at arm's-length rates and

22 terms and the principal purpose for the payment is

23 not federal or Illinois tax avoidance; or

24 (iv) an item of interest paid, accrued, or

25 incurred, directly or indirectly, to a person if

26 the taxpayer establishes by clear and convincing

10000SB0009ham002

- 293 -

LRB100 06347 HLH 27841 a

1 evidence that the adjustments are unreasonable; or

2 if the taxpayer and the Director agree in writing

3 to the application or use of an alternative method

4 of apportionment under Section 304(f).

5 Nothing in this subsection shall preclude the

6 Director from making any other adjustment

7 otherwise allowed under Section 404 of this Act for

8 any tax year beginning after the effective date of

9 this amendment provided such adjustment is made

10 pursuant to regulation adopted by the Department

11 and such regulations provide methods and standards

12 by which the Department will utilize its authority

13 under Section 404 of this Act;

14 (D-18) An amount equal to the amount of intangible

15 expenses and costs otherwise allowed as a deduction in

16 computing base income, and that were paid, accrued, or

17 incurred, directly or indirectly, (i) for taxable

18 years ending on or after December 31, 2004, to a

19 foreign person who would be a member of the same

20 unitary business group but for the fact that the

21 foreign person's business activity outside the United

22 States is 80% or more of that person's total business

23 activity and (ii) for taxable years ending on or after

24 December 31, 2008, to a person who would be a member of

25 the same unitary business group but for the fact that

26 the person is prohibited under Section 1501(a)(27)

10000SB0009ham002

- 294 -

LRB100 06347 HLH 27841 a

1 from being included in the unitary business group

2 because he or she is ordinarily required to apportion

3 business income under different subsections of Section

4 304. The addition modification required by this

5 subparagraph shall be reduced to the extent that

6 dividends were included in base income of the unitary

7 group for the same taxable year and received by the

8 taxpayer or by a member of the taxpayer's unitary

9 business group (including amounts included in gross

10 income under Sections 951 through 964 of the Internal

11 Revenue Code and amounts included in gross income under

12 Section 78 of the Internal Revenue Code) with respect

13 to the stock of the same person to whom the intangible

14 expenses and costs were directly or indirectly paid,

15 incurred, or accrued. The preceding sentence does not

16 apply to the extent that the same dividends caused a

17 reduction to the addition modification required under

18 Section 203(a)(2)(D-17) of this Act. As used in this

19 subparagraph, the term "intangible expenses and costs"

20 includes (1) expenses, losses, and costs for, or

21 related to, the direct or indirect acquisition, use,

22 maintenance or management, ownership, sale, exchange,

23 or any other disposition of intangible property; (2)

24 losses incurred, directly or indirectly, from

25 factoring transactions or discounting transactions;

26 (3) royalty, patent, technical, and copyright fees;

10000SB0009ham002

- 295 -

LRB100 06347 HLH 27841 a

1 (4) licensing fees; and (5) other similar expenses and

2 costs. For purposes of this subparagraph, "intangible

3 property" includes patents, patent applications, trade

4 names, trademarks, service marks, copyrights, mask

5 works, trade secrets, and similar types of intangible

6 assets.

7 This paragraph shall not apply to the following:

8 (i) any item of intangible expenses or costs

9 paid, accrued, or incurred, directly or

10 indirectly, from a transaction with a person who is

11 subject in a foreign country or state, other than a

12 state which requires mandatory unitary reporting,

13 to a tax on or measured by net income with respect

14 to such item; or

15 (ii) any item of intangible expense or cost

16 paid, accrued, or incurred, directly or

17 indirectly, if the taxpayer can establish, based

18 on a preponderance of the evidence, both of the

19 following:

20 (a) the person during the same taxable

21 year paid, accrued, or incurred, the

22 intangible expense or cost to a person that is

23 not a related member, and

24 (b) the transaction giving rise to the

25 intangible expense or cost between the

26 taxpayer and the person did not have as a

10000SB0009ham002

- 296 -

LRB100 06347 HLH 27841 a

1 principal purpose the avoidance of Illinois

2 income tax, and is paid pursuant to a contract

3 or agreement that reflects arm's-length terms;

4 or

5 (iii) any item of intangible expense or cost

6 paid, accrued, or incurred, directly or

7 indirectly, from a transaction with a person if the

8 taxpayer establishes by clear and convincing

9 evidence, that the adjustments are unreasonable;

10 or if the taxpayer and the Director agree in

11 writing to the application or use of an alternative

12 method of apportionment under Section 304(f);

13 Nothing in this subsection shall preclude the

14 Director from making any other adjustment

15 otherwise allowed under Section 404 of this Act for

16 any tax year beginning after the effective date of

17 this amendment provided such adjustment is made

18 pursuant to regulation adopted by the Department

19 and such regulations provide methods and standards

20 by which the Department will utilize its authority

21 under Section 404 of this Act;

22 (D-19) For taxable years ending on or after

23 December 31, 2008, an amount equal to the amount of

24 insurance premium expenses and costs otherwise allowed

25 as a deduction in computing base income, and that were

26 paid, accrued, or incurred, directly or indirectly, to

10000SB0009ham002

- 297 -

LRB100 06347 HLH 27841 a

1 a person who would be a member of the same unitary

2 business group but for the fact that the person is

3 prohibited under Section 1501(a)(27) from being

4 included in the unitary business group because he or

5 she is ordinarily required to apportion business

6 income under different subsections of Section 304. The

7 addition modification required by this subparagraph

8 shall be reduced to the extent that dividends were

9 included in base income of the unitary group for the

10 same taxable year and received by the taxpayer or by a

11 member of the taxpayer's unitary business group

12 (including amounts included in gross income under

13 Sections 951 through 964 of the Internal Revenue Code

14 and amounts included in gross income under Section 78

15 of the Internal Revenue Code) with respect to the stock

16 of the same person to whom the premiums and costs were

17 directly or indirectly paid, incurred, or accrued. The

18 preceding sentence does not apply to the extent that

19 the same dividends caused a reduction to the addition

20 modification required under Section 203(a)(2)(D-17) or

21 Section 203(a)(2)(D-18) of this Act.

22 (D-20) For taxable years beginning on or after

23 January 1, 2002 and ending on or before December 31,

24 2006, in the case of a distribution from a qualified

25 tuition program under Section 529 of the Internal

26 Revenue Code, other than (i) a distribution from a

10000SB0009ham002

- 298 -

LRB100 06347 HLH 27841 a

1 College Savings Pool created under Section 16.5 of the

2 State Treasurer Act or (ii) a distribution from the

3 Illinois Prepaid Tuition Trust Fund, an amount equal to

4 the amount excluded from gross income under Section

5 529(c)(3)(B). For taxable years beginning on or after

6 January 1, 2007, in the case of a distribution from a

7 qualified tuition program under Section 529 of the

8 Internal Revenue Code, other than (i) a distribution

9 from a College Savings Pool created under Section 16.5

10 of the State Treasurer Act, (ii) a distribution from

11 the Illinois Prepaid Tuition Trust Fund, or (iii) a

12 distribution from a qualified tuition program under

13 Section 529 of the Internal Revenue Code that (I)

14 adopts and determines that its offering materials

15 comply with the College Savings Plans Network's

16 disclosure principles and (II) has made reasonable

17 efforts to inform in-state residents of the existence

18 of in-state qualified tuition programs by informing

19 Illinois residents directly and, where applicable, to

20 inform financial intermediaries distributing the

21 program to inform in-state residents of the existence

22 of in-state qualified tuition programs at least

23 annually, an amount equal to the amount excluded from

24 gross income under Section 529(c)(3)(B).

25 For the purposes of this subparagraph (D-20), a

26 qualified tuition program has made reasonable efforts

10000SB0009ham002

- 299 -

LRB100 06347 HLH 27841 a

1 if it makes disclosures (which may use the term

2 "in-state program" or "in-state plan" and need not

3 specifically refer to Illinois or its qualified

4 programs by name) (i) directly to prospective

5 participants in its offering materials or makes a

6 public disclosure, such as a website posting; and (ii)

7 where applicable, to intermediaries selling the

8 out-of-state program in the same manner that the

9 out-of-state program distributes its offering

10 materials;

11 (D-21) For taxable years beginning on or after

12 January 1, 2007, in the case of transfer of moneys from

13 a qualified tuition program under Section 529 of the

14 Internal Revenue Code that is administered by the State

15 to an out-of-state program, an amount equal to the

16 amount of moneys previously deducted from base income

17 under subsection (a)(2)(Y) of this Section;

18 (D-22) For taxable years beginning on or after

19 January 1, 2009, in the case of a nonqualified

20 withdrawal or refund of moneys from a qualified tuition

21 program under Section 529 of the Internal Revenue Code

22 administered by the State that is not used for

23 qualified expenses at an eligible education

24 institution, an amount equal to the contribution

25 component of the nonqualified withdrawal or refund

26 that was previously deducted from base income under

10000SB0009ham002

- 300 -

LRB100 06347 HLH 27841 a

1 subsection (a)(2)(y) of this Section, provided that

2 the withdrawal or refund did not result from the

3 beneficiary's death or disability;

4 (D-23) An amount equal to the credit allowable to

5 the taxpayer under Section 218(a) of this Act,

6 determined without regard to Section 218(c) of this

7 Act;

8 (D-24) For taxable years ending on or after

9 December 31, 2017, an amount equal to the deduction

10 allowed under Section 199 of the Internal Revenue Code

11 for the taxable year;

12 and by deducting from the total so obtained the sum of the

13 following amounts:

14 (E) For taxable years ending before December 31,

15 2001, any amount included in such total in respect of

16 any compensation (including but not limited to any

17 compensation paid or accrued to a serviceman while a

18 prisoner of war or missing in action) paid to a

19 resident by reason of being on active duty in the Armed

20 Forces of the United States and in respect of any

21 compensation paid or accrued to a resident who as a

22 governmental employee was a prisoner of war or missing

23 in action, and in respect of any compensation paid to a

24 resident in 1971 or thereafter for annual training

25 performed pursuant to Sections 502 and 503, Title 32,

26 United States Code as a member of the Illinois National

10000SB0009ham002

- 301 -

LRB100 06347 HLH 27841 a

1 Guard or, beginning with taxable years ending on or

2 after December 31, 2007, the National Guard of any

3 other state. For taxable years ending on or after

4 December 31, 2001, any amount included in such total in

5 respect of any compensation (including but not limited

6 to any compensation paid or accrued to a serviceman

7 while a prisoner of war or missing in action) paid to a

8 resident by reason of being a member of any component

9 of the Armed Forces of the United States and in respect

10 of any compensation paid or accrued to a resident who

11 as a governmental employee was a prisoner of war or

12 missing in action, and in respect of any compensation

13 paid to a resident in 2001 or thereafter by reason of

14 being a member of the Illinois National Guard or,

15 beginning with taxable years ending on or after

16 December 31, 2007, the National Guard of any other

17 state. The provisions of this subparagraph (E) are

18 exempt from the provisions of Section 250;

19 (F) An amount equal to all amounts included in such

20 total pursuant to the provisions of Sections 402(a),

21 402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the

22 Internal Revenue Code, or included in such total as

23 distributions under the provisions of any retirement

24 or disability plan for employees of any governmental

25 agency or unit, or retirement payments to retired

26 partners, which payments are excluded in computing net

10000SB0009ham002

- 302 -

LRB100 06347 HLH 27841 a

1 earnings from self employment by Section 1402 of the

2 Internal Revenue Code and regulations adopted pursuant

3 thereto;

4 (G) The valuation limitation amount;

5 (H) An amount equal to the amount of any tax

6 imposed by this Act which was refunded to the taxpayer

7 and included in such total for the taxable year;

8 (I) An amount equal to all amounts included in such

9 total pursuant to the provisions of Section 111 of the

10 Internal Revenue Code as a recovery of items previously

11 deducted from adjusted gross income in the computation

12 of taxable income;

13 (J) An amount equal to those dividends included in

14 such total which were paid by a corporation which

15 conducts business operations in a River Edge

16 Redevelopment Zone or zones created under the River

17 Edge Redevelopment Zone Act, and conducts

18 substantially all of its operations in a River Edge

19 Redevelopment Zone or zones. This subparagraph (J) is

20 exempt from the provisions of Section 250;

21 (K) An amount equal to those dividends included in

22 such total that were paid by a corporation that

23 conducts business operations in a federally designated

24 Foreign Trade Zone or Sub-Zone and that is designated a

25 High Impact Business located in Illinois; provided

26 that dividends eligible for the deduction provided in

10000SB0009ham002

- 303 -

LRB100 06347 HLH 27841 a

1 subparagraph (J) of paragraph (2) of this subsection

2 shall not be eligible for the deduction provided under

3 this subparagraph (K);

4 (L) For taxable years ending after December 31,

5 1983, an amount equal to all social security benefits

6 and railroad retirement benefits included in such

7 total pursuant to Sections 72(r) and 86 of the Internal

8 Revenue Code;

9 (M) With the exception of any amounts subtracted

10 under subparagraph (N), an amount equal to the sum of

11 all amounts disallowed as deductions by (i) Sections

12 171(a) (2), and 265(2) of the Internal Revenue Code,

13 and all amounts of expenses allocable to interest and

14 disallowed as deductions by Section 265(1) of the

15 Internal Revenue Code; and (ii) for taxable years

16 ending on or after August 13, 1999, Sections 171(a)(2),

17 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue

18 Code, plus, for taxable years ending on or after

19 December 31, 2011, Section 45G(e)(3) of the Internal

20 Revenue Code and, for taxable years ending on or after

21 December 31, 2008, any amount included in gross income

22 under Section 87 of the Internal Revenue Code; the

23 provisions of this subparagraph are exempt from the

24 provisions of Section 250;

25 (N) An amount equal to all amounts included in such

26 total which are exempt from taxation by this State

10000SB0009ham002

- 304 -

LRB100 06347 HLH 27841 a

1 either by reason of its statutes or Constitution or by

2 reason of the Constitution, treaties or statutes of the

3 United States; provided that, in the case of any

4 statute of this State that exempts income derived from

5 bonds or other obligations from the tax imposed under

6 this Act, the amount exempted shall be the interest net

7 of bond premium amortization;

8 (O) An amount equal to any contribution made to a

9 job training project established pursuant to the Tax

10 Increment Allocation Redevelopment Act;

11 (P) An amount equal to the amount of the deduction

12 used to compute the federal income tax credit for

13 restoration of substantial amounts held under claim of

14 right for the taxable year pursuant to Section 1341 of

15 the Internal Revenue Code or of any itemized deduction

16 taken from adjusted gross income in the computation of

17 taxable income for restoration of substantial amounts

18 held under claim of right for the taxable year;

19 (Q) An amount equal to any amounts included in such

20 total, received by the taxpayer as an acceleration in

21 the payment of life, endowment or annuity benefits in

22 advance of the time they would otherwise be payable as

23 an indemnity for a terminal illness;

24 (R) An amount equal to the amount of any federal or

25 State bonus paid to veterans of the Persian Gulf War;

26 (S) An amount, to the extent included in adjusted

10000SB0009ham002

- 305 -

LRB100 06347 HLH 27841 a

1 gross income, equal to the amount of a contribution

2 made in the taxable year on behalf of the taxpayer to a

3 medical care savings account established under the

4 Medical Care Savings Account Act or the Medical Care

5 Savings Account Act of 2000 to the extent the

6 contribution is accepted by the account administrator

7 as provided in that Act;

8 (T) An amount, to the extent included in adjusted

9 gross income, equal to the amount of interest earned in

10 the taxable year on a medical care savings account

11 established under the Medical Care Savings Account Act

12 or the Medical Care Savings Account Act of 2000 on

13 behalf of the taxpayer, other than interest added

14 pursuant to item (D-5) of this paragraph (2);

15 (U) For one taxable year beginning on or after

16 January 1, 1994, an amount equal to the total amount of

17 tax imposed and paid under subsections (a) and (b) of

18 Section 201 of this Act on grant amounts received by

19 the taxpayer under the Nursing Home Grant Assistance

20 Act during the taxpayer's taxable years 1992 and 1993;

21 (V) Beginning with tax years ending on or after

22 December 31, 1995 and ending with tax years ending on

23 or before December 31, 2004, an amount equal to the

24 amount paid by a taxpayer who is a self-employed

25 taxpayer, a partner of a partnership, or a shareholder

26 in a Subchapter S corporation for health insurance or

10000SB0009ham002

- 306 -

LRB100 06347 HLH 27841 a

1 long-term care insurance for that taxpayer or that

2 taxpayer's spouse or dependents, to the extent that the

3 amount paid for that health insurance or long-term care

4 insurance may be deducted under Section 213 of the

5 Internal Revenue Code, has not been deducted on the

6 federal income tax return of the taxpayer, and does not

7 exceed the taxable income attributable to that

8 taxpayer's income, self-employment income, or

9 Subchapter S corporation income; except that no

10 deduction shall be allowed under this item (V) if the

11 taxpayer is eligible to participate in any health

12 insurance or long-term care insurance plan of an

13 employer of the taxpayer or the taxpayer's spouse. The

14 amount of the health insurance and long-term care

15 insurance subtracted under this item (V) shall be

16 determined by multiplying total health insurance and

17 long-term care insurance premiums paid by the taxpayer

18 times a number that represents the fractional

19 percentage of eligible medical expenses under Section

20 213 of the Internal Revenue Code of 1986 not actually

21 deducted on the taxpayer's federal income tax return;

22 (W) For taxable years beginning on or after January

23 1, 1998, all amounts included in the taxpayer's federal

24 gross income in the taxable year from amounts converted

25 from a regular IRA to a Roth IRA. This paragraph is

26 exempt from the provisions of Section 250;

10000SB0009ham002

- 307 -

LRB100 06347 HLH 27841 a

1 (X) For taxable year 1999 and thereafter, an amount

2 equal to the amount of any (i) distributions, to the

3 extent includible in gross income for federal income

4 tax purposes, made to the taxpayer because of his or

5 her status as a victim of persecution for racial or

6 religious reasons by Nazi Germany or any other Axis

7 regime or as an heir of the victim and (ii) items of

8 income, to the extent includible in gross income for

9 federal income tax purposes, attributable to, derived

10 from or in any way related to assets stolen from,

11 hidden from, or otherwise lost to a victim of

12 persecution for racial or religious reasons by Nazi

13 Germany or any other Axis regime immediately prior to,

14 during, and immediately after World War II, including,

15 but not limited to, interest on the proceeds receivable

16 as insurance under policies issued to a victim of

17 persecution for racial or religious reasons by Nazi

18 Germany or any other Axis regime by European insurance

19 companies immediately prior to and during World War II;

20 provided, however, this subtraction from federal

21 adjusted gross income does not apply to assets acquired

22 with such assets or with the proceeds from the sale of

23 such assets; provided, further, this paragraph shall

24 only apply to a taxpayer who was the first recipient of

25 such assets after their recovery and who is a victim of

26 persecution for racial or religious reasons by Nazi

10000SB0009ham002

- 308 -

LRB100 06347 HLH 27841 a

1 Germany or any other Axis regime or as an heir of the

2 victim. The amount of and the eligibility for any

3 public assistance, benefit, or similar entitlement is

4 not affected by the inclusion of items (i) and (ii) of

5 this paragraph in gross income for federal income tax

6 purposes. This paragraph is exempt from the provisions

7 of Section 250;

8 (Y) For taxable years beginning on or after January

9 1, 2002 and ending on or before December 31, 2004,

10 moneys contributed in the taxable year to a College

11 Savings Pool account under Section 16.5 of the State

12 Treasurer Act, except that amounts excluded from gross

13 income under Section 529(c)(3)(C)(i) of the Internal

14 Revenue Code shall not be considered moneys

15 contributed under this subparagraph (Y). For taxable

16 years beginning on or after January 1, 2005, a maximum

17 of $10,000 contributed in the taxable year to (i) a

18 College Savings Pool account under Section 16.5 of the

19 State Treasurer Act or (ii) the Illinois Prepaid

20 Tuition Trust Fund, except that amounts excluded from

21 gross income under Section 529(c)(3)(C)(i) of the

22 Internal Revenue Code shall not be considered moneys

23 contributed under this subparagraph (Y). For purposes

24 of this subparagraph, contributions made by an

25 employer on behalf of an employee, or matching

26 contributions made by an employee, shall be treated as

10000SB0009ham002

- 309 -

LRB100 06347 HLH 27841 a

1 made by the employee. This subparagraph (Y) is exempt

2 from the provisions of Section 250;

3 (Z) For taxable years 2001 and thereafter, for the

4 taxable year in which the bonus depreciation deduction

5 is taken on the taxpayer's federal income tax return

6 under subsection (k) of Section 168 of the Internal

7 Revenue Code and for each applicable taxable year

8 thereafter, an amount equal to "x", where:

9 (1) "y" equals the amount of the depreciation

10 deduction taken for the taxable year on the

11 taxpayer's federal income tax return on property

12 for which the bonus depreciation deduction was

13 taken in any year under subsection (k) of Section

14 168 of the Internal Revenue Code, but not including

15 the bonus depreciation deduction;

16 (2) for taxable years ending on or before

17 December 31, 2005, "x" equals "y" multiplied by 30

18 and then divided by 70 (or "y" multiplied by

19 0.429); and

20 (3) for taxable years ending after December

21 31, 2005:

22 (i) for property on which a bonus

23 depreciation deduction of 30% of the adjusted

24 basis was taken, "x" equals "y" multiplied by

25 30 and then divided by 70 (or "y" multiplied by

26 0.429); and

10000SB0009ham002

- 310 -

LRB100 06347 HLH 27841 a

1 (ii) for property on which a bonus

2 depreciation deduction of 50% of the adjusted

3 basis was taken, "x" equals "y" multiplied by

4 1.0.

5 The aggregate amount deducted under this

6 subparagraph in all taxable years for any one piece of

7 property may not exceed the amount of the bonus

8 depreciation deduction taken on that property on the

9 taxpayer's federal income tax return under subsection

10 (k) of Section 168 of the Internal Revenue Code. This

11 subparagraph (Z) is exempt from the provisions of

12 Section 250;

13 (AA) If the taxpayer sells, transfers, abandons,

14 or otherwise disposes of property for which the

15 taxpayer was required in any taxable year to make an

16 addition modification under subparagraph (D-15), then

17 an amount equal to that addition modification.

18 If the taxpayer continues to own property through

19 the last day of the last tax year for which the

20 taxpayer may claim a depreciation deduction for

21 federal income tax purposes and for which the taxpayer

22 was required in any taxable year to make an addition

23 modification under subparagraph (D-15), then an amount

24 equal to that addition modification.

25 The taxpayer is allowed to take the deduction under

26 this subparagraph only once with respect to any one

10000SB0009ham002

- 311 -

LRB100 06347 HLH 27841 a

1 piece of property.

2 This subparagraph (AA) is exempt from the

3 provisions of Section 250;

4 (BB) Any amount included in adjusted gross income,

5 other than salary, received by a driver in a

6 ridesharing arrangement using a motor vehicle;

7 (CC) The amount of (i) any interest income (net of

8 the deductions allocable thereto) taken into account

9 for the taxable year with respect to a transaction with

10 a taxpayer that is required to make an addition

11 modification with respect to such transaction under

12 Section 203(a)(2)(D-17), 203(b)(2)(E-12),

13 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

14 the amount of that addition modification, and (ii) any

15 income from intangible property (net of the deductions

16 allocable thereto) taken into account for the taxable

17 year with respect to a transaction with a taxpayer that

18 is required to make an addition modification with

19 respect to such transaction under Section

20 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

21 203(d)(2)(D-8), but not to exceed the amount of that

22 addition modification. This subparagraph (CC) is

23 exempt from the provisions of Section 250;

24 (DD) An amount equal to the interest income taken

25 into account for the taxable year (net of the

26 deductions allocable thereto) with respect to

10000SB0009ham002

- 312 -

LRB100 06347 HLH 27841 a

1 transactions with (i) a foreign person who would be a

2 member of the taxpayer's unitary business group but for

3 the fact that the foreign person's business activity

4 outside the United States is 80% or more of that

5 person's total business activity and (ii) for taxable

6 years ending on or after December 31, 2008, to a person

7 who would be a member of the same unitary business

8 group but for the fact that the person is prohibited

9 under Section 1501(a)(27) from being included in the

10 unitary business group because he or she is ordinarily

11 required to apportion business income under different

12 subsections of Section 304, but not to exceed the

13 addition modification required to be made for the same

14 taxable year under Section 203(a)(2)(D-17) for

15 interest paid, accrued, or incurred, directly or

16 indirectly, to the same person. This subparagraph (DD)

17 is exempt from the provisions of Section 250;

18 (EE) An amount equal to the income from intangible

19 property taken into account for the taxable year (net

20 of the deductions allocable thereto) with respect to

21 transactions with (i) a foreign person who would be a

22 member of the taxpayer's unitary business group but for

23 the fact that the foreign person's business activity

24 outside the United States is 80% or more of that

25 person's total business activity and (ii) for taxable

26 years ending on or after December 31, 2008, to a person

10000SB0009ham002

- 313 -

LRB100 06347 HLH 27841 a

1 who would be a member of the same unitary business

2 group but for the fact that the person is prohibited

3 under Section 1501(a)(27) from being included in the

4 unitary business group because he or she is ordinarily

5 required to apportion business income under different

6 subsections of Section 304, but not to exceed the

7 addition modification required to be made for the same

8 taxable year under Section 203(a)(2)(D-18) for

9 intangible expenses and costs paid, accrued, or

10 incurred, directly or indirectly, to the same foreign

11 person. This subparagraph (EE) is exempt from the

12 provisions of Section 250;

13 (FF) An amount equal to any amount awarded to the

14 taxpayer during the taxable year by the Court of Claims

15 under subsection (c) of Section 8 of the Court of

16 Claims Act for time unjustly served in a State prison.

17 This subparagraph (FF) is exempt from the provisions of

18 Section 250; and

19 (GG) For taxable years ending on or after December

20 31, 2011, in the case of a taxpayer who was required to

21 add back any insurance premiums under Section

22 203(a)(2)(D-19), such taxpayer may elect to subtract

23 that part of a reimbursement received from the

24 insurance company equal to the amount of the expense or

25 loss (including expenses incurred by the insurance

26 company) that would have been taken into account as a

10000SB0009ham002

- 314 -

LRB100 06347 HLH 27841 a

1 deduction for federal income tax purposes if the

2 expense or loss had been uninsured. If a taxpayer makes

3 the election provided for by this subparagraph (GG),

4 the insurer to which the premiums were paid must add

5 back to income the amount subtracted by the taxpayer

6 pursuant to this subparagraph (GG). This subparagraph

7 (GG) is exempt from the provisions of Section 250.

8 (b) Corporations.

9 (1) In general. In the case of a corporation, base

10 income means an amount equal to the taxpayer's taxable

11 income for the taxable year as modified by paragraph (2).

12 (2) Modifications. The taxable income referred to in

13 paragraph (1) shall be modified by adding thereto the sum

14 of the following amounts:

15 (A) An amount equal to all amounts paid or accrued

16 to the taxpayer as interest and all distributions

17 received from regulated investment companies during

18 the taxable year to the extent excluded from gross

19 income in the computation of taxable income;

20 (B) An amount equal to the amount of tax imposed by

21 this Act to the extent deducted from gross income in

22 the computation of taxable income for the taxable year;

23 (C) In the case of a regulated investment company,

24 an amount equal to the excess of (i) the net long-term

25 capital gain for the taxable year, over (ii) the amount

10000SB0009ham002

- 315 -

LRB100 06347 HLH 27841 a

1 of the capital gain dividends designated as such in

2 accordance with Section 852(b)(3)(C) of the Internal

3 Revenue Code and any amount designated under Section

4 852(b)(3)(D) of the Internal Revenue Code,

5 attributable to the taxable year (this amendatory Act

6 of 1995 (Public Act 89-89) is declarative of existing

7 law and is not a new enactment);

8 (D) The amount of any net operating loss deduction

9 taken in arriving at taxable income, other than a net

10 operating loss carried forward from a taxable year

11 ending prior to December 31, 1986;

12 (E) For taxable years in which a net operating loss

13 carryback or carryforward from a taxable year ending

14 prior to December 31, 1986 is an element of taxable

15 income under paragraph (1) of subsection (e) or

16 subparagraph (E) of paragraph (2) of subsection (e),

17 the amount by which addition modifications other than

18 those provided by this subparagraph (E) exceeded

19 subtraction modifications in such earlier taxable

20 year, with the following limitations applied in the

21 order that they are listed:

22 (i) the addition modification relating to the

23 net operating loss carried back or forward to the

24 taxable year from any taxable year ending prior to

25 December 31, 1986 shall be reduced by the amount of

26 addition modification under this subparagraph (E)

10000SB0009ham002

- 316 -

LRB100 06347 HLH 27841 a

1 which related to that net operating loss and which

2 was taken into account in calculating the base

3 income of an earlier taxable year, and

4 (ii) the addition modification relating to the

5 net operating loss carried back or forward to the

6 taxable year from any taxable year ending prior to

7 December 31, 1986 shall not exceed the amount of

8 such carryback or carryforward;

9 For taxable years in which there is a net operating

10 loss carryback or carryforward from more than one other

11 taxable year ending prior to December 31, 1986, the

12 addition modification provided in this subparagraph

13 (E) shall be the sum of the amounts computed

14 independently under the preceding provisions of this

15 subparagraph (E) for each such taxable year;

16 (E-5) For taxable years ending after December 31,

17 1997, an amount equal to any eligible remediation costs

18 that the corporation deducted in computing adjusted

19 gross income and for which the corporation claims a

20 credit under subsection (l) of Section 201;

21 (E-10) For taxable years 2001 and thereafter, an

22 amount equal to the bonus depreciation deduction taken

23 on the taxpayer's federal income tax return for the

24 taxable year under subsection (k) of Section 168 of the

25 Internal Revenue Code;

26 (E-11) If the taxpayer sells, transfers, abandons,

10000SB0009ham002

- 317 -

LRB100 06347 HLH 27841 a

1 or otherwise disposes of property for which the

2 taxpayer was required in any taxable year to make an

3 addition modification under subparagraph (E-10), then

4 an amount equal to the aggregate amount of the

5 deductions taken in all taxable years under

6 subparagraph (T) with respect to that property.

7 If the taxpayer continues to own property through

8 the last day of the last tax year for which the

9 taxpayer may claim a depreciation deduction for

10 federal income tax purposes and for which the taxpayer

11 was allowed in any taxable year to make a subtraction

12 modification under subparagraph (T), then an amount

13 equal to that subtraction modification.

14 The taxpayer is required to make the addition

15 modification under this subparagraph only once with

16 respect to any one piece of property;

17 (E-12) An amount equal to the amount otherwise

18 allowed as a deduction in computing base income for

19 interest paid, accrued, or incurred, directly or

20 indirectly, (i) for taxable years ending on or after

21 December 31, 2004, to a foreign person who would be a

22 member of the same unitary business group but for the

23 fact the foreign person's business activity outside

24 the United States is 80% or more of the foreign

25 person's total business activity and (ii) for taxable

26 years ending on or after December 31, 2008, to a person

10000SB0009ham002

- 318 -

LRB100 06347 HLH 27841 a

1 who would be a member of the same unitary business

2 group but for the fact that the person is prohibited

3 under Section 1501(a)(27) from being included in the

4 unitary business group because he or she is ordinarily

5 required to apportion business income under different

6 subsections of Section 304. The addition modification

7 required by this subparagraph shall be reduced to the

8 extent that dividends were included in base income of

9 the unitary group for the same taxable year and

10 received by the taxpayer or by a member of the

11 taxpayer's unitary business group (including amounts

12 included in gross income pursuant to Sections 951

13 through 964 of the Internal Revenue Code and amounts

14 included in gross income under Section 78 of the

15 Internal Revenue Code) with respect to the stock of the

16 same person to whom the interest was paid, accrued, or

17 incurred.

18 This paragraph shall not apply to the following:

19 (i) an item of interest paid, accrued, or

20 incurred, directly or indirectly, to a person who

21 is subject in a foreign country or state, other

22 than a state which requires mandatory unitary

23 reporting, to a tax on or measured by net income

24 with respect to such interest; or

25 (ii) an item of interest paid, accrued, or

26 incurred, directly or indirectly, to a person if

10000SB0009ham002

- 319 -

LRB100 06347 HLH 27841 a

1 the taxpayer can establish, based on a

2 preponderance of the evidence, both of the

3 following:

4 (a) the person, during the same taxable

5 year, paid, accrued, or incurred, the interest

6 to a person that is not a related member, and

7 (b) the transaction giving rise to the

8 interest expense between the taxpayer and the

9 person did not have as a principal purpose the

10 avoidance of Illinois income tax, and is paid

11 pursuant to a contract or agreement that

12 reflects an arm's-length interest rate and

13 terms; or

14 (iii) the taxpayer can establish, based on

15 clear and convincing evidence, that the interest

16 paid, accrued, or incurred relates to a contract or

17 agreement entered into at arm's-length rates and

18 terms and the principal purpose for the payment is

19 not federal or Illinois tax avoidance; or

20 (iv) an item of interest paid, accrued, or

21 incurred, directly or indirectly, to a person if

22 the taxpayer establishes by clear and convincing

23 evidence that the adjustments are unreasonable; or

24 if the taxpayer and the Director agree in writing

25 to the application or use of an alternative method

26 of apportionment under Section 304(f).

10000SB0009ham002

- 320 -

LRB100 06347 HLH 27841 a

1 Nothing in this subsection shall preclude the

2 Director from making any other adjustment

3 otherwise allowed under Section 404 of this Act for

4 any tax year beginning after the effective date of

5 this amendment provided such adjustment is made

6 pursuant to regulation adopted by the Department

7 and such regulations provide methods and standards

8 by which the Department will utilize its authority

9 under Section 404 of this Act;

10 (E-13) An amount equal to the amount of intangible

11 expenses and costs otherwise allowed as a deduction in

12 computing base income, and that were paid, accrued, or

13 incurred, directly or indirectly, (i) for taxable

14 years ending on or after December 31, 2004, to a

15 foreign person who would be a member of the same

16 unitary business group but for the fact that the

17 foreign person's business activity outside the United

18 States is 80% or more of that person's total business

19 activity and (ii) for taxable years ending on or after

20 December 31, 2008, to a person who would be a member of

21 the same unitary business group but for the fact that

22 the person is prohibited under Section 1501(a)(27)

23 from being included in the unitary business group

24 because he or she is ordinarily required to apportion

25 business income under different subsections of Section

26 304. The addition modification required by this

10000SB0009ham002

- 321 -

LRB100 06347 HLH 27841 a

1 subparagraph shall be reduced to the extent that

2 dividends were included in base income of the unitary

3 group for the same taxable year and received by the

4 taxpayer or by a member of the taxpayer's unitary

5 business group (including amounts included in gross

6 income pursuant to Sections 951 through 964 of the

7 Internal Revenue Code and amounts included in gross

8 income under Section 78 of the Internal Revenue Code)

9 with respect to the stock of the same person to whom

10 the intangible expenses and costs were directly or

11 indirectly paid, incurred, or accrued. The preceding

12 sentence shall not apply to the extent that the same

13 dividends caused a reduction to the addition

14 modification required under Section 203(b)(2)(E-12) of

15 this Act. As used in this subparagraph, the term

16 "intangible expenses and costs" includes (1) expenses,

17 losses, and costs for, or related to, the direct or

18 indirect acquisition, use, maintenance or management,

19 ownership, sale, exchange, or any other disposition of

20 intangible property; (2) losses incurred, directly or

21 indirectly, from factoring transactions or discounting

22 transactions; (3) royalty, patent, technical, and

23 copyright fees; (4) licensing fees; and (5) other

24 similar expenses and costs. For purposes of this

25 subparagraph, "intangible property" includes patents,

26 patent applications, trade names, trademarks, service

10000SB0009ham002

- 322 -

LRB100 06347 HLH 27841 a

1 marks, copyrights, mask works, trade secrets, and

2 similar types of intangible assets.

3 This paragraph shall not apply to the following:

4 (i) any item of intangible expenses or costs

5 paid, accrued, or incurred, directly or

6 indirectly, from a transaction with a person who is

7 subject in a foreign country or state, other than a

8 state which requires mandatory unitary reporting,

9 to a tax on or measured by net income with respect

10 to such item; or

11 (ii) any item of intangible expense or cost

12 paid, accrued, or incurred, directly or

13 indirectly, if the taxpayer can establish, based

14 on a preponderance of the evidence, both of the

15 following:

16 (a) the person during the same taxable

17 year paid, accrued, or incurred, the

18 intangible expense or cost to a person that is

19 not a related member, and

20 (b) the transaction giving rise to the

21 intangible expense or cost between the

22 taxpayer and the person did not have as a

23 principal purpose the avoidance of Illinois

24 income tax, and is paid pursuant to a contract

25 or agreement that reflects arm's-length terms;

26 or

10000SB0009ham002

- 323 -

LRB100 06347 HLH 27841 a

1 (iii) any item of intangible expense or cost

2 paid, accrued, or incurred, directly or

3 indirectly, from a transaction with a person if the

4 taxpayer establishes by clear and convincing

5 evidence, that the adjustments are unreasonable;

6 or if the taxpayer and the Director agree in

7 writing to the application or use of an alternative

8 method of apportionment under Section 304(f);

9 Nothing in this subsection shall preclude the

10 Director from making any other adjustment

11 otherwise allowed under Section 404 of this Act for

12 any tax year beginning after the effective date of

13 this amendment provided such adjustment is made

14 pursuant to regulation adopted by the Department

15 and such regulations provide methods and standards

16 by which the Department will utilize its authority

17 under Section 404 of this Act;

18 (E-14) For taxable years ending on or after

19 December 31, 2008, an amount equal to the amount of

20 insurance premium expenses and costs otherwise allowed

21 as a deduction in computing base income, and that were

22 paid, accrued, or incurred, directly or indirectly, to

23 a person who would be a member of the same unitary

24 business group but for the fact that the person is

25 prohibited under Section 1501(a)(27) from being

26 included in the unitary business group because he or

10000SB0009ham002

- 324 -

LRB100 06347 HLH 27841 a

1 she is ordinarily required to apportion business

2 income under different subsections of Section 304. The

3 addition modification required by this subparagraph

4 shall be reduced to the extent that dividends were

5 included in base income of the unitary group for the

6 same taxable year and received by the taxpayer or by a

7 member of the taxpayer's unitary business group

8 (including amounts included in gross income under

9 Sections 951 through 964 of the Internal Revenue Code

10 and amounts included in gross income under Section 78

11 of the Internal Revenue Code) with respect to the stock

12 of the same person to whom the premiums and costs were

13 directly or indirectly paid, incurred, or accrued. The

14 preceding sentence does not apply to the extent that

15 the same dividends caused a reduction to the addition

16 modification required under Section 203(b)(2)(E-12) or

17 Section 203(b)(2)(E-13) of this Act;

18 (E-15) For taxable years beginning after December

19 31, 2008, any deduction for dividends paid by a captive

20 real estate investment trust that is allowed to a real

21 estate investment trust under Section 857(b)(2)(B) of

22 the Internal Revenue Code for dividends paid;

23 (E-16) An amount equal to the credit allowable to

24 the taxpayer under Section 218(a) of this Act,

25 determined without regard to Section 218(c) of this

26 Act;

10000SB0009ham002

- 325 -

LRB100 06347 HLH 27841 a

1 (E-17) For taxable years ending on or after

2 December 31, 2017, an amount equal to the deduction

3 allowed under Section 199 of the Internal Revenue Code

4 for the taxable year;

5 and by deducting from the total so obtained the sum of the

6 following amounts:

7 (F) An amount equal to the amount of any tax

8 imposed by this Act which was refunded to the taxpayer

9 and included in such total for the taxable year;

10 (G) An amount equal to any amount included in such

11 total under Section 78 of the Internal Revenue Code;

12 (H) In the case of a regulated investment company,

13 an amount equal to the amount of exempt interest

14 dividends as defined in subsection (b) (5) of Section

15 852 of the Internal Revenue Code, paid to shareholders

16 for the taxable year;

17 (I) With the exception of any amounts subtracted

18 under subparagraph (J), an amount equal to the sum of

19 all amounts disallowed as deductions by (i) Sections

20 171(a) (2), and 265(a)(2) and amounts disallowed as

21 interest expense by Section 291(a)(3) of the Internal

22 Revenue Code, and all amounts of expenses allocable to

23 interest and disallowed as deductions by Section

24 265(a)(1) of the Internal Revenue Code; and (ii) for

25 taxable years ending on or after August 13, 1999,

26 Sections 171(a)(2), 265, 280C, 291(a)(3), and

10000SB0009ham002

- 326 -

LRB100 06347 HLH 27841 a

1 832(b)(5)(B)(i) of the Internal Revenue Code, plus,

2 for tax years ending on or after December 31, 2011,

3 amounts disallowed as deductions by Section 45G(e)(3)

4 of the Internal Revenue Code and, for taxable years

5 ending on or after December 31, 2008, any amount

6 included in gross income under Section 87 of the

7 Internal Revenue Code and the policyholders' share of

8 tax-exempt interest of a life insurance company under

9 Section 807(a)(2)(B) of the Internal Revenue Code (in

10 the case of a life insurance company with gross income

11 from a decrease in reserves for the tax year) or

12 Section 807(b)(1)(B) of the Internal Revenue Code (in

13 the case of a life insurance company allowed a

14 deduction for an increase in reserves for the tax

15 year); the provisions of this subparagraph are exempt

16 from the provisions of Section 250;

17 (J) An amount equal to all amounts included in such

18 total which are exempt from taxation by this State

19 either by reason of its statutes or Constitution or by

20 reason of the Constitution, treaties or statutes of the

21 United States; provided that, in the case of any

22 statute of this State that exempts income derived from

23 bonds or other obligations from the tax imposed under

24 this Act, the amount exempted shall be the interest net

25 of bond premium amortization;

26 (K) An amount equal to those dividends included in

10000SB0009ham002

- 327 -

LRB100 06347 HLH 27841 a

1 such total which were paid by a corporation which

2 conducts business operations in a River Edge

3 Redevelopment Zone or zones created under the River

4 Edge Redevelopment Zone Act and conducts substantially

5 all of its operations in a River Edge Redevelopment

6 Zone or zones. This subparagraph (K) is exempt from the

7 provisions of Section 250;

8 (L) An amount equal to those dividends included in

9 such total that were paid by a corporation that

10 conducts business operations in a federally designated

11 Foreign Trade Zone or Sub-Zone and that is designated a

12 High Impact Business located in Illinois; provided

13 that dividends eligible for the deduction provided in

14 subparagraph (K) of paragraph 2 of this subsection

15 shall not be eligible for the deduction provided under

16 this subparagraph (L);

17 (M) For any taxpayer that is a financial

18 organization within the meaning of Section 304(c) of

19 this Act, an amount included in such total as interest

20 income from a loan or loans made by such taxpayer to a

21 borrower, to the extent that such a loan is secured by

22 property which is eligible for the River Edge

23 Redevelopment Zone Investment Credit. To determine the

24 portion of a loan or loans that is secured by property

25 eligible for a Section 201(f) investment credit to the

26 borrower, the entire principal amount of the loan or

10000SB0009ham002

- 328 -

LRB100 06347 HLH 27841 a

1 loans between the taxpayer and the borrower should be

2 divided into the basis of the Section 201(f) investment

3 credit property which secures the loan or loans, using

4 for this purpose the original basis of such property on

5 the date that it was placed in service in the River

6 Edge Redevelopment Zone. The subtraction modification

7 available to taxpayer in any year under this subsection

8 shall be that portion of the total interest paid by the

9 borrower with respect to such loan attributable to the

10 eligible property as calculated under the previous

11 sentence. This subparagraph (M) is exempt from the

12 provisions of Section 250;

13 (M-1) For any taxpayer that is a financial

14 organization within the meaning of Section 304(c) of

15 this Act, an amount included in such total as interest

16 income from a loan or loans made by such taxpayer to a

17 borrower, to the extent that such a loan is secured by

18 property which is eligible for the High Impact Business

19 Investment Credit. To determine the portion of a loan

20 or loans that is secured by property eligible for a

21 Section 201(h) investment credit to the borrower, the

22 entire principal amount of the loan or loans between

23 the taxpayer and the borrower should be divided into

24 the basis of the Section 201(h) investment credit

25 property which secures the loan or loans, using for

26 this purpose the original basis of such property on the

10000SB0009ham002

- 329 -

LRB100 06347 HLH 27841 a

1 date that it was placed in service in a federally

2 designated Foreign Trade Zone or Sub-Zone located in

3 Illinois. No taxpayer that is eligible for the

4 deduction provided in subparagraph (M) of paragraph

5 (2) of this subsection shall be eligible for the

6 deduction provided under this subparagraph (M-1). The

7 subtraction modification available to taxpayers in any

8 year under this subsection shall be that portion of the

9 total interest paid by the borrower with respect to

10 such loan attributable to the eligible property as

11 calculated under the previous sentence;

12 (N) Two times any contribution made during the

13 taxable year to a designated zone organization to the

14 extent that the contribution (i) qualifies as a

15 charitable contribution under subsection (c) of

16 Section 170 of the Internal Revenue Code and (ii) must,

17 by its terms, be used for a project approved by the

18 Department of Commerce and Economic Opportunity under

19 Section 11 of the Illinois Enterprise Zone Act or under

20 Section 10-10 of the River Edge Redevelopment Zone Act.

21 This subparagraph (N) is exempt from the provisions of

22 Section 250;

23 (O) An amount equal to: (i) 85% for taxable years

24 ending on or before December 31, 1992, or, a percentage

25 equal to the percentage allowable under Section

26 243(a)(1) of the Internal Revenue Code of 1986 for

10000SB0009ham002

- 330 -

LRB100 06347 HLH 27841 a

1 taxable years ending after December 31, 1992, of the

2 amount by which dividends included in taxable income

3 and received from a corporation that is not created or

4 organized under the laws of the United States or any

5 state or political subdivision thereof, including, for

6 taxable years ending on or after December 31, 1988,

7 dividends received or deemed received or paid or deemed

8 paid under Sections 951 through 965 of the Internal

9 Revenue Code, exceed the amount of the modification

10 provided under subparagraph (G) of paragraph (2) of

11 this subsection (b) which is related to such dividends,

12 and including, for taxable years ending on or after

13 December 31, 2008, dividends received from a captive

14 real estate investment trust; plus (ii) 100% of the

15 amount by which dividends, included in taxable income

16 and received, including, for taxable years ending on or

17 after December 31, 1988, dividends received or deemed

18 received or paid or deemed paid under Sections 951

19 through 964 of the Internal Revenue Code and including,

20 for taxable years ending on or after December 31, 2008,

21 dividends received from a captive real estate

22 investment trust, from any such corporation specified

23 in clause (i) that would but for the provisions of

24 Section 1504 (b) (3) of the Internal Revenue Code be

25 treated as a member of the affiliated group which

26 includes the dividend recipient, exceed the amount of

10000SB0009ham002

- 331 -

LRB100 06347 HLH 27841 a

1 the modification provided under subparagraph (G) of

2 paragraph (2) of this subsection (b) which is related

3 to such dividends. This subparagraph (O) is exempt from

4 the provisions of Section 250 of this Act;

5 (P) An amount equal to any contribution made to a

6 job training project established pursuant to the Tax

7 Increment Allocation Redevelopment Act;

8 (Q) An amount equal to the amount of the deduction

9 used to compute the federal income tax credit for

10 restoration of substantial amounts held under claim of

11 right for the taxable year pursuant to Section 1341 of

12 the Internal Revenue Code;

13 (R) On and after July 20, 1999, in the case of an

14 attorney-in-fact with respect to whom an interinsurer

15 or a reciprocal insurer has made the election under

16 Section 835 of the Internal Revenue Code, 26 U.S.C.

17 835, an amount equal to the excess, if any, of the

18 amounts paid or incurred by that interinsurer or

19 reciprocal insurer in the taxable year to the

20 attorney-in-fact over the deduction allowed to that

21 interinsurer or reciprocal insurer with respect to the

22 attorney-in-fact under Section 835(b) of the Internal

23 Revenue Code for the taxable year; the provisions of

24 this subparagraph are exempt from the provisions of

25 Section 250;

26 (S) For taxable years ending on or after December

10000SB0009ham002

- 332 -

LRB100 06347 HLH 27841 a

1 31, 1997, in the case of a Subchapter S corporation, an

2 amount equal to all amounts of income allocable to a

3 shareholder subject to the Personal Property Tax

4 Replacement Income Tax imposed by subsections (c) and

5 (d) of Section 201 of this Act, including amounts

6 allocable to organizations exempt from federal income

7 tax by reason of Section 501(a) of the Internal Revenue

8 Code. This subparagraph (S) is exempt from the

9 provisions of Section 250;

10 (T) For taxable years 2001 and thereafter, for the

11 taxable year in which the bonus depreciation deduction

12 is taken on the taxpayer's federal income tax return

13 under subsection (k) of Section 168 of the Internal

14 Revenue Code and for each applicable taxable year

15 thereafter, an amount equal to "x", where:

16 (1) "y" equals the amount of the depreciation

17 deduction taken for the taxable year on the

18 taxpayer's federal income tax return on property

19 for which the bonus depreciation deduction was

20 taken in any year under subsection (k) of Section

21 168 of the Internal Revenue Code, but not including

22 the bonus depreciation deduction;

23 (2) for taxable years ending on or before

24 December 31, 2005, "x" equals "y" multiplied by 30

25 and then divided by 70 (or "y" multiplied by

26 0.429); and

10000SB0009ham002

- 333 -

LRB100 06347 HLH 27841 a

1 (3) for taxable years ending after December

2 31, 2005:

3 (i) for property on which a bonus

4 depreciation deduction of 30% of the adjusted

5 basis was taken, "x" equals "y" multiplied by

6 30 and then divided by 70 (or "y" multiplied by

7 0.429); and

8 (ii) for property on which a bonus

9 depreciation deduction of 50% of the adjusted

10 basis was taken, "x" equals "y" multiplied by

11 1.0.

12 The aggregate amount deducted under this

13 subparagraph in all taxable years for any one piece of

14 property may not exceed the amount of the bonus

15 depreciation deduction taken on that property on the

16 taxpayer's federal income tax return under subsection

17 (k) of Section 168 of the Internal Revenue Code. This

18 subparagraph (T) is exempt from the provisions of

19 Section 250;

20 (U) If the taxpayer sells, transfers, abandons, or

21 otherwise disposes of property for which the taxpayer

22 was required in any taxable year to make an addition

23 modification under subparagraph (E-10), then an amount

24 equal to that addition modification.

25 If the taxpayer continues to own property through

26 the last day of the last tax year for which the

10000SB0009ham002

- 334 -

LRB100 06347 HLH 27841 a

1 taxpayer may claim a depreciation deduction for

2 federal income tax purposes and for which the taxpayer

3 was required in any taxable year to make an addition

4 modification under subparagraph (E-10), then an amount

5 equal to that addition modification.

6 The taxpayer is allowed to take the deduction under

7 this subparagraph only once with respect to any one

8 piece of property.

9 This subparagraph (U) is exempt from the

10 provisions of Section 250;

11 (V) The amount of: (i) any interest income (net of

12 the deductions allocable thereto) taken into account

13 for the taxable year with respect to a transaction with

14 a taxpayer that is required to make an addition

15 modification with respect to such transaction under

16 Section 203(a)(2)(D-17), 203(b)(2)(E-12),

17 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

18 the amount of such addition modification, (ii) any

19 income from intangible property (net of the deductions

20 allocable thereto) taken into account for the taxable

21 year with respect to a transaction with a taxpayer that

22 is required to make an addition modification with

23 respect to such transaction under Section

24 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

25 203(d)(2)(D-8), but not to exceed the amount of such

26 addition modification, and (iii) any insurance premium

10000SB0009ham002

- 335 -

LRB100 06347 HLH 27841 a

1 income (net of deductions allocable thereto) taken

2 into account for the taxable year with respect to a

3 transaction with a taxpayer that is required to make an

4 addition modification with respect to such transaction

5 under Section 203(a)(2)(D-19), Section

6 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section

7 203(d)(2)(D-9), but not to exceed the amount of that

8 addition modification. This subparagraph (V) is exempt

9 from the provisions of Section 250;

10 (W) An amount equal to the interest income taken

11 into account for the taxable year (net of the

12 deductions allocable thereto) with respect to

13 transactions with (i) a foreign person who would be a

14 member of the taxpayer's unitary business group but for

15 the fact that the foreign person's business activity

16 outside the United States is 80% or more of that

17 person's total business activity and (ii) for taxable

18 years ending on or after December 31, 2008, to a person

19 who would be a member of the same unitary business

20 group but for the fact that the person is prohibited

21 under Section 1501(a)(27) from being included in the

22 unitary business group because he or she is ordinarily

23 required to apportion business income under different

24 subsections of Section 304, but not to exceed the

25 addition modification required to be made for the same

26 taxable year under Section 203(b)(2)(E-12) for

10000SB0009ham002

- 336 -

LRB100 06347 HLH 27841 a

1 interest paid, accrued, or incurred, directly or

2 indirectly, to the same person. This subparagraph (W)

3 is exempt from the provisions of Section 250;

4 (X) An amount equal to the income from intangible

5 property taken into account for the taxable year (net

6 of the deductions allocable thereto) with respect to

7 transactions with (i) a foreign person who would be a

8 member of the taxpayer's unitary business group but for

9 the fact that the foreign person's business activity

10 outside the United States is 80% or more of that

11 person's total business activity and (ii) for taxable

12 years ending on or after December 31, 2008, to a person

13 who would be a member of the same unitary business

14 group but for the fact that the person is prohibited

15 under Section 1501(a)(27) from being included in the

16 unitary business group because he or she is ordinarily

17 required to apportion business income under different

18 subsections of Section 304, but not to exceed the

19 addition modification required to be made for the same

20 taxable year under Section 203(b)(2)(E-13) for

21 intangible expenses and costs paid, accrued, or

22 incurred, directly or indirectly, to the same foreign

23 person. This subparagraph (X) is exempt from the

24 provisions of Section 250;

25 (Y) For taxable years ending on or after December

26 31, 2011, in the case of a taxpayer who was required to

10000SB0009ham002

- 337 -

LRB100 06347 HLH 27841 a

1 add back any insurance premiums under Section

2 203(b)(2)(E-14), such taxpayer may elect to subtract

3 that part of a reimbursement received from the

4 insurance company equal to the amount of the expense or

5 loss (including expenses incurred by the insurance

6 company) that would have been taken into account as a

7 deduction for federal income tax purposes if the

8 expense or loss had been uninsured. If a taxpayer makes

9 the election provided for by this subparagraph (Y), the

10 insurer to which the premiums were paid must add back

11 to income the amount subtracted by the taxpayer

12 pursuant to this subparagraph (Y). This subparagraph

13 (Y) is exempt from the provisions of Section 250; and

14 (Z) The difference between the nondeductible

15 controlled foreign corporation dividends under Section

16 965(e)(3) of the Internal Revenue Code over the taxable

17 income of the taxpayer, computed without regard to

18 Section 965(e)(2)(A) of the Internal Revenue Code, and

19 without regard to any net operating loss deduction.

20 This subparagraph (Z) is exempt from the provisions of

21 Section 250.

22 (3) Special rule. For purposes of paragraph (2) (A),

23 "gross income" in the case of a life insurance company, for

24 tax years ending on and after December 31, 1994, and prior

25 to December 31, 2011, shall mean the gross investment

26 income for the taxable year and, for tax years ending on or

10000SB0009ham002

- 338 -

LRB100 06347 HLH 27841 a

1 after December 31, 2011, shall mean all amounts included in

2 life insurance gross income under Section 803(a)(3) of the

3 Internal Revenue Code.

4 (c) Trusts and estates.

5 (1) In general. In the case of a trust or estate, base

6 income means an amount equal to the taxpayer's taxable

7 income for the taxable year as modified by paragraph (2).

8 (2) Modifications. Subject to the provisions of

9 paragraph (3), the taxable income referred to in paragraph

10 (1) shall be modified by adding thereto the sum of the

11 following amounts:

12 (A) An amount equal to all amounts paid or accrued

13 to the taxpayer as interest or dividends during the

14 taxable year to the extent excluded from gross income

15 in the computation of taxable income;

16 (B) In the case of (i) an estate, $600; (ii) a

17 trust which, under its governing instrument, is

18 required to distribute all of its income currently,

19 $300; and (iii) any other trust, $100, but in each such

20 case, only to the extent such amount was deducted in

21 the computation of taxable income;

22 (C) An amount equal to the amount of tax imposed by

23 this Act to the extent deducted from gross income in

24 the computation of taxable income for the taxable year;

25 (D) The amount of any net operating loss deduction

10000SB0009ham002

- 339 -

LRB100 06347 HLH 27841 a

1 taken in arriving at taxable income, other than a net

2 operating loss carried forward from a taxable year

3 ending prior to December 31, 1986;

4 (E) For taxable years in which a net operating loss

5 carryback or carryforward from a taxable year ending

6 prior to December 31, 1986 is an element of taxable

7 income under paragraph (1) of subsection (e) or

8 subparagraph (E) of paragraph (2) of subsection (e),

9 the amount by which addition modifications other than

10 those provided by this subparagraph (E) exceeded

11 subtraction modifications in such taxable year, with

12 the following limitations applied in the order that

13 they are listed:

14 (i) the addition modification relating to the

15 net operating loss carried back or forward to the

16 taxable year from any taxable year ending prior to

17 December 31, 1986 shall be reduced by the amount of

18 addition modification under this subparagraph (E)

19 which related to that net operating loss and which

20 was taken into account in calculating the base

21 income of an earlier taxable year, and

22 (ii) the addition modification relating to the

23 net operating loss carried back or forward to the

24 taxable year from any taxable year ending prior to

25 December 31, 1986 shall not exceed the amount of

26 such carryback or carryforward;

10000SB0009ham002

- 340 -

LRB100 06347 HLH 27841 a

1 For taxable years in which there is a net operating

2 loss carryback or carryforward from more than one other

3 taxable year ending prior to December 31, 1986, the

4 addition modification provided in this subparagraph

5 (E) shall be the sum of the amounts computed

6 independently under the preceding provisions of this

7 subparagraph (E) for each such taxable year;

8 (F) For taxable years ending on or after January 1,

9 1989, an amount equal to the tax deducted pursuant to

10 Section 164 of the Internal Revenue Code if the trust

11 or estate is claiming the same tax for purposes of the

12 Illinois foreign tax credit under Section 601 of this

13 Act;

14 (G) An amount equal to the amount of the capital

15 gain deduction allowable under the Internal Revenue

16 Code, to the extent deducted from gross income in the

17 computation of taxable income;

18 (G-5) For taxable years ending after December 31,

19 1997, an amount equal to any eligible remediation costs

20 that the trust or estate deducted in computing adjusted

21 gross income and for which the trust or estate claims a

22 credit under subsection (l) of Section 201;

23 (G-10) For taxable years 2001 and thereafter, an

24 amount equal to the bonus depreciation deduction taken

25 on the taxpayer's federal income tax return for the

26 taxable year under subsection (k) of Section 168 of the

10000SB0009ham002

- 341 -

LRB100 06347 HLH 27841 a

1 Internal Revenue Code; and

2 (G-11) If the taxpayer sells, transfers, abandons,

3 or otherwise disposes of property for which the

4 taxpayer was required in any taxable year to make an

5 addition modification under subparagraph (G-10), then

6 an amount equal to the aggregate amount of the

7 deductions taken in all taxable years under

8 subparagraph (R) with respect to that property.

9 If the taxpayer continues to own property through

10 the last day of the last tax year for which the

11 taxpayer may claim a depreciation deduction for

12 federal income tax purposes and for which the taxpayer

13 was allowed in any taxable year to make a subtraction

14 modification under subparagraph (R), then an amount

15 equal to that subtraction modification.

16 The taxpayer is required to make the addition

17 modification under this subparagraph only once with

18 respect to any one piece of property;

19 (G-12) An amount equal to the amount otherwise

20 allowed as a deduction in computing base income for

21 interest paid, accrued, or incurred, directly or

22 indirectly, (i) for taxable years ending on or after

23 December 31, 2004, to a foreign person who would be a

24 member of the same unitary business group but for the

25 fact that the foreign person's business activity

26 outside the United States is 80% or more of the foreign

10000SB0009ham002

- 342 -

LRB100 06347 HLH 27841 a

1 person's total business activity and (ii) for taxable

2 years ending on or after December 31, 2008, to a person

3 who would be a member of the same unitary business

4 group but for the fact that the person is prohibited

5 under Section 1501(a)(27) from being included in the

6 unitary business group because he or she is ordinarily

7 required to apportion business income under different

8 subsections of Section 304. The addition modification

9 required by this subparagraph shall be reduced to the

10 extent that dividends were included in base income of

11 the unitary group for the same taxable year and

12 received by the taxpayer or by a member of the

13 taxpayer's unitary business group (including amounts

14 included in gross income pursuant to Sections 951

15 through 964 of the Internal Revenue Code and amounts

16 included in gross income under Section 78 of the

17 Internal Revenue Code) with respect to the stock of the

18 same person to whom the interest was paid, accrued, or

19 incurred.

20 This paragraph shall not apply to the following:

21 (i) an item of interest paid, accrued, or

22 incurred, directly or indirectly, to a person who

23 is subject in a foreign country or state, other

24 than a state which requires mandatory unitary

25 reporting, to a tax on or measured by net income

26 with respect to such interest; or

10000SB0009ham002

- 343 -

LRB100 06347 HLH 27841 a

1 (ii) an item of interest paid, accrued, or

2 incurred, directly or indirectly, to a person if

3 the taxpayer can establish, based on a

4 preponderance of the evidence, both of the

5 following:

6 (a) the person, during the same taxable

7 year, paid, accrued, or incurred, the interest

8 to a person that is not a related member, and

9 (b) the transaction giving rise to the

10 interest expense between the taxpayer and the

11 person did not have as a principal purpose the

12 avoidance of Illinois income tax, and is paid

13 pursuant to a contract or agreement that

14 reflects an arm's-length interest rate and

15 terms; or

16 (iii) the taxpayer can establish, based on

17 clear and convincing evidence, that the interest

18 paid, accrued, or incurred relates to a contract or

19 agreement entered into at arm's-length rates and

20 terms and the principal purpose for the payment is

21 not federal or Illinois tax avoidance; or

22 (iv) an item of interest paid, accrued, or

23 incurred, directly or indirectly, to a person if

24 the taxpayer establishes by clear and convincing

25 evidence that the adjustments are unreasonable; or

26 if the taxpayer and the Director agree in writing

10000SB0009ham002

- 344 -

LRB100 06347 HLH 27841 a

1 to the application or use of an alternative method

2 of apportionment under Section 304(f).

3 Nothing in this subsection shall preclude the

4 Director from making any other adjustment

5 otherwise allowed under Section 404 of this Act for

6 any tax year beginning after the effective date of

7 this amendment provided such adjustment is made

8 pursuant to regulation adopted by the Department

9 and such regulations provide methods and standards

10 by which the Department will utilize its authority

11 under Section 404 of this Act;

12 (G-13) An amount equal to the amount of intangible

13 expenses and costs otherwise allowed as a deduction in

14 computing base income, and that were paid, accrued, or

15 incurred, directly or indirectly, (i) for taxable

16 years ending on or after December 31, 2004, to a

17 foreign person who would be a member of the same

18 unitary business group but for the fact that the

19 foreign person's business activity outside the United

20 States is 80% or more of that person's total business

21 activity and (ii) for taxable years ending on or after

22 December 31, 2008, to a person who would be a member of

23 the same unitary business group but for the fact that

24 the person is prohibited under Section 1501(a)(27)

25 from being included in the unitary business group

26 because he or she is ordinarily required to apportion

10000SB0009ham002

- 345 -

LRB100 06347 HLH 27841 a

1 business income under different subsections of Section

2 304. The addition modification required by this

3 subparagraph shall be reduced to the extent that

4 dividends were included in base income of the unitary

5 group for the same taxable year and received by the

6 taxpayer or by a member of the taxpayer's unitary

7 business group (including amounts included in gross

8 income pursuant to Sections 951 through 964 of the

9 Internal Revenue Code and amounts included in gross

10 income under Section 78 of the Internal Revenue Code)

11 with respect to the stock of the same person to whom

12 the intangible expenses and costs were directly or

13 indirectly paid, incurred, or accrued. The preceding

14 sentence shall not apply to the extent that the same

15 dividends caused a reduction to the addition

16 modification required under Section 203(c)(2)(G-12) of

17 this Act. As used in this subparagraph, the term

18 "intangible expenses and costs" includes: (1)

19 expenses, losses, and costs for or related to the

20 direct or indirect acquisition, use, maintenance or

21 management, ownership, sale, exchange, or any other

22 disposition of intangible property; (2) losses

23 incurred, directly or indirectly, from factoring

24 transactions or discounting transactions; (3) royalty,

25 patent, technical, and copyright fees; (4) licensing

26 fees; and (5) other similar expenses and costs. For

10000SB0009ham002

- 346 -

LRB100 06347 HLH 27841 a

1 purposes of this subparagraph, "intangible property"

2 includes patents, patent applications, trade names,

3 trademarks, service marks, copyrights, mask works,

4 trade secrets, and similar types of intangible assets.

5 This paragraph shall not apply to the following:

6 (i) any item of intangible expenses or costs

7 paid, accrued, or incurred, directly or

8 indirectly, from a transaction with a person who is

9 subject in a foreign country or state, other than a

10 state which requires mandatory unitary reporting,

11 to a tax on or measured by net income with respect

12 to such item; or

13 (ii) any item of intangible expense or cost

14 paid, accrued, or incurred, directly or

15 indirectly, if the taxpayer can establish, based

16 on a preponderance of the evidence, both of the

17 following:

18 (a) the person during the same taxable

19 year paid, accrued, or incurred, the

20 intangible expense or cost to a person that is

21 not a related member, and

22 (b) the transaction giving rise to the

23 intangible expense or cost between the

24 taxpayer and the person did not have as a

25 principal purpose the avoidance of Illinois

26 income tax, and is paid pursuant to a contract

10000SB0009ham002

- 347 -

LRB100 06347 HLH 27841 a

1 or agreement that reflects arm's-length terms;

2 or

3 (iii) any item of intangible expense or cost

4 paid, accrued, or incurred, directly or

5 indirectly, from a transaction with a person if the

6 taxpayer establishes by clear and convincing

7 evidence, that the adjustments are unreasonable;

8 or if the taxpayer and the Director agree in

9 writing to the application or use of an alternative

10 method of apportionment under Section 304(f);

11 Nothing in this subsection shall preclude the

12 Director from making any other adjustment

13 otherwise allowed under Section 404 of this Act for

14 any tax year beginning after the effective date of

15 this amendment provided such adjustment is made

16 pursuant to regulation adopted by the Department

17 and such regulations provide methods and standards

18 by which the Department will utilize its authority

19 under Section 404 of this Act;

20 (G-14) For taxable years ending on or after

21 December 31, 2008, an amount equal to the amount of

22 insurance premium expenses and costs otherwise allowed

23 as a deduction in computing base income, and that were

24 paid, accrued, or incurred, directly or indirectly, to

25 a person who would be a member of the same unitary

26 business group but for the fact that the person is

10000SB0009ham002

- 348 -

LRB100 06347 HLH 27841 a

1 prohibited under Section 1501(a)(27) from being

2 included in the unitary business group because he or

3 she is ordinarily required to apportion business

4 income under different subsections of Section 304. The

5 addition modification required by this subparagraph

6 shall be reduced to the extent that dividends were

7 included in base income of the unitary group for the

8 same taxable year and received by the taxpayer or by a

9 member of the taxpayer's unitary business group

10 (including amounts included in gross income under

11 Sections 951 through 964 of the Internal Revenue Code

12 and amounts included in gross income under Section 78

13 of the Internal Revenue Code) with respect to the stock

14 of the same person to whom the premiums and costs were

15 directly or indirectly paid, incurred, or accrued. The

16 preceding sentence does not apply to the extent that

17 the same dividends caused a reduction to the addition

18 modification required under Section 203(c)(2)(G-12) or

19 Section 203(c)(2)(G-13) of this Act;

20 (G-15) An amount equal to the credit allowable to

21 the taxpayer under Section 218(a) of this Act,

22 determined without regard to Section 218(c) of this

23 Act;

24 (G-16) For taxable years ending on or after

25 December 31, 2017, an amount equal to the deduction

26 allowed under Section 199 of the Internal Revenue Code

10000SB0009ham002

- 349 -

LRB100 06347 HLH 27841 a

1 for the taxable year;

2 and by deducting from the total so obtained the sum of the

3 following amounts:

4 (H) An amount equal to all amounts included in such

5 total pursuant to the provisions of Sections 402(a),

6 402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the

7 Internal Revenue Code or included in such total as

8 distributions under the provisions of any retirement

9 or disability plan for employees of any governmental

10 agency or unit, or retirement payments to retired

11 partners, which payments are excluded in computing net

12 earnings from self employment by Section 1402 of the

13 Internal Revenue Code and regulations adopted pursuant

14 thereto;

15 (I) The valuation limitation amount;

16 (J) An amount equal to the amount of any tax

17 imposed by this Act which was refunded to the taxpayer

18 and included in such total for the taxable year;

19 (K) An amount equal to all amounts included in

20 taxable income as modified by subparagraphs (A), (B),

21 (C), (D), (E), (F) and (G) which are exempt from

22 taxation by this State either by reason of its statutes

23 or Constitution or by reason of the Constitution,

24 treaties or statutes of the United States; provided

25 that, in the case of any statute of this State that

26 exempts income derived from bonds or other obligations

10000SB0009ham002

- 350 -

LRB100 06347 HLH 27841 a

1 from the tax imposed under this Act, the amount

2 exempted shall be the interest net of bond premium

3 amortization;

4 (L) With the exception of any amounts subtracted

5 under subparagraph (K), an amount equal to the sum of

6 all amounts disallowed as deductions by (i) Sections

7 171(a) (2) and 265(a)(2) of the Internal Revenue Code,

8 and all amounts of expenses allocable to interest and

9 disallowed as deductions by Section 265(1) of the

10 Internal Revenue Code; and (ii) for taxable years

11 ending on or after August 13, 1999, Sections 171(a)(2),

12 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue

13 Code, plus, (iii) for taxable years ending on or after

14 December 31, 2011, Section 45G(e)(3) of the Internal

15 Revenue Code and, for taxable years ending on or after

16 December 31, 2008, any amount included in gross income

17 under Section 87 of the Internal Revenue Code; the

18 provisions of this subparagraph are exempt from the

19 provisions of Section 250;

20 (M) An amount equal to those dividends included in

21 such total which were paid by a corporation which

22 conducts business operations in a River Edge

23 Redevelopment Zone or zones created under the River

24 Edge Redevelopment Zone Act and conducts substantially

25 all of its operations in a River Edge Redevelopment

26 Zone or zones. This subparagraph (M) is exempt from the

10000SB0009ham002

- 351 -

LRB100 06347 HLH 27841 a

1 provisions of Section 250;

2 (N) An amount equal to any contribution made to a

3 job training project established pursuant to the Tax

4 Increment Allocation Redevelopment Act;

5 (O) An amount equal to those dividends included in

6 such total that were paid by a corporation that

7 conducts business operations in a federally designated

8 Foreign Trade Zone or Sub-Zone and that is designated a

9 High Impact Business located in Illinois; provided

10 that dividends eligible for the deduction provided in

11 subparagraph (M) of paragraph (2) of this subsection

12 shall not be eligible for the deduction provided under

13 this subparagraph (O);

14 (P) An amount equal to the amount of the deduction

15 used to compute the federal income tax credit for

16 restoration of substantial amounts held under claim of

17 right for the taxable year pursuant to Section 1341 of

18 the Internal Revenue Code;

19 (Q) For taxable year 1999 and thereafter, an amount

20 equal to the amount of any (i) distributions, to the

21 extent includible in gross income for federal income

22 tax purposes, made to the taxpayer because of his or

23 her status as a victim of persecution for racial or

24 religious reasons by Nazi Germany or any other Axis

25 regime or as an heir of the victim and (ii) items of

26 income, to the extent includible in gross income for

10000SB0009ham002

- 352 -

LRB100 06347 HLH 27841 a

1 federal income tax purposes, attributable to, derived

2 from or in any way related to assets stolen from,

3 hidden from, or otherwise lost to a victim of

4 persecution for racial or religious reasons by Nazi

5 Germany or any other Axis regime immediately prior to,

6 during, and immediately after World War II, including,

7 but not limited to, interest on the proceeds receivable

8 as insurance under policies issued to a victim of

9 persecution for racial or religious reasons by Nazi

10 Germany or any other Axis regime by European insurance

11 companies immediately prior to and during World War II;

12 provided, however, this subtraction from federal

13 adjusted gross income does not apply to assets acquired

14 with such assets or with the proceeds from the sale of

15 such assets; provided, further, this paragraph shall

16 only apply to a taxpayer who was the first recipient of

17 such assets after their recovery and who is a victim of

18 persecution for racial or religious reasons by Nazi

19 Germany or any other Axis regime or as an heir of the

20 victim. The amount of and the eligibility for any

21 public assistance, benefit, or similar entitlement is

22 not affected by the inclusion of items (i) and (ii) of

23 this paragraph in gross income for federal income tax

24 purposes. This paragraph is exempt from the provisions

25 of Section 250;

26 (R) For taxable years 2001 and thereafter, for the

10000SB0009ham002

- 353 -

LRB100 06347 HLH 27841 a

1 taxable year in which the bonus depreciation deduction

2 is taken on the taxpayer's federal income tax return

3 under subsection (k) of Section 168 of the Internal

4 Revenue Code and for each applicable taxable year

5 thereafter, an amount equal to "x", where:

6 (1) "y" equals the amount of the depreciation

7 deduction taken for the taxable year on the

8 taxpayer's federal income tax return on property

9 for which the bonus depreciation deduction was

10 taken in any year under subsection (k) of Section

11 168 of the Internal Revenue Code, but not including

12 the bonus depreciation deduction;

13 (2) for taxable years ending on or before

14 December 31, 2005, "x" equals "y" multiplied by 30

15 and then divided by 70 (or "y" multiplied by

16 0.429); and

17 (3) for taxable years ending after December

18 31, 2005:

19 (i) for property on which a bonus

20 depreciation deduction of 30% of the adjusted

21 basis was taken, "x" equals "y" multiplied by

22 30 and then divided by 70 (or "y" multiplied by

23 0.429); and

24 (ii) for property on which a bonus

25 depreciation deduction of 50% of the adjusted

26 basis was taken, "x" equals "y" multiplied by

10000SB0009ham002

- 354 -

LRB100 06347 HLH 27841 a

1 1.0.

2 The aggregate amount deducted under this

3 subparagraph in all taxable years for any one piece of

4 property may not exceed the amount of the bonus

5 depreciation deduction taken on that property on the

6 taxpayer's federal income tax return under subsection

7 (k) of Section 168 of the Internal Revenue Code. This

8 subparagraph (R) is exempt from the provisions of

9 Section 250;

10 (S) If the taxpayer sells, transfers, abandons, or

11 otherwise disposes of property for which the taxpayer

12 was required in any taxable year to make an addition

13 modification under subparagraph (G-10), then an amount

14 equal to that addition modification.

15 If the taxpayer continues to own property through

16 the last day of the last tax year for which the

17 taxpayer may claim a depreciation deduction for

18 federal income tax purposes and for which the taxpayer

19 was required in any taxable year to make an addition

20 modification under subparagraph (G-10), then an amount

21 equal to that addition modification.

22 The taxpayer is allowed to take the deduction under

23 this subparagraph only once with respect to any one

24 piece of property.

25 This subparagraph (S) is exempt from the

26 provisions of Section 250;

10000SB0009ham002

- 355 -

LRB100 06347 HLH 27841 a

1 (T) The amount of (i) any interest income (net of

2 the deductions allocable thereto) taken into account

3 for the taxable year with respect to a transaction with

4 a taxpayer that is required to make an addition

5 modification with respect to such transaction under

6 Section 203(a)(2)(D-17), 203(b)(2)(E-12),

7 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

8 the amount of such addition modification and (ii) any

9 income from intangible property (net of the deductions

10 allocable thereto) taken into account for the taxable

11 year with respect to a transaction with a taxpayer that

12 is required to make an addition modification with

13 respect to such transaction under Section

14 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

15 203(d)(2)(D-8), but not to exceed the amount of such

16 addition modification. This subparagraph (T) is exempt

17 from the provisions of Section 250;

18 (U) An amount equal to the interest income taken

19 into account for the taxable year (net of the

20 deductions allocable thereto) with respect to

21 transactions with (i) a foreign person who would be a

22 member of the taxpayer's unitary business group but for

23 the fact the foreign person's business activity

24 outside the United States is 80% or more of that

25 person's total business activity and (ii) for taxable

26 years ending on or after December 31, 2008, to a person

10000SB0009ham002

- 356 -

LRB100 06347 HLH 27841 a

1 who would be a member of the same unitary business

2 group but for the fact that the person is prohibited

3 under Section 1501(a)(27) from being included in the

4 unitary business group because he or she is ordinarily

5 required to apportion business income under different

6 subsections of Section 304, but not to exceed the

7 addition modification required to be made for the same

8 taxable year under Section 203(c)(2)(G-12) for

9 interest paid, accrued, or incurred, directly or

10 indirectly, to the same person. This subparagraph (U)

11 is exempt from the provisions of Section 250;

12 (V) An amount equal to the income from intangible

13 property taken into account for the taxable year (net

14 of the deductions allocable thereto) with respect to

15 transactions with (i) a foreign person who would be a

16 member of the taxpayer's unitary business group but for

17 the fact that the foreign person's business activity

18 outside the United States is 80% or more of that

19 person's total business activity and (ii) for taxable

20 years ending on or after December 31, 2008, to a person

21 who would be a member of the same unitary business

22 group but for the fact that the person is prohibited

23 under Section 1501(a)(27) from being included in the

24 unitary business group because he or she is ordinarily

25 required to apportion business income under different

26 subsections of Section 304, but not to exceed the

10000SB0009ham002

- 357 -

LRB100 06347 HLH 27841 a

1 addition modification required to be made for the same

2 taxable year under Section 203(c)(2)(G-13) for

3 intangible expenses and costs paid, accrued, or

4 incurred, directly or indirectly, to the same foreign

5 person. This subparagraph (V) is exempt from the

6 provisions of Section 250;

7 (W) in the case of an estate, an amount equal to

8 all amounts included in such total pursuant to the

9 provisions of Section 111 of the Internal Revenue Code

10 as a recovery of items previously deducted by the

11 decedent from adjusted gross income in the computation

12 of taxable income. This subparagraph (W) is exempt from

13 Section 250;

14 (X) an amount equal to the refund included in such

15 total of any tax deducted for federal income tax

16 purposes, to the extent that deduction was added back

17 under subparagraph (F). This subparagraph (X) is

18 exempt from the provisions of Section 250; and

19 (Y) For taxable years ending on or after December

20 31, 2011, in the case of a taxpayer who was required to

21 add back any insurance premiums under Section

22 203(c)(2)(G-14), such taxpayer may elect to subtract

23 that part of a reimbursement received from the

24 insurance company equal to the amount of the expense or

25 loss (including expenses incurred by the insurance

26 company) that would have been taken into account as a

10000SB0009ham002

- 358 -

LRB100 06347 HLH 27841 a

1 deduction for federal income tax purposes if the

2 expense or loss had been uninsured. If a taxpayer makes

3 the election provided for by this subparagraph (Y), the

4 insurer to which the premiums were paid must add back

5 to income the amount subtracted by the taxpayer

6 pursuant to this subparagraph (Y). This subparagraph

7 (Y) is exempt from the provisions of Section 250.

8 (3) Limitation. The amount of any modification

9 otherwise required under this subsection shall, under

10 regulations prescribed by the Department, be adjusted by

11 any amounts included therein which were properly paid,

12 credited, or required to be distributed, or permanently set

13 aside for charitable purposes pursuant to Internal Revenue

14 Code Section 642(c) during the taxable year.

15 (d) Partnerships.

16 (1) In general. In the case of a partnership, base

17 income means an amount equal to the taxpayer's taxable

18 income for the taxable year as modified by paragraph (2).

19 (2) Modifications. The taxable income referred to in

20 paragraph (1) shall be modified by adding thereto the sum

21 of the following amounts:

22 (A) An amount equal to all amounts paid or accrued

23 to the taxpayer as interest or dividends during the

24 taxable year to the extent excluded from gross income

25 in the computation of taxable income;

10000SB0009ham002

- 359 -

LRB100 06347 HLH 27841 a

1 (B) An amount equal to the amount of tax imposed by

2 this Act to the extent deducted from gross income for

3 the taxable year;

4 (C) The amount of deductions allowed to the

5 partnership pursuant to Section 707 (c) of the Internal

6 Revenue Code in calculating its taxable income;

7 (D) An amount equal to the amount of the capital

8 gain deduction allowable under the Internal Revenue

9 Code, to the extent deducted from gross income in the

10 computation of taxable income;

11 (D-5) For taxable years 2001 and thereafter, an

12 amount equal to the bonus depreciation deduction taken

13 on the taxpayer's federal income tax return for the

14 taxable year under subsection (k) of Section 168 of the

15 Internal Revenue Code;

16 (D-6) If the taxpayer sells, transfers, abandons,

17 or otherwise disposes of property for which the

18 taxpayer was required in any taxable year to make an

19 addition modification under subparagraph (D-5), then

20 an amount equal to the aggregate amount of the

21 deductions taken in all taxable years under

22 subparagraph (O) with respect to that property.

23 If the taxpayer continues to own property through

24 the last day of the last tax year for which the

25 taxpayer may claim a depreciation deduction for

26 federal income tax purposes and for which the taxpayer

10000SB0009ham002

- 360 -

LRB100 06347 HLH 27841 a

1 was allowed in any taxable year to make a subtraction

2 modification under subparagraph (O), then an amount

3 equal to that subtraction modification.

4 The taxpayer is required to make the addition

5 modification under this subparagraph only once with

6 respect to any one piece of property;

7 (D-7) An amount equal to the amount otherwise

8 allowed as a deduction in computing base income for

9 interest paid, accrued, or incurred, directly or

10 indirectly, (i) for taxable years ending on or after

11 December 31, 2004, to a foreign person who would be a

12 member of the same unitary business group but for the

13 fact the foreign person's business activity outside

14 the United States is 80% or more of the foreign

15 person's total business activity and (ii) for taxable

16 years ending on or after December 31, 2008, to a person

17 who would be a member of the same unitary business

18 group but for the fact that the person is prohibited

19 under Section 1501(a)(27) from being included in the

20 unitary business group because he or she is ordinarily

21 required to apportion business income under different

22 subsections of Section 304. The addition modification

23 required by this subparagraph shall be reduced to the

24 extent that dividends were included in base income of

25 the unitary group for the same taxable year and

26 received by the taxpayer or by a member of the

10000SB0009ham002

- 361 -

LRB100 06347 HLH 27841 a

1 taxpayer's unitary business group (including amounts

2 included in gross income pursuant to Sections 951

3 through 964 of the Internal Revenue Code and amounts

4 included in gross income under Section 78 of the

5 Internal Revenue Code) with respect to the stock of the

6 same person to whom the interest was paid, accrued, or

7 incurred.

8 This paragraph shall not apply to the following:

9 (i) an item of interest paid, accrued, or

10 incurred, directly or indirectly, to a person who

11 is subject in a foreign country or state, other

12 than a state which requires mandatory unitary

13 reporting, to a tax on or measured by net income

14 with respect to such interest; or

15 (ii) an item of interest paid, accrued, or

16 incurred, directly or indirectly, to a person if

17 the taxpayer can establish, based on a

18 preponderance of the evidence, both of the

19 following:

20 (a) the person, during the same taxable

21 year, paid, accrued, or incurred, the interest

22 to a person that is not a related member, and

23 (b) the transaction giving rise to the

24 interest expense between the taxpayer and the

25 person did not have as a principal purpose the

26 avoidance of Illinois income tax, and is paid

10000SB0009ham002

- 362 -

LRB100 06347 HLH 27841 a

1 pursuant to a contract or agreement that

2 reflects an arm's-length interest rate and

3 terms; or

4 (iii) the taxpayer can establish, based on

5 clear and convincing evidence, that the interest

6 paid, accrued, or incurred relates to a contract or

7 agreement entered into at arm's-length rates and

8 terms and the principal purpose for the payment is

9 not federal or Illinois tax avoidance; or

10 (iv) an item of interest paid, accrued, or

11 incurred, directly or indirectly, to a person if

12 the taxpayer establishes by clear and convincing

13 evidence that the adjustments are unreasonable; or

14 if the taxpayer and the Director agree in writing

15 to the application or use of an alternative method

16 of apportionment under Section 304(f).

17 Nothing in this subsection shall preclude the

18 Director from making any other adjustment

19 otherwise allowed under Section 404 of this Act for

20 any tax year beginning after the effective date of

21 this amendment provided such adjustment is made

22 pursuant to regulation adopted by the Department

23 and such regulations provide methods and standards

24 by which the Department will utilize its authority

25 under Section 404 of this Act; and

26 (D-8) An amount equal to the amount of intangible

10000SB0009ham002

- 363 -

LRB100 06347 HLH 27841 a

1 expenses and costs otherwise allowed as a deduction in

2 computing base income, and that were paid, accrued, or

3 incurred, directly or indirectly, (i) for taxable

4 years ending on or after December 31, 2004, to a

5 foreign person who would be a member of the same

6 unitary business group but for the fact that the

7 foreign person's business activity outside the United

8 States is 80% or more of that person's total business

9 activity and (ii) for taxable years ending on or after

10 December 31, 2008, to a person who would be a member of

11 the same unitary business group but for the fact that

12 the person is prohibited under Section 1501(a)(27)

13 from being included in the unitary business group

14 because he or she is ordinarily required to apportion

15 business income under different subsections of Section

16 304. The addition modification required by this

17 subparagraph shall be reduced to the extent that

18 dividends were included in base income of the unitary

19 group for the same taxable year and received by the

20 taxpayer or by a member of the taxpayer's unitary

21 business group (including amounts included in gross

22 income pursuant to Sections 951 through 964 of the

23 Internal Revenue Code and amounts included in gross

24 income under Section 78 of the Internal Revenue Code)

25 with respect to the stock of the same person to whom

26 the intangible expenses and costs were directly or

10000SB0009ham002

- 364 -

LRB100 06347 HLH 27841 a

1 indirectly paid, incurred or accrued. The preceding

2 sentence shall not apply to the extent that the same

3 dividends caused a reduction to the addition

4 modification required under Section 203(d)(2)(D-7) of

5 this Act. As used in this subparagraph, the term

6 "intangible expenses and costs" includes (1) expenses,

7 losses, and costs for, or related to, the direct or

8 indirect acquisition, use, maintenance or management,

9 ownership, sale, exchange, or any other disposition of

10 intangible property; (2) losses incurred, directly or

11 indirectly, from factoring transactions or discounting

12 transactions; (3) royalty, patent, technical, and

13 copyright fees; (4) licensing fees; and (5) other

14 similar expenses and costs. For purposes of this

15 subparagraph, "intangible property" includes patents,

16 patent applications, trade names, trademarks, service

17 marks, copyrights, mask works, trade secrets, and

18 similar types of intangible assets;

19 This paragraph shall not apply to the following:

20 (i) any item of intangible expenses or costs

21 paid, accrued, or incurred, directly or

22 indirectly, from a transaction with a person who is

23 subject in a foreign country or state, other than a

24 state which requires mandatory unitary reporting,

25 to a tax on or measured by net income with respect

26 to such item; or

10000SB0009ham002

- 365 -

LRB100 06347 HLH 27841 a

1 (ii) any item of intangible expense or cost

2 paid, accrued, or incurred, directly or

3 indirectly, if the taxpayer can establish, based

4 on a preponderance of the evidence, both of the

5 following:

6 (a) the person during the same taxable

7 year paid, accrued, or incurred, the

8 intangible expense or cost to a person that is

9 not a related member, and

10 (b) the transaction giving rise to the

11 intangible expense or cost between the

12 taxpayer and the person did not have as a

13 principal purpose the avoidance of Illinois

14 income tax, and is paid pursuant to a contract

15 or agreement that reflects arm's-length terms;

16 or

17 (iii) any item of intangible expense or cost

18 paid, accrued, or incurred, directly or

19 indirectly, from a transaction with a person if the

20 taxpayer establishes by clear and convincing

21 evidence, that the adjustments are unreasonable;

22 or if the taxpayer and the Director agree in

23 writing to the application or use of an alternative

24 method of apportionment under Section 304(f);

25 Nothing in this subsection shall preclude the

26 Director from making any other adjustment

10000SB0009ham002

- 366 -

LRB100 06347 HLH 27841 a

1 otherwise allowed under Section 404 of this Act for

2 any tax year beginning after the effective date of

3 this amendment provided such adjustment is made

4 pursuant to regulation adopted by the Department

5 and such regulations provide methods and standards

6 by which the Department will utilize its authority

7 under Section 404 of this Act;

8 (D-9) For taxable years ending on or after December

9 31, 2008, an amount equal to the amount of insurance

10 premium expenses and costs otherwise allowed as a

11 deduction in computing base income, and that were paid,

12 accrued, or incurred, directly or indirectly, to a

13 person who would be a member of the same unitary

14 business group but for the fact that the person is

15 prohibited under Section 1501(a)(27) from being

16 included in the unitary business group because he or

17 she is ordinarily required to apportion business

18 income under different subsections of Section 304. The

19 addition modification required by this subparagraph

20 shall be reduced to the extent that dividends were

21 included in base income of the unitary group for the

22 same taxable year and received by the taxpayer or by a

23 member of the taxpayer's unitary business group

24 (including amounts included in gross income under

25 Sections 951 through 964 of the Internal Revenue Code

26 and amounts included in gross income under Section 78

10000SB0009ham002

- 367 -

LRB100 06347 HLH 27841 a

1 of the Internal Revenue Code) with respect to the stock

2 of the same person to whom the premiums and costs were

3 directly or indirectly paid, incurred, or accrued. The

4 preceding sentence does not apply to the extent that

5 the same dividends caused a reduction to the addition

6 modification required under Section 203(d)(2)(D-7) or

7 Section 203(d)(2)(D-8) of this Act;

8 (D-10) An amount equal to the credit allowable to

9 the taxpayer under Section 218(a) of this Act,

10 determined without regard to Section 218(c) of this

11 Act;

12 (D-11) For taxable years ending on or after

13 December 31, 2017, an amount equal to the deduction

14 allowed under Section 199 of the Internal Revenue Code

15 for the taxable year;

16 and by deducting from the total so obtained the following

17 amounts:

18 (E) The valuation limitation amount;

19 (F) An amount equal to the amount of any tax

20 imposed by this Act which was refunded to the taxpayer

21 and included in such total for the taxable year;

22 (G) An amount equal to all amounts included in

23 taxable income as modified by subparagraphs (A), (B),

24 (C) and (D) which are exempt from taxation by this

25 State either by reason of its statutes or Constitution

26 or by reason of the Constitution, treaties or statutes

10000SB0009ham002

- 368 -

LRB100 06347 HLH 27841 a

1 of the United States; provided that, in the case of any

2 statute of this State that exempts income derived from

3 bonds or other obligations from the tax imposed under

4 this Act, the amount exempted shall be the interest net

5 of bond premium amortization;

6 (H) Any income of the partnership which

7 constitutes personal service income as defined in

8 Section 1348 (b) (1) of the Internal Revenue Code (as

9 in effect December 31, 1981) or a reasonable allowance

10 for compensation paid or accrued for services rendered

11 by partners to the partnership, whichever is greater;

12 this subparagraph (H) is exempt from the provisions of

13 Section 250;

14 (I) An amount equal to all amounts of income

15 distributable to an entity subject to the Personal

16 Property Tax Replacement Income Tax imposed by

17 subsections (c) and (d) of Section 201 of this Act

18 including amounts distributable to organizations

19 exempt from federal income tax by reason of Section

20 501(a) of the Internal Revenue Code; this subparagraph

21 (I) is exempt from the provisions of Section 250;

22 (J) With the exception of any amounts subtracted

23 under subparagraph (G), an amount equal to the sum of

24 all amounts disallowed as deductions by (i) Sections

25 171(a) (2), and 265(2) of the Internal Revenue Code,

26 and all amounts of expenses allocable to interest and

10000SB0009ham002

- 369 -

LRB100 06347 HLH 27841 a

1 disallowed as deductions by Section 265(1) of the

2 Internal Revenue Code; and (ii) for taxable years

3 ending on or after August 13, 1999, Sections 171(a)(2),

4 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue

5 Code, plus, (iii) for taxable years ending on or after

6 December 31, 2011, Section 45G(e)(3) of the Internal

7 Revenue Code and, for taxable years ending on or after

8 December 31, 2008, any amount included in gross income

9 under Section 87 of the Internal Revenue Code; the

10 provisions of this subparagraph are exempt from the

11 provisions of Section 250;

12 (K) An amount equal to those dividends included in

13 such total which were paid by a corporation which

14 conducts business operations in a River Edge

15 Redevelopment Zone or zones created under the River

16 Edge Redevelopment Zone Act and conducts substantially

17 all of its operations from a River Edge Redevelopment

18 Zone or zones. This subparagraph (K) is exempt from the

19 provisions of Section 250;

20 (L) An amount equal to any contribution made to a

21 job training project established pursuant to the Real

22 Property Tax Increment Allocation Redevelopment Act;

23 (M) An amount equal to those dividends included in

24 such total that were paid by a corporation that

25 conducts business operations in a federally designated

26 Foreign Trade Zone or Sub-Zone and that is designated a

10000SB0009ham002

- 370 -

LRB100 06347 HLH 27841 a

1 High Impact Business located in Illinois; provided

2 that dividends eligible for the deduction provided in

3 subparagraph (K) of paragraph (2) of this subsection

4 shall not be eligible for the deduction provided under

5 this subparagraph (M);

6 (N) An amount equal to the amount of the deduction

7 used to compute the federal income tax credit for

8 restoration of substantial amounts held under claim of

9 right for the taxable year pursuant to Section 1341 of

10 the Internal Revenue Code;

11 (O) For taxable years 2001 and thereafter, for the

12 taxable year in which the bonus depreciation deduction

13 is taken on the taxpayer's federal income tax return

14 under subsection (k) of Section 168 of the Internal

15 Revenue Code and for each applicable taxable year

16 thereafter, an amount equal to "x", where:

17 (1) "y" equals the amount of the depreciation

18 deduction taken for the taxable year on the

19 taxpayer's federal income tax return on property

20 for which the bonus depreciation deduction was

21 taken in any year under subsection (k) of Section

22 168 of the Internal Revenue Code, but not including

23 the bonus depreciation deduction;

24 (2) for taxable years ending on or before

25 December 31, 2005, "x" equals "y" multiplied by 30

26 and then divided by 70 (or "y" multiplied by

10000SB0009ham002

- 371 -

LRB100 06347 HLH 27841 a

1 0.429); and

2 (3) for taxable years ending after December

3 31, 2005:

4 (i) for property on which a bonus

5 depreciation deduction of 30% of the adjusted

6 basis was taken, "x" equals "y" multiplied by

7 30 and then divided by 70 (or "y" multiplied by

8 0.429); and

9 (ii) for property on which a bonus

10 depreciation deduction of 50% of the adjusted

11 basis was taken, "x" equals "y" multiplied by

12 1.0.

13 The aggregate amount deducted under this

14 subparagraph in all taxable years for any one piece of

15 property may not exceed the amount of the bonus

16 depreciation deduction taken on that property on the

17 taxpayer's federal income tax return under subsection

18 (k) of Section 168 of the Internal Revenue Code. This

19 subparagraph (O) is exempt from the provisions of

20 Section 250;

21 (P) If the taxpayer sells, transfers, abandons, or

22 otherwise disposes of property for which the taxpayer

23 was required in any taxable year to make an addition

24 modification under subparagraph (D-5), then an amount

25 equal to that addition modification.

26 If the taxpayer continues to own property through

10000SB0009ham002

- 372 -

LRB100 06347 HLH 27841 a

1 the last day of the last tax year for which the

2 taxpayer may claim a depreciation deduction for

3 federal income tax purposes and for which the taxpayer

4 was required in any taxable year to make an addition

5 modification under subparagraph (D-5), then an amount

6 equal to that addition modification.

7 The taxpayer is allowed to take the deduction under

8 this subparagraph only once with respect to any one

9 piece of property.

10 This subparagraph (P) is exempt from the

11 provisions of Section 250;

12 (Q) The amount of (i) any interest income (net of

13 the deductions allocable thereto) taken into account

14 for the taxable year with respect to a transaction with

15 a taxpayer that is required to make an addition

16 modification with respect to such transaction under

17 Section 203(a)(2)(D-17), 203(b)(2)(E-12),

18 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

19 the amount of such addition modification and (ii) any

20 income from intangible property (net of the deductions

21 allocable thereto) taken into account for the taxable

22 year with respect to a transaction with a taxpayer that

23 is required to make an addition modification with

24 respect to such transaction under Section

25 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

26 203(d)(2)(D-8), but not to exceed the amount of such

10000SB0009ham002

- 373 -

LRB100 06347 HLH 27841 a

1 addition modification. This subparagraph (Q) is exempt

2 from Section 250;

3 (R) An amount equal to the interest income taken

4 into account for the taxable year (net of the

5 deductions allocable thereto) with respect to

6 transactions with (i) a foreign person who would be a

7 member of the taxpayer's unitary business group but for

8 the fact that the foreign person's business activity

9 outside the United States is 80% or more of that

10 person's total business activity and (ii) for taxable

11 years ending on or after December 31, 2008, to a person

12 who would be a member of the same unitary business

13 group but for the fact that the person is prohibited

14 under Section 1501(a)(27) from being included in the

15 unitary business group because he or she is ordinarily

16 required to apportion business income under different

17 subsections of Section 304, but not to exceed the

18 addition modification required to be made for the same

19 taxable year under Section 203(d)(2)(D-7) for interest

20 paid, accrued, or incurred, directly or indirectly, to

21 the same person. This subparagraph (R) is exempt from

22 Section 250;

23 (S) An amount equal to the income from intangible

24 property taken into account for the taxable year (net

25 of the deductions allocable thereto) with respect to

26 transactions with (i) a foreign person who would be a

10000SB0009ham002

- 374 -

LRB100 06347 HLH 27841 a

1 member of the taxpayer's unitary business group but for

2 the fact that the foreign person's business activity

3 outside the United States is 80% or more of that

4 person's total business activity and (ii) for taxable

5 years ending on or after December 31, 2008, to a person

6 who would be a member of the same unitary business

7 group but for the fact that the person is prohibited

8 under Section 1501(a)(27) from being included in the

9 unitary business group because he or she is ordinarily

10 required to apportion business income under different

11 subsections of Section 304, but not to exceed the

12 addition modification required to be made for the same

13 taxable year under Section 203(d)(2)(D-8) for

14 intangible expenses and costs paid, accrued, or

15 incurred, directly or indirectly, to the same person.

16 This subparagraph (S) is exempt from Section 250; and

17 (T) For taxable years ending on or after December

18 31, 2011, in the case of a taxpayer who was required to

19 add back any insurance premiums under Section

20 203(d)(2)(D-9), such taxpayer may elect to subtract

21 that part of a reimbursement received from the

22 insurance company equal to the amount of the expense or

23 loss (including expenses incurred by the insurance

24 company) that would have been taken into account as a

25 deduction for federal income tax purposes if the

26 expense or loss had been uninsured. If a taxpayer makes

10000SB0009ham002

- 375 -

LRB100 06347 HLH 27841 a

1 the election provided for by this subparagraph (T), the

2 insurer to which the premiums were paid must add back

3 to income the amount subtracted by the taxpayer

4 pursuant to this subparagraph (T). This subparagraph

5 (T) is exempt from the provisions of Section 250.

6 (e) Gross income; adjusted gross income; taxable income.

7 (1) In general. Subject to the provisions of paragraph

8 (2) and subsection (b) (3), for purposes of this Section

9 and Section 803(e), a taxpayer's gross income, adjusted

10 gross income, or taxable income for the taxable year shall

11 mean the amount of gross income, adjusted gross income or

12 taxable income properly reportable for federal income tax

13 purposes for the taxable year under the provisions of the

14 Internal Revenue Code. Taxable income may be less than

15 zero. However, for taxable years ending on or after

16 December 31, 1986, net operating loss carryforwards from

17 taxable years ending prior to December 31, 1986, may not

18 exceed the sum of federal taxable income for the taxable

19 year before net operating loss deduction, plus the excess

20 of addition modifications over subtraction modifications

21 for the taxable year. For taxable years ending prior to

22 December 31, 1986, taxable income may never be an amount in

23 excess of the net operating loss for the taxable year as

24 defined in subsections (c) and (d) of Section 172 of the

25 Internal Revenue Code, provided that when taxable income of

10000SB0009ham002

- 376 -

LRB100 06347 HLH 27841 a

1 a corporation (other than a Subchapter S corporation),

2 trust, or estate is less than zero and addition

3 modifications, other than those provided by subparagraph

4 (E) of paragraph (2) of subsection (b) for corporations or

5 subparagraph (E) of paragraph (2) of subsection (c) for

6 trusts and estates, exceed subtraction modifications, an

7 addition modification must be made under those

8 subparagraphs for any other taxable year to which the

9 taxable income less than zero (net operating loss) is

10 applied under Section 172 of the Internal Revenue Code or

11 under subparagraph (E) of paragraph (2) of this subsection

12 (e) applied in conjunction with Section 172 of the Internal

13 Revenue Code.

14 (2) Special rule. For purposes of paragraph (1) of this

15 subsection, the taxable income properly reportable for

16 federal income tax purposes shall mean:

17 (A) Certain life insurance companies. In the case

18 of a life insurance company subject to the tax imposed

19 by Section 801 of the Internal Revenue Code, life

20 insurance company taxable income, plus the amount of

21 distribution from pre-1984 policyholder surplus

22 accounts as calculated under Section 815a of the

23 Internal Revenue Code;

24 (B) Certain other insurance companies. In the case

25 of mutual insurance companies subject to the tax

26 imposed by Section 831 of the Internal Revenue Code,

10000SB0009ham002

- 377 -

LRB100 06347 HLH 27841 a

1 insurance company taxable income;

2 (C) Regulated investment companies. In the case of

3 a regulated investment company subject to the tax

4 imposed by Section 852 of the Internal Revenue Code,

5 investment company taxable income;

6 (D) Real estate investment trusts. In the case of a

7 real estate investment trust subject to the tax imposed

8 by Section 857 of the Internal Revenue Code, real

9 estate investment trust taxable income;

10 (E) Consolidated corporations. In the case of a

11 corporation which is a member of an affiliated group of

12 corporations filing a consolidated income tax return

13 for the taxable year for federal income tax purposes,

14 taxable income determined as if such corporation had

15 filed a separate return for federal income tax purposes

16 for the taxable year and each preceding taxable year

17 for which it was a member of an affiliated group. For

18 purposes of this subparagraph, the taxpayer's separate

19 taxable income shall be determined as if the election

20 provided by Section 243(b) (2) of the Internal Revenue

21 Code had been in effect for all such years;

22 (F) Cooperatives. In the case of a cooperative

23 corporation or association, the taxable income of such

24 organization determined in accordance with the

25 provisions of Section 1381 through 1388 of the Internal

26 Revenue Code, but without regard to the prohibition

10000SB0009ham002

- 378 -

LRB100 06347 HLH 27841 a

1 against offsetting losses from patronage activities

2 against income from nonpatronage activities; except

3 that a cooperative corporation or association may make

4 an election to follow its federal income tax treatment

5 of patronage losses and nonpatronage losses. In the

6 event such election is made, such losses shall be

7 computed and carried over in a manner consistent with

8 subsection (a) of Section 207 of this Act and

9 apportioned by the apportionment factor reported by

10 the cooperative on its Illinois income tax return filed

11 for the taxable year in which the losses are incurred.

12 The election shall be effective for all taxable years

13 with original returns due on or after the date of the

14 election. In addition, the cooperative may file an

15 amended return or returns, as allowed under this Act,

16 to provide that the election shall be effective for

17 losses incurred or carried forward for taxable years

18 occurring prior to the date of the election. Once made,

19 the election may only be revoked upon approval of the

20 Director. The Department shall adopt rules setting

21 forth requirements for documenting the elections and

22 any resulting Illinois net loss and the standards to be

23 used by the Director in evaluating requests to revoke

24 elections. Public Act 96-932 is declaratory of

25 existing law;

26 (G) Subchapter S corporations. In the case of: (i)

10000SB0009ham002

- 379 -

LRB100 06347 HLH 27841 a

1 a Subchapter S corporation for which there is in effect

2 an election for the taxable year under Section 1362 of

3 the Internal Revenue Code, the taxable income of such

4 corporation determined in accordance with Section

5 1363(b) of the Internal Revenue Code, except that

6 taxable income shall take into account those items

7 which are required by Section 1363(b)(1) of the

8 Internal Revenue Code to be separately stated; and (ii)

9 a Subchapter S corporation for which there is in effect

10 a federal election to opt out of the provisions of the

11 Subchapter S Revision Act of 1982 and have applied

12 instead the prior federal Subchapter S rules as in

13 effect on July 1, 1982, the taxable income of such

14 corporation determined in accordance with the federal

15 Subchapter S rules as in effect on July 1, 1982; and

16 (H) Partnerships. In the case of a partnership,

17 taxable income determined in accordance with Section

18 703 of the Internal Revenue Code, except that taxable

19 income shall take into account those items which are

20 required by Section 703(a)(1) to be separately stated

21 but which would be taken into account by an individual

22 in calculating his taxable income.

23 (3) Recapture of business expenses on disposition of

24 asset or business. Notwithstanding any other law to the

25 contrary, if in prior years income from an asset or

26 business has been classified as business income and in a

10000SB0009ham002

- 380 -

LRB100 06347 HLH 27841 a

1 later year is demonstrated to be non-business income, then

2 all expenses, without limitation, deducted in such later

3 year and in the 2 immediately preceding taxable years

4 related to that asset or business that generated the

5 non-business income shall be added back and recaptured as

6 business income in the year of the disposition of the asset

7 or business. Such amount shall be apportioned to Illinois

8 using the greater of the apportionment fraction computed

9 for the business under Section 304 of this Act for the

10 taxable year or the average of the apportionment fractions

11 computed for the business under Section 304 of this Act for

12 the taxable year and for the 2 immediately preceding

13 taxable years.

14 (f) Valuation limitation amount.

15 (1) In general. The valuation limitation amount

16 referred to in subsections (a) (2) (G), (c) (2) (I) and

17 (d)(2) (E) is an amount equal to:

18 (A) The sum of the pre-August 1, 1969 appreciation

19 amounts (to the extent consisting of gain reportable

20 under the provisions of Section 1245 or 1250 of the

21 Internal Revenue Code) for all property in respect of

22 which such gain was reported for the taxable year; plus

23 (B) The lesser of (i) the sum of the pre-August 1,

24 1969 appreciation amounts (to the extent consisting of

25 capital gain) for all property in respect of which such

10000SB0009ham002

- 381 -

LRB100 06347 HLH 27841 a

1 gain was reported for federal income tax purposes for

2 the taxable year, or (ii) the net capital gain for the

3 taxable year, reduced in either case by any amount of

4 such gain included in the amount determined under

5 subsection (a) (2) (F) or (c) (2) (H).

6 (2) Pre-August 1, 1969 appreciation amount.

7 (A) If the fair market value of property referred

8 to in paragraph (1) was readily ascertainable on August

9 1, 1969, the pre-August 1, 1969 appreciation amount for

10 such property is the lesser of (i) the excess of such

11 fair market value over the taxpayer's basis (for

12 determining gain) for such property on that date

13 (determined under the Internal Revenue Code as in

14 effect on that date), or (ii) the total gain realized

15 and reportable for federal income tax purposes in

16 respect of the sale, exchange or other disposition of

17 such property.

18 (B) If the fair market value of property referred

19 to in paragraph (1) was not readily ascertainable on

20 August 1, 1969, the pre-August 1, 1969 appreciation

21 amount for such property is that amount which bears the

22 same ratio to the total gain reported in respect of the

23 property for federal income tax purposes for the

24 taxable year, as the number of full calendar months in

25 that part of the taxpayer's holding period for the

26 property ending July 31, 1969 bears to the number of

10000SB0009ham002

- 382 -

LRB100 06347 HLH 27841 a

1 full calendar months in the taxpayer's entire holding

2 period for the property.

3 (C) The Department shall prescribe such

4 regulations as may be necessary to carry out the

5 purposes of this paragraph.

6 (g) Double deductions. Unless specifically provided

7 otherwise, nothing in this Section shall permit the same item

8 to be deducted more than once.

9 (h) Legislative intention. Except as expressly provided by

10 this Section there shall be no modifications or limitations on

11 the amounts of income, gain, loss or deduction taken into

12 account in determining gross income, adjusted gross income or

13 taxable income for federal income tax purposes for the taxable

14 year, or in the amount of such items entering into the

15 computation of base income and net income under this Act for

16 such taxable year, whether in respect of property values as of

17 August 1, 1969 or otherwise.

18 (Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,

19 eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;

20 96-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.

21 6-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,

22 eff. 8-23-11; 97-905, eff. 8-7-12.)

23 (35 ILCS 5/204) (from Ch. 120, par. 2-204)

10000SB0009ham002

- 383 -

LRB100 06347 HLH 27841 a

1 Sec. 204. Standard Exemption.

2 (a) Allowance of exemption. In computing net income under

3 this Act, there shall be allowed as an exemption the sum of the

4 amounts determined under subsections (b), (c) and (d),

5 multiplied by a fraction the numerator of which is the amount

6 of the taxpayer's base income allocable to this State for the

7 taxable year and the denominator of which is the taxpayer's

8 total base income for the taxable year.

9 (b) Basic amount. For the purpose of subsection (a) of this

10 Section, except as provided by subsection (a) of Section 205

11 and in this subsection, each taxpayer shall be allowed a basic

12 amount of $1000, except that for corporations the basic amount

13 shall be zero for tax years ending on or after December 31,

14 2003, and for individuals the basic amount shall be:

15 (1) for taxable years ending on or after December 31,

16 1998 and prior to December 31, 1999, $1,300;

17 (2) for taxable years ending on or after December 31,

18 1999 and prior to December 31, 2000, $1,650;

19 (3) for taxable years ending on or after December 31,

20 2000 and prior to December 31, 2012, $2,000;

21 (4) for taxable years ending on or after December 31,

22 2012 and prior to December 31, 2013, $2,050;

23 (5) for taxable years ending on or after December 31,

24 2013, $2,050 plus the cost-of-living adjustment under

25 subsection (d-5).

26 For taxable years ending on or after December 31, 1992, a

10000SB0009ham002

- 384 -

LRB100 06347 HLH 27841 a

1 taxpayer whose Illinois base income exceeds the basic amount

2 and who is claimed as a dependent on another person's tax

3 return under the Internal Revenue Code shall not be allowed any

4 basic amount under this subsection.

5 (c) Additional amount for individuals. In the case of an

6 individual taxpayer, there shall be allowed for the purpose of

7 subsection (a), in addition to the basic amount provided by

8 subsection (b), an additional exemption equal to the basic

9 amount for each exemption in excess of one allowable to such

10 individual taxpayer for the taxable year under Section 151 of

11 the Internal Revenue Code.

12 (d) Additional exemptions for an individual taxpayer and

13 his or her spouse. In the case of an individual taxpayer and

14 his or her spouse, he or she shall each be allowed additional

15 exemptions as follows:

16 (1) Additional exemption for taxpayer or spouse 65

17 years of age or older.

18 (A) For taxpayer. An additional exemption of

19 $1,000 for the taxpayer if he or she has attained the

20 age of 65 before the end of the taxable year.

21 (B) For spouse when a joint return is not filed. An

22 additional exemption of $1,000 for the spouse of the

23 taxpayer if a joint return is not made by the taxpayer

24 and his spouse, and if the spouse has attained the age

25 of 65 before the end of such taxable year, and, for the

26 calendar year in which the taxable year of the taxpayer

10000SB0009ham002

- 385 -

LRB100 06347 HLH 27841 a

1 begins, has no gross income and is not the dependent of

2 another taxpayer.

3 (2) Additional exemption for blindness of taxpayer or

4 spouse.

5 (A) For taxpayer. An additional exemption of

6 $1,000 for the taxpayer if he or she is blind at the

7 end of the taxable year.

8 (B) For spouse when a joint return is not filed. An

9 additional exemption of $1,000 for the spouse of the

10 taxpayer if a separate return is made by the taxpayer,

11 and if the spouse is blind and, for the calendar year

12 in which the taxable year of the taxpayer begins, has

13 no gross income and is not the dependent of another

14 taxpayer. For purposes of this paragraph, the

15 determination of whether the spouse is blind shall be

16 made as of the end of the taxable year of the taxpayer;

17 except that if the spouse dies during such taxable year

18 such determination shall be made as of the time of such

19 death.

20 (C) Blindness defined. For purposes of this

21 subsection, an individual is blind only if his or her

22 central visual acuity does not exceed 20/200 in the

23 better eye with correcting lenses, or if his or her

24 visual acuity is greater than 20/200 but is accompanied

25 by a limitation in the fields of vision such that the

26 widest diameter of the visual fields subtends an angle

10000SB0009ham002

- 386 -

LRB100 06347 HLH 27841 a

1 no greater than 20 degrees.

2 (d-5) Cost-of-living adjustment. For purposes of item (5)

3 of subsection (b), the cost-of-living adjustment for any

4 calendar year and for taxable years ending prior to the end of

5 the subsequent calendar year is equal to $2,050 times the

6 percentage (if any) by which:

7 (1) the Consumer Price Index for the preceding calendar

8 year, exceeds

9 (2) the Consumer Price Index for the calendar year

10 2011.

11 The Consumer Price Index for any calendar year is the

12 average of the Consumer Price Index as of the close of the

13 12-month period ending on August 31 of that calendar year.

14 The term "Consumer Price Index" means the last Consumer

15 Price Index for All Urban Consumers published by the United

16 States Department of Labor or any successor agency.

17 If any cost-of-living adjustment is not a multiple of $25,

18 that adjustment shall be rounded to the next lowest multiple of

19 $25.

20 (e) Cross reference. See Article 3 for the manner of

21 determining base income allocable to this State.

22 (f) Application of Section 250. Section 250 does not apply

23 to the amendments to this Section made by Public Act 90-613.

24 (g) Notwithstanding any other provision of law, for taxable

25 years beginning on or after January 1, 2017, no taxpayer may

26 claim an exemption under this Section if the taxpayer's

10000SB0009ham002

- 387 -

LRB100 06347 HLH 27841 a

1 adjusted gross income for the taxable year exceeds (i)

2 $500,000, in the case of spouses filing a joint federal tax

3 return or (ii) $250,000, in the case of all other taxpayers.

4 (Source: P.A. 97-507, eff. 8-23-11; 97-652, eff. 6-1-12.)

5 (35 ILCS 5/208) (from Ch. 120, par. 2-208)

6 Sec. 208. Tax credit for residential real property taxes.

7 Beginning with tax years ending on or after December 31, 1991,

8 every individual taxpayer shall be entitled to a tax credit

9 equal to 5% of real property taxes paid by such taxpayer during

10 the taxable year on the principal residence of the taxpayer. In

11 the case of multi-unit or multi-use structures and farm

12 dwellings, the taxes on the taxpayer's principal residence

13 shall be that portion of the total taxes which is attributable

14 to such principal residence.Notwithstanding any other

15 provision of law, for taxable years beginning on or after

16 January 1, 2017, no taxpayer may claim a credit under this

17 Section if the taxpayer's adjusted gross income for the taxable

18 year exceeds (i) $500,000, in the case of spouses filing a

19 joint federal tax return, or (ii) $250,000, in the case of all

20 other taxpayers.

21 (Source: P.A. 87-17.)

22 (35 ILCS 5/212)

23 Sec. 212. Earned income tax credit.

24 (a) With respect to the federal earned income tax credit

10000SB0009ham002

- 388 -

LRB100 06347 HLH 27841 a

1 allowed for the taxable year under Section 32 of the federal

2 Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer

3 is entitled to a credit against the tax imposed by subsections

4 (a) and (b) of Section 201 in an amount equal to (i) 5% of the

5 federal tax credit for each taxable year beginning on or after

6 January 1, 2000 and ending prior to December 31, 2012, (ii)

7 7.5% of the federal tax credit for each taxable year beginning

8 on or after January 1, 2012 and ending prior to December 31,

9 2013, ~~and~~ (iii) 10% of the federal tax credit for each taxable

10 year beginning on or after January 1, 2013 and beginning prior

11 to January 1, 2017, (iv) 14% of the federal tax credit for each

12 taxable year beginning on or after January 1, 2017 and

13 beginning prior to January 1, 2018, and (v) 18% of the federal

14 tax credit for each taxable year beginning on or after January

15 1, 2018.

16 For a non-resident or part-year resident, the amount of the

17 credit under this Section shall be in proportion to the amount

18 of income attributable to this State.

19 (b) For taxable years beginning before January 1, 2003, in

20 no event shall a credit under this Section reduce the

21 taxpayer's liability to less than zero. For each taxable year

22 beginning on or after January 1, 2003, if the amount of the

23 credit exceeds the income tax liability for the applicable tax

24 year, then the excess credit shall be refunded to the taxpayer.

25 The amount of a refund shall not be included in the taxpayer's

26 income or resources for the purposes of determining eligibility

10000SB0009ham002

- 389 -

LRB100 06347 HLH 27841 a

1 or benefit level in any means-tested benefit program

2 administered by a governmental entity unless required by

3 federal law.

4 (c) This Section is exempt from the provisions of Section

5 250.

6 (Source: P.A. 97-652, eff. 6-1-12.)

7 (35 ILCS 5/225 new)

8 Sec. 225. Credit for instructional materials and supplies.

9 For taxable years beginning on and after January 1, 2017, a

10 taxpayer shall be allowed a credit in the amount paid by the

11 taxpayer during the taxable year for instructional materials

12 and supplies with respect to classroom based instruction in a

13 qualified school, or $250, whichever is less, provided that the

14 taxpayer is a teacher, instructor, counselor, principal, or

15 aide in a qualified school for at least 900 hours during a

16 school year.

17 The credit may not be carried back and may not reduce the

18 taxpayer's liability to less than zero. If the amount of the

19 credit exceeds the tax liability for the year, the excess may

20 be carried forward and applied to the tax liability of the 5

21 taxable years following the excess credit year. The tax credit

22 shall be applied to the earliest year for which there is a tax

23 liability. If there are credits for more than one year that are

24 available to offset a liability, the earlier credit shall be

25 applied first.

10000SB0009ham002

- 390 -

LRB100 06347 HLH 27841 a

1 For purposes of this Section, the term "materials and

2 supplies" means amounts paid for instructional materials or

3 supplies that are designated for classroom use in any qualified

4 school. For purposes of this Section, the term "qualified

5 school" means a public school or non-public school located in

6 Illinois.

7 This Section is exempt from the provisions of Section 250.

8 (35 ILCS 5/901) (from Ch. 120, par. 9-901)

9 Sec. 901. Collection authority.

10 (a) In general.

11 The Department shall collect the taxes imposed by this Act.

12 The Department shall collect certified past due child support

13 amounts under Section 2505-650 of the Department of Revenue Law

14 (20 ILCS 2505/2505-650). Except as provided in subsections (c),

15 (e), (f), (g), and (h) of this Section, money collected

16 pursuant to subsections (a) and (b) of Section 201 of this Act

17 shall be paid into the General Revenue Fund in the State

18 treasury; money collected pursuant to subsections (c) and (d)

19 of Section 201 of this Act shall be paid into the Personal

20 Property Tax Replacement Fund, a special fund in the State

21 Treasury; and money collected under Section 2505-650 of the

22 Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid

23 into the Child Support Enforcement Trust Fund, a special fund

24 outside the State Treasury, or to the State Disbursement Unit

25 established under Section 10-26 of the Illinois Public Aid

10000SB0009ham002

- 391 -

LRB100 06347 HLH 27841 a

1 Code, as directed by the Department of Healthcare and Family

2 Services.

3 (b) Local Government Distributive Fund.

4 Beginning August 1, 1969, and continuing through June 30,

5 1994, the Treasurer shall transfer each month from the General

6 Revenue Fund to a special fund in the State treasury, to be

7 known as the "Local Government Distributive Fund", an amount

8 equal to 1/12 of the net revenue realized from the tax imposed

9 by subsections (a) and (b) of Section 201 of this Act during

10 the preceding month. Beginning July 1, 1994, and continuing

11 through June 30, 1995, the Treasurer shall transfer each month

12 from the General Revenue Fund to the Local Government

13 Distributive Fund an amount equal to 1/11 of the net revenue

14 realized from the tax imposed by subsections (a) and (b) of

15 Section 201 of this Act during the preceding month. Beginning

16 July 1, 1995 and continuing through January 31, 2011, the

17 Treasurer shall transfer each month from the General Revenue

18 Fund to the Local Government Distributive Fund an amount equal

19 to the net of (i) 1/10 of the net revenue realized from the tax

20 imposed by subsections (a) and (b) of Section 201 of the

21 Illinois Income Tax Act during the preceding month (ii) minus,

22 beginning July 1, 2003 and ending June 30, 2004, $6,666,666,

23 and beginning July 1, 2004, zero. Beginning February 1, 2011,

24 and continuing through January 31, 2015, the Treasurer shall

25 transfer each month from the General Revenue Fund to the Local

26 Government Distributive Fund an amount equal to the sum of (i)

10000SB0009ham002

- 392 -

LRB100 06347 HLH 27841 a

1 6% (10% of the ratio of the 3% individual income tax rate prior

2 to 2011 to the 5% individual income tax rate after 2010) of the

3 net revenue realized from the tax imposed by subsections (a)

4 and (b) of Section 201 of this Act upon individuals, trusts,

5 and estates during the preceding month and (ii) 6.86% (10% of

6 the ratio of the 4.8% corporate income tax rate prior to 2011

7 to the 7% corporate income tax rate after 2010) of the net

8 revenue realized from the tax imposed by subsections (a) and

9 (b) of Section 201 of this Act upon corporations during the

10 preceding month. Beginning February 1, 2015 and continuing

11 through July 31, 2017 ~~January 31, 2025~~, the Treasurer shall

12 transfer each month from the General Revenue Fund to the Local

13 Government Distributive Fund an amount equal to the sum of (i)

14 8% (10% of the ratio of the 3% individual income tax rate prior

15 to 2011 to the 3.75% individual income tax rate after 2014) of

16 the net revenue realized from the tax imposed by subsections

17 (a) and (b) of Section 201 of this Act upon individuals,

18 trusts, and estates during the preceding month and (ii) 9.14%

19 (10% of the ratio of the 4.8% corporate income tax rate prior

20 to 2011 to the 5.25% corporate income tax rate after 2014) of

21 the net revenue realized from the tax imposed by subsections

22 (a) and (b) of Section 201 of this Act upon corporations during

23 the preceding month. Beginning August 1, 2017 ~~February 1, 2025~~,

24 the Treasurer shall transfer each month from the General

25 Revenue Fund to the Local Government Distributive Fund an

26 amount equal to the sum of (i) 6.06% ~~9.23%~~ (10% of the ratio of

10000SB0009ham002

- 393 -

LRB100 06347 HLH 27841 a

1 the 3% individual income tax rate prior to 2011 to the 4.95%

2 ~~3.25%~~ individual income tax rate after July 1, 2017 ~~2024~~) of

3 the net revenue realized from the tax imposed by subsections

4 (a) and (b) of Section 201 of this Act upon individuals,

5 trusts, and estates during the preceding month and (ii) 6.85%

6 (10% of the ratio of the 4.8% corporate income tax rate prior

7 to 2011 to the 7% corporate income tax rate after July 1, 2017)

8 ~~10%~~ of the net revenue realized from the tax imposed by

9 subsections (a) and (b) of Section 201 of this Act upon

10 corporations during the preceding month. Net revenue realized

11 for a month shall be defined as the revenue from the tax

12 imposed by subsections (a) and (b) of Section 201 of this Act

13 which is deposited in the General Revenue Fund, the Education

14 Assistance Fund, the Income Tax Surcharge Local Government

15 Distributive Fund, the Fund for the Advancement of Education,

16 and the Commitment to Human Services Fund during the month

17 minus the amount paid out of the General Revenue Fund in State

18 warrants during that same month as refunds to taxpayers for

19 overpayment of liability under the tax imposed by subsections

20 (a) and (b) of Section 201 of this Act.

21 Beginning on August 26, 2014 (the effective date of Public

22 Act 98-1052), the Comptroller shall perform the transfers

23 required by this subsection (b) no later than 60 days after he

24 or she receives the certification from the Treasurer as

25 provided in Section 1 of the State Revenue Sharing Act.

26 (c) Deposits Into Income Tax Refund Fund.

10000SB0009ham002

- 394 -

LRB100 06347 HLH 27841 a

1 (1) Beginning on January 1, 1989 and thereafter, the

2 Department shall deposit a percentage of the amounts

3 collected pursuant to subsections (a) and (b)(1), (2), and

4 (3), of Section 201 of this Act into a fund in the State

5 treasury known as the Income Tax Refund Fund. The

6 Department shall deposit 6% of such amounts during the

7 period beginning January 1, 1989 and ending on June 30,

8 1989. Beginning with State fiscal year 1990 and for each

9 fiscal year thereafter, the percentage deposited into the

10 Income Tax Refund Fund during a fiscal year shall be the

11 Annual Percentage. For fiscal years 1999 through 2001, the

12 Annual Percentage shall be 7.1%. For fiscal year 2003, the

13 Annual Percentage shall be 8%. For fiscal year 2004, the

14 Annual Percentage shall be 11.7%. Upon the effective date

15 of this amendatory Act of the 93rd General Assembly, the

16 Annual Percentage shall be 10% for fiscal year 2005. For

17 fiscal year 2006, the Annual Percentage shall be 9.75%. For

18 fiscal year 2007, the Annual Percentage shall be 9.75%. For

19 fiscal year 2008, the Annual Percentage shall be 7.75%. For

20 fiscal year 2009, the Annual Percentage shall be 9.75%. For

21 fiscal year 2010, the Annual Percentage shall be 9.75%. For

22 fiscal year 2011, the Annual Percentage shall be 8.75%. For

23 fiscal year 2012, the Annual Percentage shall be 8.75%. For

24 fiscal year 2013, the Annual Percentage shall be 9.75%. For

25 fiscal year 2014, the Annual Percentage shall be 9.5%. For

26 fiscal year 2015, the Annual Percentage shall be 10%. For

10000SB0009ham002

- 395 -

LRB100 06347 HLH 27841 a

1 all other fiscal years, the Annual Percentage shall be

2 calculated as a fraction, the numerator of which shall be

3 the amount of refunds approved for payment by the

4 Department during the preceding fiscal year as a result of

5 overpayment of tax liability under subsections (a) and

6 (b)(1), (2), and (3) of Section 201 of this Act plus the

7 amount of such refunds remaining approved but unpaid at the

8 end of the preceding fiscal year, minus the amounts

9 transferred into the Income Tax Refund Fund from the

10 Tobacco Settlement Recovery Fund, and the denominator of

11 which shall be the amounts which will be collected pursuant

12 to subsections (a) and (b)(1), (2), and (3) of Section 201

13 of this Act during the preceding fiscal year; except that

14 in State fiscal year 2002, the Annual Percentage shall in

15 no event exceed 7.6%. The Director of Revenue shall certify

16 the Annual Percentage to the Comptroller on the last

17 business day of the fiscal year immediately preceding the

18 fiscal year for which it is to be effective.

19 (2) Beginning on January 1, 1989 and thereafter, the

20 Department shall deposit a percentage of the amounts

21 collected pursuant to subsections (a) and (b)(6), (7), and

22 (8), (c) and (d) of Section 201 of this Act into a fund in

23 the State treasury known as the Income Tax Refund Fund. The

24 Department shall deposit 18% of such amounts during the

25 period beginning January 1, 1989 and ending on June 30,

26 1989. Beginning with State fiscal year 1990 and for each

10000SB0009ham002

- 396 -

LRB100 06347 HLH 27841 a

1 fiscal year thereafter, the percentage deposited into the

2 Income Tax Refund Fund during a fiscal year shall be the

3 Annual Percentage. For fiscal years 1999, 2000, and 2001,

4 the Annual Percentage shall be 19%. For fiscal year 2003,

5 the Annual Percentage shall be 27%. For fiscal year 2004,

6 the Annual Percentage shall be 32%. Upon the effective date

7 of this amendatory Act of the 93rd General Assembly, the

8 Annual Percentage shall be 24% for fiscal year 2005. For

9 fiscal year 2006, the Annual Percentage shall be 20%. For

10 fiscal year 2007, the Annual Percentage shall be 17.5%. For

11 fiscal year 2008, the Annual Percentage shall be 15.5%. For

12 fiscal year 2009, the Annual Percentage shall be 17.5%. For

13 fiscal year 2010, the Annual Percentage shall be 17.5%. For

14 fiscal year 2011, the Annual Percentage shall be 17.5%. For

15 fiscal year 2012, the Annual Percentage shall be 17.5%. For

16 fiscal year 2013, the Annual Percentage shall be 14%. For

17 fiscal year 2014, the Annual Percentage shall be 13.4%. For

18 fiscal year 2015, the Annual Percentage shall be 14%. For

19 all other fiscal years, the Annual Percentage shall be

20 calculated as a fraction, the numerator of which shall be

21 the amount of refunds approved for payment by the

22 Department during the preceding fiscal year as a result of

23 overpayment of tax liability under subsections (a) and

24 (b)(6), (7), and (8), (c) and (d) of Section 201 of this

25 Act plus the amount of such refunds remaining approved but

26 unpaid at the end of the preceding fiscal year, and the

10000SB0009ham002

- 397 -

LRB100 06347 HLH 27841 a

1 denominator of which shall be the amounts which will be

2 collected pursuant to subsections (a) and (b)(6), (7), and

3 (8), (c) and (d) of Section 201 of this Act during the

4 preceding fiscal year; except that in State fiscal year

5 2002, the Annual Percentage shall in no event exceed 23%.

6 The Director of Revenue shall certify the Annual Percentage

7 to the Comptroller on the last business day of the fiscal

8 year immediately preceding the fiscal year for which it is

9 to be effective.

10 (3) The Comptroller shall order transferred and the

11 Treasurer shall transfer from the Tobacco Settlement

12 Recovery Fund to the Income Tax Refund Fund (i) $35,000,000

13 in January, 2001, (ii) $35,000,000 in January, 2002, and

14 (iii) $35,000,000 in January, 2003.

15 (d) Expenditures from Income Tax Refund Fund.

16 (1) Beginning January 1, 1989, money in the Income Tax

17 Refund Fund shall be expended exclusively for the purpose

18 of paying refunds resulting from overpayment of tax

19 liability under Section 201 of this Act, for paying rebates

20 under Section 208.1 in the event that the amounts in the

21 Homeowners' Tax Relief Fund are insufficient for that

22 purpose, and for making transfers pursuant to this

23 subsection (d).

24 (2) The Director shall order payment of refunds

25 resulting from overpayment of tax liability under Section

26 201 of this Act from the Income Tax Refund Fund only to the

10000SB0009ham002

- 398 -

LRB100 06347 HLH 27841 a

1 extent that amounts collected pursuant to Section 201 of

2 this Act and transfers pursuant to this subsection (d) and

3 item (3) of subsection (c) have been deposited and retained

4 in the Fund.

5 (3) As soon as possible after the end of each fiscal

6 year, the Director shall order transferred and the State

7 Treasurer and State Comptroller shall transfer from the

8 Income Tax Refund Fund to the Personal Property Tax

9 Replacement Fund an amount, certified by the Director to

10 the Comptroller, equal to the excess of the amount

11 collected pursuant to subsections (c) and (d) of Section

12 201 of this Act deposited into the Income Tax Refund Fund

13 during the fiscal year over the amount of refunds resulting

14 from overpayment of tax liability under subsections (c) and

15 (d) of Section 201 of this Act paid from the Income Tax

16 Refund Fund during the fiscal year.

17 (4) As soon as possible after the end of each fiscal

18 year, the Director shall order transferred and the State

19 Treasurer and State Comptroller shall transfer from the

20 Personal Property Tax Replacement Fund to the Income Tax

21 Refund Fund an amount, certified by the Director to the

22 Comptroller, equal to the excess of the amount of refunds

23 resulting from overpayment of tax liability under

24 subsections (c) and (d) of Section 201 of this Act paid

25 from the Income Tax Refund Fund during the fiscal year over

26 the amount collected pursuant to subsections (c) and (d) of

10000SB0009ham002

- 399 -

LRB100 06347 HLH 27841 a

1 Section 201 of this Act deposited into the Income Tax

2 Refund Fund during the fiscal year.

3 (4.5) As soon as possible after the end of fiscal year

4 1999 and of each fiscal year thereafter, the Director shall

5 order transferred and the State Treasurer and State

6 Comptroller shall transfer from the Income Tax Refund Fund

7 to the General Revenue Fund any surplus remaining in the

8 Income Tax Refund Fund as of the end of such fiscal year;

9 excluding for fiscal years 2000, 2001, and 2002 amounts

10 attributable to transfers under item (3) of subsection (c)

11 less refunds resulting from the earned income tax credit.

12 (5) This Act shall constitute an irrevocable and

13 continuing appropriation from the Income Tax Refund Fund

14 for the purpose of paying refunds upon the order of the

15 Director in accordance with the provisions of this Section.

16 (e) Deposits into the Education Assistance Fund and the

17 Income Tax Surcharge Local Government Distributive Fund.

18 On July 1, 1991, and thereafter, of the amounts collected

19 pursuant to subsections (a) and (b) of Section 201 of this Act,

20 minus deposits into the Income Tax Refund Fund, the Department

21 shall deposit 7.3% into the Education Assistance Fund in the

22 State Treasury. Beginning July 1, 1991, and continuing through

23 January 31, 1993, of the amounts collected pursuant to

24 subsections (a) and (b) of Section 201 of the Illinois Income

25 Tax Act, minus deposits into the Income Tax Refund Fund, the

26 Department shall deposit 3.0% into the Income Tax Surcharge

10000SB0009ham002

- 400 -

LRB100 06347 HLH 27841 a

1 Local Government Distributive Fund in the State Treasury.

2 Beginning February 1, 1993 and continuing through June 30,

3 1993, of the amounts collected pursuant to subsections (a) and

4 (b) of Section 201 of the Illinois Income Tax Act, minus

5 deposits into the Income Tax Refund Fund, the Department shall

6 deposit 4.4% into the Income Tax Surcharge Local Government

7 Distributive Fund in the State Treasury. Beginning July 1,

8 1993, and continuing through June 30, 1994, of the amounts

9 collected under subsections (a) and (b) of Section 201 of this

10 Act, minus deposits into the Income Tax Refund Fund, the

11 Department shall deposit 1.475% into the Income Tax Surcharge

12 Local Government Distributive Fund in the State Treasury.

13 (f) Deposits into the Fund for the Advancement of

14 Education. Beginning February 1, 2015, the Department shall

15 deposit the following portions of the revenue realized from the

16 tax imposed upon individuals, trusts, and estates by

17 subsections (a) and (b) of Section 201 of this Act during the

18 preceding month, minus deposits into the Income Tax Refund

19 Fund, into the Fund for the Advancement of Education:

20 (1) beginning February 1, 2015, and prior to February

21 1, 2025, 1/30; and

22 (2) beginning February 1, 2025, 1/26.

23 If the rate of tax imposed by subsection (a) and (b) of

24 Section 201 is reduced pursuant to Section 201.5 of this Act,

25 the Department shall not make the deposits required by this

26 subsection (f) on or after the effective date of the reduction.

10000SB0009ham002

- 401 -

LRB100 06347 HLH 27841 a

1 (g) Deposits into the Commitment to Human Services Fund.

2 Beginning February 1, 2015, the Department shall deposit the

3 following portions of the revenue realized from the tax imposed

4 upon individuals, trusts, and estates by subsections (a) and

5 (b) of Section 201 of this Act during the preceding month,

6 minus deposits into the Income Tax Refund Fund, into the

7 Commitment to Human Services Fund:

8 (1) beginning February 1, 2015, and prior to February

9 1, 2025, 1/30; and

10 (2) beginning February 1, 2025, 1/26.

11 If the rate of tax imposed by subsection (a) and (b) of

12 Section 201 is reduced pursuant to Section 201.5 of this Act,

13 the Department shall not make the deposits required by this

14 subsection (g) on or after the effective date of the reduction.

15 (h) Deposits into the Tax Compliance and Administration

16 Fund. Beginning on the first day of the first calendar month to

17 occur on or after August 26, 2014 (the effective date of Public

18 Act 98-1098), each month the Department shall pay into the Tax

19 Compliance and Administration Fund, to be used, subject to

20 appropriation, to fund additional auditors and compliance

21 personnel at the Department, an amount equal to 1/12 of 5% of

22 the cash receipts collected during the preceding fiscal year by

23 the Audit Bureau of the Department from the tax imposed by

24 subsections (a), (b), (c), and (d) of Section 201 of this Act,

25 net of deposits into the Income Tax Refund Fund made from those

26 cash receipts.

10000SB0009ham002

- 402 -

LRB100 06347 HLH 27841 a

1 (Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;

2 98-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.

3 7-20-15.)

4 (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)

5 Sec. 1501. Definitions.

6 (a) In general. When used in this Act, where not otherwise

7 distinctly expressed or manifestly incompatible with the

8 intent thereof:

9 (1) Business income. The term "business income" means

10 all income that may be treated as apportionable business

11 income under the Constitution of the United States.

12 Business income is net of the deductions allocable thereto.

13 Such term does not include compensation or the deductions

14 allocable thereto. For each taxable year beginning on or

15 after January 1, 2003, a taxpayer may elect to treat all

16 income other than compensation as business income. This

17 election shall be made in accordance with rules adopted by

18 the Department and, once made, shall be irrevocable.

19 (1.5) Captive real estate investment trust:

20 (A) The term "captive real estate investment

21 trust" means a corporation, trust, or association:

22 (i) that is considered a real estate

23 investment trust for the taxable year under

24 Section 856 of the Internal Revenue Code;

25 (ii) the certificates of beneficial interest

10000SB0009ham002

- 403 -

LRB100 06347 HLH 27841 a

1 or shares of which are not regularly traded on an

2 established securities market; and

3 (iii) of which more than 50% of the voting

4 power or value of the beneficial interest or

5 shares, at any time during the last half of the

6 taxable year, is owned or controlled, directly,

7 indirectly, or constructively, by a single

8 corporation.

9 (B) The term "captive real estate investment

10 trust" does not include:

11 (i) a real estate investment trust of which

12 more than 50% of the voting power or value of the

13 beneficial interest or shares is owned or

14 controlled, directly, indirectly, or

15 constructively, by:

16 (a) a real estate investment trust, other

17 than a captive real estate investment trust;

18 (b) a person who is exempt from taxation

19 under Section 501 of the Internal Revenue Code,

20 and who is not required to treat income

21 received from the real estate investment trust

22 as unrelated business taxable income under

23 Section 512 of the Internal Revenue Code;

24 (c) a listed Australian property trust, if

25 no more than 50% of the voting power or value

26 of the beneficial interest or shares of that

10000SB0009ham002

- 404 -

LRB100 06347 HLH 27841 a

1 trust, at any time during the last half of the

2 taxable year, is owned or controlled, directly

3 or indirectly, by a single person;

4 (d) an entity organized as a trust,

5 provided a listed Australian property trust

6 described in subparagraph (c) owns or

7 controls, directly or indirectly, or

8 constructively, 75% or more of the voting power

9 or value of the beneficial interests or shares

10 of such entity; or

11 (e) an entity that is organized outside of

12 the laws of the United States and that

13 satisfies all of the following criteria:

14 (1) at least 75% of the entity's total

15 asset value at the close of its taxable

16 year is represented by real estate assets

17 (as defined in Section 856(c)(5)(B) of the

18 Internal Revenue Code, thereby including

19 shares or certificates of beneficial

20 interest in any real estate investment

21 trust), cash and cash equivalents, and

22 U.S. Government securities;

23 (2) the entity is not subject to tax on

24 amounts that are distributed to its

25 beneficial owners or is exempt from

26 entity-level taxation;

10000SB0009ham002

- 405 -

LRB100 06347 HLH 27841 a

1 (3) the entity distributes at least

2 85% of its taxable income (as computed in

3 the jurisdiction in which it is organized)

4 to the holders of its shares or

5 certificates of beneficial interest on an

6 annual basis;

7 (4) either (i) the shares or

8 beneficial interests of the entity are

9 regularly traded on an established

10 securities market or (ii) not more than 10%

11 of the voting power or value in the entity

12 is held, directly, indirectly, or

13 constructively, by a single entity or

14 individual; and

15 (5) the entity is organized in a

16 country that has entered into a tax treaty

17 with the United States; or

18 (ii) during its first taxable year for which it

19 elects to be treated as a real estate investment

20 trust under Section 856(c)(1) of the Internal

21 Revenue Code, a real estate investment trust the

22 certificates of beneficial interest or shares of

23 which are not regularly traded on an established

24 securities market, but only if the certificates of

25 beneficial interest or shares of the real estate

26 investment trust are regularly traded on an

10000SB0009ham002

- 406 -

LRB100 06347 HLH 27841 a

1 established securities market prior to the earlier

2 of the due date (including extensions) for filing

3 its return under this Act for that first taxable

4 year or the date it actually files that return.

5 (C) For the purposes of this subsection (1.5), the

6 constructive ownership rules prescribed under Section

7 318(a) of the Internal Revenue Code, as modified by

8 Section 856(d)(5) of the Internal Revenue Code, apply

9 in determining the ownership of stock, assets, or net

10 profits of any person.

11 (D) For the purposes of this item (1.5), for

12 taxable years ending on or after August 16, 2007, the

13 voting power or value of the beneficial interest or

14 shares of a real estate investment trust does not

15 include any voting power or value of beneficial

16 interest or shares in a real estate investment trust

17 held directly or indirectly in a segregated asset

18 account by a life insurance company (as described in

19 Section 817 of the Internal Revenue Code) to the extent

20 such voting power or value is for the benefit of

21 entities or persons who are either immune from taxation

22 or exempt from taxation under subtitle A of the

23 Internal Revenue Code.

24 (2) Commercial domicile. The term "commercial

25 domicile" means the principal place from which the trade or

26 business of the taxpayer is directed or managed.

10000SB0009ham002

- 407 -

LRB100 06347 HLH 27841 a

1 (3) Compensation. The term "compensation" means wages,

2 salaries, commissions and any other form of remuneration

3 paid to employees for personal services.

4 (4) Corporation. The term "corporation" includes

5 associations, joint-stock companies, insurance companies

6 and cooperatives. Any entity, including a limited

7 liability company formed under the Illinois Limited

8 Liability Company Act, shall be treated as a corporation if

9 it is so classified for federal income tax purposes.

10 (5) Department. The term "Department" means the

11 Department of Revenue of this State.

12 (6) Director. The term "Director" means the Director of

13 Revenue of this State.

14 (7) Fiduciary. The term "fiduciary" means a guardian,

15 trustee, executor, administrator, receiver, or any person

16 acting in any fiduciary capacity for any person.

17 (8) Financial organization.

18 (A) The term "financial organization" means any

19 bank, bank holding company, trust company, savings

20 bank, industrial bank, land bank, safe deposit

21 company, private banker, savings and loan association,

22 building and loan association, credit union, currency

23 exchange, cooperative bank, small loan company, sales

24 finance company, investment company, or any person

25 which is owned by a bank or bank holding company. For

26 the purpose of this Section a "person" will include

10000SB0009ham002

- 408 -

LRB100 06347 HLH 27841 a

1 only those persons which a bank holding company may

2 acquire and hold an interest in, directly or

3 indirectly, under the provisions of the Bank Holding

4 Company Act of 1956 (12 U.S.C. 1841, et seq.), except

5 where interests in any person must be disposed of

6 within certain required time limits under the Bank

7 Holding Company Act of 1956.

8 (B) For purposes of subparagraph (A) of this

9 paragraph, the term "bank" includes (i) any entity that

10 is regulated by the Comptroller of the Currency under

11 the National Bank Act, or by the Federal Reserve Board,

12 or by the Federal Deposit Insurance Corporation and

13 (ii) any federally or State chartered bank operating as

14 a credit card bank.

15 (C) For purposes of subparagraph (A) of this

16 paragraph, the term "sales finance company" has the

17 meaning provided in the following item (i) or (ii):

18 (i) A person primarily engaged in one or more

19 of the following businesses: the business of

20 purchasing customer receivables, the business of

21 making loans upon the security of customer

22 receivables, the business of making loans for the

23 express purpose of funding purchases of tangible

24 personal property or services by the borrower, or

25 the business of finance leasing. For purposes of

26 this item (i), "customer receivable" means:

10000SB0009ham002

- 409 -

LRB100 06347 HLH 27841 a

1 (a) a retail installment contract or

2 retail charge agreement within the meaning of

3 the Sales Finance Agency Act, the Retail

4 Installment Sales Act, or the Motor Vehicle

5 Retail Installment Sales Act;

6 (b) an installment, charge, credit, or

7 similar contract or agreement arising from the

8 sale of tangible personal property or services

9 in a transaction involving a deferred payment

10 price payable in one or more installments

11 subsequent to the sale; or

12 (c) the outstanding balance of a contract

13 or agreement described in provisions (a) or (b)

14 of this item (i).

15 A customer receivable need not provide for

16 payment of interest on deferred payments. A sales

17 finance company may purchase a customer receivable

18 from, or make a loan secured by a customer

19 receivable to, the seller in the original

20 transaction or to a person who purchased the

21 customer receivable directly or indirectly from

22 that seller.

23 (ii) A corporation meeting each of the

24 following criteria:

25 (a) the corporation must be a member of an

26 "affiliated group" within the meaning of

10000SB0009ham002

- 410 -

LRB100 06347 HLH 27841 a

1 Section 1504(a) of the Internal Revenue Code,

2 determined without regard to Section 1504(b)

3 of the Internal Revenue Code;

4 (b) more than 50% of the gross income of

5 the corporation for the taxable year must be

6 interest income derived from qualifying loans.

7 A "qualifying loan" is a loan made to a member

8 of the corporation's affiliated group that

9 originates customer receivables (within the

10 meaning of item (i)) or to whom customer

11 receivables originated by a member of the

12 affiliated group have been transferred, to the

13 extent the average outstanding balance of

14 loans from that corporation to members of its

15 affiliated group during the taxable year do not

16 exceed the limitation amount for that

17 corporation. The "limitation amount" for a

18 corporation is the average outstanding

19 balances during the taxable year of customer

20 receivables (within the meaning of item (i))

21 originated by all members of the affiliated

22 group. If the average outstanding balances of

23 the loans made by a corporation to members of

24 its affiliated group exceed the limitation

25 amount, the interest income of that

26 corporation from qualifying loans shall be

10000SB0009ham002

- 411 -

LRB100 06347 HLH 27841 a

1 equal to its interest income from loans to

2 members of its affiliated groups times a

3 fraction equal to the limitation amount

4 divided by the average outstanding balances of

5 the loans made by that corporation to members

6 of its affiliated group;

7 (c) the total of all shareholder's equity

8 (including, without limitation, paid-in

9 capital on common and preferred stock and

10 retained earnings) of the corporation plus the

11 total of all of its loans, advances, and other

12 obligations payable or owed to members of its

13 affiliated group may not exceed 20% of the

14 total assets of the corporation at any time

15 during the tax year; and

16 (d) more than 50% of all interest-bearing

17 obligations of the affiliated group payable to

18 persons outside the group determined in

19 accordance with generally accepted accounting

20 principles must be obligations of the

21 corporation.

22 This amendatory Act of the 91st General Assembly is

23 declaratory of existing law.

24 (D) Subparagraphs (B) and (C) of this paragraph are

25 declaratory of existing law and apply retroactively,

26 for all tax years beginning on or before December 31,

10000SB0009ham002

- 412 -

LRB100 06347 HLH 27841 a

1 1996, to all original returns, to all amended returns

2 filed no later than 30 days after the effective date of

3 this amendatory Act of 1996, and to all notices issued

4 on or before the effective date of this amendatory Act

5 of 1996 under subsection (a) of Section 903, subsection

6 (a) of Section 904, subsection (e) of Section 909, or

7 Section 912. A taxpayer that is a "financial

8 organization" that engages in any transaction with an

9 affiliate shall be a "financial organization" for all

10 purposes of this Act.

11 (E) For all tax years beginning on or before

12 December 31, 1996, a taxpayer that falls within the

13 definition of a "financial organization" under

14 subparagraphs (B) or (C) of this paragraph, but who

15 does not fall within the definition of a "financial

16 organization" under the Proposed Regulations issued by

17 the Department of Revenue on July 19, 1996, may

18 irrevocably elect to apply the Proposed Regulations

19 for all of those years as though the Proposed

20 Regulations had been lawfully promulgated, adopted,

21 and in effect for all of those years. For purposes of

22 applying subparagraphs (B) or (C) of this paragraph to

23 all of those years, the election allowed by this

24 subparagraph applies only to the taxpayer making the

25 election and to those members of the taxpayer's unitary

26 business group who are ordinarily required to

10000SB0009ham002

- 413 -

LRB100 06347 HLH 27841 a

1 apportion business income under the same subsection of

2 Section 304 of this Act as the taxpayer making the

3 election. No election allowed by this subparagraph

4 shall be made under a claim filed under subsection (d)

5 of Section 909 more than 30 days after the effective

6 date of this amendatory Act of 1996.

7 (F) Finance Leases. For purposes of this

8 subsection, a finance lease shall be treated as a loan

9 or other extension of credit, rather than as a lease,

10 regardless of how the transaction is characterized for

11 any other purpose, including the purposes of any

12 regulatory agency to which the lessor is subject. A

13 finance lease is any transaction in the form of a lease

14 in which the lessee is treated as the owner of the

15 leased asset entitled to any deduction for

16 depreciation allowed under Section 167 of the Internal

17 Revenue Code.

18 (9) Fiscal year. The term "fiscal year" means an

19 accounting period of 12 months ending on the last day of

20 any month other than December.

21 (9.5) Fixed place of business. The term "fixed place of

22 business" has the same meaning as that term is given in

23 Section 864 of the Internal Revenue Code and the related

24 Treasury regulations.

25 (10) Includes and including. The terms "includes" and

26 "including" when used in a definition contained in this Act

10000SB0009ham002

- 414 -

LRB100 06347 HLH 27841 a

1 shall not be deemed to exclude other things otherwise

2 within the meaning of the term defined.

3 (11) Internal Revenue Code. The term "Internal Revenue

4 Code" means the United States Internal Revenue Code of 1954

5 or any successor law or laws relating to federal income

6 taxes in effect for the taxable year.

7 (11.5) Investment partnership.

8 (A) The term "investment partnership" means any

9 entity that is treated as a partnership for federal

10 income tax purposes that meets the following

11 requirements:

12 (i) no less than 90% of the partnership's cost

13 of its total assets consists of qualifying

14 investment securities, deposits at banks or other

15 financial institutions, and office space and

16 equipment reasonably necessary to carry on its

17 activities as an investment partnership;

18 (ii) no less than 90% of its gross income

19 consists of interest, dividends, and gains from

20 the sale or exchange of qualifying investment

21 securities; and

22 (iii) the partnership is not a dealer in

23 qualifying investment securities.

24 (B) For purposes of this paragraph (11.5), the term

25 "qualifying investment securities" includes all of the

26 following:

10000SB0009ham002

- 415 -

LRB100 06347 HLH 27841 a

1 (i) common stock, including preferred or debt

2 securities convertible into common stock, and

3 preferred stock;

4 (ii) bonds, debentures, and other debt

5 securities;

6 (iii) foreign and domestic currency deposits

7 secured by federal, state, or local governmental

8 agencies;

9 (iv) mortgage or asset-backed securities

10 secured by federal, state, or local governmental

11 agencies;

12 (v) repurchase agreements and loan

13 participations;

14 (vi) foreign currency exchange contracts and

15 forward and futures contracts on foreign

16 currencies;

17 (vii) stock and bond index securities and

18 futures contracts and other similar financial

19 securities and futures contracts on those

20 securities;

21 (viii) options for the purchase or sale of any

22 of the securities, currencies, contracts, or

23 financial instruments described in items (i) to

24 (vii), inclusive;

25 (ix) regulated futures contracts;

26 (x) commodities (not described in Section

10000SB0009ham002

- 416 -

LRB100 06347 HLH 27841 a

1 1221(a)(1) of the Internal Revenue Code) or

2 futures, forwards, and options with respect to

3 such commodities, provided, however, that any item

4 of a physical commodity to which title is actually

5 acquired in the partnership's capacity as a dealer

6 in such commodity shall not be a qualifying

7 investment security;

8 (xi) derivatives; and

9 (xii) a partnership interest in another

10 partnership that is an investment partnership.

11 (12) Mathematical error. The term "mathematical error"

12 includes the following types of errors, omissions, or

13 defects in a return filed by a taxpayer which prevents

14 acceptance of the return as filed for processing:

15 (A) arithmetic errors or incorrect computations on

16 the return or supporting schedules;

17 (B) entries on the wrong lines;

18 (C) omission of required supporting forms or

19 schedules or the omission of the information in whole

20 or in part called for thereon; and

21 (D) an attempt to claim, exclude, deduct, or

22 improperly report, in a manner directly contrary to the

23 provisions of the Act and regulations thereunder any

24 item of income, exemption, deduction, or credit.

25 (13) Nonbusiness income. The term "nonbusiness income"

26 means all income other than business income or

10000SB0009ham002

- 417 -

LRB100 06347 HLH 27841 a

1 compensation.

2 (14) Nonresident. The term "nonresident" means a

3 person who is not a resident.

4 (15) Paid, incurred and accrued. The terms "paid",

5 "incurred" and "accrued" shall be construed according to

6 the method of accounting upon the basis of which the

7 person's base income is computed under this Act.

8 (16) Partnership and partner. The term "partnership"

9 includes a syndicate, group, pool, joint venture or other

10 unincorporated organization, through or by means of which

11 any business, financial operation, or venture is carried

12 on, and which is not, within the meaning of this Act, a

13 trust or estate or a corporation; and the term "partner"

14 includes a member in such syndicate, group, pool, joint

15 venture or organization.

16 The term "partnership" includes any entity, including

17 a limited liability company formed under the Illinois

18 Limited Liability Company Act, classified as a partnership

19 for federal income tax purposes.

20 The term "partnership" does not include a syndicate,

21 group, pool, joint venture, or other unincorporated

22 organization established for the sole purpose of playing

23 the Illinois State Lottery.

24 (17) Part-year resident. The term "part-year resident"

25 means an individual who became a resident during the

26 taxable year or ceased to be a resident during the taxable

10000SB0009ham002

- 418 -

LRB100 06347 HLH 27841 a

1 year. Under Section 1501(a)(20)(A)(i) residence commences

2 with presence in this State for other than a temporary or

3 transitory purpose and ceases with absence from this State

4 for other than a temporary or transitory purpose. Under

5 Section 1501(a)(20)(A)(ii) residence commences with the

6 establishment of domicile in this State and ceases with the

7 establishment of domicile in another State.

8 (18) Person. The term "person" shall be construed to

9 mean and include an individual, a trust, estate,

10 partnership, association, firm, company, corporation,

11 limited liability company, or fiduciary. For purposes of

12 Section 1301 and 1302 of this Act, a "person" means (i) an

13 individual, (ii) a corporation, (iii) an officer, agent, or

14 employee of a corporation, (iv) a member, agent or employee

15 of a partnership, or (v) a member, manager, employee,

16 officer, director, or agent of a limited liability company

17 who in such capacity commits an offense specified in

18 Section 1301 and 1302.

19 (18A) Records. The term "records" includes all data

20 maintained by the taxpayer, whether on paper, microfilm,

21 microfiche, or any type of machine-sensible data

22 compilation.

23 (19) Regulations. The term "regulations" includes

24 rules promulgated and forms prescribed by the Department.

25 (20) Resident. The term "resident" means:

26 (A) an individual (i) who is in this State for

10000SB0009ham002

- 419 -

LRB100 06347 HLH 27841 a

1 other than a temporary or transitory purpose during the

2 taxable year; or (ii) who is domiciled in this State

3 but is absent from the State for a temporary or

4 transitory purpose during the taxable year;

5 (B) The estate of a decedent who at his or her

6 death was domiciled in this State;

7 (C) A trust created by a will of a decedent who at

8 his death was domiciled in this State; and

9 (D) An irrevocable trust, the grantor of which was

10 domiciled in this State at the time such trust became

11 irrevocable. For purpose of this subparagraph, a trust

12 shall be considered irrevocable to the extent that the

13 grantor is not treated as the owner thereof under

14 Sections 671 through 678 of the Internal Revenue Code.

15 (21) Sales. The term "sales" means all gross receipts

16 of the taxpayer not allocated under Sections 301, 302 and

17 303.

18 (22) State. The term "state" when applied to a

19 jurisdiction other than this State means any state of the

20 United States, the District of Columbia, the Commonwealth

21 of Puerto Rico, any Territory or Possession of the United

22 States, and any foreign country, or any political

23 subdivision of any of the foregoing. For purposes of the

24 foreign tax credit under Section 601, the term "state"

25 means any state of the United States, the District of

26 Columbia, the Commonwealth of Puerto Rico, and any

10000SB0009ham002

- 420 -

LRB100 06347 HLH 27841 a

1 territory or possession of the United States, or any

2 political subdivision of any of the foregoing, effective

3 for tax years ending on or after December 31, 1989.

4 (23) Taxable year. The term "taxable year" means the

5 calendar year, or the fiscal year ending during such

6 calendar year, upon the basis of which the base income is

7 computed under this Act. "Taxable year" means, in the case

8 of a return made for a fractional part of a year under the

9 provisions of this Act, the period for which such return is

10 made.

11 (24) Taxpayer. The term "taxpayer" means any person

12 subject to the tax imposed by this Act.

13 (25) International banking facility. The term

14 international banking facility shall have the same meaning

15 as is set forth in the Illinois Banking Act or as is set

16 forth in the laws of the United States or regulations of

17 the Board of Governors of the Federal Reserve System.

18 (26) Income Tax Return Preparer.

19 (A) The term "income tax return preparer" means any

20 person who prepares for compensation, or who employs

21 one or more persons to prepare for compensation, any

22 return of tax imposed by this Act or any claim for

23 refund of tax imposed by this Act. The preparation of a

24 substantial portion of a return or claim for refund

25 shall be treated as the preparation of that return or

26 claim for refund.

10000SB0009ham002

- 421 -

LRB100 06347 HLH 27841 a

1 (B) A person is not an income tax return preparer

2 if all he or she does is

3 (i) furnish typing, reproducing, or other

4 mechanical assistance;

5 (ii) prepare returns or claims for refunds for

6 the employer by whom he or she is regularly and

7 continuously employed;

8 (iii) prepare as a fiduciary returns or claims

9 for refunds for any person; or

10 (iv) prepare claims for refunds for a taxpayer

11 in response to any notice of deficiency issued to

12 that taxpayer or in response to any waiver of

13 restriction after the commencement of an audit of

14 that taxpayer or of another taxpayer if a

15 determination in the audit of the other taxpayer

16 directly or indirectly affects the tax liability

17 of the taxpayer whose claims he or she is

18 preparing.

19 (27) Unitary business group.

20 (A) The term "unitary business group" means a group

21 of persons related through common ownership whose

22 business activities are integrated with, dependent

23 upon and contribute to each other. The group will not

24 include those members whose business activity outside

25 the United States is 80% or more of any such member's

26 total business activity; for purposes of this

10000SB0009ham002

- 422 -

LRB100 06347 HLH 27841 a

1 paragraph and clause (a)(3)(B)(ii) of Section 304,

2 business activity within the United States shall be

3 measured by means of the factors ordinarily applicable

4 under subsections (a), (b), (c), (d), or (h) of Section

5 304 except that, in the case of members ordinarily

6 required to apportion business income by means of the 3

7 factor formula of property, payroll and sales

8 specified in subsection (a) of Section 304, including

9 the formula as weighted in subsection (h) of Section

10 304, such members shall not use the sales factor in the

11 computation and the results of the property and payroll

12 factor computations of subsection (a) of Section 304

13 shall be divided by 2 (by one if either the property or

14 payroll factor has a denominator of zero). The

15 computation required by the preceding sentence shall,

16 in each case, involve the division of the member's

17 property, payroll, or revenue miles in the United

18 States, insurance premiums on property or risk in the

19 United States, or financial organization business

20 income from sources within the United States, as the

21 case may be, by the respective worldwide figures for

22 such items. Common ownership in the case of

23 corporations is the direct or indirect control or

24 ownership of more than 50% of the outstanding voting

25 stock of the persons carrying on unitary business

26 activity. Unitary business activity can ordinarily be

10000SB0009ham002

- 423 -

LRB100 06347 HLH 27841 a

1 illustrated where the activities of the members are:

2 (1) in the same general line (such as manufacturing,

3 wholesaling, retailing of tangible personal property,

4 insurance, transportation or finance); or (2) are

5 steps in a vertically structured enterprise or process

6 (such as the steps involved in the production of

7 natural resources, which might include exploration,

8 mining, refining, and marketing); and, in either

9 instance, the members are functionally integrated

10 through the exercise of strong centralized management

11 (where, for example, authority over such matters as

12 purchasing, financing, tax compliance, product line,

13 personnel, marketing and capital investment is not

14 left to each member).

15 (B) In no event, for taxable years ending prior to

16 December 31, 2017,shall any unitary business group

17 include members which are ordinarily required to

18 apportion business income under different subsections

19 of Section 304 except that for tax years ending on or

20 after December 31, 1987 this prohibition shall not

21 apply to a holding company that would otherwise be a

22 member of a unitary business group with taxpayers that

23 apportion business income under any of subsections

24 (b), (c), (c-1), or (d) of Section 304. If a unitary

25 business group would, but for the preceding sentence,

26 include members that are ordinarily required to

10000SB0009ham002

- 424 -

LRB100 06347 HLH 27841 a

1 apportion business income under different subsections

2 of Section 304, then for each subsection of Section 304

3 for which there are two or more members, there shall be

4 a separate unitary business group composed of such

5 members. For purposes of the preceding two sentences, a

6 member is "ordinarily required to apportion business

7 income" under a particular subsection of Section 304 if

8 it would be required to use the apportionment method

9 prescribed by such subsection except for the fact that

10 it derives business income solely from Illinois. As

11 used in this paragraph, for taxable years ending before

12 December 31, 2017, the phrase "United States" means

13 only the 50 states and the District of Columbia, but

14 does not include any territory or possession of the

15 United States or any area over which the United States

16 has asserted jurisdiction or claimed exclusive rights

17 with respect to the exploration for or exploitation of

18 natural resources.For taxable years ending on or after

19 December 31, 2017, the phrase "United States", as used

20 in this paragraph, means only the 50 states, the

21 District of Columbia, and any area over which the

22 United States has asserted jurisdiction or claimed

23 exclusive rights with respect to the exploration for or

24 exploitation of natural resources, but does not

25 include any territory or possession of the United

26 States.

10000SB0009ham002

- 425 -

LRB100 06347 HLH 27841 a

1 (C) Holding companies.

2 (i) For purposes of this subparagraph, a

3 "holding company" is a corporation (other than a

4 corporation that is a financial organization under

5 paragraph (8) of this subsection (a) of Section

6 1501 because it is a bank holding company under the

7 provisions of the Bank Holding Company Act of 1956

8 (12 U.S.C. 1841, et seq.) or because it is owned by

9 a bank or a bank holding company) that owns a

10 controlling interest in one or more other

11 taxpayers ("controlled taxpayers"); that, during

12 the period that includes the taxable year and the 2

13 immediately preceding taxable years or, if the

14 corporation was formed during the current or

15 immediately preceding taxable year, the taxable

16 years in which the corporation has been in

17 existence, derived substantially all its gross

18 income from dividends, interest, rents, royalties,

19 fees or other charges received from controlled

20 taxpayers for the provision of services, and gains

21 on the sale or other disposition of interests in

22 controlled taxpayers or in property leased or

23 licensed to controlled taxpayers or used by the

24 taxpayer in providing services to controlled

25 taxpayers; and that incurs no substantial expenses

26 other than expenses (including interest and other

10000SB0009ham002

- 426 -

LRB100 06347 HLH 27841 a

1 costs of borrowing) incurred in connection with

2 the acquisition and holding of interests in

3 controlled taxpayers and in the provision of

4 services to controlled taxpayers or in the leasing

5 or licensing of property to controlled taxpayers.

6 (ii) The income of a holding company which is a

7 member of more than one unitary business group

8 shall be included in each unitary business group of

9 which it is a member on a pro rata basis, by

10 including in each unitary business group that

11 portion of the base income of the holding company

12 that bears the same proportion to the total base

13 income of the holding company as the gross receipts

14 of the unitary business group bears to the combined

15 gross receipts of all unitary business groups (in

16 both cases without regard to the holding company)

17 or on any other reasonable basis, consistently

18 applied.

19 (iii) A holding company shall apportion its

20 business income under the subsection of Section

21 304 used by the other members of its unitary

22 business group. The apportionment factors of a

23 holding company which would be a member of more

24 than one unitary business group shall be included

25 with the apportionment factors of each unitary

26 business group of which it is a member on a pro

10000SB0009ham002

- 427 -

LRB100 06347 HLH 27841 a

1 rata basis using the same method used in clause

2 (ii).

3 (iv) The provisions of this subparagraph (C)

4 are intended to clarify existing law.

5 (D) If including the base income and factors of a

6 holding company in more than one unitary business group

7 under subparagraph (C) does not fairly reflect the

8 degree of integration between the holding company and

9 one or more of the unitary business groups, the

10 dependence of the holding company and one or more of

11 the unitary business groups upon each other, or the

12 contributions between the holding company and one or

13 more of the unitary business groups, the holding

14 company may petition the Director, under the

15 procedures provided under Section 304(f), for

16 permission to include all base income and factors of

17 the holding company only with members of a unitary

18 business group apportioning their business income

19 under one subsection of subsections (a), (b), (c), or

20 (d) of Section 304. If the petition is granted, the

21 holding company shall be included in a unitary business

22 group only with persons apportioning their business

23 income under the selected subsection of Section 304

24 until the Director grants a petition of the holding

25 company either to be included in more than one unitary

26 business group under subparagraph (C) or to include its

10000SB0009ham002

- 428 -

LRB100 06347 HLH 27841 a

1 base income and factors only with members of a unitary

2 business group apportioning their business income

3 under a different subsection of Section 304.

4 (E) If the unitary business group members'

5 accounting periods differ, the common parent's

6 accounting period or, if there is no common parent, the

7 accounting period of the member that is expected to

8 have, on a recurring basis, the greatest Illinois

9 income tax liability must be used to determine whether

10 to use the apportionment method provided in subsection

11 (a) or subsection (h) of Section 304. The prohibition

12 against membership in a unitary business group for

13 taxpayers ordinarily required to apportion income

14 under different subsections of Section 304 does not

15 apply to taxpayers required to apportion income under

16 subsection (a) and subsection (h) of Section 304. The

17 provisions of this amendatory Act of 1998 apply to tax

18 years ending on or after December 31, 1998.

19 (28) Subchapter S corporation. The term "Subchapter S

20 corporation" means a corporation for which there is in

21 effect an election under Section 1362 of the Internal

22 Revenue Code, or for which there is a federal election to

23 opt out of the provisions of the Subchapter S Revision Act

24 of 1982 and have applied instead the prior federal

25 Subchapter S rules as in effect on July 1, 1982.

26 (30) Foreign person. The term "foreign person" means

10000SB0009ham002

- 429 -

LRB100 06347 HLH 27841 a

1 any person who is a nonresident alien individual and any

2 nonindividual entity, regardless of where created or

3 organized, whose business activity outside the United

4 States is 80% or more of the entity's total business

5 activity.

6 (b) Other definitions.

7 (1) Words denoting number, gender, and so forth, when

8 used in this Act, where not otherwise distinctly expressed

9 or manifestly incompatible with the intent thereof:

10 (A) Words importing the singular include and apply

11 to several persons, parties or things;

12 (B) Words importing the plural include the

13 singular; and

14 (C) Words importing the masculine gender include

15 the feminine as well.

16 (2) "Company" or "association" as including successors

17 and assigns. The word "company" or "association", when used

18 in reference to a corporation, shall be deemed to embrace

19 the words "successors and assigns of such company or

20 association", and in like manner as if these last-named

21 words, or words of similar import, were expressed.

22 (3) Other terms. Any term used in any Section of this

23 Act with respect to the application of, or in connection

24 with, the provisions of any other Section of this Act shall

25 have the same meaning as in such other Section.

10000SB0009ham002

- 430 -

LRB100 06347 HLH 27841 a

1 (Source: P.A. 99-213, eff. 7-31-15.)

2 ARTICLE 25. AMENDATORY PROVISIONS; STATE TAX LIEN REGISTRY

3 Section 25-5. The Illinois Income Tax Act is amended by

4 changing Sections 1102, 1103, and 1105 as follows:

5 (35 ILCS 5/1102) (from Ch. 120, par. 11-1102)

6 Sec. 1102. Jeopardy Assessments.

7 (a) Jeopardy assessment and lien.

8 (1) Assessment. If the Department finds that a taxpayer

9 is about to depart from the State, or to conceal himself or

10 his property, or to do any other act tending to prejudice

11 or to render wholly or partly ineffectual proceedings to

12 collect any amount of tax or penalties imposed under this

13 Act unless court proceedings are brought without delay, or

14 if the Department finds that the collection of such amount

15 will be jeopardized by delay, the Department shall give the

16 taxpayer notice of such findings and shall make demand for

17 immediate return and payment of such amount, whereupon such

18 amount shall be deemed assessed and shall become

19 immediately due and payable.

20 (2) Filing of lien. If the taxpayer, within 5 days

21 after such notice (or within such extension of time as the

22 Department may grant), does not comply with such notice or

23 show to the Department that the findings in such notice are

10000SB0009ham002

- 431 -

LRB100 06347 HLH 27841 a

1 erroneous, the Department may file a notice of jeopardy

2 assessment lien in the State Tax Lien Registry ~~office of~~

3 ~~the recorder of the county in which any property of the~~

4 ~~taxpayer may be located~~and shall notify the taxpayer of

5 such filing. Such jeopardy assessment lien shall have the

6 same scope and effect as a statutory lien under this Act.

7 The taxpayer is liable for any administrative fee imposed

8 by the Department by rule in connection with the State Tax

9 Lien Registry ~~the filing fee incurred by the Department for~~

10 ~~filing the lien and the filing fee incurred by the~~

11 ~~Department to file the release of that lien~~. The filing

12 fees shall be paid to the Department in addition to payment

13 of the tax, penalty, and interest included in the amount of

14 the lien.

15 (b) Termination of taxable year. In the case of a tax for a

16 current taxable year, the Director shall declare the taxable

17 period of the taxpayer immediately terminated and his notice

18 and demand for a return and immediate payment of the tax shall

19 relate to the period declared terminated, including therein

20 income accrued and deductions incurred up to the date of

21 termination if not otherwise properly includible or deductible

22 in respect of such taxable year.

23 (c) Protest. If the taxpayer believes that he does not owe

24 some or all of the amount for which the jeopardy assessment

25 lien against him has been filed, or that no jeopardy to the

26 revenue in fact exists, he may protest within 20 days after

10000SB0009ham002

- 432 -

LRB100 06347 HLH 27841 a

1 being notified by the Department of the filing of such jeopardy

2 assessment lien and request a hearing, whereupon the Department

3 shall hold a hearing in conformity with the provisions of

4 section 908 and, pursuant thereto, shall notify the taxpayer of

5 its decision as to whether or not such jeopardy assessment lien

6 will be released.

7 (Source: P.A. 92-826, eff. 1-1-03.)

8 (35 ILCS 5/1103) (from Ch. 120, par. 11-1103)

9 Sec. 1103. Filing and Priority of Liens.

10 (a) Filing in the State Tax Lien Registry ~~with Recorder~~.

11 Nothing in this Article shall be construed to give the

12 Department a preference over the rights of any bona fide

13 purchaser, holder of a security interest, mechanics lienor,

14 mortgagee, or judgment lien creditor arising prior to the

15 filing of a regular notice of lien or a notice of jeopardy

16 assessment lien in the State Tax Lien Registry ~~office of the~~

17 ~~recorder in the county in which the property subject to the~~

18 ~~lien is located~~. For purposes of thisSection ~~section~~, the term

19 "bona fide," shall not include any mortgage of real or personal

20 property or any other credit transaction that results in the

21 mortgagee or the holder of the security acting as trustee for

22 unsecured creditors of the taxpayer mentioned in the notice of

23 lien who executed such chattel or real property mortgage or the

24 document evidencing such credit transaction. Such lien shall be

25 inferior to the lien of general taxes, special assessments and

10000SB0009ham002

- 433 -

LRB100 06347 HLH 27841 a

1 special taxes heretofore or hereafter levied by any political

2 subdivision of this State.

3 (b) Filing in the State Tax Lien Registry ~~with Registrar~~.

4 In case title to land to be affected by the notice of lien or

5 notice of jeopardy assessment lien is registered under the

6 provisions of "An Act concerning land titles," approved May 1,

7 1897, as amended, such notice shall also be filed in the State

8 Tax Lien Registry ~~office of the Registrar of Titles of the~~

9 ~~county within which the property subject to the lien is~~

10 ~~situated and shall be entered upon the register of titles as a~~

11 ~~memorial of charge upon each folium of the register of titles~~

12 ~~affected by such notice~~, and the Department shall not have a

13 preference over the rights of any bona fide purchaser,

14 mortgagee, judgment creditor or other lien holder arising prior

15 to the registration of such notice.

16 (c) Index. The Department of Revenue shall maintain a State

17 Tax Lien Index of all tax liens filed in the State Tax Lien

18 Registry as provided for by the State Tax Lien Registration

19 Act. ~~The recorder of each county shall procure a file labeled~~

20 ~~"State Tax Lien Notices" and an index book labeled "State Tax~~

21 ~~Lien Index." When notice of any lien or jeopardy assessment~~

22 ~~lien is presented to him for filing, he shall file it in~~

23 ~~numerical order in the file and shall enter it alphabetically~~

24 ~~in the index. The entry shall show the name and last known~~

25 ~~address of the person named in the notice, the serial number of~~

26 ~~the notice, the date and hour of filing, whether it is a~~

10000SB0009ham002

- 434 -

LRB100 06347 HLH 27841 a

1 ~~regular lien or a jeopardy assessment lien, and the amount of~~

2 ~~tax and penalty due and unpaid, plus the amount of interest due~~

3 ~~at the time when the notice of lien or jeopardy assessment is~~

4 ~~filed.~~

5 (d) (Blank). ~~No recorder or registrar of titles of any~~

6 ~~county shall require that the Department pay any costs or fees~~

7 ~~in connection with recordation of any notice or other document~~

8 ~~filed by the Department under this Act at the time such notice~~

9 ~~or other document is presented for recordation. The recorder or~~

10 ~~registrar of each county, in order to receive payment for fees~~

11 ~~or costs incurred by the Department, shall present the~~

12 ~~Department with monthly statements indicating the amount of~~

13 ~~fees and costs incurred by the Department and for which no~~

14 ~~payment has been received. This amendatory Act of 1987 applies~~

15 ~~to all liens heretofore or hereafter filed.~~

16 (e) The taxpayer is liable for any ~~the~~ filing fees imposed

17 ~~fee incurred~~by the Department for filing the lienin the State

18 Tax Lien Registry and any ~~the~~ filing fees imposed ~~fee incurred~~

19 by the Department for ~~to file~~the release of that lien. The

20 filing fees shall be paid to the Department in addition to

21 payment of the tax, penalty, and interest included in the

22 amount of the lien.

23 (Source: P.A. 92-826, eff. 1-1-03.)

24 (35 ILCS 5/1105) (from Ch. 120, par. 11-1105)

25 Sec. 1105. Release of Liens.

10000SB0009ham002

- 435 -

LRB100 06347 HLH 27841 a

1 (a) In general. Upon payment by the taxpayer to the

2 Department in cash or by guaranteed remittance of an amount

3 representing the filing fees and charges for the lien and the

4 filing fees and charges for the release of that lien, the

5 Department shall release all or any portion of the property

6 subject to any lien provided for in this Act and file that

7 complete or partial release of lien in the State Tax Lien

8 Registry ~~with the recorder of the county where that lien was~~

9 ~~filed~~if it determines that the release will not endanger or

10 jeopardize the collection of the amount secured thereby.

11 (b) Judicial determination. If on judicial review the final

12 judgment of the court is that the taxpayer does not owe some or

13 all of the amount secured by the lien against him, or that no

14 jeopardy to the revenue exists, the Department shall release

15 its lien to the extent of such finding of nonliability, or to

16 the extent of such finding of no jeopardy to the revenue. The

17 taxpayer shall, however, be liable for the filing fee imposed

18 ~~paid~~by the Department to file the lien and the filing fee

19 imposed to release ~~required to file a release of~~the lien. The

20 filing fees shall be paid to the Department.

21 (c) Payment. The Department shall also release its jeopardy

22 assessment lien against the taxpayer whenever the tax and

23 penalty covered by such lien, plus any interest which may be

24 due and an amount representing the filing fee to file the lien

25 and the filing feeimposed to release ~~required to file a~~

26 ~~release of~~that lien, are paid by the taxpayer to the

10000SB0009ham002

- 436 -

LRB100 06347 HLH 27841 a

1 Department in cash or by guaranteed remittance.

2 (d) Certificate of release. The Department shall issue a

3 certificate of complete or partial release of the lien upon

4 payment by the taxpayer to the Department in cash or by

5 guaranteed remittance of an amount representing the filing fee

6 imposed ~~paid~~by the Department to file the lien and the filing

7 fee imposed to release ~~required to file the release of~~ that

8 lien:

9 (1) to the extent that the fair market value of any

10 property subject to the lien exceeds the amount of the lien

11 plus the amount of all prior liens upon such property;

12 (2) to the extent that such lien shall become

13 unenforceable;

14 (3) to the extent that the amount of such lien is paid

15 by the person whose property is subject to such lien,

16 together with any interest and penalty which may become due

17 under this Act between the date when the notice of lien is

18 filed and the date when the amount of such lien is paid;

19 (4) to the extent that there is furnished to the

20 Department on a form to be approved and with a surety or

21 sureties satisfactory to the Department a bond that is

22 conditioned upon the payment of the amount of such lien,

23 together with any interest which may become due under this

24 Act after the notice of lien is filed, but before the

25 amount thereof is fully paid;

26 (5) to the extent and under the circumstances specified

10000SB0009ham002

- 437 -

LRB100 06347 HLH 27841 a

1 in this Section.

2 A certificate of complete or partial release of any lien

3 shall be held conclusive that the lien upon the property

4 covered by the certificate is extinguished to the extent

5 indicated by such certificate.

6 Such release of lien shall be issued to the person, or his

7 agent, against whom the lien was obtained and shall contain in

8 legible letters a statement as follows:

9 FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

10 BE FILED IN THE STATE TAX LIEN REGISTRY ~~WITH THE RECORDER~~

11 ~~OR THE REGISTRAR~~

12 ~~OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED~~.

13 (e) Filing. When a certificate of complete or partial

14 release of lien issued by the Department isfiled in the State

15 Tax Lien Registry, the Department ~~presented for filing in the~~

16 ~~office of the recorder or Registrar of Titles where a notice of~~

17 ~~lien or notice of jeopardy assessment lien was filed:~~

18 ~~(1) the recorder, in the case of nonregistered~~

19 ~~property,~~shall permanently attach the certificate of

20 release to the notice of lien or notice of jeopardy

21 assessment lien and shall enter the certificate of release

22 and the date in the "State Tax Lien Index" on the line

23 where the notice of lien or notice of jeopardy assessment

24 lien is entered. ~~; and~~

25 ~~(2) in the case of registered property, the Registrar~~

26 ~~of Titles shall file and enter upon each folium of the~~

10000SB0009ham002

- 438 -

LRB100 06347 HLH 27841 a

1 ~~register of titles affected thereby a memorial of the~~

2 ~~certificate of release which memorial when so entered shall~~

3 ~~act as a release pro tanto of any memorial of such notice~~

4 ~~of lien or notice of jeopardy assessment lien previously~~

5 ~~filed and registered.~~

6 (Source: P.A. 92-826, eff. 1-1-03.)

7 Section 25-10. The Retailers' Occupation Tax Act is amended

8 by changing Sections 5a, 5b, and 5c as follows:

9 (35 ILCS 120/5a) (from Ch. 120, par. 444a)

10 Sec. 5a. The Department shall have a lien for the tax

11 herein imposed or any portion thereof, or for any penalty

12 provided for in this Act, or for any amount of interest which

13 may be due as provided for in Section 5 of this Act, upon all

14 the real and personal property of any person to whom a final

15 assessment or revised final assessment has been issued as

16 provided in this Act, or whenever a return is filed without

17 payment of the tax or penalty shown therein to be due,

18 including all such property of such persons acquired after

19 receipt of such assessment or filing of such return. The

20 taxpayer is liable for the filing fee imposed ~~incurred~~ by the

21 Department for filing the lien and the filing feeimposed

22 ~~incurred~~ by the Department to ~~file the~~releasethe ~~of that~~

23 lien. The filing fees shall be paid to the Department in

24 addition to payment of the tax, penalty, and interest included

10000SB0009ham002

- 439 -

LRB100 06347 HLH 27841 a

1 in the amount of the lien.

2 However, where the lien arises because of the issuance of a

3 final assessment or revised final assessment by the Department,

4 such lien shall not attach and the notice hereinafter referred

5 to in this Section shall not be filed until all proceedings in

6 court for review of such final assessment or revised final

7 assessment have terminated or the time for the taking thereof

8 has expired without such proceedings being instituted.

9 Upon the granting of a rehearing or departmental review

10 pursuant to Section 4 or Section 5 of this Act after a lien has

11 attached, such lien shall remain in full force except to the

12 extent to which the final assessment may be reduced by a

13 revised final assessment following such rehearing or review.

14 The lien created by the issuance of a final assessment

15 shall terminate unless a notice of lien is filed, as provided

16 in Section 5b hereof, within 3 years from the date all

17 proceedings in court for the review of such final assessment

18 have terminated or the time for the taking thereof has expired

19 without such proceedings being instituted, or (in the case of a

20 revised final assessment issued pursuant to a rehearing or

21 departmental review) within 3 years from the date all

22 proceedings in court for the review of such revised final

23 assessment have terminated or the time for the taking thereof

24 has expired without such proceedings being instituted; and

25 where the lien results from the filing of a return without

26 payment of the tax or penalty shown therein to be due, the lien

10000SB0009ham002

- 440 -

LRB100 06347 HLH 27841 a

1 shall terminate unless a notice of lien is filed, as provided

2 in Section 5b hereof, within 3 years from the date when such

3 return is filed with the Department: Provided that the time

4 limitation period on the Department's right to file a notice of

5 lien shall not run (1) during any period of time in which the

6 order of any court has the effect of enjoining or restraining

7 the Department from filing such notice of lien, or (2) during

8 the term of a repayment plan that taxpayer has entered into

9 with the Department, as long as taxpayer remains in compliance

10 with the terms of the repayment plan.

11 If the Department finds that a taxpayer is about to depart

12 from the State, or to conceal himself or his property, or to do

13 any other act tending to prejudice or to render wholly or

14 partly ineffectual proceedings to collect such tax unless such

15 proceedings are brought without delay, or if the Department

16 finds that the collection of the amount due from any taxpayer

17 will be jeopardized by delay, the Department shall give the

18 taxpayer notice of such findings and shall make demand for

19 immediate return and payment of such tax, whereupon such tax

20 shall become immediately due and payable. If the taxpayer,

21 within 5 days after such notice (or within such extension of

22 time as the Department may grant), does not comply with such

23 notice or show to the Department that the findings in such

24 notice are erroneous, the Department may file a notice of

25 jeopardy assessment lien in theState Tax Lien Registry ~~office~~

26 ~~of the recorder of the county in which any property of the~~

10000SB0009ham002

- 441 -

LRB100 06347 HLH 27841 a

1 ~~taxpayer may be located~~ and shall notify the taxpayer of such

2 filing. Such jeopardy assessment lien shall have the same scope

3 and effect as the statutory lien hereinbefore provided for in

4 this Section.

5 If the taxpayer believes that he does not owe some or all

6 of the tax for which the jeopardy assessment lien against him

7 has been filed, or that no jeopardy to the revenue in fact

8 exists, he may protest within 20 days after being notified by

9 the Department of the filing of such jeopardy assessment lien

10 and request a hearing, whereupon the Department shall hold a

11 hearing in conformity with the provisions of this Act and,

12 pursuant thereto, shall notify the taxpayer of its findings as

13 to whether or not such jeopardy assessment lien will be

14 released. If not, and if the taxpayer is aggrieved by this

15 decision, he may file an action for judicial review of such

16 final determination of the Department in accordance with

17 Section 12 of this Act and the Administrative Review Law.

18 On and after July 1, 2013, protests concerning matters that

19 are subject to the jurisdiction of the Illinois Independent Tax

20 Tribunal shall be filed with the Tribunal, and hearings on

21 those matters shall be held before the Tribunal in accordance

22 with the Illinois Independent Tax Tribunal Act of 2012. The

23 Tribunal shall notify the taxpayer of its findings as to

24 whether or not such jeopardy assessment lien will be released.

25 If not, and if the taxpayer is aggrieved by this decision, he

26 may file an action for judicial review of such final

10000SB0009ham002

- 442 -

LRB100 06347 HLH 27841 a

1 determination of the Department in accordance with Section 12

2 of this Act and the Illinois Independent Tax Tribunal Act of

3 2012.

4 With respect to protests filed with the Department prior to

5 July 1, 2013 that would otherwise be subject to the

6 jurisdiction of the Illinois Independent Tax Tribunal, the

7 taxpayer may elect to be subject to the provisions of the

8 Illinois Independent Tax Tribunal Act of 2012 at any time on or

9 after July 1, 2013, but not later than 30 days after the date

10 on which the protest was filed. If made, the election shall be

11 irrevocable.

12 If, pursuant to such hearing (or after an independent

13 determination of the facts by the Department without a

14 hearing), the Department or the Tribunal determines that some

15 or all of the tax covered by the jeopardy assessment lien is

16 not owed by the taxpayer, or that no jeopardy to the revenue

17 exists, or if on judicial review the final judgment of the

18 court is that the taxpayer does not owe some or all of the tax

19 covered by the jeopardy assessment lien against him, or that no

20 jeopardy to the revenue exists, the Department shall release

21 its jeopardy assessment lien to the extent of such finding of

22 nonliability for the tax, or to the extent of such finding of

23 no jeopardy to the revenue.

24 The Department shall also release its jeopardy assessment

25 lien against the taxpayer whenever the tax and penalty covered

26 by such lien, plus any interest which may be due, are paid and

10000SB0009ham002

- 443 -

LRB100 06347 HLH 27841 a

1 the taxpayer has paid the Department in cash or by guaranteed

2 remittance an amount representing the filing fee for the lien

3 and the filing fee for the release of that lien. The Department

4 shall file that release of lien in the State Tax Lien Registry

5 ~~with the recorder of the county where that lien was filed~~.

6 Nothing in this Section shall be construed to give the

7 Department a preference over the rights of any bona fide

8 purchaser, holder of a security interest, mechanics

9 lienholder, mortgagee, or judgment lien creditor arising prior

10 to the filing of a regular notice of lien or a notice of

11 jeopardy assessment lien in the State Tax Lien Registry ~~office~~

12 ~~of the recorder in the county in which the property subject to~~

13 ~~the lien is located~~: Provided, however, that the word "bona

14 fide", as used in this Section shall not include any mortgage

15 of real or personal property or any other credit transaction

16 that results in the mortgagee or the holder of the security

17 acting as trustee for unsecured creditors of the taxpayer

18 mentioned in the notice of lien who executed such chattel or

19 real property mortgage or the document evidencing such credit

20 transaction. Such lien shall be inferior to the lien of general

21 taxes, special assessments and special taxes heretofore or

22 hereafter levied by any political subdivision of this State.

23 In case title to land to be affected by the notice of lien

24 or notice of jeopardy assessment lien is registered under the

25 provisions of "An Act concerning land titles", approved May 1,

26 1897, as amended, such notice shallalso be filed in the State

10000SB0009ham002

- 444 -

LRB100 06347 HLH 27841 a

1 Tax Lien Registry ~~office of the Registrar of Titles of the~~

2 ~~county within which the property subject to the lien is~~

3 ~~situated and shall be entered upon the register of titles as a~~

4 ~~memorial or charge upon each folium of the register of titles~~

5 ~~affected by such notice~~, and the Department shall not have a

6 preference over the rights of any bona fide purchaser,

7 mortgagee, judgment creditor or other lien holder arising prior

8 to the registration of such notice: Provided, however, that the

9 word "bona fide" shall not include any mortgage of real or

10 personal property or any other credit transaction that results

11 in the mortgagee or the holder of the security acting as

12 trustee for unsecured creditors of the taxpayer mentioned in

13 the notice of lien who executed such chattel or real property

14 mortgage or the document evidencing such credit transaction.

15 Such regular lien or jeopardy assessment lien shall not be

16 effective against any purchaser with respect to any item in a

17 retailer's stock in trade purchased from the retailer in the

18 usual course of such retailer's business.

19 (Source: P.A. 97-1129, eff. 8-28-12; 98-446, eff. 8-16-13.)

20 (35 ILCS 120/5b) (from Ch. 120, par. 444b)

21 Sec. 5b. State Tax Lien Index. The Department of Revenue

22 shall maintain a State Tax Lien Index of all tax liens filed in

23 the State Tax Lien Registry as provided for by the State Tax

24 Lien Registration Act. ~~The recorder of each county shall~~

25 ~~procure a file labeled "State Tax Lien Notices" and an index~~

10000SB0009ham002

- 445 -

LRB100 06347 HLH 27841 a

1 ~~book labeled "State Tax Lien Index". When notice of any lien or~~

2 ~~jeopardy assessment lien is presented to him for filing, he~~

3 ~~shall file it in numerical order in the file and shall enter it~~

4 ~~alphabetically in the index. The entry shall show the name and~~

5 ~~last known business address of the person named in the notice,~~

6 ~~the serial number of the notice, the date and hour of filing,~~

7 ~~whether it is a regular lien or a jeopardy assessment lien, and~~

8 ~~the amount of tax and penalty due and unpaid, plus the amount~~

9 ~~of interest due under Section 5 of this Act at the time when~~

10 ~~the notice of lien or jeopardy assessment lien is filed.~~

11 ~~No recorder or registrar of titles of any county shall~~

12 ~~require that the Department pay any costs or fees in connection~~

13 ~~with recordation of any notice or other document filed by the~~

14 ~~Department under this Act at the time such notice or other~~

15 ~~document is presented for recordation. The recorder or~~

16 ~~registrar of each county, in order to receive payment for fees~~

17 ~~or costs incurred by the Department, shall present the~~

18 ~~Department with monthly statements indicating the amount of~~

19 ~~fees and costs incurred by the Department and for which no~~

20 ~~payment has been received.~~

21 A notice of lien may be filed after the issuance of a

22 revised final assessment pursuant to a rehearing or

23 departmental review under Section 4 or Section 5 of this Act.

24 When the lien obtained pursuant to this Act has been

25 satisfied and the taxpayer has paid the Department in cash or

26 by guaranteed remittance an amount representing the filing fee

10000SB0009ham002

- 446 -

LRB100 06347 HLH 27841 a

1 for the lien and the filing fee for the release of that lien,

2 the Department shall issue a release of lien and file that

3 release of lien in the State Tax Lien Registry ~~with the~~

4 ~~recorder of the county where that lien was filed~~. The release

5 of lien shall contain in legible letters a statement as

6 follows:

7 FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

8 BE FILED IN THE STATE TAX LIEN REGISTRY ~~WITH THE RECORDER~~

9 ~~OR THE REGISTRAR~~

10 ~~OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED~~.

11 When a certificate of complete or partial release of lien

12 issued by the Department isfiled in the State Tax Lien

13 Registry, the Department of Revenue ~~presented for filing in the~~

14 ~~office of the recorder or Registrar of Titles where a notice of~~

15 ~~lien or notice of jeopardy assessment lien was filed, the~~

16 ~~recorder, in the case of nonregistered property,~~ shall

17 permanently attach the certificate of release to the notice of

18 lien or notice of jeopardy assessment lien and shall enter the

19 certificate of release and the date in the "State Tax Lien

20 Index" on the line where the notice of lien or notice of

21 jeopardy assessment lien is entered.

22 ~~In the case of registered property, the Registrar of Titles~~

23 ~~shall file and enter upon each folium of the register of titles~~

24 ~~affected thereby a memorial of the certificate of release which~~

25 ~~memorial when so entered shall act as a release pro tanto of~~

26 ~~any memorial of such notice of lien or notice of jeopardy~~

10000SB0009ham002

- 447 -

LRB100 06347 HLH 27841 a

1 ~~assessment lien previously filed and registered.~~

2 (Source: P.A. 92-826, eff. 1-1-03.)

3 (35 ILCS 120/5c) (from Ch. 120, par. 444c)

4 Sec. 5c. Upon payment by the taxpayer to the Department in

5 cash or by guaranteed remittance of an amount representing the

6 filing fee for the lien and the filing fee for the release of

7 that lien, the Department shall issue a certificate of complete

8 or partial release of the lien and file that complete or

9 partial release of lien in the State Tax Lien Registry ~~with the~~

10 ~~recorder of the county where the lien was filed~~:

11 (a) to the extent that the fair market value of any

12 property subject to the lien exceeds the amount of the lien

13 plus the amount of all prior liens upon such property;

14 (b) to the extent that such lien shall become

15 unenforceable;

16 (c) to the extent that the amount of such lien is paid

17 by the retailer whose property is subject to such lien,

18 together with any interest which may become due under

19 Section 5 of this Act between the date when the notice of

20 lien is filed and the date when the amount of such lien is

21 paid;

22 (d) to the extent that there is furnished to the

23 Department on a form to be approved and with a surety or

24 sureties satisfactory to the Department a bond that is

25 conditioned upon the payment of the amount of such lien,

10000SB0009ham002

- 448 -

LRB100 06347 HLH 27841 a

1 together with any interest which may become due under

2 Section 5 of this Act after the notice of lien is filed,

3 but before the amount thereof is fully paid;

4 (e) to the extent and under the circumstances specified

5 in Section 5a of this Act in the case of jeopardy

6 assessment liens;

7 (f) to the extent to which an assessment is reduced

8 pursuant to a rehearing or departmental review under

9 Section 4 or Section 5 of this Act.

10 A certificate of complete or partial release of any lien

11 shall be held conclusive that the lien upon the property

12 covered by the certificate is extinguished to the extent

13 indicated by such certificate.

14 (Source: P.A. 92-826, eff. 1-1-03.)

15 Section 25-15. The Cannabis and Controlled Substances Tax

16 Act is amended by changing Sections 16, 17, and 19 as follows:

17 (35 ILCS 520/16) (from Ch. 120, par. 2166)

18 Sec. 16. All assessments are Jeopardy Assessments - lien.

19 (a) Assessment. An assessment for a dealer not possessing

20 valid stamps or other official indicia showing that the tax has

21 been paid shall be considered a jeopardy assessment or

22 collection, as provided by Section 1102 of the Illinois Income

23 Tax Act. The Department shall determine and assess a tax and

24 applicable penalties and interest according to the best

10000SB0009ham002

- 449 -

LRB100 06347 HLH 27841 a

1 judgment and information available to the Department, which

2 amount so fixed by the Department shall be prima facie correct

3 and shall be prima facie evidence of the correctness of the

4 amount of tax due, as shown in such determination. When,

5 according to the best judgment and information available to the

6 Department with regard to all real and personal property and

7 rights to property of the dealer, there is no reasonable

8 expectation of collection of the amount of tax and penalty to

9 be assessed, the Department may issue an assessment under this

10 Section for the amount of tax without penalty.

11 (b) Filing of Lien. Upon issuance of a jeopardy assessment

12 as provided by subsection (a) of this Section, the Department

13 may file a notice of jeopardy assessment lien in theState Tax

14 Lien Registry ~~office of the recorder of the county in which any~~

15 ~~property of the taxpayer may be located~~and shall notify the

16 taxpayer of such filing.

17 (c) Protest. If the taxpayer believes that he does not owe

18 some or all of the amount for which the jeopardy assessment

19 lien against him has been filed, he may protest within 20 days

20 after being notified by the Department of the filing of such

21 jeopardy assessment lien and request a hearing, whereupon the

22 Department shall hold a hearing in conformity with the

23 provisions of Section 908 of the Illinois Income Tax Act and,

24 pursuant thereto, shall notify the taxpayer of its decision as

25 to whether or not such jeopardy assessment lien will be

26 released.

10000SB0009ham002

- 450 -

LRB100 06347 HLH 27841 a

1 After the expiration of the period within which the person

2 assessed may file an action for judicial review without such

3 action being filed, a certified copy of the final assessment or

4 revised final assessment of the Department may be filed with

5 the Circuit Court of the county in which the dealer resides, or

6 of Cook County in the case of a dealer who does not reside in

7 this State, or in the county where the violation of this Act

8 took place. The certified copy of the final assessment or

9 revised final assessment shall be accompanied by a

10 certification which recites facts that are sufficient to show

11 that the Department complied with the jurisdictional

12 requirements of the Act in arriving at its final assessment or

13 its revised final assessment and that the dealer had this

14 opportunity for an administrative hearing and for judicial

15 review, whether he availed himself or herself of either or both

16 of these opportunities or not. If the court is satisfied that

17 the Department complied with the jurisdictional requirements

18 of the Act in arriving at its final assessment or its revised

19 final assessment and that the taxpayer had his opportunity for

20 an administrative hearing and for judicial review, whether he

21 availed himself of either or both of these opportunities or

22 not, the court shall render judgment in favor of the Department

23 and against the taxpayer for the amount shown to be due by the

24 final assessment or the revised final assessment, plus any

25 interest which may be due, and such judgment shall be entered

26 in the judgment docket of the court. Such judgment shall bear

10000SB0009ham002

- 451 -

LRB100 06347 HLH 27841 a

1 the same rate of interest and shall have the same effect as

2 other judgments. The judgment may be enforced, and all laws

3 applicable to sales for the enforcement of a judgment shall be

4 applicable to sales made under such judgments. The Department

5 shall file the certified copy of its assessment, as herein

6 provided, with the Circuit Court within 2 years after such

7 assessment becomes final except when the taxpayer consents in

8 writing to an extension of such filing period, and except that

9 the time limitation period on the Department's right to file

10 the certified copy of its assessment with the Circuit Court

11 shall not run during any period of time in which the order of

12 any court has the effect of enjoining or restraining the

13 Department from filing such certified copy of its assessment

14 with the Circuit Court.

15 If, when the cause of action for a proceeding in court

16 accrues against a person, he or she is out of the State, the

17 action may be commenced within the times herein limited, after

18 his or her coming into or returning to the State; and if, after

19 the cause of action accrues, he or she departs from and remains

20 out of the State, the time of his or her absence from the

21 State, the time of his or her absence is no part of the time

22 limited for the commencement of the action; but the foregoing

23 provisions concerning absence from the State shall not apply to

24 any case in which, at the time the cause of action accrues, the

25 party against whom the cause of action accrues is not a

26 resident of this State. The time within which a court action is

10000SB0009ham002

- 452 -

LRB100 06347 HLH 27841 a

1 to be commenced by the Department hereunder shall not run from

2 the date the taxpayer files a petition in bankruptcy under the

3 Federal Bankruptcy Act until 30 days after notice of

4 termination or expiration of the automatic stay imposed by the

5 Federal Bankruptcy Act.

6 No claim shall be filed against the estate of any deceased

7 person or any person under legal disability for any tax or

8 penalty or part of either, or interest, except in the manner

9 prescribed and within the time limited by the Probate Act of

10 1975, as amended.

11 The collection of tax or penalty or interest by any means

12 provided for herein shall not be a bar to any prosecution under

13 this Act.

14 In addition to any penalty provided for in this Act, any

15 amount of tax which is not paid when due shall bear interest at

16 the rate determined in accordance with the Uniform Penalty and

17 Interest Act, per month or fraction thereof from the date when

18 such tax becomes past due until such tax is paid or a judgment

19 therefor is obtained by the Department. If the time for making

20 or completing an audit of a taxpayer's books and records is

21 extended with the taxpayer's consent, at the request of and for

22 the convenience of the Department, beyond the date on which the

23 statute of limitations upon the issuance of a notice of tax

24 liability by the Department otherwise run, no interest shall

25 accrue during the period of such extension. Interest shall be

26 collected in the same manner and as part of the tax.

10000SB0009ham002

- 453 -

LRB100 06347 HLH 27841 a

1 If the Department determines that an amount of tax or

2 penalty or interest was incorrectly assessed, whether as the

3 result of a mistake of fact or an error of law, the Department

4 shall waive the amount of tax or penalty or interest that

5 accrued due to the incorrect assessment.

6 (Source: P.A. 97-1129, eff. 8-28-12.)

7 (35 ILCS 520/17) (from Ch. 120, par. 2167)

8 Sec. 17. Filing and Priority of Liens. (a) Filing in the

9 State Tax Lien Registry ~~with Recorder~~. Nothing in this Act

10 shall be construed to give the Department a preference over the

11 rights of any bona fide purchaser, holder of a security

12 interest, mechanics lienholder, mortgagee, or judgment lien

13 creditor arising prior to the filing of a regular notice of

14 lien or a notice of jeopardy assessment lien in theState Tax

15 Lien Registry ~~office of the recorder in the county in which the~~

16 ~~property subject to the lien is located~~. For purposes of this

17 section, the term "bona fide," shall not include any mortgage

18 of real or personal property or any other credit transaction

19 that results in the mortgagee or the holder of the security

20 acting as trustee for unsecured creditors of the taxpayer

21 mentioned in the notice of lien who executed such chattel or

22 real property mortgage or the document evidencing such credit

23 transaction. Such lien shall be inferior to the lien of general

24 taxes, special assessments and special taxes heretofore or

25 hereafter levied by any political subdivision of this State.

10000SB0009ham002

- 454 -

LRB100 06347 HLH 27841 a

1 (b) ~~Filing with Registrar.~~ In case title to land to be

2 affected by the notice of lien or notice of jeopardy assessment

3 lien is registered under the provisions of "An Act concerning

4 land titles," approved May 1, 1897, as amended, such notice

5 shall also be filed in the State Tax Lien Registry ~~office of~~

6 ~~the Registrar of Titles of the county within which the property~~

7 ~~subject to the lien is situated and shall be entered upon the~~

8 ~~register of titles as a memorial of charge upon each folium of~~

9 ~~the register of titles affected by such notice~~, and the

10 Department shall not have a preference over the rights of any

11 bona fide purchaser, mortgagee, judgment creditor or other lien

12 holder arising prior to the registration of such notice.

13 (c) (Blank). ~~No recorder or registrar of titles of any~~

14 ~~county shall require that the Department pay any costs or fees~~

15 ~~in connection with recordation of any notice or other document~~

16 ~~filed by the Department under this Act at the time such notice~~

17 ~~or other document is presented for recordation.~~

18 (Source: P.A. 86-905.)

19 (35 ILCS 520/19) (from Ch. 120, par. 2169)

20 Sec. 19. Release of Liens.

21 (a) In general. The Department shall release all or any

22 portion of the property subject to any lien provided for in

23 this Act if it determines that the release will not endanger or

24 jeopardize the collection of the amount secured thereby. The

25 Department shall release its lien on property which is the

10000SB0009ham002

- 455 -

LRB100 06347 HLH 27841 a

1 subject of forfeiture proceedings under the Narcotics Profit

2 Forfeiture Act, the Criminal Code of 2012, or the Drug Asset

3 Forfeiture Procedure Act until all forfeiture proceedings are

4 concluded. Property forfeited shall not be subject to a lien

5 under this Act.

6 (b) Judicial determination. If on judicial review the final

7 judgment of the court is that the taxpayer does not owe some or

8 all of the amount secured by the lien against him, or that no

9 jeopardy to the revenue exists, the Department shall release

10 its lien to the extent of such finding of nonliability, or to

11 the extent of such finding of no jeopardy to the revenue.

12 (c) Payment. The Department shall also release its jeopardy

13 assessment lien against the taxpayer whenever the tax and

14 penalty covered by such lien, plus any interest which may be

15 due, are paid.

16 (d) Certificate of release. The Department shall issue a

17 certificate of complete or partial release of the lien:

18 (1) To the extent that the fair market value of any

19 property subject to the lien exceeds the amount of the lien

20 plus the amount of all prior liens upon such property;

21 (2) To the extent that such lien shall become

22 unenforceable;

23 (3) To the extent that the amount of such lien is paid

24 by the person whose property is subject to such lien,

25 together with any interest and penalty which may become due

26 under this Act between the date when the notice of lien is

10000SB0009ham002

- 456 -

LRB100 06347 HLH 27841 a

1 filed and the date when the amount of such lien is paid;

2 (4) To the extent and under the circumstances specified

3 in this Section. A certificate of complete or partial

4 release of any lien shall be held conclusive that the lien

5 upon the property covered by the certificate is

6 extinguished to the extent indicated by such certificate.

7 Such release of lien shall be issued to the person, or his

8 agent, against whom the lien was obtained and shall contain in

9 legible letters a statement as follows:

10 FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

11 BE FILED IN THE STATE TAX LIEN REGISTRY ~~WITH THE RECORDER~~

12 ~~OR THE REGISTRAR~~

13 ~~OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED~~.

14 (e) Filing. When a certificate of complete or partial

15 release of lien issued by the Department isfiled in the State

16 Tax Lien Registry, the Department ~~presented for filing in the~~

17 ~~office of the recorder or Registrar of Titles where a notice of~~

18 ~~lien or notice of jeopardy assessment lien was filed:~~

19 ~~(1) The recorder, in the case of nonregistered~~

20 ~~property,~~shall permanently attach the certificate of

21 release to the notice of lien or notice of jeopardy

22 assessment lien and shall enter the certificate of release

23 and the date in the "State Tax Lien Index" on the line

24 where the notice of lien or notice of jeopardy assessment

25 lien is entered. ~~; and~~

26 ~~(2) In the case of registered property, the Registrar~~

10000SB0009ham002

- 457 -

LRB100 06347 HLH 27841 a

1 ~~of Titles shall file and enter upon each folium of the~~

2 ~~register of titles affected thereby a memorial of the~~

3 ~~certificate of release which memorial when so entered shall~~

4 ~~act as a release pro tanto of any memorial of such notice~~

5 ~~of lien or notice of jeopardy assessment lien previously~~

6 ~~filed and registered.~~

7 (Source: P.A. 97-1150, eff. 1-25-13.)

8 Section 25-20. The Illinois Municipal Code is amended by

9 changing Section 8-3-15 as follows:

10 (65 ILCS 5/8-3-15) (from Ch. 24, par. 8-3-15)

11 Sec. 8-3-15. The corporate authorities of each

12 municipality shall have all powers necessary to enforce the

13 collection of any tax imposed and collected by such

14 municipality, whether such tax was imposed pursuant to its home

15 rule powers or statutory authorization, including but not

16 limited to subpoena power and the power to create and enforce

17 liens. No such lien shall affect the rights of bona fide

18 purchasers, mortgagees, judgment creditors or other

19 lienholders who acquire their interests in such property prior

20 to the time a notice of such lien is placed on record in the

21 office of the recorder or the registrar of titles of the county

22 in which the property is located. However, nothing in this

23 Section shall permit a municipality to place a lien upon

24 property not located or found within its corporate boundaries.

10000SB0009ham002

- 458 -

LRB100 06347 HLH 27841 a

1 A municipality creating a lien may provide that the procedures

2 for its notice and enforcement shall be the same as that

3 provided in the Retailers' Occupation Tax Act, asthat Act

4 existed prior to the adoption of the State Tax Lien

5 Registration Act ~~now or hereafter amended~~, for State tax liens,

6 and any recorder or registrar of titles with whom a notice of

7 such lien is filed shall treat such lien as a State tax lien

8 for recording purposes.

9 (Source: P.A. 86-680.)

10 Section 25-25. The Title Insurance Act is amended by

11 changing Section 22 as follows:

12 (215 ILCS 155/22) (from Ch. 73, par. 1422)

13 Sec. 22. Tax indemnity; notice.A corporation authorized to

14 do business under this Act shall notify the Director of Revenue

15 of the State of Illinois, by notice directed to his office in

16 the City of Chicago, of each trust account or similar account

17 established which relates to title exceptions due to a judgment

18 lien or any other lien arising under any tax Act administered

19 by the Illinois Department of Revenue, when notice of such lien

20 has been filed with the registrar of titles or recorderor in

21 the State Tax Lien Registry, as the case may be, in the manner

22 prescribed by law. Such notice shall contain the name, address,

23 and tax identification number of the debtor, the permanent real

24 estate index numbers, if any, and the address and legal

10000SB0009ham002

- 459 -

LRB100 06347 HLH 27841 a

1 description of the property, the type of lien claimed by the

2 Department and identification of any trust fund or similar

3 account held by such corporation or any agent thereof relating

4 to such lien. Any trust fund or similar account established by

5 such corporation or agent relating to any such lien shall

6 include provisions requiring such corporation or agent to apply

7 such fund in satisfaction or release of such lien upon written

8 demand therefor by the Department of Revenue.

9 (Source: P.A. 94-893, eff. 6-20-06.)

10 ARTICLE 30. GASOHOL; ETHANOL FUEL

11 Section 30-5. The Use Tax Act is amended by changing

12 Section 3-10 and by adding Section 3-44.3 as follows:

13 (35 ILCS 105/3-10)

14 Sec. 3-10. Rate of tax. Unless otherwise provided in this

15 Section, the tax imposed by this Act is at the rate of 6.25% of

16 either the selling price or the fair market value, if any, of

17 the tangible personal property. In all cases where property

18 functionally used or consumed is the same as the property that

19 was purchased at retail, then the tax is imposed on the selling

20 price of the property. In all cases where property functionally

21 used or consumed is a by-product or waste product that has been

22 refined, manufactured, or produced from property purchased at

23 retail, then the tax is imposed on the lower of the fair market

10000SB0009ham002

- 460 -

LRB100 06347 HLH 27841 a

1 value, if any, of the specific property so used in this State

2 or on the selling price of the property purchased at retail.

3 For purposes of this Section "fair market value" means the

4 price at which property would change hands between a willing

5 buyer and a willing seller, neither being under any compulsion

6 to buy or sell and both having reasonable knowledge of the

7 relevant facts. The fair market value shall be established by

8 Illinois sales by the taxpayer of the same property as that

9 functionally used or consumed, or if there are no such sales by

10 the taxpayer, then comparable sales or purchases of property of

11 like kind and character in Illinois.

12 Beginning on July 1, 2000 and through December 31, 2000,

13 with respect to motor fuel, as defined in Section 1.1 of the

14 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

15 the Use Tax Act, the tax is imposed at the rate of 1.25%.

16 Beginning on August 6, 2010 through August 15, 2010, with

17 respect to sales tax holiday items as defined in Section 3-6 of

18 this Act, the tax is imposed at the rate of 1.25%.

19 With respect to gasohol, the tax imposed by this Act

20 applies to (i) 70% of the proceeds of sales made on or after

21 January 1, 1990, and before July 1, 2003, (ii) 80% of the

22 proceeds of sales made on or after July 1, 2003 and on or

23 before July 1, 2017 ~~December 31, 2018~~, and (iii) 100% of the

24 proceeds of sales made thereafter. If, at any time, however,

25 the tax under this Act on sales of gasohol is imposed at the

26 rate of 1.25%, then the tax imposed by this Act applies to 100%

10000SB0009ham002

- 461 -

LRB100 06347 HLH 27841 a

1 of the proceeds of sales of gasohol made during that time.

2 With respect to mid-range ethanol blends, the tax imposed

3 by this Act applies to (i) 80% of the proceeds of sales made on

4 or after July 1, 2017 and on or before December 31, 2023 and

5 (ii) 100% of the proceeds of sales made thereafter. If, at any

6 time, however, the tax under this Act on sales of mid-range

7 ethanol blends is imposed at the rate of 1.25%, then the tax

8 imposed by this Act applies to 100% of the proceeds of sales of

9 mid-range ethanol blends made during that time.

10 With respect to majority blended ethanol fuel, the tax

11 imposed by this Act does not apply to the proceeds of sales

12 made on or after July 1, 2003 and on or beforeDecember 31,

13 2023 ~~December 31, 2018~~ but applies to 100% of the proceeds of

14 sales made thereafter.

15 With respect to biodiesel blends with no less than 1% and

16 no more than 10% biodiesel, the tax imposed by this Act applies

17 to (i) 80% of the proceeds of sales made on or after July 1,

18 2003 and on or before December 31, 2018 and (ii) 100% of the

19 proceeds of sales made thereafter. If, at any time, however,

20 the tax under this Act on sales of biodiesel blends with no

21 less than 1% and no more than 10% biodiesel is imposed at the

22 rate of 1.25%, then the tax imposed by this Act applies to 100%

23 of the proceeds of sales of biodiesel blends with no less than

24 1% and no more than 10% biodiesel made during that time.

25 With respect to 100% biodiesel and biodiesel blends with

26 more than 10% but no more than 99% biodiesel, the tax imposed

10000SB0009ham002

- 462 -

LRB100 06347 HLH 27841 a

1 by this Act does not apply to the proceeds of sales made on or

2 after July 1, 2003 and on or beforeDecember 31, 2023 ~~December~~

3 ~~31, 2018~~but applies to 100% of the proceeds of sales made

4 thereafter.

5 With respect to food for human consumption that is to be

6 consumed off the premises where it is sold (other than

7 alcoholic beverages, soft drinks, and food that has been

8 prepared for immediate consumption) and prescription and

9 nonprescription medicines, drugs, medical appliances, products

10 classified as Class III medical devices by the United States

11 Food and Drug Administration that are used for cancer treatment

12 pursuant to a prescription, as well as any accessories and

13 components related to those devices, modifications to a motor

14 vehicle for the purpose of rendering it usable by a person with

15 a disability, and insulin, urine testing materials, syringes,

16 and needles used by diabetics, for human use, the tax is

17 imposed at the rate of 1%. For the purposes of this Section,

18 until September 1, 2009: the term "soft drinks" means any

19 complete, finished, ready-to-use, non-alcoholic drink, whether

20 carbonated or not, including but not limited to soda water,

21 cola, fruit juice, vegetable juice, carbonated water, and all

22 other preparations commonly known as soft drinks of whatever

23 kind or description that are contained in any closed or sealed

24 bottle, can, carton, or container, regardless of size; but

25 "soft drinks" does not include coffee, tea, non-carbonated

26 water, infant formula, milk or milk products as defined in the

10000SB0009ham002

- 463 -

LRB100 06347 HLH 27841 a

1 Grade A Pasteurized Milk and Milk Products Act, or drinks

2 containing 50% or more natural fruit or vegetable juice.

3 Notwithstanding any other provisions of this Act,

4 beginning September 1, 2009, "soft drinks" means non-alcoholic

5 beverages that contain natural or artificial sweeteners. "Soft

6 drinks" do not include beverages that contain milk or milk

7 products, soy, rice or similar milk substitutes, or greater

8 than 50% of vegetable or fruit juice by volume.

9 Until August 1, 2009, and notwithstanding any other

10 provisions of this Act, "food for human consumption that is to

11 be consumed off the premises where it is sold" includes all

12 food sold through a vending machine, except soft drinks and

13 food products that are dispensed hot from a vending machine,

14 regardless of the location of the vending machine. Beginning

15 August 1, 2009, and notwithstanding any other provisions of

16 this Act, "food for human consumption that is to be consumed

17 off the premises where it is sold" includes all food sold

18 through a vending machine, except soft drinks, candy, and food

19 products that are dispensed hot from a vending machine,

20 regardless of the location of the vending machine.

21 Notwithstanding any other provisions of this Act,

22 beginning September 1, 2009, "food for human consumption that

23 is to be consumed off the premises where it is sold" does not

24 include candy. For purposes of this Section, "candy" means a

25 preparation of sugar, honey, or other natural or artificial

26 sweeteners in combination with chocolate, fruits, nuts or other

10000SB0009ham002

- 464 -

LRB100 06347 HLH 27841 a

1 ingredients or flavorings in the form of bars, drops, or

2 pieces. "Candy" does not include any preparation that contains

3 flour or requires refrigeration.

4 Notwithstanding any other provisions of this Act,

5 beginning September 1, 2009, "nonprescription medicines and

6 drugs" does not include grooming and hygiene products. For

7 purposes of this Section, "grooming and hygiene products"

8 includes, but is not limited to, soaps and cleaning solutions,

9 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

10 lotions and screens, unless those products are available by

11 prescription only, regardless of whether the products meet the

12 definition of "over-the-counter-drugs". For the purposes of

13 this paragraph, "over-the-counter-drug" means a drug for human

14 use that contains a label that identifies the product as a drug

15 as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"

16 label includes:

17 (A) A "Drug Facts" panel; or

18 (B) A statement of the "active ingredient(s)" with a

19 list of those ingredients contained in the compound,

20 substance or preparation.

21 Beginning on the effective date of this amendatory Act of

22 the 98th General Assembly, "prescription and nonprescription

23 medicines and drugs" includes medical cannabis purchased from a

24 registered dispensing organization under the Compassionate Use

25 of Medical Cannabis Pilot Program Act.

26 If the property that is purchased at retail from a retailer

10000SB0009ham002

- 465 -

LRB100 06347 HLH 27841 a

1 is acquired outside Illinois and used outside Illinois before

2 being brought to Illinois for use here and is taxable under

3 this Act, the "selling price" on which the tax is computed

4 shall be reduced by an amount that represents a reasonable

5 allowance for depreciation for the period of prior out-of-state

6 use.

7 (Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;

8 99-858, eff. 8-19-16.)

9 (35 ILCS 105/3-44.3 new)

10 Sec. 3-44.3. Mid-range ethanol blend. "Mid-range ethanol

11 blend" means a blend of gasoline and denatured ethanol that

12 contains not less than 20% but less than 51% denatured ethanol.

13 Section 30-10. The Service Use Tax Act is amended by

14 changing Section 3-10 as follows:

15 (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)

16 Sec. 3-10. Rate of tax. Unless otherwise provided in this

17 Section, the tax imposed by this Act is at the rate of 6.25% of

18 the selling price of tangible personal property transferred as

19 an incident to the sale of service, but, for the purpose of

20 computing this tax, in no event shall the selling price be less

21 than the cost price of the property to the serviceman.

22 Beginning on July 1, 2000 and through December 31, 2000,

23 with respect to motor fuel, as defined in Section 1.1 of the

10000SB0009ham002

- 466 -

LRB100 06347 HLH 27841 a

1 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

2 the Use Tax Act, the tax is imposed at the rate of 1.25%.

3 With respect to gasohol, as defined in the Use Tax Act, the

4 tax imposed by this Act applies to (i) 70% of the selling price

5 of property transferred as an incident to the sale of service

6 on or after January 1, 1990, and before July 1, 2003, (ii) 80%

7 of the selling price of property transferred as an incident to

8 the sale of service on or after July 1, 2003 and on or before

9 July 1, 2017 ~~December 31, 2018~~, and (iii) 100% of the selling

10 price thereafter. If, at any time, however, the tax under this

11 Act on sales of gasohol, as defined in the Use Tax Act, is

12 imposed at the rate of 1.25%, then the tax imposed by this Act

13 applies to 100% of the proceeds of sales of gasohol made during

14 that time.

15 With respect to mid-range ethanol blends, as defined in the

16 Use Tax Act, the tax imposed by this Act applies to (i) 80% of

17 the selling price of property transferred as an incident to the

18 sale of service on or after July 1, 2017 and on or before

19 December 31, 2023 and (ii) 100% of the selling price

20 thereafter. If, at any time, however, the tax under this Act on

21 sales of mid-range ethanol blends is imposed at the rate of

22 1.25%, then the tax imposed by this Act applies to 100% of the

23 proceeds of sales of mid-range ethanol blends made during that

24 time.

25 With respect to majority blended ethanol fuel, as defined

26 in the Use Tax Act, the tax imposed by this Act does not apply

10000SB0009ham002

- 467 -

LRB100 06347 HLH 27841 a

1 to the selling price of property transferred as an incident to

2 the sale of service on or after July 1, 2003 and on or before

3 December 31, 2023 ~~December 31, 2018~~ but applies to 100% of the

4 selling price thereafter.

5 With respect to biodiesel blends, as defined in the Use Tax

6 Act, with no less than 1% and no more than 10% biodiesel, the

7 tax imposed by this Act applies to (i) 80% of the selling price

8 of property transferred as an incident to the sale of service

9 on or after July 1, 2003 and on or before December 31, 2018 and

10 (ii) 100% of the proceeds of the selling price thereafter. If,

11 at any time, however, the tax under this Act on sales of

12 biodiesel blends, as defined in the Use Tax Act, with no less

13 than 1% and no more than 10% biodiesel is imposed at the rate

14 of 1.25%, then the tax imposed by this Act applies to 100% of

15 the proceeds of sales of biodiesel blends with no less than 1%

16 and no more than 10% biodiesel made during that time.

17 With respect to 100% biodiesel, as defined in the Use Tax

18 Act, and biodiesel blends, as defined in the Use Tax Act, with

19 more than 10% but no more than 99% biodiesel, the tax imposed

20 by this Act does not apply to the proceeds of the selling price

21 of property transferred as an incident to the sale of service

22 on or after July 1, 2003 and on or beforeDecember 31, 2023

23 ~~December 31, 2018~~ but applies to 100% of the selling price

24 thereafter.

25 At the election of any registered serviceman made for each

26 fiscal year, sales of service in which the aggregate annual

10000SB0009ham002

- 468 -

LRB100 06347 HLH 27841 a

1 cost price of tangible personal property transferred as an

2 incident to the sales of service is less than 35%, or 75% in

3 the case of servicemen transferring prescription drugs or

4 servicemen engaged in graphic arts production, of the aggregate

5 annual total gross receipts from all sales of service, the tax

6 imposed by this Act shall be based on the serviceman's cost

7 price of the tangible personal property transferred as an

8 incident to the sale of those services.

9 The tax shall be imposed at the rate of 1% on food prepared

10 for immediate consumption and transferred incident to a sale of

11 service subject to this Act or the Service Occupation Tax Act

12 by an entity licensed under the Hospital Licensing Act, the

13 Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD

14 Act, the Specialized Mental Health Rehabilitation Act of 2013,

15 or the Child Care Act of 1969. The tax shall also be imposed at

16 the rate of 1% on food for human consumption that is to be

17 consumed off the premises where it is sold (other than

18 alcoholic beverages, soft drinks, and food that has been

19 prepared for immediate consumption and is not otherwise

20 included in this paragraph) and prescription and

21 nonprescription medicines, drugs, medical appliances, products

22 classified as Class III medical devices by the United States

23 Food and Drug Administration that are used for cancer treatment

24 pursuant to a prescription, as well as any accessories and

25 components related to those devices, modifications to a motor

26 vehicle for the purpose of rendering it usable by a person with

10000SB0009ham002

- 469 -

LRB100 06347 HLH 27841 a

1 a disability, and insulin, urine testing materials, syringes,

2 and needles used by diabetics, for human use. For the purposes

3 of this Section, until September 1, 2009: the term "soft

4 drinks" means any complete, finished, ready-to-use,

5 non-alcoholic drink, whether carbonated or not, including but

6 not limited to soda water, cola, fruit juice, vegetable juice,

7 carbonated water, and all other preparations commonly known as

8 soft drinks of whatever kind or description that are contained

9 in any closed or sealed bottle, can, carton, or container,

10 regardless of size; but "soft drinks" does not include coffee,

11 tea, non-carbonated water, infant formula, milk or milk

12 products as defined in the Grade A Pasteurized Milk and Milk

13 Products Act, or drinks containing 50% or more natural fruit or

14 vegetable juice.

15 Notwithstanding any other provisions of this Act,

16 beginning September 1, 2009, "soft drinks" means non-alcoholic

17 beverages that contain natural or artificial sweeteners. "Soft

18 drinks" do not include beverages that contain milk or milk

19 products, soy, rice or similar milk substitutes, or greater

20 than 50% of vegetable or fruit juice by volume.

21 Until August 1, 2009, and notwithstanding any other

22 provisions of this Act, "food for human consumption that is to

23 be consumed off the premises where it is sold" includes all

24 food sold through a vending machine, except soft drinks and

25 food products that are dispensed hot from a vending machine,

26 regardless of the location of the vending machine. Beginning

10000SB0009ham002

- 470 -

LRB100 06347 HLH 27841 a

1 August 1, 2009, and notwithstanding any other provisions of

2 this Act, "food for human consumption that is to be consumed

3 off the premises where it is sold" includes all food sold

4 through a vending machine, except soft drinks, candy, and food

5 products that are dispensed hot from a vending machine,

6 regardless of the location of the vending machine.

7 Notwithstanding any other provisions of this Act,

8 beginning September 1, 2009, "food for human consumption that

9 is to be consumed off the premises where it is sold" does not

10 include candy. For purposes of this Section, "candy" means a

11 preparation of sugar, honey, or other natural or artificial

12 sweeteners in combination with chocolate, fruits, nuts or other

13 ingredients or flavorings in the form of bars, drops, or

14 pieces. "Candy" does not include any preparation that contains

15 flour or requires refrigeration.

16 Notwithstanding any other provisions of this Act,

17 beginning September 1, 2009, "nonprescription medicines and

18 drugs" does not include grooming and hygiene products. For

19 purposes of this Section, "grooming and hygiene products"

20 includes, but is not limited to, soaps and cleaning solutions,

21 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

22 lotions and screens, unless those products are available by

23 prescription only, regardless of whether the products meet the

24 definition of "over-the-counter-drugs". For the purposes of

25 this paragraph, "over-the-counter-drug" means a drug for human

26 use that contains a label that identifies the product as a drug

10000SB0009ham002

- 471 -

LRB100 06347 HLH 27841 a

1 as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"

2 label includes:

3 (A) A "Drug Facts" panel; or

4 (B) A statement of the "active ingredient(s)" with a

5 list of those ingredients contained in the compound,

6 substance or preparation.

7 Beginning on January 1, 2014 (the effective date of Public

8 Act 98-122), "prescription and nonprescription medicines and

9 drugs" includes medical cannabis purchased from a registered

10 dispensing organization under the Compassionate Use of Medical

11 Cannabis Pilot Program Act.

12 If the property that is acquired from a serviceman is

13 acquired outside Illinois and used outside Illinois before

14 being brought to Illinois for use here and is taxable under

15 this Act, the "selling price" on which the tax is computed

16 shall be reduced by an amount that represents a reasonable

17 allowance for depreciation for the period of prior out-of-state

18 use.

19 (Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;

20 98-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.

21 7-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16.)

22 Section 30-15. The Service Occupation Tax Act is amended by

23 changing Section 3-10 as follows:

24 (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)

10000SB0009ham002

- 472 -

LRB100 06347 HLH 27841 a

1 Sec. 3-10. Rate of tax. Unless otherwise provided in this

2 Section, the tax imposed by this Act is at the rate of 6.25% of

3 the "selling price", as defined in Section 2 of the Service Use

4 Tax Act, of the tangible personal property. For the purpose of

5 computing this tax, in no event shall the "selling price" be

6 less than the cost price to the serviceman of the tangible

7 personal property transferred. The selling price of each item

8 of tangible personal property transferred as an incident of a

9 sale of service may be shown as a distinct and separate item on

10 the serviceman's billing to the service customer. If the

11 selling price is not so shown, the selling price of the

12 tangible personal property is deemed to be 50% of the

13 serviceman's entire billing to the service customer. When,

14 however, a serviceman contracts to design, develop, and produce

15 special order machinery or equipment, the tax imposed by this

16 Act shall be based on the serviceman's cost price of the

17 tangible personal property transferred incident to the

18 completion of the contract.

19 Beginning on July 1, 2000 and through December 31, 2000,

20 with respect to motor fuel, as defined in Section 1.1 of the

21 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

22 the Use Tax Act, the tax is imposed at the rate of 1.25%.

23 With respect to gasohol, as defined in the Use Tax Act, the

24 tax imposed by this Act shall apply to (i) 70% of the cost

25 price of property transferred as an incident to the sale of

26 service on or after January 1, 1990, and before July 1, 2003,

10000SB0009ham002

- 473 -

LRB100 06347 HLH 27841 a

1 (ii) 80% of the selling price of property transferred as an

2 incident to the sale of service on or after July 1, 2003 and on

3 or before July 1, 2017 ~~December 31, 2018~~, and (iii) 100% of the

4 cost price thereafter. If, at any time, however, the tax under

5 this Act on sales of gasohol, as defined in the Use Tax Act, is

6 imposed at the rate of 1.25%, then the tax imposed by this Act

7 applies to 100% of the proceeds of sales of gasohol made during

8 that time.

9 With respect to mid-range ethanol blends, as defined in the

10 Use Tax Act, the tax imposed by this Act applies to (i) 80% of

11 the selling price of property transferred as an incident to the

12 sale of service on or after July 1, 2017 and on or before

13 December 31, 2023 and (ii) 100% of the selling price

14 thereafter. If, at any time, however, the tax under this Act on

15 sales of mid-range ethanol blends is imposed at the rate of

16 1.25%, then the tax imposed by this Act applies to 100% of the

17 proceeds of sales of mid-range ethanol blends made during that

18 time.

19 With respect to majority blended ethanol fuel, as defined

20 in the Use Tax Act, the tax imposed by this Act does not apply

21 to the selling price of property transferred as an incident to

22 the sale of service on or after July 1, 2003 and on or before

23 December 31, 2023 ~~December 31, 2018~~ but applies to 100% of the

24 selling price thereafter.

25 With respect to biodiesel blends, as defined in the Use Tax

26 Act, with no less than 1% and no more than 10% biodiesel, the

10000SB0009ham002

- 474 -

LRB100 06347 HLH 27841 a

1 tax imposed by this Act applies to (i) 80% of the selling price

2 of property transferred as an incident to the sale of service

3 on or after July 1, 2003 and on or before December 31, 2018 and

4 (ii) 100% of the proceeds of the selling price thereafter. If,

5 at any time, however, the tax under this Act on sales of

6 biodiesel blends, as defined in the Use Tax Act, with no less

7 than 1% and no more than 10% biodiesel is imposed at the rate

8 of 1.25%, then the tax imposed by this Act applies to 100% of

9 the proceeds of sales of biodiesel blends with no less than 1%

10 and no more than 10% biodiesel made during that time.

11 With respect to 100% biodiesel, as defined in the Use Tax

12 Act, and biodiesel blends, as defined in the Use Tax Act, with

13 more than 10% but no more than 99% biodiesel material, the tax

14 imposed by this Act does not apply to the proceeds of the

15 selling price of property transferred as an incident to the

16 sale of service on or after July 1, 2003 and on or before

17 December 31, 2023 ~~December 31, 2018~~ but applies to 100% of the

18 selling price thereafter.

19 At the election of any registered serviceman made for each

20 fiscal year, sales of service in which the aggregate annual

21 cost price of tangible personal property transferred as an

22 incident to the sales of service is less than 35%, or 75% in

23 the case of servicemen transferring prescription drugs or

24 servicemen engaged in graphic arts production, of the aggregate

25 annual total gross receipts from all sales of service, the tax

26 imposed by this Act shall be based on the serviceman's cost

10000SB0009ham002

- 475 -

LRB100 06347 HLH 27841 a

1 price of the tangible personal property transferred incident to

2 the sale of those services.

3 The tax shall be imposed at the rate of 1% on food prepared

4 for immediate consumption and transferred incident to a sale of

5 service subject to this Act or the Service Occupation Tax Act

6 by an entity licensed under the Hospital Licensing Act, the

7 Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD

8 Act, the Specialized Mental Health Rehabilitation Act of 2013,

9 or the Child Care Act of 1969. The tax shall also be imposed at

10 the rate of 1% on food for human consumption that is to be

11 consumed off the premises where it is sold (other than

12 alcoholic beverages, soft drinks, and food that has been

13 prepared for immediate consumption and is not otherwise

14 included in this paragraph) and prescription and

15 nonprescription medicines, drugs, medical appliances, products

16 classified as Class III medical devices by the United States

17 Food and Drug Administration that are used for cancer treatment

18 pursuant to a prescription, as well as any accessories and

19 components related to those devices, modifications to a motor

20 vehicle for the purpose of rendering it usable by a person with

21 a disability, and insulin, urine testing materials, syringes,

22 and needles used by diabetics, for human use. For the purposes

23 of this Section, until September 1, 2009: the term "soft

24 drinks" means any complete, finished, ready-to-use,

25 non-alcoholic drink, whether carbonated or not, including but

26 not limited to soda water, cola, fruit juice, vegetable juice,

10000SB0009ham002

- 476 -

LRB100 06347 HLH 27841 a

1 carbonated water, and all other preparations commonly known as

2 soft drinks of whatever kind or description that are contained

3 in any closed or sealed can, carton, or container, regardless

4 of size; but "soft drinks" does not include coffee, tea,

5 non-carbonated water, infant formula, milk or milk products as

6 defined in the Grade A Pasteurized Milk and Milk Products Act,

7 or drinks containing 50% or more natural fruit or vegetable

8 juice.

9 Notwithstanding any other provisions of this Act,

10 beginning September 1, 2009, "soft drinks" means non-alcoholic

11 beverages that contain natural or artificial sweeteners. "Soft

12 drinks" do not include beverages that contain milk or milk

13 products, soy, rice or similar milk substitutes, or greater

14 than 50% of vegetable or fruit juice by volume.

15 Until August 1, 2009, and notwithstanding any other

16 provisions of this Act, "food for human consumption that is to

17 be consumed off the premises where it is sold" includes all

18 food sold through a vending machine, except soft drinks and

19 food products that are dispensed hot from a vending machine,

20 regardless of the location of the vending machine. Beginning

21 August 1, 2009, and notwithstanding any other provisions of

22 this Act, "food for human consumption that is to be consumed

23 off the premises where it is sold" includes all food sold

24 through a vending machine, except soft drinks, candy, and food

25 products that are dispensed hot from a vending machine,

26 regardless of the location of the vending machine.

10000SB0009ham002

- 477 -

LRB100 06347 HLH 27841 a

1 Notwithstanding any other provisions of this Act,

2 beginning September 1, 2009, "food for human consumption that

3 is to be consumed off the premises where it is sold" does not

4 include candy. For purposes of this Section, "candy" means a

5 preparation of sugar, honey, or other natural or artificial

6 sweeteners in combination with chocolate, fruits, nuts or other

7 ingredients or flavorings in the form of bars, drops, or

8 pieces. "Candy" does not include any preparation that contains

9 flour or requires refrigeration.

10 Notwithstanding any other provisions of this Act,

11 beginning September 1, 2009, "nonprescription medicines and

12 drugs" does not include grooming and hygiene products. For

13 purposes of this Section, "grooming and hygiene products"

14 includes, but is not limited to, soaps and cleaning solutions,

15 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

16 lotions and screens, unless those products are available by

17 prescription only, regardless of whether the products meet the

18 definition of "over-the-counter-drugs". For the purposes of

19 this paragraph, "over-the-counter-drug" means a drug for human

20 use that contains a label that identifies the product as a drug

21 as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"

22 label includes:

23 (A) A "Drug Facts" panel; or

24 (B) A statement of the "active ingredient(s)" with a

25 list of those ingredients contained in the compound,

26 substance or preparation.

10000SB0009ham002

- 478 -

LRB100 06347 HLH 27841 a

1 Beginning on January 1, 2014 (the effective date of Public

2 Act 98-122), "prescription and nonprescription medicines and

3 drugs" includes medical cannabis purchased from a registered

4 dispensing organization under the Compassionate Use of Medical

5 Cannabis Pilot Program Act.

6 (Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;

7 98-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.

8 7-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16.)

9 Section 30-20. The Retailers' Occupation Tax Act is amended

10 by changing Section 2-10 as follows:

11 (35 ILCS 120/2-10)

12 Sec. 2-10. Rate of tax. Unless otherwise provided in this

13 Section, the tax imposed by this Act is at the rate of 6.25% of

14 gross receipts from sales of tangible personal property made in

15 the course of business.

16 Beginning on July 1, 2000 and through December 31, 2000,

17 with respect to motor fuel, as defined in Section 1.1 of the

18 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

19 the Use Tax Act, the tax is imposed at the rate of 1.25%.

20 Beginning on August 6, 2010 through August 15, 2010, with

21 respect to sales tax holiday items as defined in Section 2-8 of

22 this Act, the tax is imposed at the rate of 1.25%.

23 Within 14 days after the effective date of this amendatory

24 Act of the 91st General Assembly, each retailer of motor fuel

10000SB0009ham002

- 479 -

LRB100 06347 HLH 27841 a

1 and gasohol shall cause the following notice to be posted in a

2 prominently visible place on each retail dispensing device that

3 is used to dispense motor fuel or gasohol in the State of

4 Illinois: "As of July 1, 2000, the State of Illinois has

5 eliminated the State's share of sales tax on motor fuel and

6 gasohol through December 31, 2000. The price on this pump

7 should reflect the elimination of the tax." The notice shall be

8 printed in bold print on a sign that is no smaller than 4

9 inches by 8 inches. The sign shall be clearly visible to

10 customers. Any retailer who fails to post or maintain a

11 required sign through December 31, 2000 is guilty of a petty

12 offense for which the fine shall be $500 per day per each

13 retail premises where a violation occurs.

14 With respect to gasohol, as defined in the Use Tax Act, the

15 tax imposed by this Act applies to (i) 70% of the proceeds of

16 sales made on or after January 1, 1990, and before July 1,

17 2003, (ii) 80% of the proceeds of sales made on or after July

18 1, 2003 and on or before July 1, 2017 ~~December 31, 2018~~, and

19 (iii) 100% of the proceeds of sales made thereafter. If, at any

20 time, however, the tax under this Act on sales of gasohol, as

21 defined in the Use Tax Act, is imposed at the rate of 1.25%,

22 then the tax imposed by this Act applies to 100% of the

23 proceeds of sales of gasohol made during that time.

24 With respect to mid-range ethanol blends, as defined in the

25 Use Tax Act, the tax imposed by this Act applies to (i) 80% of

26 the selling price of property transferred as an incident to the

10000SB0009ham002

- 480 -

LRB100 06347 HLH 27841 a

1 sale of service on or after July 1, 2017 and on or before

2 December 31, 2023 and (ii) 100% of the selling price

3 thereafter. If, at any time, however, the tax under this Act on

4 sales of mid-range ethanol blends is imposed at the rate of

5 1.25%, then the tax imposed by this Act applies to 100% of the

6 proceeds of sales of mid-range ethanol blends made during that

7 time.

8 With respect to majority blended ethanol fuel, as defined

9 in the Use Tax Act, the tax imposed by this Act does not apply

10 to the proceeds of sales made on or after July 1, 2003 and on or

11 before December 31, 2023 ~~December 31, 2018~~ but applies to 100%

12 of the proceeds of sales made thereafter.

13 With respect to biodiesel blends, as defined in the Use Tax

14 Act, with no less than 1% and no more than 10% biodiesel, the

15 tax imposed by this Act applies to (i) 80% of the proceeds of

16 sales made on or after July 1, 2003 and on or before December

17 31, 2018 and (ii) 100% of the proceeds of sales made

18 thereafter. If, at any time, however, the tax under this Act on

19 sales of biodiesel blends, as defined in the Use Tax Act, with

20 no less than 1% and no more than 10% biodiesel is imposed at

21 the rate of 1.25%, then the tax imposed by this Act applies to

22 100% of the proceeds of sales of biodiesel blends with no less

23 than 1% and no more than 10% biodiesel made during that time.

24 With respect to 100% biodiesel, as defined in the Use Tax

25 Act, and biodiesel blends, as defined in the Use Tax Act, with

26 more than 10% but no more than 99% biodiesel, the tax imposed

10000SB0009ham002

- 481 -