Rep. Gregory Harris

Filed: 7/2/2017

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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

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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.

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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

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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

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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,

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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:

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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,

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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

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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

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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;

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

16 redeemed for or converted into money or otherwise

17 monetized by the issuer; and

18 (B) includes a prepaid commercial mobile radio

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

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

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

22 subject to this Act.

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

24 corporation, or fraternal or mutual-benefit organization,

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

26 providing life endowments, annuities, or insurance,

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

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

3 health, hospitalization, illness, life, malpractice,

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

5 worker-compensation insurance.

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

7 monetary consideration under an award, reward, benefit,

8 loyalty, incentive, rebate, or promotional program which

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

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

11 a record that may be redeemed for money or otherwise

12 monetized by the issuer.

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

14 gaseous liquid or solid hydrocarbon, cement material, sand

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

16 material, gemstone, fissionable and nonfissionable ores,

17 colloidal and other clay, steam and other geothermal

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

19 law of this State other than this Act.

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

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

22 abandonment of the amount, an amount that becomes payable

23 after abandonment. The term includes an amount payable:

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

25 lease, including a bonus, royalty, compensatory

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

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1 rental;

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

3 minerals, including a net revenue interest, royalty,

4 overriding royalty, extraction payment, and production

5 payment; and

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

7 joint-operating agreement, unit agreement, pooling

8 agreement, and farm-out agreement.

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

10 specified amount of money. The term includes an express

11 money order and a personal money order on which the

12 remitter is the purchaser.

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

14 indebtedness issued by a municipality or other political

15 subdivision of a state.

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

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

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

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

20 permitted by law.

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

22 security that cannot be delivered to the administrator by

23 the Depository Trust Clearing Corporation or similar

24 custodian of securities providing post-trade clearing and

25 settlement services to financial markets or cannot be

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

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1 term includes a worthless security.

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

3 beneficial, or equitable interest in property subject to

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

5 on behalf of the owner. The term includes:

6 (A) a depositor, for a deposit;

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

8 in trust;

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

10 property; and

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

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

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

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

15 Part 1005, as amended.

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

17 association, public corporation, government or

18 governmental subdivision, agency, or instrumentality, or

19 other legal entity whether or not for profit.

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

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

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

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

24 subdivision, agency, or instrumentality. The term:

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

26 property;

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1 (B) includes property referred to as or evidenced

2 by:

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

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

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

6 stored-value card, security deposit, refund,

7 credit memorandum, unpaid wage, unused ticket for

8 which the issuer has an obligation to provide a

9 refund, mineral proceeds, or unidentified

10 remittance;

11 (iii) a security except for:

12 (I) a worthless security; or

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

14 legal hold, or restriction evidenced on the

15 records of the holder or imposed by operation

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

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

18 receive, transfer, sell, or otherwise

19 negotiate the security;

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

21 evidence of indebtedness;

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

23 a distribution, or pay a dividend;

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

25 contract or insurance policy; and

26 (vii) an amount distributable from a trust or

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1 custodial fund established under a plan to provide

2 health, welfare, pension, vacation, severance,

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

4 employee-savings, supplemental-unemployment

5 insurance, or a similar benefit; and

6 (C) does not include:

7 (i) game-related digital content;

8 (ii) a loyalty card; or

9 (iii) a gift card.

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

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

12 delivers to the administrator property subject to this Act

13 or the administrator or a court makes a final determination

14 that the person is or is not a holder.

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

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

17 medium and is retrievable in perceivable form. The phrase

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

19 third party that has contracted with the holder.

20 (27) "Security" means:

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

22 Uniform Commercial Code;

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

24 of the Uniform Commercial Code, including a customer

25 security account held by a registered broker-dealer,

26 to the extent the financial assets held in the security

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1 account are not:

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

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

4 holds the assets;

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

6 (iii) specifically indorsed to the person; or

7 (C) an equity interest in a business association

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

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

10 or adopt a record:

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

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

13 record an electronic symbol, sound, or process.

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

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

16 United States Virgin Islands, or any territory or insular

17 possession subject to the jurisdiction of the United

18 States.

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

20 promise made for consideration by the seller or issuer of

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

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

23 the record. The term:

24 (A) includes:

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

26 microprocessor chip, magnetic strip, or other

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1 means for the storage of information, which is

2 prefunded and whose value or amount is decreased on

3 each use and increased by payment of additional

4 consideration; and

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

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

7 digital content.

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

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

10 license for the following public services:

11 (A) transmission of communications or information;

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

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

14 or gas; or

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

16 trash, garbage, or recycling disposal.

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

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

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

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

21 (A) the software or protocols governing the

22 transfer of the digital representation of value;

23 (B) game-related digital content; or

24 (C) a loyalty card or gift card.

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

26 of liquidation and delivery to the administrator would

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

2 due under this Act.

3 Section 15-103. Inapplicability to foreign transaction.

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

5 foreign country if the transaction out of which the property

6 arose was a foreign transaction.

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

8 rules to implement and administer this Act pursuant to the

9 Illinois Administrative Procedure Act.

10 ARTICLE 2. PRESUMPTION OF ABANDONMENT

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

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

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

14 specified below:

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

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

17 (3) (Blank).

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

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

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

21 to pay the principal of the bond arises;

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

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1 obligation to pay arises;

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

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

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

5 a deposit that is automatically renewable, 3 years after

6 its initial date of maturity unless the apparent owner

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

8 or about the time of the renewal;

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

10 a retail business transaction, other than in-store credit

11 for returned merchandise, other than a stored-value card, 3

12 years after the obligation arose;

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

14 endowment insurance policy or an annuity contract that has

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

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

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

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

19 or annuitant, as follows:

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

21 endowment insurance policy, the earlier of:

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

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

24 would have attained if living, the limiting age

25 under the mortality table on which the reserve for

26 the policy is based; and

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

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

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

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

5 the earliest of:

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

7 beneficiary;

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

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

10 105 where the holder does not know whether the

11 beneficiary is deceased;

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

13 executed;

14 (10) property distributable by a business association

15 in the course of dissolution or distributions from the

16 termination of a retirement plan, one year after the

17 property becomes distributable;

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

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

20 property becomes distributable;

21 (12) property held by a government or governmental

22 subdivision, agency, or instrumentality, including

23 municipal bond interest and unredeemed principal under the

24 administration of a paying agent or indenture trustee, 3

25 years after the property becomes distributable;

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

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1 which an employee is entitled, or other compensation for

2 personal services, including amounts held on a payroll

3 card, one year after the amount becomes payable;

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

5 utility, one year after the deposit or refund becomes

6 payable, except that any capital credits or patronage

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

8 of an electric cooperative, as defined in Section 3.4 of

9 the Electric Supplier Act, or a telephone or

10 telecommunications cooperative, as defined in Section

11 13-212 of the Public Utilities Act, that has remained

12 unclaimed by the person appearing on the records of the

13 entitled cooperative for more than 2 years, shall not be

14 subject to, or governed by, any other provisions of this

15 Act, but rather shall be used by the cooperative for the

16 benefit of the general membership of the cooperative; and

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

18 15-202 through 15-208, the earlier of 3 years after the

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

20 obligation to pay or distribute the property arises.

21 Notwithstanding anything to the contrary in this Section

22 15-201, and subject to Section 15-210, a deceased owner cannot

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

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

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

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

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

2 that has matured or terminated, shall instead be presumed

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

4 of interest in the property.

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

6 presumed abandoned.

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

8 account or retirement account that qualifies for tax deferral

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

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

11 later of:

12 (1) 3 years after the following dates:

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

14 communication sent by the holder by first-class United

15 States mail to the apparent owner is returned to the

16 holder undelivered by the United States Postal

17 Service; or

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

19 after the date the first communication is returned

20 undelivered, the date the second communication was

21 returned undelivered by the United States Postal

22 Service; or

23 (2) the earlier of the following dates:

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

25 becomes 70.5 years of age, if determinable by the

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1 holder; or

2 (B) one year after the date of mandatory

3 distribution following death if the Internal Revenue

4 Code requires distribution to avoid a tax penalty and

5 the holder:

6 (i) receives confirmation of the death of the

7 apparent owner in the ordinary course of its

8 business; or

9 (ii) confirms the death of the apparent owner

10 under subsection (b).

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

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

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

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

15 indication to confirm whether the apparent owner is deceased.

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

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

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

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

20 in the property by sending the apparent owner an

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

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

23 However, the holder promptly shall attempt to contact the

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

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

26 the apparent owner an electronic mail communication or the

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1 holder believes that the apparent owner's electronic mail

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

3 (2) the holder receives notification that the

4 electronic-mail communication was not received; or

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

6 electronic-mail communication within 30 days after the

7 communication was sent.

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

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

10 Postal Service, the property is presumed abandoned 3 years

11 after the later of:

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

13 communication to contact the apparent owner sent by

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

15 undelivered;

16 (2) 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; or

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

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

22 abandoned.

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

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

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

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

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

3 years after the earlier of:

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

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

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

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

8 (2) 30 years after the date the account was opened.

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

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

11 (1) the date of the distribution or attempted

12 distribution of the property;

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

14 the plan or trust agreement governing the plan; or

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

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

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

18 tax penalty.

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

20 abandoned.

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

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

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

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

25 account was opened 3 years after the later of:

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

2 communication sent by the holder by first-class United

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

4 the account was opened is returned undelivered to the

5 holder by the United States Postal Service;

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

7 the date the first communication is returned undelivered,

8 the date the second communication was returned

9 undelivered; or

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

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

12 accordance with the Uniform Gifts to Minors Act or Uniform

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

14 was opened.

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

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

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

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

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

20 custodian an electronic-mail communication not later than 2

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

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

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

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

25 the custodian an electronic mail communication or the

26 holder believes that the custodian's electronic-mail

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

2 (2) the holder receives notification that the

3 electronic-mail communication was not received; or

4 (3) the custodian does not respond to the

5 electronic-mail communication within 30 days after the

6 communication was sent.

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

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

9 Postal Service, the property is presumed abandoned 3 years

10 after the later of:

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

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

13 undelivered by the United States Postal Service; or

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

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

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

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

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

19 deposited into an account which shall indicate the date of

20 birth of the minor.

21 (e) (Blank).

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

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

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

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

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

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

3 presumed abandoned if the property remains unclaimed by the

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

5 rental period for the box.

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

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

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

9 presumed abandoned on the latest of 5 years after:

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

11 or additional funds are deposited into it;

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

13 by the apparent owner; or

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

15 behalf of the apparent owner.

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

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

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

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

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

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

22 the card on presentation indefinitely and may then request

23 reimbursement from the administrator under Section 605.

24 Section 15-208. When security presumed abandoned.

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

2 abandoned upon the earlier of the following:

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

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

5 owner is returned to the holder undelivered by the United

6 States Postal Service; however, if such returned

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

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

9 day the resent item is returned as undeliverable; or

10 (2) 5 years after the date of the apparent owner's last

11 indication of interest in the security.

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

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

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

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

16 sending the apparent owner an electronic-mail communication

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

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

19 promptly shall attempt to contact the apparent owner by

20 first-class United States mail if:

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

22 the apparent owner an electronic-mail communication or the

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

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

25 (2) the holder receives notification that the

26 electronic-mail communication was not received; or

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

2 electronic-mail communication within 30 days after the

3 communication was sent.

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

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

6 Postal Service, the security is presumed abandoned in

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

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

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

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

11 receipt of the notice or indication to confirm whether the

12 apparent owner is deceased. Notwithstanding the standards set

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

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

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

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

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

18 the owner.

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

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

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

22 from the property and not previously presumed abandoned is also

23 presumed abandoned.

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

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1 property.

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

3 is measured from the later of:

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

5 this Article; or

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

7 owner in the property.

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

9 interest in property includes:

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

11 holder or agent of the holder concerning the property or

12 the account in which the property is held;

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

14 holder or agent of the holder concerning the property or

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

16 its agent contemporaneously makes and preserves a record of

17 the fact of the apparent owner's communication;

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

19 payment of a dividend, interest payment, or other

20 distribution, or evidence of receipt of a distribution made

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

22 underlying security, or interest in a business

23 association;

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

25 account in which the property is held, including accessing

26 the account or information concerning the account, or a

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

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

3 account;

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

5 financial organization, except for a recurring Automated

6 Clearing House (ACH) debit or credit previously authorized

7 by the apparent owner or an automatic reinvestment of

8 dividends or interest; and

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

10 an insurance policy.

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

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

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

14 apparent owner.

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

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

17 indication of interest in the property by the apparent owner

18 unless a record of the communication evidences the apparent

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

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

21 insurance policy otherwise becomes entitled to the proceeds

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

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

24 nonforfeiture provision contained in the policy, the operation

25 does not prevent the policy from maturing or terminating.

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

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

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

3 accounts, at a financial organization holding an inactive

4 account of the apparent owner shall be an indication of

5 interest in all such accounts if:

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

7 the following activities:

8 (i) the apparent owner undertakes one or more

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

10 Section regarding any account that appears on a

11 consolidated statement with the inactive account;

12 (ii) the apparent owner increases or decreases

13 the amount of funds in any other account the

14 apparent owner has with the financial

15 organization; or

16 (iii) the apparent owner engages in any other

17 relationship with the financial organization,

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

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

20 address for the apparent owner in the financial

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

22 the inactive account and the active account.

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

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

25 States Social Security Administration Death Master File or

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

2 the United States Social Security Administration Death Master

3 File for determining that an individual reportedly has died.

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

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

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

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

8 or annuitant when:

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

10 order determining that the insured or annuitant has died;

11 (2) the company:

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

13 annuitant from the administrator or an unclaimed

14 property administrator of another state, a

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

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

17 an executor or other legal representative of the

18 insured's or annuitant's estate; and

19 (B) validates the death of the insured or

20 annuitant;

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

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

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

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

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

26 conducts a comparison for the purpose of finding matches

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1 during an examination conducted under Article 10 between a

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

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

4 provides notice that the insured or annuitant has died.

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

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

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

8 are satisfied as provided by either:

9 (A) the Unclaimed Life Insurance Benefits Act or

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

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

12 Department of Insurance.

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

14 proof of death for the purpose of submission to an

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

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

17 an insurance policy or annuity contract.

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

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

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

21 policy or contract to make a claim to receive proceeds

22 under the terms of the policy or contract.

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

24 date of his or her death is indicated by the

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

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

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

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

3 or his or her legal representative.

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

5 extent to which an insurance company before the effective date

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

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

8 comparison to determine whether amounts owed by the company on

9 a life or endowment insurance policy or annuity contract were

10 presumed abandoned or unclaimed.

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

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

13 endowment insurance policy or annuity contract are deposited

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

15 beneficiary of the policy or contract and, under a

16 supplementary contract not involving annuity benefits other

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

18 company or the financial organization where the account is

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

20 account.

21 Section 15-213. United States savings bonds.

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

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

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

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

2 thereof in the possession of the administrator.

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

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

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

6 abandoned when such bond has remained unclaimed and unredeemed

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

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

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

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

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

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

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

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

15 subsections (d) through (f).

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

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

18 filed with the administrator for the savings bond, the

19 administrator shall commence a civil action in the Circuit

20 Court of Sangamon County for a determination that the United

21 States savings bonds has escheated to the State. The

22 administrator may postpone the bringing of the action until

23 sufficient United States savings bonds have accumulated in the

24 administrator's custody to justify the expense of the

25 proceedings.

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

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

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

3 with the Circuit Court of Sangamon County of the affidavit

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

5 administrator with personal knowledge of the efforts made to

6 contact the owners of United States savings bonds presumed

7 abandoned under this Section. In addition to the diligent

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

9 Procedure, the administrator may also utilize additional

10 discretionary means to attempt to provide notice to persons who

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

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

13 civil action pursuant to subsection (d).

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

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

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

17 claim for such United States savings bond with either the

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

19 Circuit Court of Sangamon County in which the savings bond

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

21 final judgment by the Circuit Court pursuant to this

22 subsection, and unless the Circuit Court determines that such

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

24 such United States savings bond shall no longer be presumed

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

26 to substantiate a disputed claim or if the court determines

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

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

3 administrator has substantially complied with the laws of this

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

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

6 legal title to and ownership of such United States savings

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

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

9 or beneficiary, shall vest in this State.

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

11 Fiscal Service of the United States Treasury the United States

12 savings bonds escheated to the State and deposit the proceeds

13 from the redemption of United States savings bonds into the

14 Unclaimed Property Trust Fund.

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

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

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

18 administrator. Upon providing sufficient proof of the validity

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

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

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

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

23 on account of such funds.

24 ARTICLE 3. RULES FOR TAKING CUSTODY OF PROPERTY PRESUMED

25 ABANDONED

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

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

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

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

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

6 description, code, or indication of location is not

7 sufficient to direct the delivery of first-class United

8 States mail to the apparent owner.

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

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

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

12 last-known address of the apparent owner unless other

13 records associated with the apparent owner specifically

14 identify the physical address of the apparent owner to be

15 in another state.

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

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

18 last-known address of the apparent owner.

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

20 endowment insurance policy or annuity contract or its

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

22 annuitant if a person other than the insured or annuitant

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

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

25 insurance company and cannot be determined under Section

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1 15-302. The address of the apparent owner of other property

2 where ownership vests in a beneficiary upon the death of

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

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

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

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

7 The administrator may take custody of property that is presumed

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

9 foreign country if:

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

11 records of the holder is in this State; or

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

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

14 the administrator has determined that the last-known

15 address of the apparent owner is in this State.

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

17 apparent owner.

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

19 reflect multiple addresses for an apparent owner and this State

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

21 may take custody of property presumed abandoned, whether

22 located in this State or another state.

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

24 recently recorded address of the apparent owner under

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

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

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

4 presumed abandoned.

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

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

7 15-303, the administrator may take custody of property presumed

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

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

10 this State or a governmental subdivision, agency, or

11 instrumentality of this State, and

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

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

14 apparent owner or other person entitled to the property in

15 the records of the holder; or

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

17 address of the apparent owner or other person entitled to

18 the property does not provide for custodial taking of the

19 property.

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

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

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

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

24 owner.

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

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

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

3 holder was domiciled at the time the property was presumed

4 abandoned.

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

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

7 administrator may take custody of property presumed abandoned

8 whether located in this State or another state if:

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

10 took place in this State;

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

12 provide for the custodial taking of the property, except

13 that if the property is specifically exempt from custodial

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

15 the property is not subject to the custody of the

16 administrator; and

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

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

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

20 property, except that if the property is specifically

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

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

23 custody of the administrator.

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

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1 instrument. The administrator may take custody of sums payable

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

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

4 Sections 2501 through 2503, as amended.

5 Section 15-307. Burden of proof to establish

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

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

8 custody of unclaimed property and there is a dispute concerning

9 such property, the administrator has the initial burden to

10 prove:

11 (1) the amount of the property;

12 (2) the property is presumed abandoned; and

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

14 administrator.

15 ARTICLE 4. REPORT BY HOLDER

16 Section 15-401. Report required by holder.

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

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

19 the administrator concerning the property. A holder shall

20 report via the internet in a format approved by the

21 administrator, unless the administrator gives a holder

22 specific permission to file a paper report.

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

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1 report required under subsection (a).

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

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

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

5 and timely reporting of property presumed abandoned; and

6 (2) for paying or delivering to the administrator

7 property described in the report.

8 Section 15-402. Content of report.

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

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

11 verified as to its completeness and accuracy;

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

13 approved by the administrator which protects confidential

14 information of the apparent owner;

15 (3) describe the property;

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

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

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

19 identification number, if known or readily ascertainable,

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

21 more;

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

23 endowment insurance policy, annuity contract, or other

24 property where ownership vests in a beneficiary upon the

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

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

2 policy or contract and of the beneficiary;

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

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

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

6 holder under Section 15-606;

7 (7) contain the commencement date for determining

8 abandonment under Article 2;

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

10 requirements of Section 15-501;

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

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

13 transferable security; and

14 (10) contain other information the administrator

15 prescribes by rules.

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

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

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

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

20 an apparent owner of an item unless the information is

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

22 apparent owner.

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

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

25 owner or the apparent owner's property.

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

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1 presumed abandoned or is a successor to another person that

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

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

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

5 and address of each previous holder of the property.

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

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

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

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

10 preceding July 1 of that year.

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

12 15-401 to be filed by business associations, utilities, and

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

14 year for the immediately preceding calendar year.

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

16 15-401, the holder of property presumed abandoned may request

17 the administrator to extend the time for filing. The

18 administrator may grant an extension. If the extension is

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

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

21 or partial payment terminates accrual of interest on the amount

22 paid.

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

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

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

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

3 unless a shorter period is provided by rule of the

4 administrator. The holder may satisfy the requirement to retain

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

6 contain:

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

8 report;

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

10 that gave rise to the property right;

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

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

13 the holder;

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

15 as unclaimed, to allow examination to determine whether the

16 holder has complied with the Act; and

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

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

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

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

21 record of the instruments while they remain outstanding

22 indicating the state and date of issue.

23 Section 15-405. Property reportable and payable or

24 deliverable absent owner demand. Property is reportable and

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

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1 to make demand or present an instrument or document otherwise

2 required to obtain payment.

3 ARTICLE 5. NOTICE TO APPARENT OWNER OF PROPERTY PRESUMED

4 ABANDONED

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

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

7 property presumed abandoned shall send to the apparent owner

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

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

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

11 report under Section 15-401 if:

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

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

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

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

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

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

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

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

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

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

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

23 (c) The holder of securities presumed abandoned under

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

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1 owner notice by certified United States mail that complies with

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

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

4 if:

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

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

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

8 United States mail to the apparent owner; and

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

10 The administrator may issue rules allowing a holder to

11 deduct reasonable costs incurred in sending a notice by

12 certified United States mail under this subsection.

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

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

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

16 Section by certified United States mail shall constitute a

17 record communicated by the apparent owner to the holder

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

19 held.

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

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

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

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

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

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

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1 notice)."

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

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

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

5 is the subject of the notice;

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

7 State Treasurer;

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

9 State Treasurer an apparent owner that seeks return of the

10 property may file a claim with the administrator;

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

12 United States may be sold by the State Treasurer;

13 (5) provide instructions that the apparent owner must

14 follow to prevent the holder from reporting and paying or

15 delivering the property to the State Treasurer; and

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

17 telephone number to contact the holder.

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

19 listing a website where apparent owners may obtain more

20 information about how to prevent the holder from reporting and

21 paying or delivering the property to the State Treasurer.

22 Section 15-503. Notice by administrator.

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

24 owner that property presumed abandoned and appears to be owned

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

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1 Act.

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

3 administrator shall:

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

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

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

7 the administrator, unless the administrator determines

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

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

10 security held in an account for which the apparent owner

11 had consented to receiving electronic mail from the holder,

12 send notice by electronic mail if the electronic-mail

13 address of the apparent owner is known to the administrator

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

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

16 electronic-mail address if the administrator does not have

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

18 but has an electronic-mail address that the administrator

19 does not know to be invalid.

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

21 administrator shall:

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

23 language newspaper of general circulation in each county in

24 this State notice of property held by the administrator

25 which must include:

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

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1 administrator during the preceding 6-month period,

2 taken from the reports under Section 15-401;

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

4 administrator during the preceding 6-month period;

5 (C) the Internet web address of the unclaimed

6 property website maintained by the administrator;

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

8 to contact the administrator to inquire about or claim

9 property; and

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

11 Internet by a computer to search for unclaimed property

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

13 public at a local public library.

14 (2) The administrator shall maintain a website

15 accessible by the public and electronically searchable

16 which contains the names reported to the administrator of

17 apparent owners for whom property is being held by the

18 administrator. The administrator need not list property on

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

20 been initiated or is pending for the property, the

21 administrator has made direct contact with the apparent

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

23 administrator reasonably believes exclusion of the

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

25 owner of the property.

26 (d) The website or database maintained under subsection

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

2 administrator a claim to property and a printable claim form

3 with instructions for its use.

4 (e) Tax return identification of apparent owners of

5 abandoned property.

6 (1) At least annually the administrator shall notify

7 the Department of Revenue of the names of persons appearing

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

9 administrator shall also provide to the Department of

10 Revenue the social security numbers of the persons, if

11 available.

12 (2) The Department of Revenue shall notify the

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

14 filed an Illinois income tax return and shall provide the

15 administrator with the last known address of the person as

16 it appears in Department of Revenue records, except as

17 prohibited by federal law. The Department of Revenue may

18 also provide additional addresses for the same taxpayer

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

20 federal law.

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

22 this subsection, the administrator and the Department of

23 Revenue may enter into an interagency agreement concerning

24 protection of confidential information, data match rules,

25 and other issues.

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

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

2 owing to a person matched under this Section without the

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

4 the following conditions are met:

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

6 person is $2,000 or less;

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

8 securities;

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

10 to the Department of Revenue records is less than 12

11 months old; and

12 (D) the administrator has evidence sufficient to

13 establish that the person who appears in Department of

14 Revenue records is the owner of the property and the

15 owner currently resides at the last known address from

16 the Department of Revenue.

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

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

19 securities the administrator shall provide notice to the

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

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

22 with the administrator for return of the property.

23 (f) The administrator may use additional databases to

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

25 resides at the last known address. The administrator may

26 utilize publicly and commercially available databases to find

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1 and update or add information for apparent owners of property

2 held by the administrator.

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

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

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

6 the administrator may use other printed publication,

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

8 public of the existence of unclaimed property held by the

9 administrator.

10 Section 15-504. Cooperation among State officers and

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

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

13 administrator, each officer, agency, board, commission,

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

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

16 political subdivision of this State shall make its books and

17 records available to the administrator and cooperate with the

18 administrator to determine the current address of an apparent

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

20 to otherwise assist the administrator in the administration of

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

22 agreements to enable such other governmental agencies to

23 provide an additional notice to apparent owners of property

24 held by the administrator.

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1 ARTICLE 6. TAKING CUSTODY OF PROPERTY BY ADMINISTRATOR

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

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

4 holder:

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

6 facts then known, that the property was required or

7 permitted to be paid or delivered to the administrator

8 under this Act; or

9 (2) made payment or delivery:

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

11 administrator's agent; or

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

13 administrator which the holder reasonably believed

14 required or permitted the property to be paid or

15 delivered.

16 Section 15-602. Dormancy charge.

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

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

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

20 apparent owner authorizes imposition of the charge for the

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

22 specified time; and

23 (2) the holder regularly imposes the charge and

24 regularly does not reverse or otherwise cancel the charge.

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

2 limited to an amount that is not unconscionable considering all

3 relevant factors, including the marginal transactional costs

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

5 property and any services received by the apparent owner.

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

7 imposed solely by virtue of property being reported as presumed

8 abandoned.

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

10 administrator.

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

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

13 to the administrator the property described in the report.

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

15 automatically renewable deposit and a penalty or forfeiture in

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

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

18 payment of the property to the administrator is extended until

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

20 the holder informs the administrator of the extended date.

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

22 delivered to the administrator until a mutually agreed upon

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

24 under Section 15-401.

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

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1 15-401 is a security, the administrator may:

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

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

4 the issuer, its transfer agent, or the securities

5 intermediary to transfer the security; or

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

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

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

9 the administrator may obtain a replacement certificate in

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

11 Commercial Code. An indemnity bond is not required.

12 (f) The administrator shall establish procedures for the

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

14 maintenance of securities delivered to the administrator by a

15 holder.

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

17 acting in good faith under this Section under instructions of

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

19 apparent owner for a claim arising with respect to property

20 after the property has been delivered to the administrator.

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

22 administrator a security identified by the holder as a

23 non-freely transferable security in a report filed under

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

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

26 holder shall report and deliver the security on the next

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1 regular date prescribed for delivery of securities under this

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

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

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

5 transferable security.

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

7 to administrator.

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

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

10 assumes custody and responsibility for safekeeping the

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

12 administrator in good faith and substantially complies with

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

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

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

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

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

18 unclaimed funds or abandoned property previously paid or

19 delivered to the administrator, the holder shall give written

20 notification to the administrator and the Attorney General of

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

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

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

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

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

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

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

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

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

5 reasonably sufficient time for the holder to comply with the

6 directions received, shall either direct the holder actively to

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

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

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

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

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

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

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

14 hereinafter provided in respect to defenses made pursuant to

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

16 has actively defended in such proceedings pursuant to a

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

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

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

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

21 the administrator shall, upon being furnished with proof of

22 payment in satisfaction of such judgment, reimburse the holder

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

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

25 expenses incurred in legal proceedings undertaken pursuant to

26 the direction of the Attorney General.

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

2 administrator.

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

4 administrator may file a claim for reimbursement from the

5 administrator of the amount paid if the holder:

6 (1) paid the money in error; or

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

8 money to a person the holder reasonably believed entitled

9 to the money.

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

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

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

13 holder must submit proof that the instrument was presented and

14 payment was made to a person the holder reasonably believed

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

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

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

18 receive or recover property, whether specified by contract,

19 statute, or court order.

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

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

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

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

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

25 was paid by the holder to the owner.

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

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

3 the property from the administrator if:

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

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

6 the holder.

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

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

9 sufficient to establish that the apparent owner has claimed the

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

11 the holder to the administrator in error.

12 (f) The administrator may determine that an affidavit

13 submitted by a holder is evidence sufficient to establish that

14 the holder is entitled to reimbursement or to recover property

15 under this Section.

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

17 for reimbursement or return of property under this Section.

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

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

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

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

22 information and documentation requested by the administrator

23 as necessary to establish legal ownership of the property and

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

25 administrator may close the claim without issuing a final

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

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

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

3 claim will be considered complete when a holder has provided

4 all the information and documentation requested by the

5 administrator as necessary to establish legal ownership and

6 such information or documentation is entered into the

7 administrator's unclaimed property system.

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

9 Illinois Administrative Procedure Act for review of the

10 administrator's decision or the deemed denial under subsection

11 (h) not later than:

12 (1) 30 days following receipt of the notice of the

13 administrator's decision; or

14 (2) 120 days following the filing of a claim under

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

16 subsection (h).

17 Section 15-606. Property removed from safe-deposit box.

18 Property removed from a safe-deposit box and delivered under

19 this Act to the administrator under this Act is subject to the

20 holder's right to reimbursement for the cost of opening the box

21 and a lien or contract providing reimbursement to the holder

22 for unpaid rent charges for the box. Upon application by the

23 holder, after the sale of the property, and after deducting the

24 expense incurred by the administrator in selling the property,

25 the administrator shall reimburse the holder from the proceeds

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1 remaining. The administrator shall promulgate administrative

2 rules concerning the reimbursement process under this Section.

3 Section 15-607. Crediting income or gain to owner's

4 account. If property other than money is delivered to the

5 administrator, the owner is entitled to receive from the

6 administrator income or gain realized or accrued on the

7 property before the property is sold. Interest on money is not

8 payable to an owner for periods where the property is in the

9 possession of the administrator.

10 Section 15-608. Administrator's options as to custody.

11 (a) The administrator may decline to take custody of

12 property reported under Section 15-401 if the administrator

13 determines that:

14 (1) the property has a value less than the estimated

15 expenses of notice and sale of the property; or

16 (2) taking custody of the property would be unlawful.

17 (b) A holder may pay or deliver property to the

18 administrator before the property is presumed abandoned under

19 this Act if the holder:

20 (1) provides the apparent owner of the property any

21 notice required by Section 15-501 and provides the

22 administrator evidence of the holder's compliance with

23 this paragraph;

24 (2) includes with the payment or delivery a report

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1 regarding the property conforming to Section 15-402; and

2 (3) first obtains the administrator's consent in a

3 record to accept payment or delivery.

4 (c) A holder's request for the administrator's consent

5 under subsection (b)(3) must be in a record. If the

6 administrator fails to respond to the request not later than 30

7 days after receipt of the request, the administrator is deemed

8 to consent to the payment or delivery of the property and the

9 payment or delivery is considered to have been made in good

10 faith.

11 (d) On payment or delivery of property under subsection

12 (b), the property is presumed abandoned.

13 Section 15-609. Disposition of property having no

14 substantial value; immunity from liability.

15 (a) If the administrator takes custody of property

16 delivered under this Act and later determines that the property

17 has no substantial commercial value or that the cost of

18 disposing of the property will exceed the value of the

19 property, the administrator may return the property to the

20 holder or destroy or otherwise dispose of the property.

21 (b) An action or proceeding may not be commenced against

22 the State, an agency of the State, the administrator, another

23 officer, employee, or agent of the State, or a holder for or

24 because of an act of the administrator under this Section,

25 except for intentional misconduct or malfeasance.

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1 Section 15-610. Periods of limitation and repose.

2 (a) Expiration, before, on, or after the effective date of

3 this Act, of a period of limitation on an owner's right to

4 receive or recover property, whether specified by contract,

5 statute, or court order, does not prevent the property from

6 being presumed abandoned or affect the duty of a holder under

7 this Act to file a report or pay or deliver property to the

8 administrator.

9 (b) An action or proceeding may not be maintained by the

10 administrator to enforce this Act in regard to the reporting,

11 delivery, or payment of property more than 10 years after the

12 holder specifically identified the property in a report filed

13 with the administrator or gave express notice to the

14 administrator of a dispute regarding the property. In the

15 absence of such a report or other express notice, the period of

16 limitation is tolled. The period of limitation is also tolled

17 by the filing of a report that is fraudulent.

18 ARTICLE 7. SALE OF PROPERTY BY ADMINISTRATOR

19 Section 15-701. Public sale of property.

20 (a) Subject to Section 15-702, not earlier than 3 years

21 after receipt of property presumed abandoned, the

22 administrator may sell the property.

23 (b) Before selling property under subsection (a), the

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1 administrator shall give notice to the public of:

2 (1) the date of the sale; and

3 (2) a reasonable description of the property.

4 (c) A sale under subsection (a) must be to the highest

5 bidder:

6 (1) at public sale at a location in this State which

7 the administrator determines to be the most favorable

8 market for the property;

9 (2) on the Internet; or

10 (3) on another forum the administrator determines is

11 likely to yield the highest net proceeds of sale.

12 (d) The administrator may decline the highest bid at a sale

13 under this Section and reoffer the property for sale if the

14 administrator determines the highest bid is insufficient.

15 (e) If a sale held under this Section is to be conducted

16 other than on the Internet, the administrator must cause to be

17 published at least one notice of the sale, at least 2 weeks but

18 not more than 5 weeks before the sale, in a newspaper of

19 general circulation in the county in which the property is to

20 be sold. For purposes of this subsection, the reasonable

21 description of property to be sold required by subsection (b)

22 above may be satisfied by posting such information on the

23 administrator's website so long as the newspaper notice

24 includes the website address where such information is posted.

25 (f) Property eligible for sale will not be sold when a

26 claim has been filed with the administrator by an apparent

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1 owner, heir, or agent. However, upon approval of a claim, the

2 owner, heir or, agent may request the administrator to dispose

3 of the property by sale and remit the net proceeds to the

4 owner, heir, or agent. Upon disapproval of the claim, the

5 administrator may dispose of the property by sale.

6 Section 15-702. Disposal of securities.

7 (a) The administrator may not sell or otherwise liquidate a

8 security until 3 years after the administrator receives the

9 security and gives the apparent owner notice under Section

10 15-503 that the administrator holds the security unless the

11 administrator determines it would be in the best interests of

12 the owner for the sale to occur prior to the expiration of the

13 3-year period after the administrator receives the security and

14 gives the apparent owner notice under Section 15-503. The

15 administrator shall by administrative rule provide examples of

16 situations where it would be in the best interests of the owner

17 for the sale to occur prior to the expiration of the 3-year

18 period.

19 (b) The administrator may not sell a security listed on an

20 established stock exchange for less than the price prevailing

21 on the exchange at the time of sale. The administrator may sell

22 a security not listed on an established exchange by any

23 commercially reasonable method.

24 Section 15-703. Recovery of securities or value by owner.

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1 (a) If the administrator sells a security before the

2 expiration of 3 years after delivery of the security to the

3 administrator, an apparent owner that files a valid claim under

4 this Act of ownership of the security before the 3-year period

5 expires is entitled, at the option of the owner, to receive:

6 (1) replacement of the security;

7 (2) the market value of the security at the time the

8 claim is filed, plus dividends, interest, and other

9 increments on the security up to the time the claim is

10 paid; or

11 (3) the net proceeds of the sale of the security, plus

12 dividends, interest, and other increments on the security

13 up to the time the security was sold.

14 (b) Replacement of the security or calculation of market

15 value under subsection (a) must take into account a stock

16 split, reverse stock split, stock dividend, or similar

17 corporate action.

18 (c) A person that makes a valid claim under this Act of

19 ownership of a security after expiration of 3 years after

20 delivery of the security to the administrator is entitled to

21 receive:

22 (1) the security the holder delivered to the

23 administrator, if it is in the custody of the

24 administrator, plus dividends, interest, and other

25 increments on the security up to the time the administrator

26 delivers the security to the person; or

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1 (2) the net proceeds of the sale of the security, plus

2 dividends, interest, and other increments on the security

3 up to the time the security was sold.

4 (d) Securities eligible for sale will not be sold when a

5 claim has been filed with the administrator by an apparent

6 owner, heir, or agent. However, upon approval of a claim, the

7 owner, heir or, agent may request the administrator to dispose

8 of the securities by sale and remit the net proceeds to the

9 owner, heir, or agent. Upon disapproval of the claim, the

10 administrator may dispose of the securities by sale.

11 Section 15-704. Purchaser owns property after sale. A

12 purchaser of property at a sale conducted by the administrator

13 under this Act takes the property free of all claims of the

14 owner, a previous holder, or a person claiming through the

15 owner or holder. The administrator shall execute documents

16 necessary to complete the transfer of ownership to the

17 purchaser.

18 Section 15-705. Exceptions to the sale of tangible

19 property. The administrator shall dispose of tangible property

20 identified by this Section in accordance with this Section.

21 (a) Military medals or decorations. The administrator may

22 not sell a medal or decoration awarded for military service in

23 the armed forces of the United States. Instead, the

24 administrator, with the consent of the respective organization

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1 under paragraph (1), agency under paragraph (2), or entity

2 under paragraph (3), may deliver a medal or decoration to be

3 held in custody for the owner, to:

4 (1) a military veterans organization qualified under

5 Section 501(c)(19) of the Internal Revenue Code;

6 (2) the agency that awarded the medal or decoration; or

7 (3) a governmental entity.

8 After delivery, the administrator is not responsible for

9 the safekeeping of the medal or decoration.

10 (b) Property with historical value. Property that the

11 administrator reasonably believes may have historical value

12 may be, at his or her discretion, loaned to an accredited

13 museum in the United States where it will be kept until such

14 time as the administrator orders it to be returned to his or

15 her custody.

16 (c) Human remains. If human remains are delivered to the

17 administrator under this Act, the administrator shall deliver

18 those human remains to the coroner of the county in which the

19 human remains were abandoned for disposition under Section

20 3-3034 of the Counties Code. The only human remains that may be

21 delivered to the administrator under this Act and that the

22 administrator may receive are those that are reported and

23 delivered as contents of a safe deposit box.

24 (d) Evidence in a criminal investigation. Property that may

25 have been used in the commission of a crime or that may assist

26 in the investigation of a crime, as determined after consulting

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1 with the Department of State Police, shall be delivered to the

2 Department of State Police or other appropriate law enforcement

3 authority to allow law enforcement to determine whether a

4 criminal investigation should take place. Any such property

5 delivered to a law enforcement authority shall be held in

6 accordance with existing statutes and rules related to the

7 gathering, retention, and release of evidence.

8 (e) Firearms.

9 (1) The administrator, in cooperation with the

10 Department of State Police, shall develop a procedure to

11 determine whether a firearm delivered to the administrator

12 under this Act has been stolen or used in the commission of

13 a crime. The Department of State Police shall determine the

14 appropriate disposition of a firearm that has been stolen

15 or used in the commission of a crime. The administrator

16 shall attempt to return a firearm that has not been stolen

17 or used in the commission of a crime to the rightful owner

18 if the Department of State Police determines that the owner

19 may lawfully possess the firearm.

20 (2) If the administrator is unable to return a firearm

21 to its owner, the administrator shall transfer custody of

22 the firearm to the Department of State Police. Legal title

23 to a firearm transferred to the Department of State Police

24 under this subsection (e) is vested in the Department of

25 State Police by operation of law if:

26 (i) the administrator cannot locate the owner of

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1 the firearm;

2 (ii) the owner of the firearm may not lawfully

3 possess the firearm;

4 (iii) the apparent owner does not respond to notice

5 published under Section 15-503 of this Act; or

6 (iv) the apparent owner responds to notice

7 published under Section 15-502 and states that he or

8 she no longer claims an interest in the firearm.

9 (3) With respect to a firearm whose title is

10 transferred to the Department of State Police under this

11 subsection (e), the Department of State Police may:

12 (i) retain the firearm for use by the crime

13 laboratory system, for training purposes, or for

14 any other application as deemed appropriate by the

15 Department;

16 (ii) transfer the firearm to the Illinois

17 State Museum if the firearm has historical value;

18 or

19 (iii) destroy the firearm if it is not retained

20 pursuant to subparagraph (i) or transferred

21 pursuant to subparagraph (ii).

22 As used in this subsection, "firearm" has the meaning

23 provided in the Firearm Owners Identification Card Act.

24 ARTICLE 8. ADMINISTRATION OF PROPERTY

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1 Section 15-801. Deposit of funds by administrator.

2 (a) Except as otherwise provided in this Section, the

3 administrator shall deposit in the Unclaimed Property Trust

4 Fund all funds received under this Act, including proceeds from

5 the sale of property under Article 7. The administrator may

6 deposit any amount in the Unclaimed Property Trust Fund into

7 the State Pensions Fund during the fiscal year at his or her

8 discretion; however, he or she shall, on April 15 and October

9 15 of each year, deposit any amount in the Unclaimed Property

10 Trust Fund exceeding $2,500,000 into the State Pensions Fund.

11 If on either April 15 or October 15, the administrator

12 determines that a balance of $2,500,000 is insufficient for the

13 prompt payment of unclaimed property claims authorized under

14 this Act, the administrator may retain more than $2,500,000 in

15 the Unclaimed Property Trust Fund in order to ensure the prompt

16 payment of claims. Beginning in State fiscal year 2018, all

17 amounts that are deposited into the State Pensions Fund from

18 the Unclaimed Property Trust Fund shall be apportioned to the

19 designated retirement systems as provided in subsection (c-6)

20 of Section 8.12 of the State Finance Act to reduce their

21 actuarial reserve deficiencies.

22 (b) The administrator shall make prompt payment of claims

23 he or she duly allows as provided for in this Act from the

24 Unclaimed Property Trust Fund. This shall constitute an

25 irrevocable and continuing appropriation of all amounts in the

26 Unclaimed Property Trust Fund necessary to make prompt payment

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1 of claims duly allowed by the administrator pursuant to this

2 Act.

3 Section 15-802. Administrator to retain records of

4 property. The administrator shall:

5 (1) record and retain the name and last-known address

6 of each person shown on a report filed under Section 15-401

7 to be the apparent owner of property delivered to the

8 administrator;

9 (2) record and retain the name and last-known address

10 of each insured or annuitant and beneficiary shown on the

11 report;

12 (3) for each policy of insurance or annuity contract

13 listed in the report of an insurance company, record and

14 retain the policy or account number, the name of the

15 company, and the amount due or paid shown on the report;

16 (4) for each apparent owner listed in the report,

17 record and retain the name of the holder that filed the

18 report and the amount due or paid; and

19 (5) maintain records sufficient to indicate the filing

20 of reports required under Section 15-401 and the payment or

21 delivery of property to the administrator under Section

22 15-603.

23 Records created or maintained pursuant to this Section are

24 subject to the requirements of the Illinois State Records Act.

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1 Section 15-803. Expenses and service charges of

2 administrator. Before making a deposit of funds received under

3 this Act to the Unclaimed Property Trust Fund, the

4 administrator may deduct expenses incurred in examining

5 records of or collecting property from a putative holder or

6 holder as provided in the State Officers and Employees Money

7 Disposition Act.

8 Section 15-804. Administrator holds property as custodian

9 for owner. Upon the payment or delivery of abandoned property

10 to the administrator, the State shall assume custody and shall

11 be responsible for the safekeeping thereof.

12 ARTICLE 9. CLAIM TO RECOVER PROPERTY FROM ADMINISTRATOR

13 Section 15-901. Claim of another state to recover property.

14 (a) If the administrator knows that property held by the

15 administrator under this Act is subject to a superior claim of

16 another state, the administrator shall:

17 (1) report and pay or deliver the property to the other

18 state; or

19 (2) return the property to the holder so that the

20 holder may pay or deliver the property to the other state.

21 (b) The administrator is not required to enter into an

22 agreement to transfer property to the other state under

23 subsection (a).

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1 Section 15-902. Property subject to recovery by another

2 state.

3 (a) Property held under this Act by the administrator is

4 subject to the right of another state to take custody of the

5 property if:

6 (1) the property was paid or delivered to the

7 administrator because the records of the holder did not

8 reflect a last-known address in the other state of the

9 apparent owner and:

10 (A) the other state establishes that the

11 last-known address of the apparent owner or other

12 person entitled to the property was in the other state;

13 or

14 (B) under the law of the other state, the property

15 has become subject to a claim by the other state of

16 abandonment;

17 (2) the records of the holder did not accurately

18 identify the owner of the property, the last-known address

19 of the owner was in another state, and, under the law of

20 the other state, the property has become subject to a claim

21 by the other state of abandonment;

22 (3) the property was subject to the custody of the

23 administrator of this State under Section 15-305 and, under

24 the law of the state of domicile of the holder, the

25 property has become subject to a claim by the state of

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1 domicile of the holder of abandonment; or

2 (4) the property:

3 (A) is a sum payable on a traveler's check, money

4 order, or similar instrument that was purchased in the

5 other state and delivered to the administrator under

6 Section 15-306; and

7 (B) under the law of the other state, has become

8 subject to a claim by the other state of abandonment.

9 (b) A claim by another state to recover property under this

10 Section must be presented in a form prescribed by the

11 administrator, unless the administrator waives presentation of

12 the form.

13 (c) The administrator shall decide a claim under this

14 Section not later than 90 days after it is presented. If the

15 administrator determines that the other state is entitled under

16 subsection (a) to custody of the property, the administrator

17 shall allow the claim and pay or deliver the property to the

18 other state.

19 (d) The administrator may require another state, before

20 recovering property under this Section, to agree to indemnify

21 this State and its agents, officers and employees against any

22 liability on a claim to the property.

23 Section 15-903. Claim for property by person claiming to be

24 owner.

25 (a) A person claiming to be the owner of property held

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1 under this Act by the administrator or to the proceeds from the

2 sale thereof may file a claim for the property on a form

3 prescribed by the administrator. The claimant must verify the

4 claim as to its completeness and accuracy.

5 (b) The administrator may waive the requirement in

6 subsection (a) and may pay or deliver property directly to a

7 person if:

8 (1) the person receiving the property or payment is

9 shown to be the apparent owner included on a report filed

10 under Section 15-401;

11 (2) the administrator reasonably believes the person

12 is entitled to receive the property or payment; and

13 (3) the property has a value of less than $500.

14 (c) The administrator may change the maximum value in

15 subsection (b) by administrative rule.

16 Section 15-904. When administrator must honor claim for

17 property.

18 (a) The administrator shall pay or deliver property to a

19 claimant under subsection (a) of Section 15-903 if the

20 administrator receives evidence sufficient to establish to the

21 satisfaction of the administrator that the claimant is the

22 owner of the property.

23 (b) A claim will be considered complete when a claimant has

24 provided all the information and documentation requested by the

25 administrator as necessary to establish legal ownership and

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1 such information or documentation is entered into the

2 administrator's unclaimed property system. Unless extended for

3 reasonable cause, not later than 90 days after a claim is

4 complete the administrator shall allow or deny the claim and

5 give the claimant notice in a record of the decision. If a

6 claimant fails to provide all the information and documentation

7 requested by the administrator as necessary to establish legal

8 ownership of the property and the claim is inactive for at

9 least 90 days, then the administrator may close the claim

10 without issuing a final decision. However, if the claimant

11 makes a request in writing for a final decision prior to the

12 administrator's closing of the claim, the administrator shall

13 issue a final decision.

14 (c) If the claim is denied or there is insufficient

15 evidence to allow the claim under subsection (b):

16 (1) the administrator shall inform the claimant of the

17 reason for the denial and may specify what additional

18 evidence, if any, is required for the claim to be allowed;

19 (2) the claimant may file an amended claim with the

20 administrator or commence an action under Section 15-906;

21 and

22 (3) the administrator shall consider an amended claim

23 filed under paragraph (2) as an initial claim.

24 Section 15-905. Allowance of claim for property.

25 (a) The administrator shall pay or deliver to the owner the

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1 property or pay to the owner the net proceeds of a sale of the

2 property, together with income or gain to which the owner is

3 entitled under Section 15-607. On request of the owner, the

4 administrator may sell or liquidate property and pay the net

5 proceeds to the owner, even if the property had been held by

6 the administrator for less than 3 years or the administrator

7 has not complied with the notice requirements under Section

8 15-503.

9 (b) Property held under this Act by the administrator is

10 subject to offset under Section 10.05 of the State Comptroller

11 Act.

12 Section 15-906. Action by person whose claim is denied. Not

13 later than one year after filing a claim under subsection (a)

14 of Section 15-903, the claimant may commence a contested case

15 pursuant to the Illinois Administrative Procedure Act to

16 establish a claim by the preponderance of the evidence after

17 either receiving notice under subsection (b) of Section 15-903

18 or the claim is deemed denied under subsection (d) of Section

19 15-903.

20 ARTICLE 10. VERIFIED REPORT OF PROPERTY; EXAMINATION OF RECORDS

21 Section 15-1001. Verified report of property. If a person

22 does not file a report required by Section 15-401 or the

23 administrator believes that a person may have filed an

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1 inaccurate, incomplete, or false report, the administrator may

2 require the person to file a verified report in a form

3 prescribed by the administrator. The verified report must:

4 (1) state whether the person is holding property

5 reportable under this Act;

6 (2) describe property not previously reported or about

7 which the administrator has inquired;

8 (3) specifically identify property described under

9 paragraph (2) about which there is a dispute whether it is

10 reportable under this Act; and

11 (4) state the amount or value of the property.

12 Section 15-1002. Examination of records to determine

13 compliance. The administrator, at reasonable times and on

14 reasonable notice, may:

15 (1) examine the records of any person to determine

16 whether the person has complied with this Act even if the

17 person believes it is not in possession of any property

18 that must be reported, paid, or delivered under this Act;

19 (2) issue an administrative subpoena requiring the

20 person or agent of the person to make records available for

21 examination; and

22 (3) bring an action seeking judicial enforcement of the

23 subpoena.

24 Section 15-1002.1. Examination of State-regulated

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1 financial institutions.

2 (a) Notwithstanding Section 15-1002 of this Act, for any

3 financial organization for which the Department of Financial

4 and Professional Regulation is the primary prudential

5 regulator, the administrator shall not examine such financial

6 institution unless the administrator has consulted with the

7 Secretary of Financial and Professional Regulation and the

8 Department of Financial and Professional Regulation has not

9 examined such financial organization for compliance with this

10 Act within the past 5 years. The Secretary of Financial and

11 Professional Regulation may waive in writing the provisions of

12 this subsection (a) in order to permit the administrator to

13 examine a financial organization or group of financial

14 organizations for compliance with this Act.

15 (b) Nothing in this Section shall be construed to prohibit

16 the administrator from examining a financial organization for

17 which the Department of Financial and Professional Regulation

18 is not the primary prudential regulator. Further, nothing is

19 this Act shall be construed to limit the authority of the

20 Department of Financial and Professional Regulation to examine

21 financial organizations.

22 Section 15-1003. Rules for conducting examination.

23 (a) The administrator shall adopt rules governing

24 procedures and standards for an examination under Section

25 15-1002; the rules may reference any standards concerning

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1 unclaimed property examinations promulgated by the National

2 Association of Unclaimed Property Administrators and shall

3 make provisions for multi-state examinations.

4 (b) After the adoption of rules under subsection (a), an

5 examination under Section 15-1002 must be performed under the

6 rules adopted under subsection (a).

7 (c) If a person subject to examination under Section

8 15-1002 has filed the reports required under Section 15-401 and

9 Section 15-1001 and has retained the records required by

10 Section 15-404, the following rules apply:

11 (1) The examination must include a review of the

12 person's records.

13 (2) The examination may not be based on an estimate

14 unless the person expressly consents in a record to the use

15 of an estimate.

16 (3) The person conducting the examination shall

17 consider the evidence presented in good faith by the person

18 in preparing the findings of the examination under Section

19 15-1007.

20 Section 15-1004. Records obtained in examination. Records

21 obtained and records, including work papers, compiled by the

22 administrator in the course of conducting an examination under

23 Section 15-1002:

24 (1) are subject to the confidentiality and security

25 provisions of Article 14 and are exempt from disclosure

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1 under the Freedom of Information Act;

2 (2) may be used by the administrator in an action to

3 collect property or otherwise enforce this Act;

4 (3) may be used in a joint examination conducted with

5 another state, the United States, a foreign country or

6 subordinate unit of a foreign country, or any other

7 governmental entity if the governmental entity conducting

8 the examination is legally bound to maintain the

9 confidentiality and security of information obtained from

10 a person subject to examination in a manner substantially

11 equivalent to Article 14;

12 (4) may be disclosed, on request, to the person that

13 administers the unclaimed property law of another state for

14 that state's use in circumstances equivalent to

15 circumstances described in this Article, if the other state

16 is required to maintain the confidentiality and security of

17 information obtained in a manner substantially equivalent

18 to Article 14;

19 (5) must be produced by the administrator under an

20 administrative or judicial subpoena or administrative or

21 court order; and

22 (6) must be produced by the administrator on request of

23 the person subject to the examination in an administrative

24 or judicial proceeding relating to the property.

25 Section 15-1005. Evidence of unpaid debt or undischarged

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1 obligation.

2 (a) A record of a putative holder showing an unpaid debt or

3 undischarged obligation is prima facie evidence of the debt or

4 obligation.

5 (b) A putative holder may establish by a preponderance of

6 the evidence that there is no unpaid debt or undischarged

7 obligation for a debt or obligation described in subsection (a)

8 or that the debt or obligation was not, or no longer is, a

9 fixed and certain obligation of the putative holder.

10 (c) A putative holder may overcome prima facie evidence

11 under subsection (a) by establishing by a preponderance of the

12 evidence that a check, draft, or similar instrument was:

13 (1) issued as an unaccepted offer in settlement of an

14 unliquidated amount;

15 (2) issued but later was replaced with another

16 instrument because the earlier instrument was lost or

17 contained an error that was corrected;

18 (3) issued to a party affiliated with the issuer;

19 (4) paid, satisfied, or discharged;

20 (5) issued in error;

21 (6) issued without consideration;

22 (7) issued but there was a failure of consideration;

23 (8) voided not later than 90 days after issuance for a

24 valid business reason set forth in a contemporaneous

25 record; or

26 (9) issued but not delivered to the third-party payee

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1 for a sufficient reason recorded within a reasonable time

2 after issuance.

3 (d) In asserting a defense under this Section, and subject

4 to the records retention requirements of Section 15-404, a

5 putative holder may present evidence of a course of dealing

6 between the putative holder and the apparent owner.

7 Section 15-1006. Failure of person examined to retain

8 records. If a person subject to examination under Section

9 15-1002 does not retain the records required by Section 15-404,

10 the administrator may determine the value of property due using

11 a reasonable method of estimation based on all information

12 available to the administrator, including extrapolation and

13 use of statistical sampling when appropriate and necessary,

14 consistent with examination procedures and standards adopted

15 under Section 15-1003. A payment made based on estimation under

16 this Section is a penalty for failure to maintain the records

17 required by Section 15-404 and does not relieve a person from

18 an obligation to report and deliver property to a State in

19 which the holder is domiciled.

20 Section 15-1007. Report to person whose records were

21 examined. At the conclusion of an examination under Section

22 15-1002, unless waived in writing by the person being examined,

23 the administrator shall provide to the person whose records

24 were examined a report that specifies:

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1 (1) the work performed;

2 (2) the property types reviewed;

3 (3) the methodology of any estimation technique,

4 extrapolation, or statistical sampling used in conducting

5 the examination;

6 (4) each calculation showing the value of property

7 determined to be due; and

8 (5) the findings of the person conducting the

9 examination.

10 Section 15-1008. Informal conference during examination.

11 (a) If a person subject to examination under Section

12 15-1002 believes the person conducting the examination has made

13 an unreasonable or unauthorized request or is not proceeding

14 expeditiously to complete the examination, the person in a

15 record may request an informal conference with the

16 administrator.

17 (b) If a person in a record requests an informal conference

18 with the administrator, the administrator shall hold the

19 informal conference not later than 30 days after receiving the

20 request. For good cause, and after notice in a record to the

21 person requesting an informal conference, the administrator

22 may extend the time for the holding of an informal conference.

23 The administrator may hold the informal conference in person,

24 by telephone, or by electronic means.

25 (c) If an informal conference is held under subsection (b),

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1 not later than 30 days after the conference ends, the

2 administrator shall provide a response to the person that

3 requested the conference.

4 (d) The administrator may deny a request for an informal

5 conference under this Section if the administrator reasonably

6 believes that the request was made in bad faith or primarily to

7 delay the examination. If the administrator denies a request

8 for an informal conference the denial shall be in a record

9 provided to the person requesting the informal conference.

10 Section 15-1009. Administrator's contract with another to

11 conduct examination.

12 (a) The administrator may contract with a person to conduct

13 an examination under this Article. The contract shall be

14 awarded pursuant to a request for proposals issued in

15 compliance with the procurement rules of the administrator.

16 (b) If the administrator contracts with a person under

17 subsection (a):

18 (1) the contract may provide for compensation of the

19 person based on a fixed fee, hourly fee, or contingent fee;

20 (2) a contingent fee arrangement may not provide for a

21 payment that exceeds 15% of the amount or value of property

22 paid or delivered as a result of the examination; and

23 (3) as authorized in the State Officers and Employees

24 Money Disposition Act, the administrator may permit the

25 deduction of fees from property recovered during an

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1 examination under this Article prior to depositing funds

2 received under this Act into the Unclaimed Property Trust

3 Fund.

4 (c) A contract under subsection (a) is a public record

5 under the Freedom of Information Act.

6 Section 15-1010. Report by administrator. As part of the

7 report required by Section 15 of the State Treasurer Act, the

8 administrator shall compile and include the following

9 information about property presumed abandoned for the

10 preceding fiscal year for the State:

11 (1) the total amount and value of all property paid or

12 delivered under this Act to the administrator, separated

13 into:

14 (A) the part voluntarily paid or delivered; and

15 (B) the part paid or delivered as a result of an

16 examination under Section 15-1002;

17 (2) the total amount and value of all property paid or

18 delivered by the administrator to persons that made claims

19 for property held by the administrator under this Act;

20 (3) the amounts expended from the State Pensions Fund;

21 and

22 (4) such other information as the administrator

23 believes would be useful or informative.

24 Section 15-1011. Determination of liability for unreported

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1 reportable property. If the administrator determines from an

2 examination conducted under Section 15-1002 that a putative

3 holder failed or refused to pay or deliver to the administrator

4 property which is reportable under this Act, the administrator

5 shall issue a determination of the putative holder's liability

6 to pay or deliver and give notice in a record to the putative

7 holder of the determination.

8 ARTICLE 11. DETERMINATION OF LIABILITY; PUTATIVE HOLDER

9 REMEDIES

10 Section 15-1101. Informal conference.

11 (a) Not later than 30 days after receipt of a notice under

12 Section 15-1011, the putative holder may request an informal

13 conference with the administrator to review the determination.

14 Except as otherwise provided in this Section, the administrator

15 may designate an employee to act on behalf of the

16 administrator.

17 (b) If a putative holder makes a timely request under

18 subsection (a) for an informal conference:

19 (1) not later than 30 days after the date of the

20 request, the administrator shall set the time and place of

21 the conference;

22 (2) the administrator shall give the putative holder

23 notice in a record of the time and place of the conference;

24 (3) the conference may be held in person, by telephone,

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1 or by electronic means, as determined by the administrator;

2 (4) the request tolls the 90-day period under Sections

3 15-1103 and 15-1104 until notice of a decision under

4 paragraph (7) has been given to the putative holder or the

5 putative holder withdraws the request for the conference;

6 (5) the conference may be postponed, adjourned, and

7 reconvened as the administrator determines appropriate;

8 (6) the administrator or administrator's designee with

9 the approval of the administrator may modify a

10 determination made under Section 15-1011 or withdraw it;

11 and

12 (7) the administrator shall issue a decision in a

13 record and provide a copy of the record to the putative

14 holder and examiner not later than 30 days after the

15 conference ends.

16 (c) A conference under subsection (b) is not an

17 administrative remedy and is not a contested case subject to

18 the Illinois Administrative Procedure Act. An oath is not

19 required and rules of evidence do not apply in the conference.

20 (d) At a conference under subsection (b), the putative

21 holder must be given an opportunity to confer informally with

22 the administrator and the person that examined the records of

23 the putative holder to:

24 (1) discuss the determination made under Section

25 15-1011; and

26 (2) present any issue concerning the validity of the

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1 determination.

2 (e) If the administrator fails to act within the period

3 prescribed in subsection (b)(1) or (7), the failure does not

4 affect a right of the administrator, except that interest does

5 not accrue on the amount for which the putative holder was

6 determined to be liable under Section 15-1011 during the period

7 in which the administrator failed to act until the earlier of:

8 (1) the date under Section 15-1103 the putative holder

9 initiates administrative review or files an action under

10 Section 15-1104; or

11 (2) 90 days after the putative holder received notice

12 of the administrator's determination under Section 15-1011

13 if no review was initiated under Section 15-1103 and no

14 action was filed under Section 15-1104.

15 (f) The administrator may hold an informal conference with

16 a putative holder about a determination under Section 15-1011

17 without a request at any time before the putative holder

18 initiates administrative review under Section 15-1102.

19 (g) Interest and penalties under Section 15-1204 continue

20 to accrue on property not reported, paid, or delivered as

21 required by this Act after the initiation, and during the

22 pendency, of an informal conference under this Section.

23 Section 15-1102. Administrative review.

24 (a) Not later than 90 days after receiving notice of the

25 administrator's determination under Section 15-1011, or, if

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1 applicable and as provided in Section 15-1101(b)(4), after

2 notice of a decision under 15-1101(b)(7) has been given to the

3 putative holder or the putative holder has withdrawn the

4 request for an informal conference, a putative holder may

5 initiate a contested case under the Illinois Administrative

6 Procedure Act for review of the administrator's determination.

7 (b) A final decision in an administrative proceeding

8 initiated under subsection (a) is subject to judicial review

9 under the Article III of Code of Civil Procedure.

10 ARTICLE 12. ENFORCEMENT BY ADMINISTRATOR

11 Section 15-1201. Judicial action to enforce liability.

12 (a) If a determination under Section 15-1011 becomes final

13 and is not subject to administrative or judicial review, the

14 administrator may commence an action in the Circuit Court of

15 Sangamon County or Cook County, federal court, or in an

16 appropriate court of another state to enforce the determination

17 and secure payment or delivery of past due, unpaid, or

18 undelivered property. The action must be brought not later than

19 5 years after the determination becomes final.

20 (b) In an action under subsection (a), if no court in this

21 State has jurisdiction over the defendant, the administrator

22 may commence an action in any court having jurisdiction over

23 the defendant.

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1 Section 15-1202. Interstate and international agreement;

2 cooperation.

3 (a) Subject to subsection (b), the administrator may:

4 (1) exchange information with another state or foreign

5 country relating to property presumed abandoned or

6 relating to the possible existence of property presumed

7 abandoned; and

8 (2) authorize in a record another state or foreign

9 country or a person acting on behalf of the other state or

10 country to examine its records of a putative holder as

11 provided in Article 10.

12 (b) An exchange or examination under subsection (a) may be

13 done only if the state or foreign country has confidentiality

14 and security requirements substantially equivalent to those in

15 Article 14 or agrees in a record to be bound by this State's

16 confidentiality and security requirements.

17 Section 15-1203. Action involving another state or foreign

18 country.

19 (a) The administrator may join another state or foreign

20 country to examine and seek enforcement of this Act against a

21 putative holder.

22 (b) On request of another state or foreign country, the

23 Attorney General may commence an action on behalf of the other

24 state or country to enforce, in this State, the law of the

25 other state or country against a putative holder subject to a

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1 claim by the other state or country.

2 (c) The administrator may request the official authorized

3 to enforce the unclaimed property law of another state or

4 foreign country to commence an action to recover property in

5 the other state or country on behalf of the administrator. This

6 state may pay the costs, including reasonable attorney's fees

7 and expenses, incurred by the other state or foreign country in

8 an action under this subsection.

9 (d) The administrator may pursue an action on behalf of

10 this State to recover property subject to this Act but

11 delivered to the custody of another state if the administrator

12 believes the property is subject to the custody of the

13 administrator.

14 (e) At the request of the administrator, the Attorney

15 General may commence an action to recover property on behalf of

16 the administrator in this State, another state, or a foreign

17 country. With the written consent of the Attorney General, the

18 administrator may retain an attorney in this State, another

19 state, or a foreign country to recover property on behalf of

20 the administrator in this State, another state, or a foreign

21 country and may agree to pay attorney's fees based in whole or

22 in part on a fixed fee, hourly fee, or a percentage of the

23 amounts or value of property recovered in the action.

24 (f) Expenses incurred by this State in an action under this

25 Section may be paid from property received under this Act or

26 the net proceeds of the property. Expenses paid to recover

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1 property may not be deducted from the amount that is subject to

2 a claim under this Act by the owner.

3 Section 15-1204. Interest and penalty for failure to act in

4 timely manner.

5 (a) A holder that fails to report, pay, or deliver property

6 within the time prescribed by this Act shall pay to the

7 administrator interest at a rate of 1% per month on the

8 property or value of the property from the date the property

9 should have been reported, paid, or delivered to the

10 administrator until the date reported, paid, or delivered.

11 (b) Except as otherwise provided in Section 15-1 or

12 15-1206, the administrator may require a holder that fails to

13 report, pay, or deliver property within the time prescribed by

14 this Act to pay to the administrator, in addition to interest

15 included under subsection (a), a civil penalty of $200 for each

16 day the duty is not performed, up to a cumulative maximum

17 amount of $5,000.

18 (c) A holder who fails to report, pay, or deliver property

19 within the time prescribed by this Act shall not be required to

20 pay interest under subsection (a) above or be subject to

21 penalties under subsection (b) above if the failure to report,

22 pay, or deliver the property was due to lack of knowledge of

23 the death that established the period of abandonment under this

24 Act.

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1 Section 15-1205. Other civil penalties.

2 (a) If a holder enters into a contract or other arrangement

3 for the purpose of evading an obligation under this Act or

4 otherwise willfully fails to perform a duty imposed on the

5 holder under this Act, the administrator may require the holder

6 to pay the administrator, in addition to interest as provided

7 in subsection (a) of Section 15-1204, a civil penalty of $1,000

8 for each day the obligation is evaded or the duty is not

9 performed, up to a cumulative maximum amount of $25,000, plus

10 25% of the amount or value of property that should have been

11 but was not reported, paid, or delivered as a result of the

12 evasion or failure to perform.

13 (b) If a holder makes a fraudulent report under this Act,

14 the administrator may require the holder to pay to the

15 administrator, in addition to interest under subsection (a) of

16 Section 15-1204, a civil penalty of $1,000 for each day from

17 the date the report was made until corrected, up to a

18 cumulative maximum of $25,000, plus 25% of the amount or value

19 of any property that should have been reported but was not

20 included in the report or was underreported.

21 Section 15-1206. Waiver of interest and penalty. The

22 administrator:

23 (1) may waive, in whole or in part, interest under

24 subsection (a) of Section 15-1204 and penalties under

25 subsection (b) of Section 15-1204 or Section 15-1; and

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1 (2) shall waive a penalty under subsection (b) of

2 Section 15-1204 if the administrator determines that the

3 holder acted in good faith and without negligence.

4 ARTICLE 13. AGREEMENT TO LOCATE PROPERTY OF APPARENT OWNER HELD

5 BY ADMINISTRATOR

6 Section 15-1301. When agreement to locate property

7 enforceable. An agreement by an apparent owner and another

8 person, the primary purpose of which is to locate, deliver,

9 recover, or assist in the location, delivery, or recovery of

10 property held by the administrator, is enforceable only if the

11 agreement:

12 (1) is in a record that clearly states the nature of

13 the property and the services to be provided;

14 (2) is signed by or on behalf of the apparent owner;

15 and

16 (3) states the amount or value of the property

17 reasonably expected to be recovered, computed before and

18 after a fee or other compensation to be paid to the person

19 has been deducted.

20 Section 15-1302. When agreement to locate property void.

21 (a) Subject to subsection (b), an agreement under Section

22 15-1301 is void if it is entered into during the period

23 beginning on the date the property was presumed abandoned under

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1 this Act and ending 24 months after the payment or delivery of

2 the property to the administrator.

3 (b) If a provision in an agreement described in Section

4 15-1301 applies to mineral proceeds for which compensation is

5 to be paid to the other person based in whole or in part on a

6 part of the underlying minerals or mineral proceeds not then

7 presumed abandoned, the provision is void regardless of when

8 the agreement was entered into.

9 (c) An agreement under subsection (a) which provides for

10 compensation in an amount that is more than 10% of the amount

11 collected is unenforceable except by the apparent owner.

12 (d) An apparent owner or the administrator may assert that

13 an agreement described in this Section is void on a ground

14 other than it provides for payment of unconscionable

15 compensation.

16 (e) A person attempting to collect a contingent fee for

17 discovering, on behalf of an apparent owner, presumptively

18 abandoned property must be licensed as a private detective

19 pursuant to the Private Detective, Private Alarm, Private

20 Security, Fingerprint Vendor, and Locksmith Act of 2004.

21 (f) This Section does not apply to an apparent owner's

22 agreement with an attorney to pursue a claim for recovery of

23 specifically identified property held by the administrator or

24 to contest the administrator's denial of a claim for recovery

25 of the property.

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1 ARTICLE 14. CONFIDENTIALITY AND SECURITY OF INFORMATION

2 Section 15-1401. Confidential information.

3 (a) Except as otherwise provide in this Section,

4 information that is confidential under law of this State other

5 than this Act, another state, or the United States, including

6 "private information" as defined in the Freedom of Information

7 Act and "personal information" as defined in the Personal

8 Information Protection Act, continues to be confidential when

9 disclosed or delivered under this Act to the administrator or

10 administrator's agent.

11 (b) Information provided in reports filed pursuant to

12 Section 15-401, information obtained in the course of an

13 examination pursuant to Section 15-1002, and the database

14 required by Section 15-503 is exempt from disclosure under the

15 Freedom of Information Act.

16 (c) If reasonably necessary to enforce or implement this

17 Act, the administrator or the administrator's agent may

18 disclose confidential information concerning property held by

19 the administrator or the administrator's agent to:

20 (1) an apparent owner or the apparent owner's

21 representative under the Probate Act of 1975, attorney,

22 other legal representative, or relative;

23 (2) the representative under the Probate Act of 1975,

24 other legal representative, relative of a deceased

25 apparent owner, or a person entitled to inherit from the

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1 deceased apparent owner;

2 (3) another department or agency of this State or the

3 United States;

4 (4) the person that administers the unclaimed property

5 law of another state, if the other state accords

6 substantially reciprocal privileges to the administrator

7 of this State if the other state is required to maintain

8 the confidentiality and security of information obtained

9 in a manner substantially equivalent to Article 14;

10 (5) a person subject to an examination as required by

11 Section 15-1004; and

12 (6) an agent of the administrator.

13 (b) The administrator may include on the website or in the

14 database the names and addresses of apparent owners of property

15 held by the administrator as provided in Section 15-503. The

16 administrator may include in published notices, printed

17 publications, telecommunications, the Internet, or other media

18 and on the website or in the database additional information

19 concerning the apparent owner's property if the administrator

20 believes the information will assist in identifying and

21 returning property to the owner and does not disclose personal

22 information as defined in the Personal Information Protection

23 Act.

24 (c) The administrator and the administrator's agent may not

25 use confidential information provided to them or in their

26 possession except as expressly authorized by this Act or

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1 required by law other than this Act.

2 Section 15-1402. Confidentiality agreement. A person to be

3 examined under Section 15-1002 may require, as a condition of

4 disclosure of the records of the person to be examined, that

5 the administrator or the administrator's agent execute and

6 deliver to the person to be examined a confidentiality

7 agreement that:

8 (1) is in a form that is reasonably satisfactory to the

9 administrator; and

10 (2) requires the person having access to the records to

11 comply with the provisions of this Article applicable to

12 the person.

13 Section 15-1403. No confidential information in notice.

14 Except as otherwise provided in Sections 15-501 and 15-502, a

15 holder is not required under this Act to include confidential

16 information in a notice the holder is required to provide to an

17 apparent owner under this Act.

18 Section 15-1404. Security of information.

19 (a) If a holder is required to include confidential

20 information in a report to the administrator, the information

21 must be provided by a secure means.

22 (b) If confidential information in a record is provided to

23 and maintained by the administrator or administrator's agent as

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1 required by this Act, the administrator or agent shall

2 implement and maintain reasonable security measures to protect

3 those records from unauthorized access, acquisition,

4 destruction, use, modification, or disclosure as required by

5 the Personal Information Protection Act. If a State or federal

6 law requires the administrator or agent to provide greater

7 protection to records that contain personal information that

8 are maintained by the administrator or agent and the

9 administrator or agent is in compliance with the provisions of

10 that State or federal law, the administrator or agent is deemed

11 to be in compliance with the provisions of this subsection.

12 (c) If there is any breach of the security of the system

13 data or written material, the administrator and the

14 administrator's agent shall comply with the notice

15 requirements of Section 12 of the Personal Information

16 Protection Act, and shall, if applicable, cooperate with a

17 holder in complying with the notice requirements of Section 10

18 of the Personal Information Protection Act.

19 (d) The administrator and the administrator's agent shall

20 either return in a secure manner or destroy in a manner

21 consistent with the Personal Information Protection Act all

22 confidential information no longer reasonably needed under

23 this Act.

24 ARTICLE 15. MISCELLANEOUS

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1 Section 15-1501. Uniformity of application and

2 construction. In applying and construing this uniform Act

3 consideration must be given to the need to promote uniformity

4 of the law with respect to its subject matter among states that

5 enact it.

6 Section 15-1502. Relation to Electronic Signatures in

7 Global and National Commerce Act. This Act modifies, limits, or

8 supersedes the Electronic Signatures in Global and National

9 Commerce Act, 15 U.S.C. Section 7001 et seq., but does not

10 modify, limit, or supersede Section 101(c) of that Act, 15

11 U.S.C. Section 7001(c), or authorize electronic delivery of any

12 of the notices described in Section 103(b) of that Act, 15

13 U.S.C. Section 7003(b).

14 Section 15-1503. Transitional provision.

15 (a) An initial report filed under this Act for property

16 that was not required to be reported before the effective date

17 of this Act, but that is required to be reported under this

18 Act, must include all items of property that would have been

19 presumed abandoned during the 5-year period preceding the

20 effective date of this Act as if this Act had been in effect

21 during that period.

22 (b) This Act does not relieve a holder of a duty that arose

23 before the effective date of this Act to report, pay, or

24 deliver property. Subject to subsection (b) of Section 15-610,

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1 a holder that did not comply with the law governing unclaimed

2 property before the effective date of this Act is subject to

3 applicable provisions for enforcement and penalties in effect

4 before the effective date of this Act.

5 Section 15-1504. Severability. If any provision of this Act

6 or its application to any person or circumstance is held

7 invalid, the invalidity does not affect other provisions or

8 applications of this Act which can be given effect without the

9 invalid provision or application, and to this end the

10 provisions of this Act are severable.

11 ARTICLE 17. AMENDATORY PROVISIONS; UNCLAIMED PROPERTY

12 (765 ILCS 1025/Act rep.)

13 Section 17-5. The Uniform Disposition of Unclaimed

14 Property Act is repealed.

15 Section 17-10. The Illinois Administrative Procedure Act

16 is amended by changing Section 1-5 as follows:

17 (5 ILCS 100/1-5) (from Ch. 127, par. 1001-5)

18 Sec. 1-5. Applicability.

19 (a) This Act applies to every agency as defined in this

20 Act. Beginning January 1, 1978, in case of conflict between the

21 provisions of this Act and the Act creating or conferring power

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1 on an agency, this Act shall control. If, however, an agency

2 (or its predecessor in the case of an agency that has been

3 consolidated or reorganized) has existing procedures on July 1,

4 1977, specifically for contested cases or licensing, those

5 existing provisions control, except that this exception

6 respecting contested cases and licensing does not apply if the

7 Act creating or conferring power on the agency adopts by

8 express reference the provisions of this Act. Where the Act

9 creating or conferring power on an agency establishes

10 administrative procedures not covered by this Act, those

11 procedures shall remain in effect.

12 (b) The provisions of this Act do not apply to (i)

13 preliminary hearings, investigations, or practices where no

14 final determinations affecting State funding are made by the

15 State Board of Education, (ii) legal opinions issued under

16 Section 2-3.7 of the School Code, (iii) as to State colleges

17 and universities, their disciplinary and grievance

18 proceedings, academic irregularity and capricious grading

19 proceedings, and admission standards and procedures, and (iv)

20 the class specifications for positions and individual position

21 descriptions prepared and maintained under the Personnel Code.

22 Those class specifications shall, however, be made reasonably

23 available to the public for inspection and copying. ~~The~~

24 ~~provisions of this Act do not apply to hearings under Section~~

25 ~~20 of the Uniform Disposition of Unclaimed Property Act.~~

26 (c) Section 5-35 of this Act relating to procedures for

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1 rulemaking does not apply to the following:

2 (1) Rules adopted by the Pollution Control Board that,

3 in accordance with Section 7.2 of the Environmental

4 Protection Act, are identical in substance to federal

5 regulations or amendments to those regulations

6 implementing the following: Sections 3001, 3002, 3003,

7 3004, 3005, and 9003 of the Solid Waste Disposal Act;

8 Section 105 of the Comprehensive Environmental Response,

9 Compensation, and Liability Act of 1980; Sections 307(b),

10 307(c), 307(d), 402(b)(8), and 402(b)(9) of the Federal

11 Water Pollution Control Act; Sections 1412(b), 1414(c),

12 1417(a), 1421, and 1445(a) of the Safe Drinking Water Act;

13 and Section 109 of the Clean Air Act.

14 (2) Rules adopted by the Pollution Control Board that

15 establish or amend standards for the emission of

16 hydrocarbons and carbon monoxide from gasoline powered

17 motor vehicles subject to inspection under the Vehicle

18 Emissions Inspection Law of 2005 or its predecessor laws.

19 (3) Procedural rules adopted by the Pollution Control

20 Board governing requests for exceptions under Section 14.2

21 of the Environmental Protection Act.

22 (4) The Pollution Control Board's grant, pursuant to an

23 adjudicatory determination, of an adjusted standard for

24 persons who can justify an adjustment consistent with

25 subsection (a) of Section 27 of the Environmental

26 Protection Act.

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1 (4.5) The Pollution Control Board's adoption of

2 time-limited water quality standards under Section 38.5 of

3 the Environmental Protection Act.

4 (5) Rules adopted by the Pollution Control Board that

5 are identical in substance to the regulations adopted by

6 the Office of the State Fire Marshal under clause (ii) of

7 paragraph (b) of subsection (3) of Section 2 of the

8 Gasoline Storage Act.

9 (d) Pay rates established under Section 8a of the Personnel

10 Code shall be amended or repealed pursuant to the process set

11 forth in Section 5-50 within 30 days after it becomes necessary

12 to do so due to a conflict between the rates and the terms of a

13 collective bargaining agreement covering the compensation of

14 an employee subject to that Code.

15 (e) Section 10-45 of this Act shall not apply to any

16 hearing, proceeding, or investigation conducted under Section

17 13-515 of the Public Utilities Act.

18 (f) Article 10 of this Act does not apply to any hearing,

19 proceeding, or investigation conducted by the State Council for

20 the State of Illinois created under Section 3-3-11.05 of the

21 Unified Code of Corrections or by the Interstate Commission for

22 Adult Offender Supervision created under the Interstate

23 Compact for Adult Offender Supervision or by the Interstate

24 Commission for Juveniles created under the Interstate Compact

25 for Juveniles.

26 (g) This Act is subject to the provisions of Article XXI of

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1 the Public Utilities Act. To the extent that any provision of

2 this Act conflicts with the provisions of that Article XXI, the

3 provisions of that Article XXI control.

4 (Source: P.A. 98-463, eff. 8-16-13; 99-937, eff. 2-24-17.)

5 Section 17-15. The Freedom of Information Act is amended by

6 changing Section 7.5 as follows:

7 (5 ILCS 140/7.5)

8 Sec. 7.5. Statutory exemptions. To the extent provided for

9 by the statutes referenced below, the following shall be exempt

10 from inspection and copying:

11 (a) All information determined to be confidential

12 under Section 4002 of the Technology Advancement and

13 Development Act.

14 (b) Library circulation and order records identifying

15 library users with specific materials under the Library

16 Records Confidentiality Act.

17 (c) Applications, related documents, and medical

18 records received by the Experimental Organ Transplantation

19 Procedures Board and any and all documents or other records

20 prepared by the Experimental Organ Transplantation

21 Procedures Board or its staff relating to applications it

22 has received.

23 (d) Information and records held by the Department of

24 Public Health and its authorized representatives relating

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1 to known or suspected cases of sexually transmissible

2 disease or any information the disclosure of which is

3 restricted under the Illinois Sexually Transmissible

4 Disease Control Act.

5 (e) Information the disclosure of which is exempted

6 under Section 30 of the Radon Industry Licensing Act.

7 (f) Firm performance evaluations under Section 55 of

8 the Architectural, Engineering, and Land Surveying

9 Qualifications Based Selection Act.

10 (g) Information the disclosure of which is restricted

11 and exempted under Section 50 of the Illinois Prepaid

12 Tuition Act.

13 (h) Information the disclosure of which is exempted

14 under the State Officials and Employees Ethics Act, and

15 records of any lawfully created State or local inspector

16 general's office that would be exempt if created or

17 obtained by an Executive Inspector General's office under

18 that Act.

19 (i) Information contained in a local emergency energy

20 plan submitted to a municipality in accordance with a local

21 emergency energy plan ordinance that is adopted under

22 Section 11-21.5-5 of the Illinois Municipal Code.

23 (j) Information and data concerning the distribution

24 of surcharge moneys collected and remitted by wireless

25 carriers under the Wireless Emergency Telephone Safety

26 Act.

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1 (k) Law enforcement officer identification information

2 or driver identification information compiled by a law

3 enforcement agency or the Department of Transportation

4 under Section 11-212 of the Illinois Vehicle Code.

5 (l) Records and information provided to a residential

6 health care facility resident sexual assault and death

7 review team or the Executive Council under the Abuse

8 Prevention Review Team Act.

9 (m) Information provided to the predatory lending

10 database created pursuant to Article 3 of the Residential

11 Real Property Disclosure Act, except to the extent

12 authorized under that Article.

13 (n) Defense budgets and petitions for certification of

14 compensation and expenses for court appointed trial

15 counsel as provided under Sections 10 and 15 of the Capital

16 Crimes Litigation Act. This subsection (n) shall apply

17 until the conclusion of the trial of the case, even if the

18 prosecution chooses not to pursue the death penalty prior

19 to trial or sentencing.

20 (o) Information that is prohibited from being

21 disclosed under Section 4 of the Illinois Health and

22 Hazardous Substances Registry Act.

23 (p) Security portions of system safety program plans,

24 investigation reports, surveys, schedules, lists, data, or

25 information compiled, collected, or prepared by or for the

26 Regional Transportation Authority under Section 2.11 of

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1 the Regional Transportation Authority Act or the St. Clair

2 County Transit District under the Bi-State Transit Safety

3 Act.

4 (q) Information prohibited from being disclosed by the

5 Personnel Records Review Act.

6 (r) Information prohibited from being disclosed by the

7 Illinois School Student Records Act.

8 (s) Information the disclosure of which is restricted

9 under Section 5-108 of the Public Utilities Act.

10 (t) All identified or deidentified health information

11 in the form of health data or medical records contained in,

12 stored in, submitted to, transferred by, or released from

13 the Illinois Health Information Exchange, and identified

14 or deidentified health information in the form of health

15 data and medical records of the Illinois Health Information

16 Exchange in the possession of the Illinois Health

17 Information Exchange Authority due to its administration

18 of the Illinois Health Information Exchange. The terms

19 "identified" and "deidentified" shall be given the same

20 meaning as in the Health Insurance Portability and

21 Accountability Act of 1996, Public Law 104-191, or any

22 subsequent amendments thereto, and any regulations

23 promulgated thereunder.

24 (u) Records and information provided to an independent

25 team of experts under Brian's Law.

26 (v) Names and information of people who have applied

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1 for or received Firearm Owner's Identification Cards under

2 the Firearm Owners Identification Card Act or applied for

3 or received a concealed carry license under the Firearm

4 Concealed Carry Act, unless otherwise authorized by the

5 Firearm Concealed Carry Act; and databases under the

6 Firearm Concealed Carry Act, records of the Concealed Carry

7 Licensing Review Board under the Firearm Concealed Carry

8 Act, and law enforcement agency objections under the

9 Firearm Concealed Carry Act.

10 (w) Personally identifiable information which is

11 exempted from disclosure under subsection (g) of Section

12 19.1 of the Toll Highway Act.

13 (x) Information which is exempted from disclosure

14 under Section 5-1014.3 of the Counties Code or Section

15 8-11-21 of the Illinois Municipal Code.

16 (y) Confidential information under the Adult

17 Protective Services Act and its predecessor enabling

18 statute, the Elder Abuse and Neglect Act, including

19 information about the identity and administrative finding

20 against any caregiver of a verified and substantiated

21 decision of abuse, neglect, or financial exploitation of an

22 eligible adult maintained in the Registry established

23 under Section 7.5 of the Adult Protective Services Act.

24 (z) Records and information provided to a fatality

25 review team or the Illinois Fatality Review Team Advisory

26 Council under Section 15 of the Adult Protective Services

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1 Act.

2 (aa) Information which is exempted from disclosure

3 under Section 2.37 of the Wildlife Code.

4 (bb) Information which is or was prohibited from

5 disclosure by the Juvenile Court Act of 1987.

6 (cc) Recordings made under the Law Enforcement

7 Officer-Worn Body Camera Act, except to the extent

8 authorized under that Act.

9 (dd) Information that is prohibited from being

10 disclosed under Section 45 of the Condominium and Common

11 Interest Community Ombudsperson Act.

12 (ee) ~~(dd)~~ Information that is exempted from disclosure

13 under Section 30.1 of the Pharmacy Practice Act.

14 (ff) Information that is exempted from disclosure

15 under the Revised Uniform Unclaimed Property Act.

16 (Source: P.A. 98-49, eff. 7-1-13; 98-63, eff. 7-9-13; 98-756,

17 eff. 7-16-14; 98-1039, eff. 8-25-14; 98-1045, eff. 8-25-14;

18 99-78, eff. 7-20-15; 99-298, eff. 8-6-15; 99-352, eff. 1-1-16;

19 99-642, eff. 7-28-16; 99-776, eff. 8-12-16; 99-863, eff.

20 8-19-16; revised 9-1-16.)

21 Section 17-20. The State Comptroller Act is amended by

22 changing Section 9 as follows:

23 (15 ILCS 405/9) (from Ch. 15, par. 209)

24 Sec. 9. Warrants; vouchers; preaudit.

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1 (a) No payment may be made from public funds held by the

2 State Treasurer in or outside of the State treasury, except by

3 warrant drawn by the Comptroller and presented by him to the

4 treasurer to be countersigned except for payments made pursuant

5 to Section 9.03 or 9.05 of this Act.

6 (b) No warrant for the payment of money by the State

7 Treasurer may be drawn by the Comptroller without the

8 presentation of itemized vouchers indicating that the

9 obligation or expenditure is pursuant to law and authorized,

10 and authorizing the Comptroller to order payment.

11 (b-1) An itemized voucher for under $5 that is presented to

12 the Comptroller for payment shall not be paid except through

13 electronic funds transfer. This subsection (b-1) does not apply

14 to (i) vouchers presented by the legislative branch of State

15 government, (ii) vouchers presented by the State Treasurer's

16 Office for the payment of unclaimed property claims authorized

17 under the Revised Uniform ~~Disposition of~~ Unclaimed Property

18 Act, or (iii) vouchers presented by the Department of Revenue

19 for the payment of refunds of taxes administered by the

20 Department.

21 (c) The Comptroller shall examine each voucher required by

22 law to be filed with him and determine whether unencumbered

23 appropriations or unencumbered obligational or expenditure

24 authority other than by appropriation are legally available to

25 incur the obligation or to make the expenditure of public

26 funds. If he determines that unencumbered appropriations or

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1 other obligational or expenditure authority are not available

2 from which to incur the obligation or make the expenditure, the

3 Comptroller shall refuse to draw a warrant.

4 (d) The Comptroller shall examine each voucher and all

5 other documentation required to accompany the voucher, and

6 shall ascertain whether the voucher and documentation meet all

7 requirements established by or pursuant to law. If the

8 Comptroller determines that the voucher and documentation do

9 not meet applicable requirements established by or pursuant to

10 law, he shall refuse to draw a warrant. As used in this

11 Section, "requirements established by or pursuant to law"

12 includes statutory enactments and requirements established by

13 rules and regulations adopted pursuant to this Act.

14 (e) Prior to drawing a warrant, the Comptroller may review

15 the voucher, any documentation accompanying the voucher, and

16 any other documentation related to the transaction on file with

17 him, and determine if the transaction is in accordance with the

18 law. If based on his review the Comptroller has reason to

19 believe that such transaction is not in accordance with the

20 law, he shall refuse to draw a warrant.

21 (f) Where the Comptroller refuses to draw a warrant

22 pursuant to this Section, he shall maintain separate records of

23 such transactions.

24 (g) State agencies shall have the principal responsibility

25 for the preaudit of their encumbrances, expenditures, and other

26 transactions as otherwise required by law.

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1 (Source: P.A. 97-969, eff. 8-16-12; 97-1142, eff. 12-28-12;

2 98-421, eff. 8-16-13.)

3 Section 17-25. The State Treasurer Act is amended by

4 changing Sections 0.02, 0.03, 0.04, 0.05, and 0.06 as follows:

5 (15 ILCS 505/0.02)

6 Sec. 0.02. Transfer of powers. The rights, powers, duties,

7 and functions vested in the Department of Financial

8 Institutions to administer the Uniform Disposition of

9 Unclaimed Property Act(superseded by the Revised Uniform

10 Unclaimed Property Act) are transferred to the State Treasurer

11 on July 1, 1999; provided, however, that the rights, powers,

12 duties, and functions involving the examination of the records

13 of any person that the State Treasurer has reason to believe

14 has failed to report properly under this Act shall be

15 transferred to the Office of Banks and Real Estate if the

16 person is regulated by the Office of Banks and Real Estate

17 under the Illinois Banking Act, the Corporate Fiduciary Act,

18 the Foreign Banking Office Act, the Illinois Savings and Loan

19 Act of 1985, or the Savings Bank Act and shall be retained by

20 the Department of Financial Institutions if the person is doing

21 business in the State under the supervision of the Department

22 of Financial Institutions, the National Credit Union

23 Administration, the Office of Thrift Supervision, or the

24 Comptroller of the Currency.

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1 (Source: P.A. 91-16, eff. 6-4-99.)

2 (15 ILCS 505/0.03)

3 Sec. 0.03. Transfer of personnel.

4 (a) Except as provided in subsection (b), personnel

5 employed by the Department of Financial Institutions on June

6 30, 1999 to perform duties pertaining to the administration of

7 the Uniform Disposition of Unclaimed Property Act(superseded

8 by the Revised Uniform Unclaimed Property Act) are transferred

9 to the State Treasurer on July 1, 1999.

10 (b) In the case of a person employed by the Department of

11 Financial Institutions to perform both duties pertaining to the

12 administration of the Uniform Disposition of Unclaimed

13 Property Act (superseded by the Revised Uniform Unclaimed

14 Property Act)and duties pertaining to a function retained by

15 the Department of Financial Institutions, the State Treasurer,

16 in consultation with the Director of Financial Institutions,

17 shall determine whether to transfer the employee to the Office

18 of the State Treasurer; until this determination has been made,

19 the transfer shall not take effect.

20 (c) The rights of State employees, the State, and its

21 agencies under the Personnel Code and applicable collective

22 bargaining agreements and retirement plans are not affected by

23 this amendatory Act of 1999, except that all positions

24 transferred to the State Treasurer shall be subject to the

25 State Treasurer Employment Code effective July 1, 2000.

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1 All transferred employees who are members of collective

2 bargaining units shall retain their seniority, continuous

3 service, salary, and accrued benefits. During the pendency of

4 the existing collective bargaining agreement, the rights

5 provided for under that agreement and memoranda and supplements

6 to that agreement, including but not limited to, the rights of

7 employees performing duties pertaining to the administration

8 of the Uniform Disposition of Unclaimed Property Act

9 (superseded by the Revised Uniform Unclaimed Property Act) to

10 positions in other State agencies and the right of employees in

11 other State agencies covered by the agreement to positions

12 performing duties pertaining to the administration of the

13 Uniform Disposition of Unclaimed Property Act (superseded by

14 the Revised Uniform Unclaimed Property Act), shall not be

15 abridged.

16 The State Treasurer shall continue to honor during their

17 pendency all bargaining agreements in effect at the time of the

18 transfer and to recognize all collective bargaining

19 representatives for the employees who perform or will perform

20 functions transferred by this amendatory Act of 1999. For all

21 purposes with respect to the management of the existing

22 agreement and the negotiation and management of any successor

23 agreements, the State Treasurer shall be deemed to be the

24 employer of employees who perform or will perform functions

25 transferred to the Office of the State Treasurer by this

26 amendatory Act of 1999; provided that the Illinois Department

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1 of Central Management Services shall be a party to any

2 grievance or arbitration proceeding held pursuant to the

3 provisions of the collective bargaining agreement which

4 involves the movement of employees from the Office of the State

5 Treasurer to an agency under the jurisdiction of the Governor

6 covered by the agreement.

7 (Source: P.A. 91-16, eff. 6-4-99.)

8 (15 ILCS 505/0.04)

9 Sec. 0.04. Transfer of property.

10 (a) Except as provided in subsection (b), all real and

11 personal property, including but not limited to all books,

12 records, and documents, and all unexpended appropriations and

13 pending business pertaining to the administration of the

14 Uniform Disposition of Unclaimed Property Act(superseded by

15 the Revised Uniform Unclaimed Property Act) shall be

16 transferred and delivered to the State Treasurer effective July

17 1, 1999.

18 (b) In the case of books, records, or documents that

19 pertain both to the administration of the Uniform Disposition

20 of Unclaimed Property Act (superseded by the Revised Uniform

21 Unclaimed Property Act)and to a function retained by the

22 Department of Financial Institutions, the State Treasurer, in

23 consultation with the Director of Financial Institutions,

24 shall determine whether the books, records, or documents shall

25 be transferred, copied, or left with the Department of

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1 Financial Institutions; until this determination has been

2 made, the transfer shall not take effect.

3 In the case of property or an unexpended appropriation that

4 pertains both to the administration of the Uniform Disposition

5 of Unclaimed Property Act (superseded by the Revised Uniform

6 Unclaimed Property Act)and to a function retained by the

7 Department of Financial Institutions, the State Treasurer, in

8 consultation with the Director of Financial Institutions,

9 shall determine whether the property or unexpended

10 appropriation shall be transferred, divided, or left with the

11 Department of Financial Institutions; until this determination

12 has been made (and, in the case of an unexpended appropriation,

13 notice of the determination has been filed with the State

14 Comptroller), the transfer shall not take effect.

15 (Source: P.A. 91-16, eff. 6-4-99.)

16 (15 ILCS 505/0.05)

17 Sec. 0.05. Rules and standards.

18 (a) The rules and standards of the Department of Financial

19 Institutions that are in effect on June 30, 1999 and pertain to

20 the administration of the Uniform Disposition of Unclaimed

21 Property Act (superseded by the Revised Uniform Unclaimed

22 Property Act)shall become the rules and standards of the State

23 Treasurer on July 1, 1999 and shall continue in effect until

24 amended or repealed by the State Treasurer.

25 (b) Any rules pertaining to the administration of the

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1 Uniform Disposition of Unclaimed Property Act(superseded by

2 the Revised Uniform Unclaimed Property Act) that have been

3 proposed by the Department of Financial Institutions but have

4 not taken effect or been finally adopted by June 30, 1999 shall

5 become proposed rules of the State Treasurer on July 1, 1999,

6 and any rulemaking procedures that have already been completed

7 by the Department of Financial Institutions need not be

8 repeated.

9 (c) As soon as practical after July 1, 1999, the State

10 Treasurer shall revise and clarify the rules transferred to it

11 under this amendatory Act of 1999 to reflect the reorganization

12 of rights, powers, duties, and functions effected by this

13 amendatory Act of 1999 using the procedures for recodification

14 of rules available under the Illinois Administrative Procedure

15 Act, except that existing title, part, and section numbering

16 for the affected rules may be retained.

17 (d) As soon as practical after July 1, 1999, the Office of

18 Banks and Real Estate and the Office of the State Treasurer

19 shall jointly promulgate rules to reflect the transfer of

20 examination functions to the Office of Banks and Real Estate

21 under this amendatory Act of 1999 using the procedures

22 available under the Illinois Administrative Procedure Act.

23 (e) As soon as practical after July 1, 1999, the Department

24 of Financial Institutions and the Office of the State Treasurer

25 shall jointly promulgate rules to reflect the retention of

26 examination functions by the Department of Financial

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1 Institutions under this amendatory Act of 1999 using the

2 procedures available under the Illinois Administrative

3 Procedure Act.

4 (Source: P.A. 91-16, eff. 6-4-99.)

5 (15 ILCS 505/0.06)

6 Sec. 0.06. Savings provisions.

7 (a) The rights, powers, duties, and functions transferred

8 to the State Treasurer or the Commissioner of Banks and Real

9 Estate by this amendatory Act of 1999 shall be vested in and

10 exercised by the State Treasurer or the Commissioner of Banks

11 and Real Estate subject to the provisions of this amendatory

12 Act of 1999. An act done by the State Treasurer or the

13 Commissioner of Banks and Real Estate or an officer, employee,

14 or agent of the State Treasurer or the Commissioner of Banks

15 and Real Estate in the exercise of the transferred rights,

16 powers, duties, or functions shall have the same legal effect

17 as if done by the Department of Financial Institutions or an

18 officer, employee, or agent of the Department of Financial

19 Institutions prior to the effective date of this amendatory Act

20 of 1999.

21 (b) The transfer of rights, powers, duties, and functions

22 to the State Treasurer or the Commissioner of Banks and Real

23 Estate under this amendatory Act of 1999 does not invalidate

24 any previous action taken by or in respect to the Department of

25 Financial Institutions or its officers, employees, or agents.

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1 References to the Department of Financial Institutions or its

2 officers, employees or agents in any document, contract,

3 agreement, or law shall, in appropriate contexts, be deemed to

4 refer to the State Treasurer or the Commissioner of Banks and

5 Real Estate or the officers, employees, or agents of the State

6 Treasurer or the Commissioner of Banks and Real Estate.

7 (c) The transfer of rights, powers, duties, and functions

8 from the Department of Financial Institutions to the State

9 Treasurer or the Commissioner of Banks and Real Estate under

10 this amendatory Act of 1999 does not affect the rights,

11 obligations, or duties of any other person or entity, including

12 any civil or criminal penalties applicable thereto, arising out

13 of those transferred rights, powers, duties, and functions.

14 (d) With respect to matters that pertain to a right, power,

15 duty, or function transferred to the State Treasurer under this

16 amendatory Act of 1999:

17 (1) Beginning July 1, 1999, any report or notice that

18 was previously required to be made or given by any person

19 to the Department of Financial Institutions or any of its

20 officers, employees, or agents under the Uniform

21 Disposition of Unclaimed Property Act (superseded by the

22 Revised Uniform Unclaimed Property Act) or rules

23 promulgated pursuant to that Act shall be made or given in

24 the same manner to the State Treasurer or his or her

25 appropriate officer, employee, or agent.

26 (2) Beginning July 1, 1999, any document that was

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1 previously required to be furnished or served by any person

2 to or upon the Department of Financial Institutions or any

3 of its officers, employees, or agents under the Uniform

4 Disposition of Unclaimed Property Act (superseded by the

5 Revised Uniform Unclaimed Property Act) or rules

6 promulgated pursuant to that Act shall be furnished or

7 served in the same manner to or upon the State Treasurer or

8 his or her appropriate officer, employee, or agent.

9 (e) This amendatory Act of 1999 does not affect any act

10 done, ratified, or canceled, any right occurring or

11 established, or any action or proceeding had or commenced in an

12 administrative, civil, or criminal cause before July 1, 1999.

13 Any such action or proceeding that pertains to the Uniform

14 Disposition of Unclaimed Property Act(superseded by the

15 Revised Uniform Unclaimed Property Act) or rules promulgated

16 pursuant to that Act and that is pending on that date may be

17 prosecuted, defended, or continued by the State Treasurer.

18 (Source: P.A. 91-16, eff. 6-4-99.)

19 Section 17-30. The Financial Institutions Code is amended

20 by changing Sections 7 and 18.1 as follows:

21 (20 ILCS 1205/7) (from Ch. 17, par. 108)

22 Sec. 7. The provisions of "The Illinois Administrative

23 Procedure Act", as now or hereafter amended, are hereby

24 expressly adopted and incorporated herein as though a part of

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1 this Act, and shall apply to all administrative rules and

2 procedures of the Director and the Department of Financial

3 Institutions under this Act, except that the provisions of the

4 Administrative Procedure Act regarding contested cases shall

5 not apply to actions of the Director under Section 15.1 of "An

6 Act in relation to the definition, licensing and regulation of

7 community currency exchanges and ambulatory currency

8 exchanges, and the operators and employees thereof, and to make

9 an appropriation therefor, and to provide penalties and

10 remedies for the violation thereof", approved June 30, 1943, as

11 amended, or Sections 8 and 61 of "The Illinois Credit Union

12 Act"~~, or to hearings under Section 20 of the "Uniform~~

13 ~~Disposition of Unclaimed Property Act"~~.

14 (Source: P.A. 81-329.)

15 (20 ILCS 1205/18.1)

16 Sec. 18.1. Transfer of administration of Uniform

17 Disposition of Unclaimed Property Act to State Treasurer. The

18 rights, powers, duties, and functions vested in the Department

19 of Financial Institutions to administer the Uniform

20 Disposition of Unclaimed Property Act (superseded by the

21 Revised Uniform Unclaimed Property Act) are transferred to the

22 State Treasurer on July 1, 1999 in accordance with Sections

23 0.02 through 0.06 of the State Treasurer Act; provided,

24 however, that the rights, powers, duties, and functions

25 involving the examination of the records of any person that the

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1 State Treasurer has reason to believe has failed to report

2 properly under this Act shall be transferred to the Office of

3 Banks and Real Estate if the person is regulated by the Office

4 of Banks and Real Estate under the Illinois Banking Act, the

5 Corporate Fiduciary Act, the Foreign Banking Office Act, the

6 Illinois Savings and Loan Act of 1985, or the Savings Bank Act

7 and shall be retained by the Department of Financial

8 Institutions if the person is doing business in the State under

9 the supervision of the Department of Financial Institutions,

10 the National Credit Union Administration, the Office of Thrift

11 Supervision, or the Comptroller of the Currency.

12 (Source: P.A. 91-16, eff. 6-4-99.)

13 Section 17-35. The State Finance Act is amended by changing

14 Sections 6b-1 and 8.12 as follows:

15 (30 ILCS 105/6b-1) (from Ch. 127, par. 142b1)

16 Sec. 6b-1. There shall be paid into the State Pensions Fund

17 the funds and proceeds from the sale of abandoned property as

18 provided in ~~Section 18 of~~theRevised Uniform ~~"Uniform~~

19 ~~Disposition of~~ Unclaimed Property Act~~", enacted by the~~

20 ~~Seventy-second General Assembly~~.

21 (Source: Laws 1961, p. 3423.)

22 (30 ILCS 105/8.12) (from Ch. 127, par. 144.12)

23 Sec. 8.12. State Pensions Fund.

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1 (a) The moneys in the State Pensions Fund shall be used

2 exclusively for the administration of theRevised Uniform

3 ~~Disposition of~~Unclaimed Property Act and for the expenses

4 incurred by the Auditor General for administering the

5 provisions of Section 2-8.1 of the Illinois State Auditing Act

6 and for operational expenses of the Office of the State

7 Treasurer and for the funding of the unfunded liabilities of

8 the designated retirement systems. Beginning in State fiscal

9 year 2018, payments to the designated retirement systems under

10 this Section shall be in addition to, and not in lieu of, any

11 State contributions required under the Illinois Pension Code.

12 "Designated retirement systems" means:

13 (1) the State Employees' Retirement System of

14 Illinois;

15 (2) the Teachers' Retirement System of the State of

16 Illinois;

17 (3) the State Universities Retirement System;

18 (4) the Judges Retirement System of Illinois; and

19 (5) the General Assembly Retirement System.

20 (b) Each year the General Assembly may make appropriations

21 from the State Pensions Fund for the administration of the

22 Revised Uniform ~~Disposition of~~Unclaimed Property Act.

23 ~~Each month, the Commissioner of the Office of Banks and~~

24 ~~Real Estate shall certify to the State Treasurer the actual~~

25 ~~expenditures that the Office of Banks and Real Estate incurred~~

26 ~~conducting unclaimed property examinations under the Uniform~~

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1 ~~Disposition of Unclaimed Property Act during the immediately~~

2 ~~preceding month. Within a reasonable time following the~~

3 ~~acceptance of such certification by the State Treasurer, the~~

4 ~~State Treasurer shall pay from its appropriation from the State~~

5 ~~Pensions Fund to the Bank and Trust Company Fund, the Savings~~

6 ~~Bank Regulatory Fund, and the Residential Finance Regulatory~~

7 ~~Fund an amount equal to the expenditures incurred by each Fund~~

8 ~~for that month.~~

9 ~~Each month, the Director of Financial Institutions shall~~

10 ~~certify to the State Treasurer the actual expenditures that the~~

11 ~~Department of Financial Institutions incurred conducting~~

12 ~~unclaimed property examinations under the Uniform Disposition~~

13 ~~of Unclaimed Property Act during the immediately preceding~~

14 ~~month. Within a reasonable time following the acceptance of~~

15 ~~such certification by the State Treasurer, the State Treasurer~~

16 ~~shall pay from its appropriation from the State Pensions Fund~~

17 ~~to the Financial Institution Fund and the Credit Union Fund an~~

18 ~~amount equal to the expenditures incurred by each Fund for that~~

19 ~~month.~~

20 (c) As soon as possible after the effective date of this

21 amendatory Act of the 93rd General Assembly, the General

22 Assembly shall appropriate from the State Pensions Fund (1) to

23 the State Universities Retirement System the amount certified

24 under Section 15-165 during the prior year, (2) to the Judges

25 Retirement System of Illinois the amount certified under

26 Section 18-140 during the prior year, and (3) to the General

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1 Assembly Retirement System the amount certified under Section

2 2-134 during the prior year as part of the required State

3 contributions to each of those designated retirement systems;

4 except that amounts appropriated under this subsection (c) in

5 State fiscal year 2005 shall not reduce the amount in the State

6 Pensions Fund below $5,000,000. If the amount in the State

7 Pensions Fund does not exceed the sum of the amounts certified

8 in Sections 15-165, 18-140, and 2-134 by at least $5,000,000,

9 the amount paid to each designated retirement system under this

10 subsection shall be reduced in proportion to the amount

11 certified by each of those designated retirement systems.

12 (c-5) For fiscal years 2006 through 2017, the General

13 Assembly shall appropriate from the State Pensions Fund to the

14 State Universities Retirement System the amount estimated to be

15 available during the fiscal year in the State Pensions Fund;

16 provided, however, that the amounts appropriated under this

17 subsection (c-5) shall not reduce the amount in the State

18 Pensions Fund below $5,000,000.

19 (c-6) For fiscal year 2018 and each fiscal year thereafter,

20 as soon as may be practical after any money is deposited into

21 the State Pensions Fund from the Unclaimed Property Trust Fund,

22 the State Treasurer shall apportion the deposited amount among

23 the designated retirement systems as defined in subsection (a)

24 to reduce their actuarial reserve deficiencies. The State

25 Comptroller and State Treasurer shall pay the apportioned

26 amounts to the designated retirement systems to fund the

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1 unfunded liabilities of the designated retirement systems. The

2 amount apportioned to each designated retirement system shall

3 constitute a portion of the amount estimated to be available

4 for appropriation from the State Pensions Fund that is the same

5 as that retirement system's portion of the total actual reserve

6 deficiency of the systems, as determined annually by the

7 Governor's Office of Management and Budget at the request of

8 the State Treasurer. The amounts apportioned under this

9 subsection shall not reduce the amount in the State Pensions

10 Fund below $5,000,000.

11 (d) The Governor's Office of Management and Budget shall

12 determine the individual and total reserve deficiencies of the

13 designated retirement systems. For this purpose, the

14 Governor's Office of Management and Budget shall utilize the

15 latest available audit and actuarial reports of each of the

16 retirement systems and the relevant reports and statistics of

17 the Public Employee Pension Fund Division of the Department of

18 Insurance.

19 (d-1) As soon as practicable after the effective date of

20 this amendatory Act of the 93rd General Assembly, the

21 Comptroller shall direct and the Treasurer shall transfer from

22 the State Pensions Fund to the General Revenue Fund, as funds

23 become available, a sum equal to the amounts that would have

24 been paid from the State Pensions Fund to the Teachers'

25 Retirement System of the State of Illinois, the State

26 Universities Retirement System, the Judges Retirement System

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1 of Illinois, the General Assembly Retirement System, and the

2 State Employees' Retirement System of Illinois after the

3 effective date of this amendatory Act during the remainder of

4 fiscal year 2004 to the designated retirement systems from the

5 appropriations provided for in this Section if the transfers

6 provided in Section 6z-61 had not occurred. The transfers

7 described in this subsection (d-1) are to partially repay the

8 General Revenue Fund for the costs associated with the bonds

9 used to fund the moneys transferred to the designated

10 retirement systems under Section 6z-61.

11 (e) The changes to this Section made by this amendatory Act

12 of 1994 shall first apply to distributions from the Fund for

13 State fiscal year 1996.

14 (Source: P.A. 98-24, eff. 6-19-13; 98-463, eff. 8-16-13;

15 98-674, eff. 6-30-14; 98-1081, eff. 1-1-15; 99-8, eff. 7-9-15;

16 99-78, eff. 7-20-15; 99-523, eff. 6-30-16.)

17 Section 17-40. The State Officers and Employees Money

18 Disposition Act is amended by changing Section 2 as follows:

19 (30 ILCS 230/2) (from Ch. 127, par. 171)

20 Sec. 2. Accounts of money received; payment into State

21 treasury.

22 (a) Every officer, board, commission, commissioner,

23 department, institution, arm or agency brought within the

24 provisions of this Act by Section 1 shall keep in proper books

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1 a detailed itemized account of all moneys received for or on

2 behalf of the State of Illinois, showing the date of receipt,

3 the payor, and purpose and amount, and the date and manner of

4 disbursement as hereinafter provided, and, unless a different

5 time of payment is expressly provided by law or by rules or

6 regulations promulgated under subsection (b) of this Section,

7 shall pay into the State treasury the gross amount of money so

8 received on the day of actual physical receipt with respect to

9 any single item of receipt exceeding $10,000, within 24 hours

10 of actual physical receipt with respect to an accumulation of

11 receipts of $10,000 or more, or within 48 hours of actual

12 physical receipt with respect to an accumulation of receipts

13 exceeding $500 but less than $10,000, disregarding holidays,

14 Saturdays and Sundays, after the receipt of same, without any

15 deduction on account of salaries, fees, costs, charges,

16 expenses or claims of any description whatever; provided that:

17 (1) the provisions of (i) Section 2505-475 of the

18 Department of Revenue Law (20 ILCS 2505/2505-475), (ii) any

19 specific taxing statute authorizing a claim for credit

20 procedure instead of the actual making of refunds, (iii)

21 Section 505 of the Illinois Controlled Substances Act, (iv)

22 Section 85 of the Methamphetamine Control and Community

23 Protection Act, authorizing the Director of State Police to

24 dispose of forfeited property, which includes the sale and

25 disposition of the proceeds of the sale of forfeited

26 property, and the Department of Central Management

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1 Services to be reimbursed for costs incurred with the sales

2 of forfeited vehicles, boats or aircraft and to pay to bona

3 fide or innocent purchasers, conditional sales vendors or

4 mortgagees of such vehicles, boats or aircraft their

5 interest in such vehicles, boats or aircraft, and (v)

6 Section 6b-2 of the State Finance Act, establishing

7 procedures for handling cash receipts from the sale of

8 pari-mutuel wagering tickets, shall not be deemed to be in

9 conflict with the requirements of this Section;

10 (2) any fees received by the State Registrar of Vital

11 Records pursuant to the Vital Records Act which are

12 insufficient in amount may be returned by the Registrar as

13 provided in that Act;

14 (3) any fees received by the Department of Public

15 Health under the Food Handling Regulation Enforcement Act

16 that are submitted for renewal of an expired food service

17 sanitation manager certificate may be returned by the

18 Director as provided in that Act;

19 (3.5) the State Treasurer may permit the deduction of

20 fees by third-party unclaimed property examiners from the

21 property recovered by the examiners for the State of

22 Illinois during examinations of holders located outside

23 the State under which the Office of the Treasurer has

24 agreed to pay for the examinations based upon a percentage,

25 ~~set by rule by the State Treasurer~~in accordance with the

26 Revised Uniform Unclaimed Property ~~Illinois Administrative~~

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1 ~~Procedure~~Act, of the property recovered during the

2 examination; and

3 (4) if the amount of money received does not exceed

4 $500, such money may be retained and need not be paid into

5 the State treasury until the total amount of money so

6 received exceeds $500, or until the next succeeding 1st or

7 15th day of each month (or until the next business day if

8 these days fall on Sunday or a holiday), whichever is

9 earlier, at which earlier time such money shall be paid

10 into the State treasury, except that if a local bank or

11 savings and loan association account has been authorized by

12 law, any balances shall be paid into the State treasury on

13 Monday of each week if more than $500 is to be deposited in

14 any fund.

15 Single items of receipt exceeding $10,000 received after 2 p.m.

16 on a working day may be deemed to have been received on the

17 next working day for purposes of fulfilling the requirement

18 that the item be deposited on the day of actual physical

19 receipt.

20 No money belonging to or left for the use of the State

21 shall be expended or applied except in consequence of an

22 appropriation made by law and upon the warrant of the State

23 Comptroller. However, payments made by the Comptroller to

24 persons by direct deposit need not be made upon the warrant of

25 the Comptroller, but if not made upon a warrant, shall be made

26 in accordance with Section 9.02 of the State Comptroller Act.

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1 All moneys so paid into the State treasury shall, unless

2 required by some statute to be held in the State treasury in a

3 separate or special fund, be covered into the General Revenue

4 Fund in the State treasury. Moneys received in the form of

5 checks, drafts or similar instruments shall be properly

6 endorsed, if necessary, and delivered to the State Treasurer

7 for collection. The State Treasurer shall remit such collected

8 funds to the depositing officer, board, commission,

9 commissioner, department, institution, arm or agency by

10 Treasurers Draft or through electronic funds transfer. The

11 draft or notification of the electronic funds transfer shall be

12 provided to the State Comptroller to allow deposit into the

13 appropriate fund.

14 (b) Different time periods for the payment of public funds

15 into the State treasury or to the State Treasurer, in excess of

16 the periods established in subsection (a) of this Section, but

17 not in excess of 30 days after receipt of such funds, may be

18 established and revised from time to time by rules or

19 regulations promulgated jointly by the State Treasurer and the

20 State Comptroller in accordance with the Illinois

21 Administrative Procedure Act. The different time periods

22 established by rule or regulation under this subsection may

23 vary according to the nature and amounts of the funds received,

24 the locations at which the funds are received, whether

25 compliance with the deposit requirements specified in

26 subsection (a) of this Section would be cost effective, and

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1 such other circumstances and conditions as the promulgating

2 authorities consider to be appropriate. The Treasurer and the

3 Comptroller shall review all such different time periods

4 established pursuant to this subsection every 2 years from the

5 establishment thereof and upon such review, unless it is

6 determined that it is economically unfeasible for the agency to

7 comply with the provisions of subsection (a), shall repeal such

8 different time period.

9 (Source: P.A. 94-556, eff. 9-11-05.)

10 Section 17-45. The Counties Code is amended by changing

11 Section 3-3034 as follows:

12 (55 ILCS 5/3-3034) (from Ch. 34, par. 3-3034)

13 Sec. 3-3034. Disposition of body. After the inquest the

14 coroner may deliver the body or human remains of the deceased

15 to the family of the deceased or, if there are no family

16 members to accept the body or the remains, then to friends of

17 the deceased, if there be any, but if not, the coroner shall

18 cause the body or the remains to be decently buried, cremated,

19 or donated for medical science purposes, the expenses to be

20 paid from the property of the deceased, if there is sufficient,

21 if not, by the county. The coroner may not approve the

22 cremation or donation of the body if it is necessary to

23 preserve the body for law enforcement purposes. If the State

24 Treasurer, pursuant to the Revised Uniform ~~Disposition of~~

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1 Unclaimed Property Act, delivers human remains to the coroner,

2 the coroner shall cause the human remains to be disposed of as

3 provided in this Section. If the police department of any

4 municipality or county investigates abandoned cremated

5 remains, determines that they are human remains, and cannot

6 locate the owner of the remains, then the police shall deliver

7 the remains to the coroner, and the coroner shall cause the

8 remains to be disposed of as provided in this Section.

9 (Source: P.A. 96-1339, eff. 7-27-10; 97-679, eff. 2-6-12.)

10 Section 17-50. The Illinois Banking Act is amended by

11 changing Sections 48, 48.1, 48.3, and 65 as follows:

12 (205 ILCS 5/48)

13 Sec. 48. Secretary's powers; duties. The Secretary shall

14 have the powers and authority, and is charged with the duties

15 and responsibilities designated in this Act, and a State bank

16 shall not be subject to any other visitorial power other than

17 as authorized by this Act, except those vested in the courts,

18 or upon prior consultation with the Secretary, a foreign bank

19 regulator with an appropriate supervisory interest in the

20 parent or affiliate of a state bank. In the performance of the

21 Secretary's duties:

22 (1) The Commissioner shall call for statements from all

23 State banks as provided in Section 47 at least one time

24 during each calendar quarter.

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1 (2) (a) The Commissioner, as often as the Commissioner

2 shall deem necessary or proper, and no less frequently than

3 18 months following the preceding examination, shall

4 appoint a suitable person or persons to make an examination

5 of the affairs of every State bank, except that for every

6 eligible State bank, as defined by regulation, the

7 Commissioner in lieu of the examination may accept on an

8 alternating basis the examination made by the eligible

9 State bank's appropriate federal banking agency pursuant

10 to Section 111 of the Federal Deposit Insurance Corporation

11 Improvement Act of 1991, provided the appropriate federal

12 banking agency has made such an examination. A person so

13 appointed shall not be a stockholder or officer or employee

14 of any bank which that person may be directed to examine,

15 and shall have powers to make a thorough examination into

16 all the affairs of the bank and in so doing to examine any

17 of the officers or agents or employees thereof on oath and

18 shall make a full and detailed report of the condition of

19 the bank to the Commissioner. In making the examination the

20 examiners shall include an examination of the affairs of

21 all the affiliates of the bank, as defined in subsection

22 (b) of Section 35.2 of this Act, or subsidiaries of the

23 bank as shall be necessary to disclose fully the conditions

24 of the subsidiaries or affiliates, the relations between

25 the bank and the subsidiaries or affiliates and the effect

26 of those relations upon the affairs of the bank, and in

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1 connection therewith shall have power to examine any of the

2 officers, directors, agents, or employees of the

3 subsidiaries or affiliates on oath. After May 31, 1997, the

4 Commissioner may enter into cooperative agreements with

5 state regulatory authorities of other states to provide for

6 examination of State bank branches in those states, and the

7 Commissioner may accept reports of examinations of State

8 bank branches from those state regulatory authorities.

9 These cooperative agreements may set forth the manner in

10 which the other state regulatory authorities may be

11 compensated for examinations prepared for and submitted to

12 the Commissioner.

13 (b) After May 31, 1997, the Commissioner is authorized

14 to examine, as often as the Commissioner shall deem

15 necessary or proper, branches of out-of-state banks. The

16 Commissioner may establish and may assess fees to be paid

17 to the Commissioner for examinations under this subsection

18 (b). The fees shall be borne by the out-of-state bank,

19 unless the fees are borne by the state regulatory authority

20 that chartered the out-of-state bank, as determined by a

21 cooperative agreement between the Commissioner and the

22 state regulatory authority that chartered the out-of-state

23 bank.

24 (2.1) Pursuant to paragraph (a) of subsection (6) of

25 this Section, the Secretary shall adopt rules that ensure

26 consistency and due process in the examination process. The

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1 Secretary may also establish guidelines that (i) define the

2 scope of the examination process and (ii) clarify

3 examination items to be resolved. The rules, formal

4 guidance, interpretive letters, or opinions furnished to

5 State banks by the Secretary may be relied upon by the

6 State banks.

7 (2.5) Whenever any State bank, any subsidiary or

8 affiliate of a State bank, or after May 31, 1997, any

9 branch of an out-of-state bank causes to be performed, by

10 contract or otherwise, any bank services for itself,

11 whether on or off its premises:

12 (a) that performance shall be subject to

13 examination by the Commissioner to the same extent as

14 if services were being performed by the bank or, after

15 May 31, 1997, branch of the out-of-state bank itself on

16 its own premises; and

17 (b) the bank or, after May 31, 1997, branch of the

18 out-of-state bank shall notify the Commissioner of the

19 existence of a service relationship. The notification

20 shall be submitted with the first statement of

21 condition (as required by Section 47 of this Act) due

22 after the making of the service contract or the

23 performance of the service, whichever occurs first.

24 The Commissioner shall be notified of each subsequent

25 contract in the same manner.

26 For purposes of this subsection (2.5), the term "bank

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1 services" means services such as sorting and posting of

2 checks and deposits, computation and posting of interest

3 and other credits and charges, preparation and mailing of

4 checks, statements, notices, and similar items, or any

5 other clerical, bookkeeping, accounting, statistical, or

6 similar functions performed for a State bank, including but

7 not limited to electronic data processing related to those

8 bank services.

9 (3) The expense of administering this Act, including

10 the expense of the examinations of State banks as provided

11 in this Act, shall to the extent of the amounts resulting

12 from the fees provided for in paragraphs (a), (a-2), and

13 (b) of this subsection (3) be assessed against and borne by

14 the State banks:

15 (a) Each bank shall pay to the Secretary a Call

16 Report Fee which shall be paid in quarterly

17 installments equal to one-fourth of the sum of the

18 annual fixed fee of $800, plus a variable fee based on

19 the assets shown on the quarterly statement of

20 condition delivered to the Secretary in accordance

21 with Section 47 for the preceding quarter according to

22 the following schedule: 16� per $1,000 of the first

23 $5,000,000 of total assets, 15� per $1,000 of the next

24 $20,000,000 of total assets, 13� per $1,000 of the next

25 $75,000,000 of total assets, 9� per $1,000 of the next

26 $400,000,000 of total assets, 7� per $1,000 of the next

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1 $500,000,000 of total assets, and 5� per $1,000 of all

2 assets in excess of $1,000,000,000, of the State bank.

3 The Call Report Fee shall be calculated by the

4 Secretary and billed to the banks for remittance at the

5 time of the quarterly statements of condition provided

6 for in Section 47. The Secretary may require payment of

7 the fees provided in this Section by an electronic

8 transfer of funds or an automatic debit of an account

9 of each of the State banks. In case more than one

10 examination of any bank is deemed by the Secretary to

11 be necessary in any examination frequency cycle

12 specified in subsection 2(a) of this Section, and is

13 performed at his direction, the Secretary may assess a

14 reasonable additional fee to recover the cost of the

15 additional examination~~; provided, however, that an~~

16 ~~examination conducted at the request of the State~~

17 ~~Treasurer pursuant to the Uniform Disposition of~~

18 ~~Unclaimed Property Act shall not be deemed to be an~~

19 ~~additional examination under this Section~~. In lieu of

20 the method and amounts set forth in this paragraph (a)

21 for the calculation of the Call Report Fee, the

22 Secretary may specify by rule that the Call Report Fees

23 provided by this Section may be assessed semiannually

24 or some other period and may provide in the rule the

25 formula to be used for calculating and assessing the

26 periodic Call Report Fees to be paid by State banks.

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1 (a-1) If in the opinion of the Commissioner an

2 emergency exists or appears likely, the Commissioner

3 may assign an examiner or examiners to monitor the

4 affairs of a State bank with whatever frequency he

5 deems appropriate, including but not limited to a daily

6 basis. The reasonable and necessary expenses of the

7 Commissioner during the period of the monitoring shall

8 be borne by the subject bank. The Commissioner shall

9 furnish the State bank a statement of time and expenses

10 if requested to do so within 30 days of the conclusion

11 of the monitoring period.

12 (a-2) On and after January 1, 1990, the reasonable

13 and necessary expenses of the Commissioner during

14 examination of the performance of electronic data

15 processing services under subsection (2.5) shall be

16 borne by the banks for which the services are provided.

17 An amount, based upon a fee structure prescribed by the

18 Commissioner, shall be paid by the banks or, after May

19 31, 1997, branches of out-of-state banks receiving the

20 electronic data processing services along with the

21 Call Report Fee assessed under paragraph (a) of this

22 subsection (3).

23 (a-3) After May 31, 1997, the reasonable and

24 necessary expenses of the Commissioner during

25 examination of the performance of electronic data

26 processing services under subsection (2.5) at or on

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1 behalf of branches of out-of-state banks shall be borne

2 by the out-of-state banks, unless those expenses are

3 borne by the state regulatory authorities that

4 chartered the out-of-state banks, as determined by

5 cooperative agreements between the Commissioner and

6 the state regulatory authorities that chartered the

7 out-of-state banks.

8 (b) "Fiscal year" for purposes of this Section 48

9 is defined as a period beginning July 1 of any year and

10 ending June 30 of the next year. The Commissioner shall

11 receive for each fiscal year, commencing with the

12 fiscal year ending June 30, 1987, a contingent fee

13 equal to the lesser of the aggregate of the fees paid

14 by all State banks under paragraph (a) of subsection

15 (3) for that year, or the amount, if any, whereby the

16 aggregate of the administration expenses, as defined

17 in paragraph (c), for that fiscal year exceeds the sum

18 of the aggregate of the fees payable by all State banks

19 for that year under paragraph (a) of subsection (3),

20 plus any amounts transferred into the Bank and Trust

21 Company Fund from the State Pensions Fund for that

22 year, plus all other amounts collected by the

23 Commissioner for that year under any other provision of

24 this Act, plus the aggregate of all fees collected for

25 that year by the Commissioner under the Corporate

26 Fiduciary Act, excluding the receivership fees

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1 provided for in Section 5-10 of the Corporate Fiduciary

2 Act, and the Foreign Banking Office Act. The aggregate

3 amount of the contingent fee thus arrived at for any

4 fiscal year shall be apportioned amongst, assessed

5 upon, and paid by the State banks and foreign banking

6 corporations, respectively, in the same proportion

7 that the fee of each under paragraph (a) of subsection

8 (3), respectively, for that year bears to the aggregate

9 for that year of the fees collected under paragraph (a)

10 of subsection (3). The aggregate amount of the

11 contingent fee, and the portion thereof to be assessed

12 upon each State bank and foreign banking corporation,

13 respectively, shall be determined by the Commissioner

14 and shall be paid by each, respectively, within 120

15 days of the close of the period for which the

16 contingent fee is computed and is payable, and the

17 Commissioner shall give 20days' ~~days~~ advance notice of

18 the amount of the contingent fee payable by the State

19 bank and of the date fixed by the Commissioner for

20 payment of the fee.

21 (c) The "administration expenses" for any fiscal

22 year shall mean the ordinary and contingent expenses

23 for that year incident to making the examinations

24 provided for by, and for otherwise administering, this

25 Act, the Corporate Fiduciary Act, excluding the

26 expenses paid from the Corporate Fiduciary

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1 Receivership account in the Bank and Trust Company

2 Fund, the Foreign Banking Office Act, the Electronic

3 Fund Transfer Act, and the Illinois Bank Examiners'

4 Education Foundation Act, including all salaries and

5 other compensation paid for personal services rendered

6 for the State by officers or employees of the State,

7 including the Commissioner and the Deputy

8 Commissioners, communication equipment and services,

9 office furnishings, surety bond premiums, and travel

10 expenses of those officers and employees, employees,

11 expenditures or charges for the acquisition,

12 enlargement or improvement of, or for the use of, any

13 office space, building, or structure, or expenditures

14 for the maintenance thereof or for furnishing heat,

15 light, or power with respect thereto, all to the extent

16 that those expenditures are directly incidental to

17 such examinations or administration. The Commissioner

18 shall not be required by paragraphs (c) or (d-1) of

19 this subsection (3) to maintain in any fiscal year's

20 budget appropriated reserves for accrued vacation and

21 accrued sick leave that is required to be paid to

22 employees of the Commissioner upon termination of

23 their service with the Commissioner in an amount that

24 is more than is reasonably anticipated to be necessary

25 for any anticipated turnover in employees, whether due

26 to normal attrition or due to layoffs, terminations, or

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1 resignations.

2 (d) The aggregate of all fees collected by the

3 Secretary under this Act, the Corporate Fiduciary Act,

4 or the Foreign Banking Office Act on and after July 1,

5 1979, shall be paid promptly after receipt of the same,

6 accompanied by a detailed statement thereof, into the

7 State treasury and shall be set apart in a special fund

8 to be known as the "Bank and Trust Company Fund",

9 except as provided in paragraph (c) of subsection (11)

10 of this Section. All earnings received from

11 investments of funds in the Bank and Trust Company Fund

12 shall be deposited in the Bank and Trust Company Fund

13 and may be used for the same purposes as fees deposited

14 in that Fund. The amount from time to time deposited

15 into the Bank and Trust Company Fund shall be used: (i)

16 to offset the ordinary administrative expenses of the

17 Secretary as defined in this Section or (ii) as a

18 credit against fees under paragraph (d-1) of this

19 subsection (3). Nothing in this amendatory Act of 1979

20 shall prevent continuing the practice of paying

21 expenses involving salaries, retirement, social

22 security, and State-paid insurance premiums of State

23 officers by appropriations from the General Revenue

24 Fund. However, the General Revenue Fund shall be

25 reimbursed for those payments made on and after July 1,

26 1979, by an annual transfer of funds from the Bank and

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1 Trust Company Fund. Moneys in the Bank and Trust

2 Company Fund may be transferred to the Professions

3 Indirect Cost Fund, as authorized under Section

4 2105-300 of the Department of Professional Regulation

5 Law of the Civil Administrative Code of Illinois.

6 Notwithstanding provisions in the State Finance

7 Act, as now or hereafter amended, or any other law to

8 the contrary, the sum of $18,788,847 shall be

9 transferred from the Bank and Trust Company Fund to the

10 Financial Institutions Settlement of 2008 Fund on the

11 effective date of this amendatory Act of the 95th

12 General Assembly, or as soon thereafter as practical.

13 Notwithstanding provisions in the State Finance

14 Act, as now or hereafter amended, or any other law to

15 the contrary, the Governor may, during any fiscal year

16 through January 10, 2011, from time to time direct the

17 State Treasurer and Comptroller to transfer a

18 specified sum not exceeding 10% of the revenues to be

19 deposited into the Bank and Trust Company Fund during

20 that fiscal year from that Fund to the General Revenue

21 Fund in order to help defray the State's operating

22 costs for the fiscal year. Notwithstanding provisions

23 in the State Finance Act, as now or hereafter amended,

24 or any other law to the contrary, the total sum

25 transferred during any fiscal year through January 10,

26 2011, from the Bank and Trust Company Fund to the

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1 General Revenue Fund pursuant to this provision shall

2 not exceed during any fiscal year 10% of the revenues

3 to be deposited into the Bank and Trust Company Fund

4 during that fiscal year. The State Treasurer and

5 Comptroller shall transfer the amounts designated

6 under this Section as soon as may be practicable after

7 receiving the direction to transfer from the Governor.

8 (d-1) Adequate funds shall be available in the Bank

9 and Trust Company Fund to permit the timely payment of

10 administration expenses. In each fiscal year the total

11 administration expenses shall be deducted from the

12 total fees collected by the Commissioner and the

13 remainder transferred into the Cash Flow Reserve

14 Account, unless the balance of the Cash Flow Reserve

15 Account prior to the transfer equals or exceeds

16 one-fourth of the total initial appropriations from

17 the Bank and Trust Company Fund for the subsequent

18 year, in which case the remainder shall be credited to

19 State banks and foreign banking corporations and

20 applied against their fees for the subsequent year. The

21 amount credited to each State bank and foreign banking

22 corporation shall be in the same proportion as the Call

23 Report Fees paid by each for the year bear to the total

24 Call Report Fees collected for the year. If, after a

25 transfer to the Cash Flow Reserve Account is made or if

26 no remainder is available for transfer, the balance of

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1 the Cash Flow Reserve Account is less than one-fourth

2 of the total initial appropriations for the subsequent

3 year and the amount transferred is less than 5% of the

4 total Call Report Fees for the year, additional amounts

5 needed to make the transfer equal to 5% of the total

6 Call Report Fees for the year shall be apportioned

7 amongst, assessed upon, and paid by the State banks and

8 foreign banking corporations in the same proportion

9 that the Call Report Fees of each, respectively, for

10 the year bear to the total Call Report Fees collected

11 for the year. The additional amounts assessed shall be

12 transferred into the Cash Flow Reserve Account. For

13 purposes of this paragraph (d-1), the calculation of

14 the fees collected by the Commissioner shall exclude

15 the receivership fees provided for in Section 5-10 of

16 the Corporate Fiduciary Act.

17 (e) The Commissioner may upon request certify to

18 any public record in his keeping and shall have

19 authority to levy a reasonable charge for issuing

20 certifications of any public record in his keeping.

21 (f) In addition to fees authorized elsewhere in

22 this Act, the Commissioner may, in connection with a

23 review, approval, or provision of a service, levy a

24 reasonable charge to recover the cost of the review,

25 approval, or service.

26 (4) Nothing contained in this Act shall be construed to

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1 limit the obligation relative to examinations and reports

2 of any State bank, deposits in which are to any extent

3 insured by the United States or any agency thereof, nor to

4 limit in any way the powers of the Commissioner with

5 reference to examinations and reports of that bank.

6 (5) The nature and condition of the assets in or

7 investment of any bonus, pension, or profit sharing plan

8 for officers or employees of every State bank or, after May

9 31, 1997, branch of an out-of-state bank shall be deemed to

10 be included in the affairs of that State bank or branch of

11 an out-of-state bank subject to examination by the

12 Commissioner under the provisions of subsection (2) of this

13 Section, and if the Commissioner shall find from an

14 examination that the condition of or operation of the

15 investments or assets of the plan is unlawful, fraudulent,

16 or unsafe, or that any trustee has abused his trust, the

17 Commissioner shall, if the situation so found by the

18 Commissioner shall not be corrected to his satisfaction

19 within 60 days after the Commissioner has given notice to

20 the board of directors of the State bank or out-of-state

21 bank of his findings, report the facts to the Attorney

22 General who shall thereupon institute proceedings against

23 the State bank or out-of-state bank, the board of directors

24 thereof, or the trustees under such plan as the nature of

25 the case may require.

26 (6) The Commissioner shall have the power:

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1 (a) To promulgate reasonable rules for the purpose

2 of administering the provisions of this Act.

3 (a-5) To impose conditions on any approval issued

4 by the Commissioner if he determines that the

5 conditions are necessary or appropriate. These

6 conditions shall be imposed in writing and shall

7 continue in effect for the period prescribed by the

8 Commissioner.

9 (b) To issue orders against any person, if the

10 Commissioner has reasonable cause to believe that an

11 unsafe or unsound banking practice has occurred, is

12 occurring, or is about to occur, if any person has

13 violated, is violating, or is about to violate any law,

14 rule, or written agreement with the Commissioner, or

15 for the purpose of administering the provisions of this

16 Act and any rule promulgated in accordance with this

17 Act.

18 (b-1) To enter into agreements with a bank

19 establishing a program to correct the condition of the

20 bank or its practices.

21 (c) To appoint hearing officers to execute any of

22 the powers granted to the Commissioner under this

23 Section for the purpose of administering this Act and

24 any rule promulgated in accordance with this Act and

25 otherwise to authorize, in writing, an officer or

26 employee of the Office of Banks and Real Estate to

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1 exercise his powers under this Act.

2 (d) To subpoena witnesses, to compel their

3 attendance, to administer an oath, to examine any

4 person under oath, and to require the production of any

5 relevant books, papers, accounts, and documents in the

6 course of and pursuant to any investigation being

7 conducted, or any action being taken, by the

8 Commissioner in respect of any matter relating to the

9 duties imposed upon, or the powers vested in, the

10 Commissioner under the provisions of this Act or any

11 rule promulgated in accordance with this Act.

12 (e) To conduct hearings.

13 (7) Whenever, in the opinion of the Secretary, any

14 director, officer, employee, or agent of a State bank or

15 any subsidiary or bank holding company of the bank or,

16 after May 31, 1997, of any branch of an out-of-state bank

17 or any subsidiary or bank holding company of the bank shall

18 have violated any law, rule, or order relating to that bank

19 or any subsidiary or bank holding company of the bank,

20 shall have obstructed or impeded any examination or

21 investigation by the Secretary, shall have engaged in an

22 unsafe or unsound practice in conducting the business of

23 that bank or any subsidiary or bank holding company of the

24 bank, or shall have violated any law or engaged or

25 participated in any unsafe or unsound practice in

26 connection with any financial institution or other

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1 business entity such that the character and fitness of the

2 director, officer, employee, or agent does not assure

3 reasonable promise of safe and sound operation of the State

4 bank, the Secretary may issue an order of removal. If, in

5 the opinion of the Secretary, any former director, officer,

6 employee, or agent of a State bank or any subsidiary or

7 bank holding company of the bank, prior to the termination

8 of his or her service with that bank or any subsidiary or

9 bank holding company of the bank, violated any law, rule,

10 or order relating to that State bank or any subsidiary or

11 bank holding company of the bank, obstructed or impeded any

12 examination or investigation by the Secretary, engaged in

13 an unsafe or unsound practice in conducting the business of

14 that bank or any subsidiary or bank holding company of the

15 bank, or violated any law or engaged or participated in any

16 unsafe or unsound practice in connection with any financial

17 institution or other business entity such that the

18 character and fitness of the director, officer, employee,

19 or agent would not have assured reasonable promise of safe

20 and sound operation of the State bank, the Secretary may

21 issue an order prohibiting that person from further service

22 with a bank or any subsidiary or bank holding company of

23 the bank as a director, officer, employee, or agent. An

24 order issued pursuant to this subsection shall be served

25 upon the director, officer, employee, or agent. A copy of

26 the order shall be sent to each director of the bank

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1 affected by registered mail. A copy of the order shall also

2 be served upon the bank of which he is a director, officer,

3 employee, or agent, whereupon he shall cease to be a

4 director, officer, employee, or agent of that bank. The

5 Secretary may institute a civil action against the

6 director, officer, or agent of the State bank or, after May

7 31, 1997, of the branch of the out-of-state bank against

8 whom any order provided for by this subsection (7) of this

9 Section 48 has been issued, and against the State bank or,

10 after May 31, 1997, out-of-state bank, to enforce

11 compliance with or to enjoin any violation of the terms of

12 the order. Any person who has been the subject of an order

13 of removal or an order of prohibition issued by the

14 Secretary under this subsection or Section 5-6 of the

15 Corporate Fiduciary Act may not thereafter serve as

16 director, officer, employee, or agent of any State bank or

17 of any branch of any out-of-state bank, or of any corporate

18 fiduciary, as defined in Section 1-5.05 of the Corporate

19 Fiduciary Act, or of any other entity that is subject to

20 licensure or regulation by the Division of Banking unless

21 the Secretary has granted prior approval in writing.

22 For purposes of this paragraph (7), "bank holding

23 company" has the meaning prescribed in Section 2 of the

24 Illinois Bank Holding Company Act of 1957.

25 (8) The Commissioner may impose civil penalties of up

26 to $100,000 against any person for each violation of any

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1 provision of this Act, any rule promulgated in accordance

2 with this Act, any order of the Commissioner, or any other

3 action which in the Commissioner's discretion is an unsafe

4 or unsound banking practice.

5 (9) The Commissioner may impose civil penalties of up

6 to $100 against any person for the first failure to comply

7 with reporting requirements set forth in the report of

8 examination of the bank and up to $200 for the second and

9 subsequent failures to comply with those reporting

10 requirements.

11 (10) All final administrative decisions of the

12 Commissioner hereunder shall be subject to judicial review

13 pursuant to the provisions of the Administrative Review

14 Law. For matters involving administrative review, venue

15 shall be in either Sangamon County or Cook County.

16 (11) The endowment fund for the Illinois Bank

17 Examiners' Education Foundation shall be administered as

18 follows:

19 (a) (Blank).

20 (b) The Foundation is empowered to receive

21 voluntary contributions, gifts, grants, bequests, and

22 donations on behalf of the Illinois Bank Examiners'

23 Education Foundation from national banks and other

24 persons for the purpose of funding the endowment of the

25 Illinois Bank Examiners' Education Foundation.

26 (c) The aggregate of all special educational fees

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1 collected by the Secretary and property received by the

2 Secretary on behalf of the Illinois Bank Examiners'

3 Education Foundation under this subsection (11) on or

4 after June 30, 1986, shall be either (i) promptly paid

5 after receipt of the same, accompanied by a detailed

6 statement thereof, into the State Treasury and shall be

7 set apart in a special fund to be known as "The

8 Illinois Bank Examiners' Education Fund" to be

9 invested by either the Treasurer of the State of

10 Illinois in the Public Treasurers' Investment Pool or

11 in any other investment he is authorized to make or by

12 the Illinois State Board of Investment as the State

13 Banking Board of Illinois may direct or (ii) deposited

14 into an account maintained in a commercial bank or

15 corporate fiduciary in the name of the Illinois Bank

16 Examiners' Education Foundation pursuant to the order

17 and direction of the Board of Trustees of the Illinois

18 Bank Examiners' Education Foundation.

19 (12) (Blank).

20 (13) The Secretary may borrow funds from the General

21 Revenue Fund on behalf of the Bank and Trust Company Fund

22 if the Director of Banking certifies to the Governor that

23 there is an economic emergency affecting banking that

24 requires a borrowing to provide additional funds to the

25 Bank and Trust Company Fund. The borrowed funds shall be

26 paid back within 3 years and shall not exceed the total

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1 funding appropriated to the Agency in the previous year.

2 (14) In addition to the fees authorized in this Act,

3 the Secretary may assess reasonable receivership fees

4 against any State bank that does not maintain insurance

5 with the Federal Deposit Insurance Corporation. All fees

6 collected under this subsection (14) shall be paid into the

7 Non-insured Institutions Receivership account in the Bank

8 and Trust Company Fund, as established by the Secretary.

9 The fees assessed under this subsection (14) shall provide

10 for the expenses that arise from the administration of the

11 receivership of any such institution required to pay into

12 the Non-insured Institutions Receivership account, whether

13 pursuant to this Act, the Corporate Fiduciary Act, the

14 Foreign Banking Office Act, or any other Act that requires

15 payments into the Non-insured Institutions Receivership

16 account. The Secretary may establish by rule a reasonable

17 manner of assessing fees under this subsection (14).

18 (Source: P.A. 98-784, eff. 7-24-14; 99-39, eff. 1-1-16.)

19 (205 ILCS 5/48.1) (from Ch. 17, par. 360)

20 Sec. 48.1. Customer financial records; confidentiality.

21 (a) For the purpose of this Section, the term "financial

22 records" means any original, any copy, or any summary of:

23 (1) a document granting signature authority over a

24 deposit or account;

25 (2) a statement, ledger card or other record on any

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1 deposit or account, which shows each transaction in or with

2 respect to that account;

3 (3) a check, draft or money order drawn on a bank or

4 issued and payable by a bank; or

5 (4) any other item containing information pertaining

6 to any relationship established in the ordinary course of a

7 bank's business between a bank and its customer, including

8 financial statements or other financial information

9 provided by the customer.

10 (b) This Section does not prohibit:

11 (1) The preparation, examination, handling or

12 maintenance of any financial records by any officer,

13 employee or agent of a bank having custody of the records,

14 or the examination of the records by a certified public

15 accountant engaged by the bank to perform an independent

16 audit.

17 (2) The examination of any financial records by, or the

18 furnishing of financial records by a bank to, any officer,

19 employee or agent of (i) the Commissioner of Banks and Real

20 Estate, (ii) after May 31, 1997, a state regulatory

21 authority authorized to examine a branch of a State bank

22 located in another state, (iii) the Comptroller of the

23 Currency, (iv) the Federal Reserve Board, or (v) the

24 Federal Deposit Insurance Corporation for use solely in the

25 exercise of his duties as an officer, employee, or agent.

26 (3) The publication of data furnished from financial

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1 records relating to customers where the data cannot be

2 identified to any particular customer or account.

3 (4) The making of reports or returns required under

4 Chapter 61 of the Internal Revenue Code of 1986.

5 (5) Furnishing information concerning the dishonor of

6 any negotiable instrument permitted to be disclosed under

7 the Uniform Commercial Code.

8 (6) The exchange in the regular course of business of

9 (i) credit information between a bank and other banks or

10 financial institutions or commercial enterprises, directly

11 or through a consumer reporting agency or (ii) financial

12 records or information derived from financial records

13 between a bank and other banks or financial institutions or

14 commercial enterprises for the purpose of conducting due

15 diligence pursuant to a purchase or sale involving the bank

16 or assets or liabilities of the bank.

17 (7) The furnishing of information to the appropriate

18 law enforcement authorities where the bank reasonably

19 believes it has been the victim of a crime.

20 (8) The furnishing of information under the Revised

21 Uniform ~~Disposition of~~Unclaimed Property Act.

22 (9) The furnishing of information under the Illinois

23 Income Tax Act and the Illinois Estate and

24 Generation-Skipping Transfer Tax Act.

25 (10) The furnishing of information under the federal

26 Currency and Foreign Transactions Reporting Act Title 31,

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1 United States Code, Section 1051 et seq.

2 (11) The furnishing of information under any other

3 statute that by its terms or by regulations promulgated

4 thereunder requires the disclosure of financial records

5 other than by subpoena, summons, warrant, or court order.

6 (12) The furnishing of information about the existence

7 of an account of a person to a judgment creditor of that

8 person who has made a written request for that information.

9 (13) The exchange in the regular course of business of

10 information between commonly owned banks in connection

11 with a transaction authorized under paragraph (23) of

12 Section 5 and conducted at an affiliate facility.

13 (14) The furnishing of information in accordance with

14 the federal Personal Responsibility and Work Opportunity

15 Reconciliation Act of 1996. Any bank governed by this Act

16 shall enter into an agreement for data exchanges with a

17 State agency provided the State agency pays to the bank a

18 reasonable fee not to exceed its actual cost incurred. A

19 bank providing information in accordance with this item

20 shall not be liable to any account holder or other person

21 for any disclosure of information to a State agency, for

22 encumbering or surrendering any assets held by the bank 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

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1 willful misconduct. A bank shall have no obligation to

2 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 (15) The exchange in the regular course of business of

6 information between a bank and any commonly owned affiliate

7 of the bank, subject to the provisions of the Financial

8 Institutions Insurance Sales Law.

9 (16) The furnishing of information to law enforcement

10 authorities, the Illinois Department on Aging and its

11 regional administrative and provider agencies, the

12 Department of Human Services Office of Inspector General,

13 or public guardians: (i) upon subpoena by the investigatory

14 entity or the guardian, or (ii) if there is suspicion by

15 the bank that a customer who is an elderly person or person

16 with a disability has been or may become the victim of

17 financial exploitation. For the purposes of this item (16),

18 the term: (i) "elderly person" means a person who is 60 or

19 more years of age, (ii) "disabled person" means a person

20 who has or reasonably appears to the bank to have a

21 physical or mental disability that impairs his or her

22 ability to seek or obtain protection from or prevent

23 financial exploitation, and (iii) "financial exploitation"

24 means tortious or illegal use of the assets or resources of

25 an elderly or disabled person, and includes, without

26 limitation, misappropriation of the elderly or disabled

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1 person's assets or resources by undue influence, breach of

2 fiduciary relationship, intimidation, fraud, deception,

3 extortion, or the use of assets or resources in any manner

4 contrary to law. A bank or person furnishing information

5 pursuant to this item (16) shall be entitled to the same

6 rights and protections as a person furnishing information

7 under the Adult Protective Services Act and the Illinois

8 Domestic Violence Act of 1986.

9 (17) The disclosure of financial records or

10 information as necessary to effect, administer, or enforce

11 a transaction requested or authorized by the customer, or

12 in connection with:

13 (A) servicing or processing a financial product or

14 service requested or authorized by the customer;

15 (B) maintaining or servicing a customer's account

16 with the bank; or

17 (C) a proposed or actual securitization or

18 secondary market sale (including sales of servicing

19 rights) related to a transaction of a customer.

20 Nothing in this item (17), however, authorizes the sale

21 of the financial records or information of a customer

22 without the consent of the customer.

23 (18) The disclosure of financial records or

24 information as necessary to protect against actual or

25 potential fraud, unauthorized transactions, claims, or

26 other liability.

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1 (19)(a) The disclosure of financial records or

2 information related to a private label credit program

3 between a financial institution and a private label party

4 in connection with that private label credit program. Such

5 information is limited to outstanding balance, available

6 credit, payment and performance and account history,

7 product references, purchase information, and information

8 related to the identity of the customer.

9 (b)(1) For purposes of this paragraph (19) of

10 subsection (b) of Section 48.1, a "private label credit

11 program" means a credit program involving a financial

12 institution and a private label party that is used by a

13 customer of the financial institution and the private label

14 party primarily for payment for goods or services sold,

15 manufactured, or distributed by a private label party.

16 (2) For purposes of this paragraph (19) of subsection

17 (b) of Section 48.1, a "private label party" means, with

18 respect to a private label credit program, any of the

19 following: a retailer, a merchant, a manufacturer, a trade

20 group, or any such person's affiliate, subsidiary, member,

21 agent, or service provider.

22 (c) Except as otherwise provided by this Act, a bank may

23 not disclose to any person, except to the customer or his duly

24 authorized agent, any financial records or financial

25 information obtained from financial records relating to that

26 customer of that bank unless:

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1 (1) the customer has authorized disclosure to the

2 person;

3 (2) the financial records are disclosed in response to

4 a lawful subpoena, summons, warrant, citation to discover

5 assets, or court order which meets the requirements of

6 subsection (d) of this Section; or

7 (3) the bank is attempting to collect an obligation

8 owed to the bank and the bank complies with the provisions

9 of Section 2I of the Consumer Fraud and Deceptive Business

10 Practices Act.

11 (d) A bank shall disclose financial records under paragraph

12 (2) of subsection (c) of this Section under a lawful subpoena,

13 summons, warrant, citation to discover assets, or court order

14 only after the bank mails a copy of the subpoena, summons,

15 warrant, citation to discover assets, or court order to the

16 person establishing the relationship with the bank, if living,

17 and, otherwise his personal representative, if known, at his

18 last known address by first class mail, postage prepaid, unless

19 the bank is specifically prohibited from notifying the person

20 by order of court or by applicable State or federal law. A bank

21 shall not mail a copy of a subpoena to any person pursuant to

22 this subsection if the subpoena was issued by a grand jury

23 under the Statewide Grand Jury Act.

24 (e) Any officer or employee of a bank who knowingly and

25 willfully furnishes financial records in violation of this

26 Section is guilty of a business offense and, upon conviction,

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1 shall be fined not more than $1,000.

2 (f) Any person who knowingly and willfully induces or

3 attempts to induce any officer or employee of a bank to

4 disclose financial records in violation of this Section is

5 guilty of a business offense and, upon conviction, shall be

6 fined not more than $1,000.

7 (g) A bank shall be reimbursed for costs that are

8 reasonably necessary and that have been directly incurred in

9 searching for, reproducing, or transporting books, papers,

10 records, or other data of a customer required or requested to

11 be produced pursuant to a lawful subpoena, summons, warrant,

12 citation to discover assets, or court order. The Commissioner

13 shall determine the rates and conditions under which payment

14 may be made.

15 (Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15.)

16 (205 ILCS 5/48.3) (from Ch. 17, par. 360.2)

17 Sec. 48.3. Disclosure of reports of examinations and

18 confidential supervisory information; limitations.

19 (a) Any report of examination, visitation, or

20 investigation prepared by the Commissioner under this Act, the

21 Electronic Fund Transfer Act, the Corporate Fiduciary Act, the

22 Illinois Bank Holding Company Act of 1957, and the Foreign

23 Banking Office Act, any report of examination, visitation, or

24 investigation prepared by the state regulatory authority of

25 another state that examines a branch of an Illinois State bank

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1 in that state, any document or record prepared or obtained in

2 connection with or relating to any examination, visitation, or

3 investigation, and any record prepared or obtained by the

4 Commissioner to the extent that the record summarizes or

5 contains information derived from any report, document, or

6 record described in this subsection shall be deemed

7 "confidential supervisory information". Confidential

8 supervisory information shall not include any information or

9 record routinely prepared by a bank or other financial

10 institution and maintained in the ordinary course of business

11 or any information or record that is required to be made

12 publicly available pursuant to State or federal law or rule.

13 Confidential supervisory information shall be the property of

14 the Commissioner and shall only be disclosed under the

15 circumstances and for the purposes set forth in this Section.

16 The Commissioner may disclose confidential supervisory

17 information only under the following circumstances:

18 (1) The Commissioner may furnish confidential

19 supervisory information to the Board of Governors of the

20 Federal Reserve System, the federal reserve bank of the

21 federal reserve district in which the State bank is located

22 or in which the parent or other affiliate of the State bank

23 is located, any official or examiner thereof duly

24 accredited for the purpose, or any other state regulator,

25 federal regulator, or in the case of a foreign bank

26 possessing a certificate of authority pursuant to the

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1 Foreign Banking Office Act or a license pursuant to the

2 Foreign Bank Representative Office Act, the bank regulator

3 in the country where the foreign bank is chartered, that

4 the Commissioner determines to have an appropriate

5 regulatory interest. Nothing contained in this Act shall be

6 construed to limit the obligation of any member State bank

7 to comply with the requirements relative to examinations

8 and reports of the Federal Reserve Act and of the Board of

9 Governors of the Federal Reserve System or the federal

10 reserve bank of the federal reserve district in which the

11 bank is located, nor to limit in any way the powers of the

12 Commissioner with reference to examinations and reports.

13 (2) The Commissioner may furnish confidential

14 supervisory information to the United States, any agency

15 thereof that has insured a bank's deposits in whole or in

16 part, or any official or examiner thereof duly accredited

17 for the purpose. Nothing contained in this Act shall be

18 construed to limit the obligation relative to examinations

19 and reports of any State bank, deposits in which are to any

20 extent insured by the United States, any agency thereof,

21 nor to limit in any way the powers of the Commissioner with

22 reference to examination and reports of such bank.

23 (3) The Commissioner may furnish confidential

24 supervisory information to the appropriate law enforcement

25 authorities when the Commissioner reasonably believes a

26 bank, which the Commissioner has caused to be examined, has

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1 been a victim of a crime.

2 (4) The Commissioner may furnish confidential

3 supervisory information relating to a bank or other

4 financial institution, which the Commissioner has caused

5 to be examined, to be sent to the administrator of the

6 Revised Uniform ~~Disposition of~~ Unclaimed Property Act.

7 (5) The Commissioner may furnish confidential

8 supervisory information relating to a bank or other

9 financial institution, which the Commissioner has caused

10 to be examined, relating to its performance of obligations

11 under the Illinois Income Tax Act and the Illinois Estate

12 and Generation-Skipping Transfer Tax Act to the Illinois

13 Department of Revenue.

14 (6) The Commissioner may furnish confidential

15 supervisory information relating to a bank or other

16 financial institution, which the Commissioner has caused

17 to be examined, under the federal Currency and Foreign

18 Transactions Reporting Act, Title 31, United States Code,

19 Section 1051 et seq.

20 (6.5) The Commissioner may furnish confidential

21 supervisory information to any other agency or entity that

22 the Commissioner determines to have a legitimate

23 regulatory interest.

24 (7) The Commissioner may furnish confidential

25 supervisory information under any other statute that by its

26 terms or by regulations promulgated thereunder requires

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1 the disclosure of financial records other than by subpoena,

2 summons, warrant, or court order.

3 (8) At the request of the affected bank or other

4 financial institution, the Commissioner may furnish

5 confidential supervisory information relating to a bank or

6 other financial institution, which the Commissioner has

7 caused to be examined, in connection with the obtaining of

8 insurance coverage or the pursuit of an insurance claim for

9 or on behalf of the bank or other financial institution;

10 provided that, when possible, the Commissioner shall

11 disclose only relevant information while maintaining the

12 confidentiality of financial records not relevant to such

13 insurance coverage or claim and, when appropriate, may

14 delete identifying data relating to any person or

15 individual.

16 (9) The Commissioner may furnish a copy of a report of

17 any examination performed by the Commissioner of the

18 condition and affairs of any electronic data processing

19 entity to the banks serviced by the electronic data

20 processing entity.

21 (10) In addition to the foregoing circumstances, the

22 Commissioner may, but is not required to, furnish

23 confidential supervisory information under the same

24 circumstances authorized for the bank or financial

25 institution pursuant to subsection (b) of this Section,

26 except that the Commissioner shall provide confidential

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1 supervisory information under circumstances described in

2 paragraph (3) of subsection (b) of this Section only upon

3 the request of the bank or other financial institution.

4 (b) A bank or other financial institution or its officers,

5 agents, and employees may disclose confidential supervisory

6 information only under the following circumstances:

7 (1) to the board of directors of the bank or other

8 financial institution, as well as the president,

9 vice-president, cashier, and other officers of the bank or

10 other financial institution to whom the board of directors

11 may delegate duties with respect to compliance with

12 recommendations for action, and to the board of directors

13 of a bank holding company that owns at least 80% of the

14 outstanding stock of the bank or other financial

15 institution;

16 (2) to attorneys for the bank or other financial

17 institution and to a certified public accountant engaged by

18 the State bank or financial institution to perform an

19 independent audit provided that the attorney or certified

20 public accountant shall not permit the confidential

21 supervisory information to be further disseminated;

22 (3) to any person who seeks to acquire a controlling

23 interest in, or who seeks to merge with, the bank or

24 financial institution, provided that all attorneys,

25 certified public accountants, officers, agents, or

26 employees of that person shall agree to be bound to respect

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1 the confidentiality of the confidential supervisory

2 information and to not further disseminate the information

3 therein contained;

4 (4) (blank); or

5 (5) to the bank's insurance company in relation to an

6 insurance claim or the effort by the bank to procure

7 insurance coverage, provided that, when possible, the bank

8 shall disclose only information that is relevant to the

9 insurance claim or that is necessary to procure the

10 insurance coverage, while maintaining the confidentiality

11 of financial information pertaining to customers. When

12 appropriate, the bank may delete identifying data relating

13 to any person.

14 The disclosure of confidential supervisory information by

15 a bank or other financial institution pursuant to this

16 subsection (b) and the disclosure of information to the

17 Commissioner or other regulatory agency in connection with any

18 examination, visitation, or investigation shall not constitute

19 a waiver of any legal privilege otherwise available to the bank

20 or other financial institution with respect to the information.

21 (c) (1) Notwithstanding any other provision of this Act or

22 any other law, confidential supervisory information shall be

23 the property of the Commissioner and shall be privileged from

24 disclosure to any person except as provided in this Section. No

25 person in possession of confidential supervisory information

26 may disclose that information for any reason or under any

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1 circumstances not specified in this Section without the prior

2 authorization of the Commissioner. Any person upon whom a

3 demand for production of confidential supervisory information

4 is made, whether by subpoena, order, or other judicial or

5 administrative process, must withhold production of the

6 confidential supervisory information and must notify the

7 Commissioner of the demand, at which time the Commissioner is

8 authorized to intervene for the purpose of enforcing the

9 limitations of this Section or seeking the withdrawal or

10 termination of the attempt to compel production of the

11 confidential supervisory information.

12 (2) Any request for discovery or disclosure of confidential

13 supervisory information, whether by subpoena, order, or other

14 judicial or administrative process, shall be made to the

15 Commissioner, and the Commissioner shall determine within 15

16 days whether to disclose the information pursuant to procedures

17 and standards that the Commissioner shall establish by rule. If

18 the Commissioner determines that such information will not be

19 disclosed, the Commissioner's decision shall be subject to

20 judicial review under the provisions of the Administrative

21 Review Law, and venue shall be in either Sangamon County or

22 Cook County.

23 (3) Any court order that compels disclosure of confidential

24 supervisory information may be immediately appealed by the

25 Commissioner, and the order shall be automatically stayed

26 pending the outcome of the appeal.

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1 (d) If any officer, agent, attorney, or employee of a bank

2 or financial institution knowingly and willfully furnishes

3 confidential supervisory information in violation of this

4 Section, the Commissioner may impose a civil monetary penalty

5 up to $1,000 for the violation against the officer, agent,

6 attorney, or employee.

7 (Source: P.A. 90-301, eff. 8-1-97; 91-201, eff. 1-1-00.)

8 (205 ILCS 5/65) (from Ch. 17, par. 377)

9 Sec. 65. Dividends; dissolution. From time to time during a

10 receivership other than a receivership conducted by the Federal

11 Deposit Insurance Corporation, the Commissioner shall make and

12 pay from monies of the bank a ratable dividend on all claims as

13 may be proved to his or her satisfaction or adjudicated by the

14 court. Claims so proven or adjudicated shall bear interest at

15 the rate of 3% per annum from the date of the appointment of

16 the receiver to the date of payment, but all dividends on a

17 claim shall be applied first to principal. In computing the

18 amount of any dividend to be paid, if the Commissioner deems it

19 desirable in the interests of economy of administration and to

20 the interest of the bank and its creditors, he or she may pay

21 up to the amount of $10 of each claim or unpaid portion thereof

22 in full. As the proceeds of the assets of the bank are

23 collected in the course of liquidation, the Commissioner shall

24 make and pay further dividends on all claims previously proven

25 or adjudicated. After one year from the entry of a judgment of

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1 dissolution, all unclaimed dividends shall be remitted to the

2 State Treasurer in accordance with the Revised Uniform

3 Unclaimed Property Act ~~"Uniform Disposition of Unclaimed~~

4 ~~Property Act"~~, as now or hereafter amended, together with a

5 list of all unpaid claimants, their last known addresses and

6 the amounts unpaid.

7 (Source: P.A. 91-16, eff. 7-1-99.)

8 Section 17-55. The Savings Bank Act is amended by changing

9 Sections 4013, 9012, and 10090 as follows:

10 (205 ILCS 205/4013) (from Ch. 17, par. 7304-13)

11 Sec. 4013. Access to books and records; communication with

12 members and shareholders.

13 (a) Every member or shareholder shall have the right to

14 inspect books and records of the savings bank that pertain to

15 his accounts. Otherwise, the right of inspection and

16 examination of the books and records shall be limited as

17 provided in this Act, and no other person shall have access to

18 the books and records nor shall be entitled to a list of the

19 members or shareholders.

20 (b) For the purpose of this Section, the term "financial

21 records" means any original, any copy, or any summary of (1) a

22 document granting signature authority over a deposit or

23 account; (2) a statement, ledger card, or other record on any

24 deposit or account that shows each transaction in or with

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1 respect to that account; (3) a check, draft, or money order

2 drawn on a savings bank or issued and payable by a savings

3 bank; or (4) any other item containing information pertaining

4 to any relationship established in the ordinary course of a

5 savings bank's business between a savings bank and its

6 customer, including financial statements or other financial

7 information provided by the member or shareholder.

8 (c) 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 savings bank having custody of

12 records or examination of records by a certified public

13 accountant engaged by the savings bank to perform an

14 independent audit.

15 (2) The examination of any financial records by, or the

16 furnishing of financial records by a savings bank to, any

17 officer, employee, or agent of the Commissioner of Banks

18 and Real Estate or the federal depository institution

19 regulator for use solely in the exercise of his duties as

20 an officer, employee, or agent.

21 (3) The publication of data furnished from financial

22 records relating to members or holders of capital where the

23 data cannot be identified to any particular member,

24 shareholder, or account.

25 (4) The making of reports or returns required under

26 Chapter 61 of the Internal Revenue Code of 1986.

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1 (5) Furnishing information concerning the dishonor of

2 any negotiable instrument permitted to be disclosed under

3 the Uniform Commercial Code.

4 (6) The exchange in the regular course of business of

5 (i) credit information between a savings bank and other

6 savings banks or financial institutions or commercial

7 enterprises, directly or through a consumer reporting

8 agency or (ii) financial records or information derived

9 from financial records between a savings bank and other

10 savings banks or financial institutions or commercial

11 enterprises for the purpose of conducting due diligence

12 pursuant to a purchase or sale involving the savings bank

13 or assets or liabilities of the savings bank.

14 (7) The furnishing of information to the appropriate

15 law enforcement authorities where the savings bank

16 reasonably believes it has been the victim of a crime.

17 (8) The furnishing of information pursuant to the

18 Revised Uniform ~~Disposition of~~ Unclaimed Property Act.

19 (9) The furnishing of information pursuant to the

20 Illinois Income Tax Act and the Illinois Estate and

21 Generation-Skipping Transfer Tax Act.

22 (10) The furnishing of information pursuant to the

23 federal ~~"~~Currency and Foreign Transactions Reporting Act~~"~~,

24 (Title 31, United States Code, Section 1051 et seq.).

25 (11) The furnishing of information pursuant to any

26 other statute which by its terms or by regulations

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1 promulgated thereunder requires the disclosure of

2 financial records other than by subpoena, summons,

3 warrant, or court order.

4 (12) The furnishing of information in accordance with

5 the federal Personal Responsibility and Work Opportunity

6 Reconciliation Act of 1996. Any savings bank governed by

7 this Act shall enter into an agreement for data exchanges

8 with a State agency provided the State agency pays to the

9 savings bank a reasonable fee not to exceed its actual cost

10 incurred. A savings bank providing information in

11 accordance with this item shall not be liable to any

12 account holder or other person for any disclosure of

13 information to a State agency, for encumbering or

14 surrendering any assets held by the savings bank in

15 response to a lien or order to withhold and deliver issued

16 by a State agency, or for any other action taken pursuant

17 to this item, including individual or mechanical errors,

18 provided the action does not constitute gross negligence or

19 willful misconduct. A savings bank shall have no obligation

20 to hold, encumber, or surrender assets until it has been

21 served with a subpoena, summons, warrant, court or

22 administrative order, lien, or levy.

23 (13) The furnishing of information to law enforcement

24 authorities, the Illinois Department on Aging and its

25 regional administrative and provider agencies, the

26 Department of Human Services Office of Inspector General,

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1 or public guardians: (i) upon subpoena by the investigatory

2 entity or the guardian, or (ii) if there is suspicion by

3 the savings bank that a customer who is an elderly person

4 or person with a disability has been or may become the

5 victim of financial exploitation. For the purposes of this

6 item (13), the term: (i) "elderly person" means a person

7 who is 60 or more years of age, (ii) "person with a

8 disability" means a person who has or reasonably appears to

9 the savings bank to have a physical or mental disability

10 that impairs his or her ability to seek or obtain

11 protection from or prevent financial exploitation, and

12 (iii) "financial exploitation" means tortious or illegal

13 use of the assets or resources of an elderly person or

14 person with a disability, and includes, without

15 limitation, misappropriation of the assets or resources of

16 the elderly person or person with a disability by undue

17 influence, breach of fiduciary relationship, intimidation,

18 fraud, deception, extortion, or the use of assets or

19 resources in any manner contrary to law. A savings bank or

20 person furnishing information pursuant to this item (13)

21 shall be entitled to the same rights and protections as a

22 person furnishing information under the Adult Protective

23 Services Act and the Illinois Domestic Violence Act of

24 1986.

25 (14) The disclosure of financial records or

26 information as necessary to effect, administer, or enforce

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1 a transaction requested or authorized by the member or

2 holder of capital, or in connection with:

3 (A) servicing or processing a financial product or

4 service requested or authorized by the member or holder

5 of capital;

6 (B) maintaining or servicing an account of a member

7 or holder of capital with the savings bank; or

8 (C) a proposed or actual securitization or

9 secondary market sale (including sales of servicing

10 rights) related to a transaction of a member or holder

11 of capital.

12 Nothing in this item (14), however, authorizes the sale

13 of the financial records or information of a member or

14 holder of capital without the consent of the member or

15 holder of capital.

16 (15) The exchange in the regular course of business of

17 information between a savings bank and any commonly owned

18 affiliate of the savings bank, subject to the provisions of

19 the Financial Institutions Insurance Sales Law.

20 (16) 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 (17)(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

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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 (17) of

7 subsection (c) of Section 4013, 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 (17) of subsection

14 (c) of Section 4013, 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 (d) A savings bank may not disclose to any person, except

20 to the member or holder of capital or his duly authorized

21 agent, any financial records relating to that member or

22 shareholder of the savings bank unless:

23 (1) the member or shareholder has authorized

24 disclosure to the person; or

25 (2) the financial records are disclosed in response to

26 a lawful subpoena, summons, warrant, citation to discover

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1 assets, or court order that meets the requirements of

2 subsection (e) of this Section.

3 (e) A savings bank shall disclose financial records under

4 subsection (d) of this Section pursuant to a lawful subpoena,

5 summons, warrant, citation to discover assets, or court order

6 only after the savings bank mails a copy of the subpoena,

7 summons, warrant, citation to discover assets, or court order

8 to the person establishing the relationship with the savings

9 bank, if living, and otherwise, his personal representative, if

10 known, at his last known address by first class mail, postage

11 prepaid, unless the savings bank is specifically prohibited

12 from notifying the person by order of court.

13 (f) Any officer or employee of a savings bank who knowingly

14 and willfully furnishes financial records in violation of this

15 Section is guilty of a business offense and, upon conviction,

16 shall be fined not more than $1,000.

17 (g) Any person who knowingly and willfully induces or

18 attempts to induce any officer or employee of a savings bank to

19 disclose financial records in violation of this Section is

20 guilty of a business offense and, upon conviction, shall be

21 fined not more than $1,000.

22 (h) If any member or shareholder desires to communicate

23 with the other members or shareholders of the savings bank with

24 reference to any question pending or to be presented at an

25 annual or special meeting, the savings bank shall give that

26 person, upon request, a statement of the approximate number of

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1 members or shareholders entitled to vote at the meeting and an

2 estimate of the cost of preparing and mailing the

3 communication. The requesting member shall submit the

4 communication to the Commissioner who, upon finding it to be

5 appropriate and truthful, shall direct that it be prepared and

6 mailed to the members upon the requesting member's or

7 shareholder's payment or adequate provision for payment of the

8 expenses of preparation and mailing.

9 (i) A savings bank shall be reimbursed for costs that are

10 necessary and that have been directly incurred in searching

11 for, reproducing, or transporting books, papers, records, or

12 other data of a customer required to be reproduced pursuant to

13 a lawful subpoena, warrant, citation to discover assets, or

14 court order.

15 (j) Notwithstanding the provisions of this Section, a

16 savings bank may sell or otherwise make use of lists of

17 customers' names and addresses. All other information

18 regarding a customer's account is ~~are~~subject to the disclosure

19 provisions of this Section. At the request of any customer,

20 that customer's name and address shall be deleted from any list

21 that is to be sold or used in any other manner beyond

22 identification of the customer's accounts.

23 (Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15; revised

24 9-14-16.)

25 (205 ILCS 205/9012) (from Ch. 17, par. 7309-12)

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1 Sec. 9012. Disclosure of reports of examinations and

2 confidential supervisory information; limitations.

3 (a) Any report of examination, visitation, or

4 investigation prepared by the Commissioner under this Act, any

5 report of examination, visitation, or investigation prepared

6 by the state regulatory authority of another state that

7 examines a branch of an Illinois State savings bank in that

8 state, any document or record prepared or obtained in

9 connection with or relating to any examination, visitation, or

10 investigation, and any record prepared or obtained by the

11 Commissioner to the extent that the record summarizes or

12 contains information derived from any report, document, or

13 record described in this subsection shall be deemed

14 confidential supervisory information. "Confidential

15 supervisory information" shall not include any information or

16 record routinely prepared by a savings bank and maintained in

17 the ordinary course of business or any information or record

18 that is required to be made publicly available pursuant to

19 State or federal law or rule. Confidential supervisory

20 information shall be the property of the Commissioner and shall

21 only be disclosed under the circumstances and for the purposes

22 set forth in this Section.

23 The Commissioner may disclose confidential supervisory

24 information only under the following circumstances:

25 (1) The Commissioner may furnish confidential

26 supervisory information to federal and state depository

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1 institution regulators, or any official or examiner

2 thereof duly accredited for the purpose. Nothing contained

3 in this Act shall be construed to limit the obligation of

4 any savings bank to comply with the requirements relative

5 to examinations and reports nor to limit in any way the

6 powers of the Commissioner relative to examinations and

7 reports.

8 (2) The Commissioner may furnish confidential

9 supervisory information to the United States or any agency

10 thereof that to any extent has insured a savings bank's

11 deposits, or any official or examiner thereof duly

12 accredited for the purpose. Nothing contained in this Act

13 shall be construed to limit the obligation relative to

14 examinations and reports of any savings bank in which

15 deposits are to any extent insured by the United States or

16 any agency thereof nor to limit in any way the powers of

17 the Commissioner with reference to examination and reports

18 of the savings bank.

19 (3) The Commissioner may furnish confidential

20 supervisory information to the appropriate law enforcement

21 authorities when the Commissioner reasonably believes a

22 savings bank, which the Commissioner has caused to be

23 examined, has been a victim of a crime.

24 (4) The Commissioner may furnish confidential

25 supervisory information related to a savings bank, which

26 the Commissioner has caused to be examined, to the

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1 administrator of the RevisedUniform~~Disposition of~~

2 Unclaimed Property Act.

3 (5) The Commissioner may furnish confidential

4 supervisory information relating to a savings bank, which

5 the Commissioner has caused to be examined, relating to its

6 performance of obligations under the Illinois Income Tax

7 Act and the Illinois Estate and Generation-Skipping

8 Transfer Tax Act to the Illinois Department of Revenue.

9 (6) The Commissioner may furnish confidential

10 supervisory information relating to a savings bank, which

11 the Commissioner has caused to be examined, under the

12 federal Currency and Foreign Transactions Reporting Act,

13 31 United States Code, Section 1051 et seq.

14 (7) The Commissioner may furnish confidential

15 supervisory information to any other agency or entity that

16 the Commissioner determines to have a legitimate

17 regulatory interest.

18 (8) The Commissioner may furnish confidential

19 supervisory information as otherwise permitted or required

20 by this Act and may furnish confidential supervisory

21 information under any other statute that by its terms or by

22 regulations promulgated thereunder requires the disclosure

23 of financial records other than by subpoena, summons,

24 warrant, or court order.

25 (9) At the request of the affected savings bank, the

26 Commissioner may furnish confidential supervisory

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1 information relating to the savings bank, which the

2 Commissioner has caused to be examined, in connection with

3 the obtaining of insurance coverage or the pursuit of an

4 insurance claim for or on behalf of the savings bank;

5 provided that, when possible, the Commissioner shall

6 disclose only relevant information while maintaining the

7 confidentiality of financial records not relevant to such

8 insurance coverage or claim and, when appropriate, may

9 delete identifying data relating to any person.

10 (10) The Commissioner may furnish a copy of a report of

11 any examination performed by the Commissioner of the

12 condition and affairs of any electronic data processing

13 entity to the savings banks serviced by the electronic data

14 processing entity.

15 (11) In addition to the foregoing circumstances, the

16 Commissioner may, but is not required to, furnish

17 confidential supervisory information under the same

18 circumstances authorized for the savings bank pursuant to

19 subsection (b) of this Section, except that the

20 Commissioner shall provide confidential supervisory

21 information under circumstances described in paragraph (3)

22 of subsection (b) of this Section only upon the request of

23 the savings bank.

24 (b) A savings bank or its officers, agents, and employees

25 may disclose confidential supervisory information only under

26 the following circumstances:

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1 (1) to the board of directors of the savings bank, as

2 well as the president, vice-president, cashier, and other

3 officers of the savings bank to whom the board of directors

4 may delegate duties with respect to compliance with

5 recommendations for action, and to the board of directors

6 of a savings bank holding company that owns at least 80% of

7 the outstanding stock of the savings bank or other

8 financial institution.

9 (2) to attorneys for the savings bank and to a

10 certified public accountant engaged by the savings bank to

11 perform an independent audit; provided that the attorney or

12 certified public accountant shall not permit the

13 confidential supervisory information to be further

14 disseminated.

15 (3) to any person who seeks to acquire a controlling

16 interest in, or who seeks to merge with, the savings bank;

17 provided that the person shall agree to be bound to respect

18 the confidentiality of the confidential supervisory

19 information and to not further disseminate the information

20 other than to attorneys, certified public accountants,

21 officers, agents, or employees of that person who likewise

22 shall agree to be bound to respect the confidentiality of

23 the confidential supervisory information and to not

24 further disseminate the information.

25 (4) to the savings bank's insurance company, if the

26 supervisory information contains information that is

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1 otherwise unavailable and is strictly necessary to

2 obtaining insurance coverage or pursuing an insurance

3 claim for or on behalf of the savings bank; provided that,

4 when possible, the savings bank shall disclose only

5 information that is relevant to obtaining insurance

6 coverage or pursuing an insurance claim, while maintaining

7 the confidentiality of financial information pertaining to

8 customers; and provided further that, when appropriate,

9 the savings bank may delete identifying data relating to

10 any person.

11 The disclosure of confidential supervisory information by

12 a savings bank pursuant to this subsection (b) and the

13 disclosure of information to the Commissioner or other

14 regulatory agency in connection with any examination,

15 visitation, or investigation shall not constitute a waiver of

16 any legal privilege otherwise available to the savings bank

17 with respect to the information.

18 (c) (1) Notwithstanding any other provision of this Act or

19 any other law, confidential supervisory information shall be

20 the property of the Commissioner and shall be privileged from

21 disclosure to any person except as provided in this Section. No

22 person in possession of confidential supervisory information

23 may disclose that information for any reason or under any

24 circumstances not specified in this Section without the prior

25 authorization of the Commissioner. Any person upon whom a

26 demand for production of confidential supervisory information

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1 is made, whether by subpoena, order, or other judicial or

2 administrative process, must withhold production of the

3 confidential supervisory information and must notify the

4 Commissioner of the demand, at which time the Commissioner is

5 authorized to intervene for the purpose of enforcing the

6 limitations of this Section or seeking the withdrawal or

7 termination of the attempt to compel production of the

8 confidential supervisory information.

9 (2) Any request for discovery or disclosure of confidential

10 supervisory information, whether by subpoena, order, or other

11 judicial or administrative process, shall be made to the

12 Commissioner, and the Commissioner shall determine within 15

13 days whether to disclose the information pursuant to procedures

14 and standards that the Commissioner shall establish by rule. If

15 the Commissioner determines that such information will not be

16 disclosed, the Commissioner's decision shall be subject to

17 judicial review under the provisions of the Administrative

18 Review Law, and venue shall be in either Sangamon County or

19 Cook County.

20 (3) Any court order that compels disclosure of confidential

21 supervisory information may be immediately appealed by the

22 Commissioner, and the order shall be automatically stayed

23 pending the outcome of the appeal.

24 (d) If any officer, agent, attorney, or employee of a

25 savings bank knowingly and willfully furnishes confidential

26 supervisory information in violation of this Section, the

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1 Commissioner may impose a civil monetary penalty up to $1,000

2 for the violation against the officer, agent, attorney, or

3 employee.

4 (e) Subject to the limits of this Section, the

5 Commissioner also may promulgate regulations to set procedures

6 and standards for disclosure of the following items:

7 (1) All fixed orders and opinions made in cases of

8 appeals of the Commissioner's actions.

9 (2) Statements of policy and interpretations adopted

10 by the Commissioner's office, but not otherwise made

11 public.

12 (3) Nonconfidential portions of application files,

13 including applications for new charters. The Commissioner

14 shall specify by rule as to what part of the files are

15 confidential.

16 (4) Quarterly reports of income, deposits, and

17 financial condition.

18 (Source: P.A. 93-271, eff. 7-22-03.)

19 (205 ILCS 205/10090)

20 Sec. 10090. Dividends; dissolution. From time to time

21 during a receivership other than a receivership conducted by

22 the Federal Deposit Insurance Corporation, the Secretary shall

23 make and pay from moneys of the savings bank a ratable dividend

24 on all claims as may be proved to his or her satisfaction or

25 adjudicated by the court. Claims so proven or adjudicated shall

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1 bear interest at the rate of 3% per annum from the date of the

2 appointment of the receiver to the date of payment, but all

3 dividends on a claim shall be applied first to principal. In

4 computing the amount of any dividend to be paid, if the

5 Secretary deems it desirable in the interests of economy of

6 administration and to the interest of the savings bank and its

7 creditors, he or she may pay up to the amount of $10 of each

8 claim or unpaid portion thereof in full. As the proceeds of the

9 assets of the savings bank are collected in the course of

10 liquidation, the Secretary shall make and pay further dividends

11 on all claims previously proven or adjudicated. After one year

12 from the entry of a judgment of dissolution, all unclaimed

13 dividends shall be remitted to the State Treasurer in

14 accordance with the Revised Uniform ~~Disposition of~~ Unclaimed

15 Property Act, as now or hereafter amended, together with a list

16 of all unpaid claimants, their last known addresses and the

17 amounts unpaid.

18 (Source: P.A. 96-1365, eff. 7-28-10.)

19 Section 17-60. The Illinois Credit Union Act is amended by

20 changing Sections 10 and 62 as follows:

21 (205 ILCS 305/10) (from Ch. 17, par. 4411)

22 Sec. 10. Credit union records; member financial records.

23 (1) A credit union shall establish and maintain books,

24 records, accounting systems and procedures which accurately

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1 reflect its operations and which enable the Department to

2 readily ascertain the true financial condition of the credit

3 union and whether it is complying with this Act.

4 (2) A photostatic or photographic reproduction of any

5 credit union records shall be admissible as evidence of

6 transactions with the credit union.

7 (3)(a) For the purpose of this Section, the term "financial

8 records" means any original, any copy, or any summary of (1) a

9 document granting signature authority over an account, (2) a

10 statement, ledger card or other record on any account which

11 shows each transaction in or with respect to that account, (3)

12 a check, draft or money order drawn on a financial institution

13 or other entity or issued and payable by or through a financial

14 institution or other entity, or (4) any other item containing

15 information pertaining to any relationship established in the

16 ordinary course of business between a credit union and its

17 member, including financial statements or other financial

18 information provided by the member.

19 (b) This Section does not prohibit:

20 (1) The preparation, examination, handling or

21 maintenance of any financial records by any officer,

22 employee or agent of a credit union having custody of such

23 records, or the examination of such records by a certified

24 public accountant engaged by the credit union to perform an

25 independent audit.

26 (2) The examination of any financial records by or the

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1 furnishing of financial records by a credit union to any

2 officer, employee or agent of the Department, the National

3 Credit Union Administration, Federal Reserve board or any

4 insurer of share accounts for use solely in the exercise of

5 his duties as an officer, employee or agent.

6 (3) The publication of data furnished from financial

7 records relating to members where the data cannot be

8 identified to any particular customer of account.

9 (4) The making of reports or returns required under

10 Chapter 61 of the Internal Revenue Code of 1954.

11 (5) Furnishing information concerning the dishonor of

12 any negotiable instrument permitted to be disclosed under

13 the Uniform Commercial Code.

14 (6) The exchange in the regular course of business of

15 (i) credit information between a credit union and other

16 credit unions or financial institutions or commercial

17 enterprises, directly or through a consumer reporting

18 agency or (ii) financial records or information derived

19 from financial records between a credit union and other

20 credit unions or financial institutions or commercial

21 enterprises for the purpose of conducting due diligence

22 pursuant to a merger or a purchase or sale of assets or

23 liabilities of the credit union.

24 (7) The furnishing of information to the appropriate

25 law enforcement authorities where the credit union

26 reasonably believes it has been the victim of a crime.

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1 (8) The furnishing of information pursuant to the

2 Revised Uniform ~~Disposition of~~ Unclaimed Property Act.

3 (9) The furnishing of information pursuant to the

4 Illinois Income Tax Act and the Illinois Estate and

5 Generation-Skipping Transfer Tax Act.

6 (10) The furnishing of information pursuant to the

7 federal "Currency and Foreign Transactions Reporting Act",

8 Title 31, United States Code, Section 1051 et sequentia.

9 (11) The furnishing of information pursuant to any

10 other statute which by its terms or by regulations

11 promulgated thereunder requires the disclosure of

12 financial records other than by subpoena, summons, warrant

13 or court order.

14 (12) The furnishing of information in accordance with

15 the federal Personal Responsibility and Work Opportunity

16 Reconciliation Act of 1996. Any credit union governed by

17 this Act shall enter into an agreement for data exchanges

18 with a State agency provided the State agency pays to the

19 credit union a reasonable fee not to exceed its actual cost

20 incurred. A credit union providing information in

21 accordance with this item shall not be liable to any

22 account holder or other person for any disclosure of

23 information to a State agency, for encumbering or

24 surrendering any assets held by the credit union in

25 response to a lien or order to withhold and deliver issued

26 by a State agency, or for any other action taken pursuant

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1 to this item, including individual or mechanical errors,

2 provided the action does not constitute gross negligence or

3 willful misconduct. A credit union shall have no obligation

4 to hold, encumber, or surrender assets until it has been

5 served with a subpoena, summons, warrant, court or

6 administrative order, lien, or levy.

7 (13) 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 credit union that a member who is an elderly person or

14 person with a disability has been or may become the victim

15 of financial exploitation. For the purposes of this item

16 (13), the term: (i) "elderly person" means a person who is

17 60 or more years of age, (ii) "person with a disability"

18 means a person who has or reasonably appears to the credit

19 union to have a physical or mental disability that impairs

20 his or her ability to seek or obtain protection from or

21 prevent financial exploitation, and (iii) "financial

22 exploitation" means tortious or illegal use of the assets

23 or resources of an elderly person or person with a

24 disability, and includes, without limitation,

25 misappropriation of the elderly or disabled person's

26 assets or resources by undue influence, breach of fiduciary

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1 relationship, intimidation, fraud, deception, extortion,

2 or the use of assets or resources in any manner contrary to

3 law. A credit union or person furnishing information

4 pursuant to this item (13) shall be entitled to the same

5 rights and protections as a person furnishing information

6 under the Adult Protective Services Act and the Illinois

7 Domestic Violence Act of 1986.

8 (14) The disclosure of financial records or

9 information as necessary to effect, administer, or enforce

10 a transaction requested or authorized by the member, or in

11 connection with:

12 (A) servicing or processing a financial product or

13 service requested or authorized by the member;

14 (B) maintaining or servicing a member's account

15 with the credit union; or

16 (C) a proposed or actual securitization or

17 secondary market sale (including sales of servicing

18 rights) related to a transaction of a member.

19 Nothing in this item (14), however, authorizes the sale

20 of the financial records or information of a member without

21 the consent of the member.

22 (15) The disclosure of financial records or

23 information as necessary to protect against or prevent

24 actual or potential fraud, unauthorized transactions,

25 claims, or other liability.

26 (16)(a) The disclosure of financial records or

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1 information related to a private label credit program

2 between a financial institution and a private label party

3 in connection with that private label credit program. Such

4 information is limited to outstanding balance, available

5 credit, payment and performance and account history,

6 product references, purchase information, and information

7 related to the identity of the customer.

8 (b)(1) For purposes of this paragraph (16) of

9 subsection (b) of Section 10, a "private label credit

10 program" means a credit program involving a financial

11 institution and a private label party that is used by a

12 customer of the financial institution and the private label

13 party primarily for payment for goods or services sold,

14 manufactured, or distributed by a private label party.

15 (2) For purposes of this paragraph (16) of subsection

16 (b) of Section 10, a "private label party" means, with

17 respect to a private label credit program, any of the

18 following: a retailer, a merchant, a manufacturer, a trade

19 group, or any such person's affiliate, subsidiary, member,

20 agent, or service provider.

21 (c) Except as otherwise provided by this Act, a credit

22 union may not disclose to any person, except to the member or

23 his duly authorized agent, any financial records relating to

24 that member of the credit union unless:

25 (1) the member has authorized disclosure to the person;

26 (2) the financial records are disclosed in response to

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1 a lawful subpoena, summons, warrant, citation to discover

2 assets, or court order that meets the requirements of

3 subparagraph (d) of this Section; or

4 (3) the credit union is attempting to collect an

5 obligation owed to the credit union and the credit union

6 complies with the provisions of Section 2I of the Consumer

7 Fraud and Deceptive Business Practices Act.

8 (d) A credit union shall disclose financial records under

9 subparagraph (c)(2) of this Section pursuant to a lawful

10 subpoena, summons, warrant, citation to discover assets, or

11 court order only after the credit union mails a copy of the

12 subpoena, summons, warrant, citation to discover assets, or

13 court order to the person establishing the relationship with

14 the credit union, if living, and otherwise his personal

15 representative, if known, at his last known address by first

16 class mail, postage prepaid unless the credit union is

17 specifically prohibited from notifying the person by order of

18 court or by applicable State or federal law. In the case of a

19 grand jury subpoena, a credit union shall not mail a copy of a

20 subpoena to any person pursuant to this subsection if the

21 subpoena was issued by a grand jury under the Statewide Grand

22 Jury Act or notifying the person would constitute a violation

23 of the federal Right to Financial Privacy Act of 1978.

24 (e)(1) Any officer or employee of a credit union who

25 knowingly and wilfully furnishes financial records in

26 violation of this Section is guilty of a business offense and

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1 upon conviction thereof shall be fined not more than $1,000.

2 (2) Any person who knowingly and wilfully induces or

3 attempts to induce any officer or employee of a credit union to

4 disclose financial records in violation of this Section is

5 guilty of a business offense and upon conviction thereof shall

6 be fined not more than $1,000.

7 (f) A credit union shall be reimbursed for costs which are

8 reasonably necessary and which have been directly incurred in

9 searching for, reproducing or transporting books, papers,

10 records or other data of a member required or requested to be

11 produced pursuant to a lawful subpoena, summons, warrant,

12 citation to discover assets, or court order. The Secretary and

13 the Director may determine, by rule, the rates and conditions

14 under which payment shall be made. Delivery of requested

15 documents may be delayed until final reimbursement of all costs

16 is received.

17 (Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15.)

18 (205 ILCS 305/62) (from Ch. 17, par. 4463)

19 Sec. 62. Liquidation.

20 (1) A credit union may elect to dissolve voluntarily and

21 liquidate its affairs in the manner prescribed in this Section.

22 (2) The board of directors shall adopt a resolution

23 recommending the credit union be dissolved voluntarily, and

24 directing that the question of liquidating be submitted to the

25 members.

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1 (3) Within 10 days after the board of directors decides to

2 submit the question of liquidation to the members, the chairman

3 or president shall notify the Secretary thereof, in writing,

4 setting forth the reasons for the proposed action. Within 10

5 days after the members act on the question of liquidation, the

6 chairman or president shall notify the Secretary, in writing,

7 as to whether or not the members approved the proposed

8 liquidation. The Secretary then must determine whether this

9 Section has been complied with and if his decision is

10 favorable, he shall prepare a certificate to the effect that

11 this Section has been complied with, a copy of which will be

12 retained by the Department and the other copy forwarded to the

13 credit union. The certificate must be filed with the recorder

14 or if there is no recorder, in the office of the county clerk

15 of the county or counties in which the credit union is

16 operating, whereupon the credit union must cease operations

17 except for the purpose of its liquidation.

18 (4) As soon as the board of directors passes a resolution

19 to submit the question of liquidation to the members, payment

20 on shares, withdrawal of shares, making any transfer of shares

21 to loans and interest, making investments of any kind and

22 granting loans shall be suspended pending action by members. On

23 approval by the members of such proposal, all such operations

24 shall be permanently discontinued. The necessary expenses of

25 operating shall, however, continue to be paid on authorization

26 of the board of directors or the liquidating agent during the

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1 period of liquidation.

2 (5) For a credit union to enter voluntary liquidation, it

3 must be approved by affirmative vote of the members owning a

4 majority of the shares entitled to vote, in person or by proxy,

5 at a regular or special meeting of the members. Notice, in

6 writing, shall be given to each member, by first class mail, at

7 least 10 days prior to such meeting. If liquidation is

8 approved, the board of directors shall appoint a liquidating

9 agent for the purpose of conserving and collecting the assets,

10 closing the affairs of the credit union and distributing the

11 assets as required by this Act.

12 (6) A liquidating credit union shall continue in existence

13 for the purpose of discharging its debts, collecting and

14 distributing its assets, and doing all acts required in order

15 to terminate its operations and may sue and be sued for the

16 purpose of enforcing such debts and obligations until its

17 affairs are fully adjusted.

18 (7) Subject to such rules and regulations as the Secretary

19 may promulgate, the liquidating agent shall use the assets of

20 the credit union to pay; first, expenses incidental to

21 liquidating including any surety bond that may be required;

22 then, liabilities of the credit union; then special classes of

23 shares. The remaining assets shall then be distributed to the

24 members proportionately to the dollar value of the shares held

25 by each member in relation to the total dollar value of all

26 shares outstanding as of the date the dissolution was voted.

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1 (8) As soon as the liquidating agent determines that all

2 assets as to which there is a reasonable expectancy of sale or

3 transfer have been liquidated and distributed as set forth in

4 this Section, he shall execute a certificate of dissolution on

5 a form prescribed by the Department and file the same, together

6 with all pertinent books and records of the liquidating credit

7 union with the Department, whereupon such credit union shall be

8 dissolved. The liquidating agent must, within 3 years after

9 issuance of a certificate by the Secretary referred to in

10 Subsection (3) of this Section, discharge the debts of the

11 credit union, collect and distribute its assets and do all

12 other acts required to wind up its business.

13 (9) If the Secretary determines that the liquidating agent

14 has failed to make reasonable progress in the liquidating of

15 the credit union's affairs and distribution of its assets or

16 has violated this Act, the Secretary may take possession and

17 control of the credit union and remove the liquidating agent

18 and appoint a liquidating agent to complete the liquidation

19 under his direction and control. The Secretary shall fill any

20 vacancy caused by the resignation, death, illness, removal,

21 desertion or incapacity to function of the liquidating agent.

22 (10) Any funds representing unclaimed dividends and shares

23 in liquidation and remaining in the hands of the board of

24 directors or the liquidating agent at the end of the

25 liquidation must be deposited by them, together with all books

26 and papers of the credit union, with the State Treasurer in

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1 compliance with the Revised Uniform ~~Disposition of~~ Unclaimed

2 Property Act~~, approved August 17, 1961, as amended~~.

3 (Source: P.A. 97-133, eff. 1-1-12.)

4 Section 17-65. The Currency Exchange Act is amended by

5 changing Sections 15.1b and 19.3 as follows:

6 (205 ILCS 405/15.1b) (from Ch. 17, par. 4827)

7 Sec. 15.1b. Liquidation; distribution; priority. The

8 General Assembly finds and declares that community currency

9 exchanges provide important and vital services to Illinois

10 citizens. The General Assembly also finds that in providing

11 such services, community currency exchanges transact extensive

12 business involving check cashing and the writing of money

13 orders in communities in which banking services are generally

14 unavailable. It is therefore declared to be the policy of this

15 State that customers who receive these services must be

16 protected from insolvencies of currency exchanges and

17 interruptions of services. To carry out this policy and to

18 insure that customers of community currency exchanges are

19 protected in the event it is determined that a community

20 currency exchange in receivership should be liquidated in

21 accordance with Section 15.1a of this Act, the Secretary shall

22 make a distribution of moneys collected by the receiver in the

23 following order of priority: First, allowed claims for the

24 actual necessary expenses of the receivership of the community

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1 currency exchange being liquidated, including (a) reasonable

2 receiver fees and receiver's attorney's fees approved by the

3 Secretary, (b) all expenses of any preliminary or other

4 examinations into the condition of the community currency

5 exchange or receivership, (c) all expenses incurred by the

6 Secretary which are incident to possession and control of any

7 property or records of the community currency exchange, and (d)

8 reasonable expenses incurred by the Secretary as the result of

9 business agreements or contractual arrangements necessary to

10 insure that the services of the community currency exchanges

11 are delivered to the community without interruption. Said

12 business agreements or contractual arrangements may include,

13 but are not limited to, agreements made by the Secretary, or by

14 the Receiver with the approval of the Secretary, with banks,

15 money order companies, bonding companies and other types of

16 financial institutions; Second, allowed claims by a purchaser

17 of money orders issued on demand of the community currency

18 exchange being liquidated; Third, allowed claims arising by

19 virtue of and to the extent of the amount a utility customer

20 deposits with the community currency exchange being liquidated

21 which are not remitted to the utility company; Fourth, allowed

22 claims arising by virtue of and to the extent of the amount

23 paid by a purchaser of Illinois license plates, vehicle

24 stickers sold for State and municipal governments in Illinois,

25 and temporary Illinois registration permits purchased at the

26 currency exchange being liquidated; Fifth, allowed unsecured

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1 claims for wages or salaries, excluding vacation, severance and

2 sick leave pay earned by employee earned within 90 days prior

3 to the appointment of a Receiver; Sixth, secured claims;

4 Seventh, allowed unsecured claims of any tax, and interest and

5 penalty on the tax; Eighth, allowed unsecured claims other than

6 a kind specified in paragraph one, two and three of this

7 Section, filed with the Secretary within the time the Secretary

8 fixes for filing claims; Ninth, allowed unsecured claims, other

9 than a kind specified in paragraphs one, two and three of this

10 Section filed with the Secretary after the time fixed for

11 filing claims by the Secretary; Tenth, allowed creditor claims

12 asserted by an owner, member, or stockholder of the community

13 currency exchange in liquidation; Eleventh, after one year from

14 the final dissolution of the currency exchange, all assets not

15 used to satisfy allowed claims shall be distributed pro rata to

16 the owner, owners, members, or stockholders of the currency

17 exchange.

18 The Secretary shall pay all claims of equal priority

19 according to the schedule set out above, and shall not pay

20 claims of lower priority until all higher priority claims are

21 satisfied. If insufficient assets are available to meet all

22 claims of equal priority, those assets shall be distributed pro

23 rata among those claims. All unclaimed assets of a currency

24 exchange shall be deposited with the Secretary to be paid out

25 by him when proper claims therefor are presented to the

26 Secretary. If there are funds remaining after the conclusion of

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1 a receivership of an abandoned currency exchange, the remaining

2 funds shall be considered unclaimed property and remitted to

3 the State Treasurer under the Revised Uniform ~~Disposition of~~

4 Unclaimed Property Act.

5 (Source: P.A. 97-315, eff. 1-1-12.)

6 (205 ILCS 405/19.3) (from Ch. 17, par. 4838)

7 Sec. 19.3. (A) The General Assembly hereby finds and

8 declares: community currency exchanges and ambulatory currency

9 exchanges provide important and vital services to Illinois

10 citizens. In so doing, they transact extensive business

11 involving check cashing and the writing of money orders in

12 communities in which banking services are generally

13 unavailable. Customers of currency exchanges who receive these

14 services must be protected from being charged unreasonable and

15 unconscionable rates for cashing checks and purchasing money

16 orders. The Illinois Department of Financial and Professional

17 Regulation has the responsibility for regulating the

18 operations of currency exchanges and has the expertise to

19 determine reasonable maximum rates to be charged for check

20 cashing and money order purchases. Therefore, it is in the

21 public interest, convenience, welfare and good to have the

22 Department establish reasonable maximum rate schedules for

23 check cashing and the issuance of money orders and to require

24 community and ambulatory currency exchanges to prominently

25 display to the public the fees charged for all services. The

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1 Secretary shall review, each year, the cost of operation of the

2 Currency Exchange Section and the revenue generated from

3 currency exchange examinations and report to the General

4 Assembly if the need exists for an increase in the fees

5 mandated by this Act to maintain the Currency Exchange Section

6 at a fiscally self-sufficient level. The Secretary shall

7 include in such report the total amount of funds remitted to

8 the State and delivered to the State Treasurer by currency

9 exchanges pursuant to the RevisedUniform~~Disposition of~~

10 Unclaimed Property Act.

11 (B) The Secretary shall, by rules adopted in accordance

12 with the Illinois Administrative Procedure Act, expeditiously

13 formulate and issue schedules of reasonable maximum rates which

14 can be charged for check cashing and writing of money orders by

15 community currency exchanges and ambulatory currency

16 exchanges.

17 (1) In determining the maximum rate schedules for the

18 purposes of this Section the Secretary shall take into

19 account:

20 (a) Rates charged in the past for the cashing of

21 checks and the issuance of money orders by community

22 and ambulatory currency exchanges.

23 (b) Rates charged by banks or other business

24 entities for rendering the same or similar services and

25 the factors upon which those rates are based.

26 (c) The income, cost and expense of the operation

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1 of currency exchanges.

2 (d) Rates charged by currency exchanges or other

3 similar entities located in other states for the same

4 or similar services and the factors upon which those

5 rates are based.

6 (e) Rates charged by the United States Postal

7 Service for the issuing of money orders and the factors

8 upon which those rates are based.

9 (f) A reasonable profit for a currency exchange

10 operation.

11 (2)(a) The schedule of reasonable maximum rates

12 established pursuant to this Section may be modified by the

13 Secretary from time to time pursuant to rules adopted in

14 accordance with the Illinois Administrative Procedure Act.

15 (b) Upon the filing of a verified petition setting

16 forth allegations demonstrating reasonable cause to

17 believe that the schedule of maximum rates previously

18 issued and promulgated should be adjusted, the Secretary

19 shall expeditiously:

20 (i) reject the petition if it fails to demonstrate

21 reasonable cause to believe that an adjustment is

22 necessary; or

23 (ii) conduct such hearings, in accordance with

24 this Section, as may be necessary to determine whether

25 the petition should be granted in whole or in part.

26 (c) No petition may be filed pursuant to subparagraph

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1 (a) of paragraph (2) of subsection (B) unless:

2 (i) at least nine months have expired since the

3 last promulgation of schedules of maximum rates; and

4 (ii) at least one-fourth of all community currency

5 exchange licensees join in a petition or, in the case

6 of ambulatory currency exchanges, a licensee or

7 licensees authorized to serve at least 100 locations

8 join in a petition.

9 (3) Any currency exchange may charge lower fees than

10 those of the applicable maximum fee schedule after filing

11 with the Secretary a schedule of fees it proposes to use.

12 (Source: P.A. 97-315, eff. 1-1-12.)

13 Section 17-70. The Corporate Fiduciary Act is amended by

14 changing Section 6-14 as follows:

15 (205 ILCS 620/6-14) (from Ch. 17, par. 1556-14)

16 Sec. 6-14. From time to time during receivership the

17 Commissioner shall make and pay from monies of the corporate

18 fiduciary a ratable dividend on all claims as may be proved to

19 his or her satisfaction or adjudicated by the court. After one

20 year from the entry of a judgment of dissolution, all unclaimed

21 dividends shall be remitted to the State Treasurer in

22 accordance with the RevisedUniform~~Disposition of~~ Unclaimed

23 Property Act, as now or hereafter amended, together with a list

24 of all unpaid claimants, their last known addresses and the

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1 amounts unpaid.

2 (Source: P.A. 91-16, eff. 7-1-99.)

3 Section 17-75. The Transmitters of Money Act is amended by

4 changing Section 30 as follows:

5 (205 ILCS 657/30)

6 Sec. 30. Surety bond.

7 (a) An applicant for a license shall post and a licensee

8 must maintain with the Director a bond or bonds issued by

9 corporations qualified to do business as surety companies in

10 this State.

11 (b) The applicant or licensee shall post a bond in the

12 amount of the greater of $100,000 or an amount equal to the

13 daily average of outstanding payment instruments for the

14 preceding 12 months or operational history, whichever is

15 shorter, up to a maximum amount of $2,000,000. When the amount

16 of the required bond exceeds $1,000,000, the applicant or

17 licensee may, in the alternative, post a bond in the amount of

18 $1,000,000 plus a dollar for dollar increase in the net worth

19 of the applicant or licensee over and above the amount required

20 in Section 20, up to a total amount of $2,000,000.

21 (c) The bond must be in a form satisfactory to the Director

22 and shall run to the State of Illinois for the benefit of any

23 claimant against the applicant or licensee with respect to the

24 receipt, handling, transmission, and payment of money by the

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1 licensee or authorized seller in connection with the licensed

2 operations. A claimant damaged by a breach of the conditions of

3 a bond shall have a right to action upon the bond for damages

4 suffered thereby and may bring suit directly on the bond, or

5 the Director may bring suit on behalf of the claimant.

6 (d) (Blank).

7 (e) (Blank).

8 (f) After receiving a license, the licensee must maintain

9 the required bond plus net worth (if applicable) until 5 years

10 after it ceases to do business in this State unless all

11 outstanding payment instruments are eliminated or the

12 provisions under the RevisedUniform~~Disposition of~~ Unclaimed

13 Property Act have become operative and are adhered to by the

14 licensee. Notwithstanding this provision, however, the amount

15 required to be maintained may be reduced to the extent that the

16 amount of the licensee's payment instruments outstanding in

17 this State are reduced.

18 (g) If the Director at any time reasonably determines that

19 the required bond is insecure, deficient in amount, or

20 exhausted in whole or in part, he may in writing require the

21 filing of a new or supplemental bond in order to secure

22 compliance with this Act and may demand compliance with the

23 requirement within 30 days following service on the licensee.

24 (Source: P.A. 92-400, eff. 1-1-02.)

25 Section 17-80. The Adverse Claims to Deposit Accounts Act

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1 is amended by changing Section 10 as follows:

2 (205 ILCS 700/10)

3 Sec. 10. Application of Act. This Act shall not preempt:

4 (1) the Revised Uniform ~~Disposition of~~ Unclaimed Property

5 Act, nor shall any provision of this Act be construed to

6 relieve any holder, including a financial institution, from

7 reporting and remitting all unclaimed property, including

8 deposit accounts, under the Revised Uniform ~~Disposition of~~

9 Unclaimed Property Act;

10 (2) the Uniform Commercial Code, nor shall any provision of

11 this Act be construed as affecting the rights of a person with

12 respect to a deposit account under the Uniform Commercial Code;

13 (3) the provisions of Section 2-1402 of the Code of Civil

14 Procedure, nor shall any provision of this Act be construed as

15 affecting the rights of a person with respect to a deposit

16 account under Section 2-1402 of the Code of Civil Procedure;

17 (4) the provisions of Part 7 of Article II of the Code of

18 Civil Procedure, nor shall any provision of this Act be

19 construed as affecting the rights of a person with respect to a

20 deposit account under the provisions of Part 7 of Article II of

21 the Code of Civil Procedure;

22 (5) the provisions of Article XXV of the Probate Act of

23 1975, nor shall any provision of this Act be construed as

24 affecting the rights of a person with respect to a deposit

25 account under the provisions of Article XXV of the Probate Act

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1 of 1975; or

2 (6) the Safety Deposit Box Opening Act, nor shall any

3 provision of this Act be construed as affecting the rights of a

4 person with respect to a deposit account under the Safety

5 Deposit Box Opening Act.

6 (Source: P.A. 89-601, eff. 8-2-96.)

7 Section 17-85. The Illinois Insurance Code is amended by

8 changing Section 210 as follows:

9 (215 ILCS 5/210) (from Ch. 73, par. 822)

10 Sec. 210. Distribution of assets; priorities; unpaid

11 dividends.

12 (1) Any time after the last day fixed for the filing of

13 proofs of claims in the liquidation of a company, the court

14 may, upon the application of the Director authorize him to

15 declare out of the funds remaining in his hands, one or more

16 dividends upon all claims allowed in accordance with the

17 priorities established in Section 205.

18 (2) Where there has been no adjudication of insolvency, the

19 Director shall pay all allowed claims in full in accordance

20 with the priorities set forth in Section 205. The director

21 shall not be chargeable for any assets so distributed to any

22 claimant who has failed to file a proper proof of claim before

23 such distribution has been made.

24 (3) When subsequent to an adjudication of insolvency,

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1 pursuant to Section 208, a surplus is found to exist after the

2 payment in full of all allowed claims falling within the

3 priorities set forth in paragraphs (a), (b), (c), (d), (e), (f)

4 and (g) of subsection (1) of Section 205 and which have been

5 duly filed prior to the last date fixed for the filing thereof,

6 and after the setting aside of a reserve for all additional

7 costs and expenses of the proceeding, the court shall set a new

8 date for the filing of claims. After the expiration of the new

9 date, all allowed claims filed on or before said new date

10 together with all previously allowed claims falling within the

11 priorities set forth in paragraphs (h) and (i) of subsection

12 (1) of Section 205 shall be paid in accordance with the

13 priorities set forth in Section 205.

14 (4) Dividends remaining unclaimed or unpaid in the hands of

15 the Director for 6 months after the final order of distribution

16 may be by him deposited in one or more savings and loan

17 associations, State or national banks, trust companies or

18 savings banks to the credit of the Director, whomsoever he may

19 be, in trust for the person entitled thereto, but no such

20 person shall be entitled to any interest upon such deposit. All

21 such deposits shall be entitled to priority of payment in case

22 of the insolvency or voluntary or involuntary liquidation of

23 the depositary on an equality with any other priority given by

24 the banking law. Any such funds together with interest, if any,

25 paid or credited thereon, remaining and unclaimed in the hands

26 of the Director in Trust after 2 years shall be presumed

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1 abandoned and reported and delivered to the State Treasurer and

2 become subject to the provisions of the RevisedUniform

3 ~~Disposition of~~ Unclaimed Property Act.

4 (Source: P.A. 91-16, eff. 7-1-99.)

5 Section 17-90. The Unclaimed Life Insurance Benefits Act is

6 amended by changing Sections 5, 15, and 20 as follows:

7 (215 ILCS 185/5)

8 Sec. 5. Purpose. This Act shall require recognition of the

9 Revised Uniform ~~Disposition of~~ Unclaimed Property Act and

10 require the complete and proper disclosure, transparency, and

11 accountability relating to any method of payment for life

12 insurance, annuity, or retained asset agreement death

13 benefits.

14 (Source: P.A. 99-893, eff. 1-1-17.)

15 (215 ILCS 185/15)

16 Sec. 15. Insurer conduct.

17 (a) An insurer shall initially perform a comparison of its

18 insureds', annuitants', and retained asset account holders'

19 in-force policies, annuity contracts, and retained asset

20 accounts by using the full Death Master File. The initial

21 comparison shall be completed on or before December 31, 2017,

22 unless extended by the Department pursuant to administrative

23 rule. Thereafter, an insurer shall perform a comparison on at

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1 least a semi-annual basis using the Death Master File update

2 files for comparisons to identify potential matches of its

3 insureds, annuitants, and retained asset account holders. In

4 the event that one of the insurer's lines of business conducts

5 a search for matches of its insureds, annuitants, and retained

6 asset account holders against the Death Master File at

7 intervals more frequently than semi-annually, then all lines of

8 the insurer's business shall conduct searches for matches

9 against the Death Master File with the same frequency.

10 An insured, an annuitant, or a retained asset account

11 holder is presumed dead if the date of his or her death is

12 indicated by the comparison required in this subsection (a),

13 unless the insurer has competent and substantial evidence that

14 the person is living, including, but not limited to, a contact

15 made by the insurer with the person or his or her legal

16 representative.

17 For those potential matches identified as a result of a

18 Death Master File match, the insurer shall within 120 days

19 after the date of death notice, if the insurer has not been

20 contacted by a beneficiary, determine whether benefits are due

21 in accordance with the applicable policy or contract and, if

22 benefits are due in accordance with the applicable policy or

23 contract:

24 (1) use good faith efforts, which shall be documented

25 by the insurer, to locate the beneficiary or beneficiaries;

26 the Department shall establish by administrative rule

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1 minimum standards for what constitutes good faith efforts

2 to locate a beneficiary, which shall include: (A) searching

3 insurer records; (B) the appropriate use of First Class

4 United States mail, e-mail addresses, and telephone calls;

5 and (C) reasonable efforts by insurers to obtain updated

6 contact information for the beneficiary or beneficiaries;

7 good faith efforts shall not include additional attempts to

8 contact the beneficiary at an address already confirmed not

9 to be current; and

10 (2) provide the appropriate claims forms or

11 instructions to the beneficiary or beneficiaries to make a

12 claim, including the need to provide an official death

13 certificate if applicable under the policy or annuity

14 contract.

15 (b) Insurers shall implement procedures to account for the

16 following when conducting searches of the Death Master File:

17 (1) common nicknames, initials used in lieu of a first

18 or middle name, use of a middle name, compound first and

19 middle names, and interchanged first and middle names;

20 (2) compound last names, maiden or married names, and

21 hyphens, blank spaces, or apostrophes in last names;

22 (3) transposition of the "month" and "date" portions of

23 the date of birth; and

24 (4) incomplete social security numbers.

25 (c) To the extent permitted by law, an insurer may disclose

26 the minimum necessary personal information about the insured,

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1 annuity owner, retained asset account holder, or beneficiary to

2 a person whom the insurer reasonably believes may be able to

3 assist the insurer with locating the beneficiary or a person

4 otherwise entitled to payment of the claims proceeds.

5 (d) An insurer or its service provider shall not charge any

6 beneficiary or other authorized representative for any fees or

7 costs associated with a Death Master File search or

8 verification of a Death Master File match conducted pursuant to

9 this Act.

10 (e) The benefits from a policy, annuity contract, or a

11 retained asset account, plus any applicable accrued interest,

12 shall first be payable to the designated beneficiaries or

13 owners and, in the event the beneficiaries or owners cannot be

14 found, shall be reported and delivered to the State Treasurer

15 pursuant to the Revised Uniform ~~Disposition of~~ Unclaimed

16 Property Act. Nothing in this subsection (e) is intended to

17 alter the amounts reportable under the existing provisions of

18 the Revised Uniform ~~Disposition of~~ Unclaimed Property Act or to

19 allow the imposition of additional statutory interest under

20 Article XIV of the Illinois Insurance Code.

21 (f) Failure to meet any requirement of this Section with

22 such frequency as to constitute a general business practice is

23 a violation of Section 424 of the Illinois Insurance Code.

24 Nothing in this Section shall be construed to create or imply a

25 private cause of action for a violation of this Section.

26 (Source: P.A. 99-893, eff. 1-1-17.)

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1 (215 ILCS 185/20)

2 Sec. 20. Revised Uniform ~~Disposition of~~ Unclaimed Property

3 Act. Nothing in this Act shall be construed to amend, modify,

4 or supersede the Revised Uniform ~~Disposition of~~ Unclaimed

5 Property Act, including the authority of the State Treasurer to

6 examine the records of any person if the State Treasurer has

7 reason to believe that such person has failed to report

8 property that should have been reported pursuant to the Revised

9 Uniform ~~Disposition of~~ Unclaimed Property Act.

10 (Source: P.A. 99-893, eff. 1-1-17.)

11 Section 17-95. The Real Estate License Act of 2000 is

12 amended by changing Section 20-20 as follows:

13 (225 ILCS 454/20-20)

14 (Section scheduled to be repealed on January 1, 2020)

15 Sec. 20-20. Grounds for discipline.

16 (a) The Department may refuse to issue or renew a license,

17 may place on probation, suspend, or revoke any license,

18 reprimand, or take any other disciplinary or non-disciplinary

19 action as the Department may deem proper and impose a fine not

20 to exceed $25,000 upon any licensee or applicant under this Act

21 or any person who holds himself or herself out as an applicant

22 or licensee or against a licensee in handling his or her own

23 property, whether held by deed, option, or otherwise, for any

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1 one or any combination of the following causes:

2 (1) Fraud or misrepresentation in applying for, or

3 procuring, a license under this Act or in connection with

4 applying for renewal of a license under this Act.

5 (2) The conviction of or plea of guilty or plea of nolo

6 contendere to a felony or misdemeanor in this State or any

7 other jurisdiction; or the entry of an administrative

8 sanction by a government agency in this State or any other

9 jurisdiction. Action taken under this paragraph (2) for a

10 misdemeanor or an administrative sanction is limited to a

11 misdemeanor or administrative sanction that has as an

12 essential element dishonesty or fraud or involves larceny,

13 embezzlement, or obtaining money, property, or credit by

14 false pretenses or by means of a confidence game.

15 (3) Inability to practice the profession with

16 reasonable judgment, skill, or safety as a result of a

17 physical illness, including, but not limited to,

18 deterioration through the aging process or loss of motor

19 skill, or a mental illness or disability.

20 (4) Practice under this Act as a licensee in a retail

21 sales establishment from an office, desk, or space that is

22 not separated from the main retail business by a separate

23 and distinct area within the establishment.

24 (5) Having been disciplined by another state, the

25 District of Columbia, a territory, a foreign nation, or a

26 governmental agency authorized to impose discipline if at

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1 least one of the grounds for that discipline is the same as

2 or the equivalent of one of the grounds for which a

3 licensee may be disciplined under this Act. A certified

4 copy of the record of the action by the other state or

5 jurisdiction shall be prima facie evidence thereof.

6 (6) Engaging in the practice of real estate brokerage

7 without a license or after the licensee's license was

8 expired or while the license was inoperative.

9 (7) Cheating on or attempting to subvert the Real

10 Estate License Exam or continuing education exam.

11 (8) Aiding or abetting an applicant to subvert or cheat

12 on the Real Estate License Exam or continuing education

13 exam administered pursuant to this Act.

14 (9) Advertising that is inaccurate, misleading, or

15 contrary to the provisions of the Act.

16 (10) Making any substantial misrepresentation or

17 untruthful advertising.

18 (11) Making any false promises of a character likely to

19 influence, persuade, or induce.

20 (12) Pursuing a continued and flagrant course of

21 misrepresentation or the making of false promises through

22 licensees, employees, agents, advertising, or otherwise.

23 (13) Any misleading or untruthful advertising, or

24 using any trade name or insignia of membership in any real

25 estate organization of which the licensee is not a member.

26 (14) Acting for more than one party in a transaction

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1 without providing written notice to all parties for whom

2 the licensee acts.

3 (15) Representing or attempting to represent a broker

4 other than the sponsoring broker.

5 (16) Failure to account for or to remit any moneys or

6 documents coming into his or her possession that belong to

7 others.

8 (17) Failure to maintain and deposit in a special

9 account, separate and apart from personal and other

10 business accounts, all escrow moneys belonging to others

11 entrusted to a licensee while acting as a broker, escrow

12 agent, or temporary custodian of the funds of others or

13 failure to maintain all escrow moneys on deposit in the

14 account until the transactions are consummated or

15 terminated, except to the extent that the moneys, or any

16 part thereof, shall be:

17 (A) disbursed prior to the consummation or

18 termination (i) in accordance with the written

19 direction of the principals to the transaction or their

20 duly authorized agents, (ii) in accordance with

21 directions providing for the release, payment, or

22 distribution of escrow moneys contained in any written

23 contract signed by the principals to the transaction or

24 their duly authorized agents, or (iii) pursuant to an

25 order of a court of competent jurisdiction; or

26 (B) deemed abandoned and transferred to the Office

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1 of the State Treasurer to be handled as unclaimed

2 property pursuant to the Revised Uniform ~~Disposition~~

3 ~~of~~ Unclaimed Property Act. Escrow moneys may be deemed

4 abandoned under this subparagraph (B) only: (i) in the

5 absence of disbursement under subparagraph (A); (ii)

6 in the absence of notice of the filing of any claim in

7 a court of competent jurisdiction; and (iii) if 6

8 months have elapsed after the receipt of a written

9 demand for the escrow moneys from one of the principals

10 to the transaction or the principal's duly authorized

11 agent.

12 The account shall be noninterest bearing, unless the

13 character of the deposit is such that payment of interest

14 thereon is otherwise required by law or unless the

15 principals to the transaction specifically require, in

16 writing, that the deposit be placed in an interest bearing

17 account.

18 (18) Failure to make available to the Department all

19 escrow records and related documents maintained in

20 connection with the practice of real estate within 24 hours

21 of a request for those documents by Department personnel.

22 (19) Failing to furnish copies upon request of

23 documents relating to a real estate transaction to a party

24 who has executed that document.

25 (20) Failure of a sponsoring broker to timely provide

26 information, sponsor cards, or termination of licenses to

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1 the Department.

2 (21) Engaging in dishonorable, unethical, or

3 unprofessional conduct of a character likely to deceive,

4 defraud, or harm the public.

5 (22) Commingling the money or property of others with

6 his or her own money or property.

7 (23) Employing any person on a purely temporary or

8 single deal basis as a means of evading the law regarding

9 payment of commission to nonlicensees on some contemplated

10 transactions.

11 (24) Permitting the use of his or her license as a

12 broker to enable a leasing agent or unlicensed person to

13 operate a real estate business without actual

14 participation therein and control thereof by the broker.

15 (25) Any other conduct, whether of the same or a

16 different character from that specified in this Section,

17 that constitutes dishonest dealing.

18 (26) Displaying a "for rent" or "for sale" sign on any

19 property without the written consent of an owner or his or

20 her duly authorized agent or advertising by any means that

21 any property is for sale or for rent without the written

22 consent of the owner or his or her authorized agent.

23 (27) Failing to provide information requested by the

24 Department, or otherwise respond to that request, within 30

25 days of the request.

26 (28) Advertising by means of a blind advertisement,

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1 except as otherwise permitted in Section 10-30 of this Act.

2 (29) Offering guaranteed sales plans, as defined in

3 clause (A) of this subdivision (29), except to the extent

4 hereinafter set forth:

5 (A) A "guaranteed sales plan" is any real estate

6 purchase or sales plan whereby a licensee enters into a

7 conditional or unconditional written contract with a

8 seller, prior to entering into a brokerage agreement

9 with the seller, by the terms of which a licensee

10 agrees to purchase a property of the seller within a

11 specified period of time at a specific price in the

12 event the property is not sold in accordance with the

13 terms of a brokerage agreement to be entered into

14 between the sponsoring broker and the seller.

15 (B) A licensee offering a guaranteed sales plan

16 shall provide the details and conditions of the plan in

17 writing to the party to whom the plan is offered.

18 (C) A licensee offering a guaranteed sales plan

19 shall provide to the party to whom the plan is offered

20 evidence of sufficient financial resources to satisfy

21 the commitment to purchase undertaken by the broker in

22 the plan.

23 (D) Any licensee offering a guaranteed sales plan

24 shall undertake to market the property of the seller

25 subject to the plan in the same manner in which the

26 broker would market any other property, unless the

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1 agreement with the seller provides otherwise.

2 (E) The licensee cannot purchase seller's property

3 until the brokerage agreement has ended according to

4 its terms or is otherwise terminated.

5 (F) Any licensee who fails to perform on a

6 guaranteed sales plan in strict accordance with its

7 terms shall be subject to all the penalties provided in

8 this Act for violations thereof and, in addition, shall

9 be subject to a civil fine payable to the party injured

10 by the default in an amount of up to $25,000.

11 (30) Influencing or attempting to influence, by any

12 words or acts, a prospective seller, purchaser, occupant,

13 landlord, or tenant of real estate, in connection with

14 viewing, buying, or leasing real estate, so as to promote

15 or tend to promote the continuance or maintenance of

16 racially and religiously segregated housing or so as to

17 retard, obstruct, or discourage racially integrated

18 housing on or in any street, block, neighborhood, or

19 community.

20 (31) Engaging in any act that constitutes a violation

21 of any provision of Article 3 of the Illinois Human Rights

22 Act, whether or not a complaint has been filed with or

23 adjudicated by the Human Rights Commission.

24 (32) Inducing any party to a contract of sale or lease

25 or brokerage agreement to break the contract of sale or

26 lease or brokerage agreement for the purpose of

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1 substituting, in lieu thereof, a new contract for sale or

2 lease or brokerage agreement with a third party.

3 (33) Negotiating a sale, exchange, or lease of real

4 estate directly with any person if the licensee knows that

5 the person has an exclusive brokerage agreement with

6 another broker, unless specifically authorized by that

7 broker.

8 (34) When a licensee is also an attorney, acting as the

9 attorney for either the buyer or the seller in the same

10 transaction in which the licensee is acting or has acted as

11 a managing broker or broker.

12 (35) Advertising or offering merchandise or services

13 as free if any conditions or obligations necessary for

14 receiving the merchandise or services are not disclosed in

15 the same advertisement or offer. These conditions or

16 obligations include without limitation the requirement

17 that the recipient attend a promotional activity or visit a

18 real estate site. As used in this subdivision (35), "free"

19 includes terms such as "award", "prize", "no charge", "free

20 of charge", "without charge", and similar words or phrases

21 that reasonably lead a person to believe that he or she may

22 receive or has been selected to receive something of value,

23 without any conditions or obligations on the part of the

24 recipient.

25 (36) Disregarding or violating any provision of the

26 Land Sales Registration Act of 1989, the Illinois Real

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1 Estate Time-Share Act, or the published rules promulgated

2 by the Department to enforce those Acts.

3 (37) Violating the terms of a disciplinary order issued

4 by the Department.

5 (38) Paying or failing to disclose compensation in

6 violation of Article 10 of this Act.

7 (39) Requiring a party to a transaction who is not a

8 client of the licensee to allow the licensee to retain a

9 portion of the escrow moneys for payment of the licensee's

10 commission or expenses as a condition for release of the

11 escrow moneys to that party.

12 (40) Disregarding or violating any provision of this

13 Act or the published rules promulgated by the Department to

14 enforce this Act or aiding or abetting any individual,

15 partnership, registered limited liability partnership,

16 limited liability company, or corporation in disregarding

17 any provision of this Act or the published rules

18 promulgated by the Department to enforce this Act.

19 (41) Failing to provide the minimum services required

20 by Section 15-75 of this Act when acting under an exclusive

21 brokerage agreement.

22 (42) Habitual or excessive use or addiction to alcohol,

23 narcotics, stimulants, or any other chemical agent or drug

24 that results in a managing broker, broker, or leasing

25 agent's inability to practice with reasonable skill or

26 safety.

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1 (43) Enabling, aiding, or abetting an auctioneer, as

2 defined in the Auction License Act, to conduct a real

3 estate auction in a manner that is in violation of this

4 Act.

5 (b) The Department may refuse to issue or renew or may

6 suspend the license of any person who fails to file a return,

7 pay the tax, penalty or interest shown in a filed return, or

8 pay any final assessment of tax, penalty, or interest, as

9 required by any tax Act administered by the Department of

10 Revenue, until such time as the requirements of that tax Act

11 are satisfied in accordance with subsection (g) of Section

12 2105-15 of the Civil Administrative Code of Illinois.

13 (c) The Department shall deny a license or renewal

14 authorized by this Act to a person who has defaulted on an

15 educational loan or scholarship provided or guaranteed by the

16 Illinois Student Assistance Commission or any governmental

17 agency of this State in accordance with item (5) of subsection

18 (a) of Section 2105-15 of the Civil Administrative Code of

19 Illinois.

20 (d) In cases where the Department of Healthcare and Family

21 Services (formerly Department of Public Aid) has previously

22 determined that a licensee or a potential licensee is more than

23 30 days delinquent in the payment of child support and has

24 subsequently certified the delinquency to the Department may

25 refuse to issue or renew or may revoke or suspend that person's

26 license or may take other disciplinary action against that

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1 person based solely upon the certification of delinquency made

2 by the Department of Healthcare and Family Services in

3 accordance with item (5) of subsection (a) of Section 2105-15

4 of the Civil Administrative Code of Illinois.

5 (e) In enforcing this Section, the Department or Board upon

6 a showing of a possible violation may compel an individual

7 licensed to practice under this Act, or who has applied for

8 licensure under this Act, to submit to a mental or physical

9 examination, or both, as required by and at the expense of the

10 Department. The Department or Board may order the examining

11 physician to present testimony concerning the mental or

12 physical examination of the licensee or applicant. No

13 information shall be excluded by reason of any common law or

14 statutory privilege relating to communications between the

15 licensee or applicant and the examining physician. The

16 examining physicians shall be specifically designated by the

17 Board or Department. The individual to be examined may have, at

18 his or her own expense, another physician of his or her choice

19 present during all aspects of this examination. Failure of an

20 individual to submit to a mental or physical examination, when

21 directed, shall be grounds for suspension of his or her license

22 until the individual submits to the examination if the

23 Department finds, after notice and hearing, that the refusal to

24 submit to the examination was without reasonable cause.

25 If the Department or Board finds an individual unable to

26 practice because of the reasons set forth in this Section, the

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1 Department or Board may require that individual to submit to

2 care, counseling, or treatment by physicians approved or

3 designated by the Department or Board, as a condition, term, or

4 restriction for continued, reinstated, or renewed licensure to

5 practice; or, in lieu of care, counseling, or treatment, the

6 Department may file, or the Board may recommend to the

7 Department to file, a complaint to immediately suspend, revoke,

8 or otherwise discipline the license of the individual. An

9 individual whose license was granted, continued, reinstated,

10 renewed, disciplined or supervised subject to such terms,

11 conditions, or restrictions, and who fails to comply with such

12 terms, conditions, or restrictions, shall be referred to the

13 Secretary for a determination as to whether the individual

14 shall have his or her license suspended immediately, pending a

15 hearing by the Department.

16 In instances in which the Secretary immediately suspends a

17 person's license under this Section, a hearing on that person's

18 license must be convened by the Department within 30 days after

19 the suspension and completed without appreciable delay. The

20 Department and Board shall have the authority to review the

21 subject individual's record of treatment and counseling

22 regarding the impairment to the extent permitted by applicable

23 federal statutes and regulations safeguarding the

24 confidentiality of medical records.

25 An individual licensed under this Act and affected under

26 this Section shall be afforded an opportunity to demonstrate to

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1 the Department or Board that he or she can resume practice in

2 compliance with acceptable and prevailing standards under the

3 provisions of his or her license.

4 (Source: P.A. 98-553, eff. 1-1-14; 98-756, eff. 7-16-14;

5 99-227, eff. 8-3-15.)

6 Section 17-100. The Code of Criminal Procedure of 1963 is

7 amended by changing Section 110-17 as follows:

8 (725 ILCS 5/110-17) (from Ch. 38, par. 110-17)

9 Sec. 110-17. Unclaimed Bail Deposits. Notwithstanding the

10 provisions of the Revised Uniform ~~Disposition of~~ Unclaimed

11 Property Act, any sum of money deposited by any person to

12 secure his release from custody which remains unclaimed by the

13 person entitled to its return for 3 years after the conditions

14 of the bail bond have been performed and the accused has been

15 discharged from all obligations in the cause shall be presumed

16 to be abandoned.

17 (a) The clerk of the circuit court, as soon thereafter as

18 practicable, shall cause notice to be published once, in

19 English, in a newspaper or newspapers of general circulation in

20 the county wherein the deposit of bond was received.

21 (b) The published notice shall be entitled "Notice of

22 Persons Appearing to be Owners of Abandoned Property" and shall

23 contain:

24 (1) The names, in alphabetical order, of persons to

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1 whom the notice is directed.

2 (2) A statement that information concerning the amount

3 of the property may be obtained by any persons possessing

4 an interest in the property by making an inquiry at the

5 office of the clerk of the circuit court at a location

6 designated by him.

7 (3) A statement that if proof of claim is not presented

8 by the owner to the clerk of the circuit court and if the

9 owner's right to receive the property is not established to

10 the satisfaction of the clerk of the court within 65 days

11 from the date of the published notice, the abandoned

12 property will be placed in the custody of the treasurer of

13 the county, not later than 85 days after such publication,

14 to whom all further claims must thereafter be directed. If

15 the claim is established as aforesaid and after deducting

16 an amount not to exceed $20 to cover the cost of notice

17 publication and related clerical expenses, the clerk of the

18 court shall make payment to the person entitled thereto.

19 (4) The clerk of the circuit court is not required to

20 publish in such notice any items of less than $100 unless

21 he deems such publication in the public interest.

22 (c) Any clerk of the circuit court who has caused notice to

23 be published as provided by this Section shall, within 20 days

24 after the time specified in this Section for claiming the

25 property from the clerk of the court, pay or deliver to the

26 treasurer of the county having jurisdiction of the offense,

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1 whether the bond was taken there or any other county, all sums

2 deposited as specified in this section less such amounts as may

3 have been returned to the persons whose rights to receive the

4 sums deposited have been established to the satisfaction of the

5 clerk of the circuit court. Any clerk of the circuit court who

6 transfers such sums to the county treasury including sums

7 deposited by persons whose names are not required to be set

8 forth in the published notice aforesaid, is relieved of all

9 liability for such sums as have been transferred as unclaimed

10 bail deposits or any claim which then exists or which

11 thereafter may arise or be made in respect to such sums.

12 (d) The treasurer of the county shall keep just and true

13 accounts of all moneys paid into the treasury, and if any

14 person appears within 5 years after the deposit of moneys by

15 the clerk of the circuit court and claims any money paid into

16 the treasury, he shall file a claim therefor on the form

17 prescribed by the treasurer of the county who shall consider

18 any claim filed under this Act and who may, in his discretion,

19 hold a hearing and receive evidence concerning it. The

20 treasurer of the county shall prepare a finding and the

21 decision in writing on each hearing, stating the substance of

22 any evidence heard by him, his findings of fact in respect

23 thereto, and the reasons for his decision. The decision shall

24 be a public record.

25 (e) All claims which are not filed within the 5 year period

26 shall be forever barred.

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1 (Source: P.A. 85-768.)

2 Section 17-105. The Probate Act of 1975 is amended by

3 changing Sections 2-1 and 2-2 as follows:

4 (755 ILCS 5/2-1) (from Ch. 110 1/2, par. 2-1)

5 Sec. 2-1. Rules of descent and distribution. The intestate

6 real and personal estate of a resident decedent and the

7 intestate real estate in this State of a nonresident decedent,

8 after all just claims against his estate are fully paid,

9 descends and shall be distributed as follows:

10 (a) If there is a surviving spouse and also a descendant of

11 the decedent: 1/2 of the entire estate to the surviving spouse

12 and 1/2 to the decedent's descendants per stirpes.

13 (b) If there is no surviving spouse but a descendant of the

14 decedent: the entire estate to the decedent's descendants per

15 stirpes.

16 (c) If there is a surviving spouse but no descendant of the

17 decedent: the entire estate to the surviving spouse.

18 (d) If there is no surviving spouse or descendant but a

19 parent, brother, sister or descendant of a brother or sister of

20 the decedent: the entire estate to the parents, brothers and

21 sisters of the decedent in equal parts, allowing to the

22 surviving parent if one is dead a double portion and to the

23 descendants of a deceased brother or sister per stirpes the

24 portion which the deceased brother or sister would have taken

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1 if living.

2 (e) If there is no surviving spouse, descendant, parent,

3 brother, sister or descendant of a brother or sister of the

4 decedent but a grandparent or descendant of a grandparent of

5 the decedent: (1) 1/2 of the entire estate to the decedent's

6 maternal grandparents in equal parts or to the survivor of

7 them, or if there is none surviving, to their descendants per

8 stirpes, and (2) 1/2 of the entire estate to the decedent's

9 paternal grandparents in equal parts or to the survivor of

10 them, or if there is none surviving, to their descendants per

11 stirpes. If there is no surviving paternal grandparent or

12 descendant of a paternal grandparent, but a maternal

13 grandparent or descendant of a maternal grandparent of the

14 decedent: the entire estate to the decedent's maternal

15 grandparents in equal parts or to the survivor of them, or if

16 there is none surviving, to their descendants per stirpes. If

17 there is no surviving maternal grandparent or descendant of a

18 maternal grandparent, but a paternal grandparent or descendant

19 of a paternal grandparent of the decedent: the entire estate to

20 the decedent's paternal grandparents in equal parts or to the

21 survivor of them, or if there is none surviving, to their

22 descendants per stirpes.

23 (f) If there is no surviving spouse, descendant, parent,

24 brother, sister, descendant of a brother or sister or

25 grandparent or descendant of a grandparent of the decedent: (1)

26 1/2 of the entire estate to the decedent's maternal

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1 great-grandparents in equal parts or to the survivor of them,

2 or if there is none surviving, to their descendants per

3 stirpes, and (2) 1/2 of the entire estate to the decedent's

4 paternal great-grandparents in equal parts or to the survivor

5 of them, or if there is none surviving, to their descendants

6 per stirpes. If there is no surviving paternal

7 great-grandparent or descendant of a paternal

8 great-grandparent, but a maternal great-grandparent or

9 descendant of a maternal great-grandparent of the decedent: the

10 entire estate to the decedent's maternal great-grandparents in

11 equal parts or to the survivor of them, or if there is none

12 surviving, to their descendants per stirpes. If there is no

13 surviving maternal great-grandparent or descendant of a

14 maternal great-grandparent, but a paternal great-grandparent

15 or descendant of a paternal great-grandparent of the decedent:

16 the entire estate to the decedent's paternal

17 great-grandparents in equal parts or to the survivor of them,

18 or if there is none surviving, to their descendants per

19 stirpes.

20 (g) If there is no surviving spouse, descendant, parent,

21 brother, sister, descendant of a brother or sister,

22 grandparent, descendant of a grandparent, great-grandparent or

23 descendant of a great-grandparent of the decedent: the entire

24 estate in equal parts to the nearest kindred of the decedent in

25 equal degree (computing by the rules of the civil law) and

26 without representation.

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1 (h) If there is no surviving spouse and no known kindred of

2 the decedent: the real estate escheats to the county in which

3 it is located; the personal estate physically located within

4 this State and the personal estate physically located or held

5 outside this State which is the subject of ancillary

6 administration of an estate being administered within this

7 State escheats to the county of which the decedent was a

8 resident, or, if the decedent was not a resident of this State,

9 to the county in which it is located; all other personal

10 property of the decedent of every class and character, wherever

11 situate, or the proceeds thereof, shall escheat to this State

12 and be delivered to the State Treasurer pursuant to theRevised

13 Uniform ~~Disposition of~~ Unclaimed Property Act.

14 In no case is there any distinction between the kindred of

15 the whole and the half blood.

16 (Source: P.A. 91-16, eff. 7-1-99.)

17 (755 ILCS 5/2-2) (from Ch. 110 1/2, par. 2-2)

18 Sec. 2-2. Children born out of wedlock. The intestate real

19 and personal estate of a resident decedent who was a child born

20 out of wedlock at the time of death and the intestate real

21 estate in this State of a nonresident decedent who was a child

22 born out of wedlock at the time of death, after all just claims

23 against his estate are fully paid, descends and shall be

24 distributed as provided in Section 2-1, subject to Section

25 2-6.5 of this Act, if both parents are eligible parents. As

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1 used in this Section, "eligible parent" means a parent of the

2 decedent who, during the decedent's lifetime, acknowledged the

3 decedent as the parent's child, established a parental

4 relationship with the decedent, and supported the decedent as

5 the parent's child. "Eligible parents" who are in arrears of in

6 excess of one year's child support obligations shall not

7 receive any property benefit or other interest of the decedent

8 unless and until a court of competent jurisdiction makes a

9 determination as to the effect on the deceased of the arrearage

10 and allows a reduced benefit. In no event shall the reduction

11 of the benefit or other interest be less than the amount of

12 child support owed for the support of the decedent at the time

13 of death. The court's considerations shall include but are not

14 limited to the considerations in subsections (1) through (3) of

15 Section 2-6.5 of this Act.

16 If neither parent is an eligible parent, 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 or her estate are fully paid, descends and shall be

22 distributed as provided in Section 2-1, but the parents of the

23 decedent shall be treated as having predeceased the decedent.

24 If only one parent is an eligible parent, the intestate

25 real and personal estate of a resident decedent who was a child

26 born out of wedlock at the time of death and the intestate real

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1 estate in this State of a nonresident decedent who was a child

2 born out of wedlock at the time of death, after all just claims

3 against his or her estate are fully paid, subject to Section

4 2-6.5 of this Act, descends and shall be distributed as

5 follows:

6 (a) If there is a surviving spouse and also a descendant of

7 the decedent: 1/2 of the entire estate to the surviving spouse

8 and 1/2 to the decedent's descendants per stirpes.

9 (b) If there is no surviving spouse but a descendant of the

10 decedent: the entire estate to the decedent's descendants per

11 stirpes.

12 (c) If there is a surviving spouse but no descendant of the

13 decedent: the entire estate to the surviving spouse.

14 (d) If there is no surviving spouse or descendant but the

15 eligible parent or a descendant of the eligible parent of the

16 decedent: the entire estate to the eligible parent and the

17 eligible parent's descendants, allowing 1/2 to the eligible

18 parent and 1/2 to the eligible parent's descendants per

19 stirpes.

20 (e) If there is no surviving spouse, descendant, eligible

21 parent, or descendant of the eligible parent of the decedent,

22 but a grandparent on the eligible parent's side of the family

23 or descendant of such grandparent of the decedent: the entire

24 estate to the decedent's grandparents on the eligible parent's

25 side of the family in equal parts, or to the survivor of them,

26 or if there is none surviving, to their descendants per

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1 stirpes.

2 (f) If there is no surviving spouse, descendant, eligible

3 parent, descendant of the eligible parent, grandparent on the

4 eligible parent's side of the family, or descendant of such

5 grandparent of the decedent: the entire estate to the

6 decedent's great-grandparents on the eligible parent's side of

7 the family in equal parts or to the survivor of them, or if

8 there is none surviving, to their descendants per stirpes.

9 (g) If there is no surviving spouse, descendant, eligible

10 parent, descendant of the eligible parent, grandparent on the

11 eligible parent's side of the family, descendant of such

12 grandparent, great-grandparent on the eligible parent's side

13 of the family, or descendant of such great-grandparent of the

14 decedent: the entire estate in equal parts to the nearest

15 kindred of the eligible parent of the decedent in equal degree

16 (computing by the rules of the civil law) and without

17 representation.

18 (h) If there is no surviving spouse, descendant, or

19 eligible parent of the decedent and no known kindred of the

20 eligible parent of the decedent: the real estate escheats to

21 the county in which it is located; the personal estate

22 physically located within this State and the personal estate

23 physically located or held outside this State which is the

24 subject of ancillary administration within this State escheats

25 to the county of which the decedent was a resident or, if the

26 decedent was not a resident of this State, to the county in

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1 which it is located; all other personal property of the

2 decedent of every class and character, wherever situate, or the

3 proceeds thereof, shall escheat to this State and be delivered

4 to the State Treasurer of this State pursuant to theRevised

5 Uniform ~~Disposition of~~ Unclaimed Property Act.

6 For purposes of inheritance, the changes made by this

7 amendatory Act of 1998 apply to all decedents who die on or

8 after the effective date of this amendatory Act of 1998. For

9 the purpose of determining the property rights of any person

10 under any instrument, the changes made by this amendatory Act

11 of 1998 apply to all instruments executed on or after the

12 effective date of this amendatory Act of 1998.

13 A child born out of wedlock is heir of his mother and of

14 any maternal ancestor and of any person from whom his mother

15 might have inherited, if living; and the descendants of a

16 person who was a child born out of wedlock shall represent such

17 person and take by descent any estate which the parent would

18 have taken, if living. If a decedent has acknowledged paternity

19 of a child born out of wedlock or if during his lifetime or

20 after his death a decedent has been adjudged to be the father

21 of a child born out of wedlock, that person is heir of his

22 father and of any paternal ancestor and of any person from whom

23 his father might have inherited, if living; and the descendants

24 of a person who was a child born out of wedlock shall represent

25 that person and take by descent any estate which the parent

26 would have taken, if living. If during his lifetime the

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1 decedent was adjudged to be the father of a child born out of

2 wedlock by a court of competent jurisdiction, an authenticated

3 copy of the judgment is sufficient proof of the paternity; but

4 in all other cases paternity must be proved by clear and

5 convincing evidence. A person who was a child born out of

6 wedlock whose parents intermarry and who is acknowledged by the

7 father as the father's child is a lawful child of the father.

8 After a child born out of wedlock is adopted, that person's

9 relationship to his or her adopting and natural parents shall

10 be governed by Section 2-4 of this Act. For purposes of

11 inheritance, the changes made by this amendatory Act of 1997

12 apply to all decedents who die on or after January 1, 1998. For

13 the purpose of determining the property rights of any person

14 under any instrument, the changes made by this amendatory Act

15 of 1997 apply to all instruments executed on or after January

16 1, 1998.

17 (Source: P.A. 94-229, eff. 1-1-06.)

18 Section 17-110. The Sale of Unclaimed Property Act is

19 amended by changing Section 3 as follows:

20 (770 ILCS 90/3) (from Ch. 141, par. 3)

21 Sec. 3. All persons other than common carriers having a

22 lien on personal property, by virtue of the Innkeepers Lien Act

23 or for more than $2,000 by virtue of the Labor and Storage Lien

24 Act may enforce the lien by a sale of the property, on giving

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1 to the owner thereof, if he and his residence be known to the

2 person having such lien, 30 days' notice by certified mail, in

3 writing of the time and place of such sale, and if the owner or

4 his place of residence be unknown to the person having such

5 lien, then upon his filing his affidavit to that effect with

6 the clerk of the circuit court in the county where such

7 property is situated; notice of the sale may be given by

8 publishing the same once in each week for 3 successive weeks in

9 some newspaper of general circulation published in the county,

10 and out of the proceeds of the sale all costs and charges for

11 advertising and making the same, and the amount of the lien

12 shall be paid, and the surplus, if any, shall be paid to the

13 owner of the property or, if not claimed by said owner, such

14 surplus, if any, shall be disposed under the Revised Uniform

15 ~~Disposition of~~ Unclaimed Property Act. All sales pursuant to

16 this Section must be public and conducted in a commercially

17 reasonable manner so as to maximize the net proceeds of the

18 sale. Conformity to the requirements of this Act shall be a

19 perpetual bar to any action against such lienor by any person

20 for the recovery of such chattels or the value thereof or any

21 damages growing out of the failure of such person to receive

22 such chattels.

23 (Source: P.A. 87-206.)

24 Section 17-115. The Business Corporation Act of 1983 is

25 amended by changing Section 12.70 as follows:

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1 (805 ILCS 5/12.70) (from Ch. 32, par. 12.70)

2 Sec. 12.70. Deposit of amount due certain shareholders.

3 Upon the distribution of the assets of a corporation among its

4 shareholders, the distributive portion to which a shareholder

5 would be entitled who is unknown orcannot ~~can not~~ be found, or

6 who is under disability and there is no person legally

7 competent to receive such distributive portion, shall be

8 presumed abandoned and reported and delivered to the State

9 Treasurer and become subject to the provision of the Revised

10 Uniform~~Disposition of~~ Unclaimed Property Act. In the event

11 such distribution is ~~be~~made other than in cash, such

12 distributive portion of the assets shall be reduced to cash

13 before being so reported and delivered.

14 (Source: P.A. 91-16, eff. 7-1-99.)

15 Section 17-120. The General Not For Profit Corporation Act

16 of 1986 is amended by changing Section 112.70 as follows:

17 (805 ILCS 105/112.70) (from Ch. 32, par. 112.70)

18 Sec. 112.70. Deposit of amount due. Upon the distribution

19 of the assets of a corporation, the distributive portion to

20 which a person would be entitled who is unknown or cannot be

21 found, or who is under disability and there is no person

22 legally competent to receive such distributive portion, shall

23 be presumed abandoned and reported and delivered to the State

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1 Treasurer and become subject to the Revised~~provision of the~~

2 Uniform ~~Disposition of~~Unclaimed Property Act. In the event

3 such distribution is ~~be~~made other than in cash, such

4 distributive portion of the assets shall be reduced to cash

5 before being so reported and delivered.

6 (Source: P.A. 91-16, eff. 7-1-99.)

7 ARTICLE 20. AMENDATORY PROVISIONS; INCOME TAX

8 Section 15-5. The Illinois Income Tax Act is amended by

9 changing Sections 201, 202.5, 203, 204, 208, 212, 901, and 1501

10 and by adding Section 225 as follows:

11 (35 ILCS 5/201) (from Ch. 120, par. 2-201)

12 Sec. 201. Tax Imposed.

13 (a) In general. A tax measured by net income is hereby

14 imposed on every individual, corporation, trust and estate for

15 each taxable year ending after July 31, 1969 on the privilege

16 of earning or receiving income in or as a resident of this

17 State. Such tax shall be in addition to all other occupation or

18 privilege taxes imposed by this State or by any municipal

19 corporation or political subdivision thereof.

20 (b) Rates. The tax imposed by subsection (a) of this

21 Section shall be determined as follows, except as adjusted by

22 subsection (d-1):

23 (1) In the case of an individual, trust or estate, for

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1 taxable years ending prior to July 1, 1989, an amount equal

2 to 2 1/2% of the taxpayer's net income for the taxable

3 year.

4 (2) In the case of an individual, trust or estate, for

5 taxable years beginning prior to July 1, 1989 and ending

6 after June 30, 1989, an amount equal to the sum of (i) 2

7 1/2% of the taxpayer's net income for the period prior to

8 July 1, 1989, as calculated under Section 202.3, and (ii)

9 3% of the taxpayer's net income for the period after June

10 30, 1989, as calculated under Section 202.3.

11 (3) In the case of an individual, trust or estate, for

12 taxable years beginning after June 30, 1989, and ending

13 prior to January 1, 2011, an amount equal to 3% of the

14 taxpayer's net income for the taxable year.

15 (4) In the case of an individual, trust, or estate, for

16 taxable years beginning prior to January 1, 2011, and

17 ending after December 31, 2010, an amount equal to the sum

18 of (i) 3% of the taxpayer's net income for the period prior

19 to January 1, 2011, as calculated under Section 202.5, and

20 (ii) 5% of the taxpayer's net income for the period after

21 December 31, 2010, as calculated under Section 202.5.

22 (5) In the case of an individual, trust, or estate, for

23 taxable years beginning on or after January 1, 2011, and

24 ending prior to January 1, 2015, an amount equal to 5% of

25 the taxpayer's net income for the taxable year.

26 (5.1) In the case of an individual, trust, or estate,

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1 for taxable years beginning prior to January 1, 2015, and

2 ending after December 31, 2014, an amount equal to the sum

3 of (i) 5% of the taxpayer's net income for the period prior

4 to January 1, 2015, as calculated under Section 202.5, and

5 (ii) 3.75% of the taxpayer's net income for the period

6 after December 31, 2014, as calculated under Section 202.5.

7 (5.2) In the case of an individual, trust, or estate,

8 for taxable years beginning on or after January 1, 2015,

9 and ending prior to July 1, 2017 ~~January 1, 2025~~, an amount

10 equal to 3.75% of the taxpayer's net income for the taxable

11 year.

12 (5.3) In the case of an individual, trust, or estate,

13 for taxable years beginning prior to July 1, 2017 ~~January~~

14 ~~1, 2025~~, and ending after June 30, 2017 ~~December 31, 2024~~,

15 an amount equal to the sum of (i) 3.75% of the taxpayer's

16 net income for the period prior to July 1, 2017 ~~January 1,~~

17 ~~2025~~, as calculated under Section 202.5, and (ii) 4.95%

18 ~~3.25%~~ of the taxpayer's net income for the period after

19 June 30, 2017 ~~December 31, 2024~~, as calculated under

20 Section 202.5.

21 (5.4) In the case of an individual, trust, or estate,

22 for taxable years beginning on or after July 1, 2017

23 ~~January 1, 2025~~, an amount equal to 4.95% ~~3.25%~~ of the

24 taxpayer's net income for the taxable year.

25 (6) In the case of a corporation, for taxable years

26 ending prior to July 1, 1989, an amount equal to 4% of the

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1 taxpayer's net income for the taxable year.

2 (7) In the case of a corporation, for taxable years

3 beginning prior to July 1, 1989 and ending after June 30,

4 1989, an amount equal to the sum of (i) 4% of the

5 taxpayer's net income for the period prior to July 1, 1989,

6 as calculated under Section 202.3, and (ii) 4.8% of the

7 taxpayer's net income for the period after June 30, 1989,

8 as calculated under Section 202.3.

9 (8) In the case of a corporation, for taxable years

10 beginning after June 30, 1989, and ending prior to January

11 1, 2011, an amount equal to 4.8% of the taxpayer's net

12 income for the taxable year.

13 (9) In the case of a corporation, for taxable years

14 beginning prior to January 1, 2011, and ending after

15 December 31, 2010, an amount equal to the sum of (i) 4.8%

16 of the taxpayer's net income for the period prior to

17 January 1, 2011, as calculated under Section 202.5, and

18 (ii) 7% of the taxpayer's net income for the period after

19 December 31, 2010, as calculated under Section 202.5.

20 (10) In the case of a corporation, for taxable years

21 beginning on or after January 1, 2011, and ending prior to

22 January 1, 2015, an amount equal to 7% of the taxpayer's

23 net income for the taxable year.

24 (11) In the case of a corporation, for taxable years

25 beginning prior to January 1, 2015, and ending after

26 December 31, 2014, an amount equal to the sum of (i) 7% of

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1 the taxpayer's net income for the period prior to January

2 1, 2015, as calculated under Section 202.5, and (ii) 5.25%

3 of the taxpayer's net income for the period after December

4 31, 2014, as calculated under Section 202.5.

5 (12) In the case of a corporation, for taxable years

6 beginning on or after January 1, 2015, and ending prior to

7 July 1, 2017 ~~January 1, 2025~~, an amount equal to 5.25% of

8 the taxpayer's net income for the taxable year.

9 (13) In the case of a corporation, for taxable years

10 beginning prior to July 1, 2017 ~~January 1, 2025~~, and ending

11 after June 30, 2017 ~~December 31, 2024~~, an amount equal to

12 the sum of (i) 5.25% of the taxpayer's net income for the

13 period prior to July 1, 2017 ~~January 1, 2025~~, as calculated

14 under Section 202.5, and (ii) 7% ~~4.8%~~ of the taxpayer's net

15 income for the period after June 30, 2017 ~~December 31,~~

16 ~~2024~~, as calculated under Section 202.5.

17 (14) In the case of a corporation, for taxable years

18 beginning on or after July 1, 2017 ~~January 1, 2025~~, an

19 amount equal to 7% ~~4.8%~~ of the taxpayer's net income for

20 the taxable year.

21 The rates under this subsection (b) are subject to the

22 provisions of Section 201.5.

23 (c) Personal Property Tax Replacement Income Tax.

24 Beginning on July 1, 1979 and thereafter, in addition to such

25 income tax, there is also hereby imposed the Personal Property

26 Tax Replacement Income Tax measured by net income on every

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1 corporation (including Subchapter S corporations), partnership

2 and trust, for each taxable year ending after June 30, 1979.

3 Such taxes are imposed on the privilege of earning or receiving

4 income in or as a resident of this State. The Personal Property

5 Tax Replacement Income Tax shall be in addition to the income

6 tax imposed by subsections (a) and (b) of this Section and in

7 addition to all other occupation or privilege taxes imposed by

8 this State or by any municipal corporation or political

9 subdivision thereof.

10 (d) Additional Personal Property Tax Replacement Income

11 Tax Rates. The personal property tax replacement income tax

12 imposed by this subsection and subsection (c) of this Section

13 in the case of a corporation, other than a Subchapter S

14 corporation and except as adjusted by subsection (d-1), shall

15 be an additional amount equal to 2.85% of such taxpayer's net

16 income for the taxable year, except that beginning on January

17 1, 1981, and thereafter, the rate of 2.85% specified in this

18 subsection shall be reduced to 2.5%, and in the case of a

19 partnership, trust or a Subchapter S corporation shall be an

20 additional amount equal to 1.5% of such taxpayer's net income

21 for the taxable year.

22 (d-1) Rate reduction for certain foreign insurers. In the

23 case of a foreign insurer, as defined by Section 35A-5 of the

24 Illinois Insurance Code, whose state or country of domicile

25 imposes on insurers domiciled in Illinois a retaliatory tax

26 (excluding any insurer whose premiums from reinsurance assumed

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1 are 50% or more of its total insurance premiums as determined

2 under paragraph (2) of subsection (b) of Section 304, except

3 that for purposes of this determination premiums from

4 reinsurance do not include premiums from inter-affiliate

5 reinsurance arrangements), beginning with taxable years ending

6 on or after December 31, 1999, the sum of the rates of tax

7 imposed by subsections (b) and (d) shall be reduced (but not

8 increased) to the rate at which the total amount of tax imposed

9 under this Act, net of all credits allowed under this Act,

10 shall equal (i) the total amount of tax that would be imposed

11 on the foreign insurer's net income allocable to Illinois for

12 the taxable year by such foreign insurer's state or country of

13 domicile if that net income were subject to all income taxes

14 and taxes measured by net income imposed by such foreign

15 insurer's state or country of domicile, net of all credits

16 allowed or (ii) a rate of zero if no such tax is imposed on such

17 income by the foreign insurer's state of domicile. For the

18 purposes of this subsection (d-1), an inter-affiliate includes

19 a mutual insurer under common management.

20 (1) For the purposes of subsection (d-1), in no event

21 shall the sum of the rates of tax imposed by subsections

22 (b) and (d) be reduced below the rate at which the sum of:

23 (A) the total amount of tax imposed on such foreign

24 insurer under this Act for a taxable year, net of all

25 credits allowed under this Act, plus

26 (B) the privilege tax imposed by Section 409 of the

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1 Illinois Insurance Code, the fire insurance company

2 tax imposed by Section 12 of the Fire Investigation

3 Act, and the fire department taxes imposed under

4 Section 11-10-1 of the Illinois Municipal Code,

5 equals 1.25% for taxable years ending prior to December 31,

6 2003, or 1.75% for taxable years ending on or after

7 December 31, 2003, of the net taxable premiums written for

8 the taxable year, as described by subsection (1) of Section

9 409 of the Illinois Insurance Code. This paragraph will in

10 no event increase the rates imposed under subsections (b)

11 and (d).

12 (2) Any reduction in the rates of tax imposed by this

13 subsection shall be applied first against the rates imposed

14 by subsection (b) and only after the tax imposed by

15 subsection (a) net of all credits allowed under this

16 Section other than the credit allowed under subsection (i)

17 has been reduced to zero, against the rates imposed by

18 subsection (d).

19 This subsection (d-1) is exempt from the provisions of

20 Section 250.

21 (e) Investment credit. A taxpayer shall be allowed a credit

22 against the Personal Property Tax Replacement Income Tax for

23 investment in qualified property.

24 (1) A taxpayer shall be allowed a credit equal to .5%

25 of the basis of qualified property placed in service during

26 the taxable year, provided such property is placed in

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1 service on or after July 1, 1984. There shall be allowed an

2 additional credit equal to .5% of the basis of qualified

3 property placed in service during the taxable year,

4 provided such property is placed in service on or after

5 July 1, 1986, and the taxpayer's base employment within

6 Illinois has increased by 1% or more over the preceding

7 year as determined by the taxpayer's employment records

8 filed with the Illinois Department of Employment Security.

9 Taxpayers who are new to Illinois shall be deemed to have

10 met the 1% growth in base employment for the first year in

11 which they file employment records with the Illinois

12 Department of Employment Security. The provisions added to

13 this Section by Public Act 85-1200 (and restored by Public

14 Act 87-895) shall be construed as declaratory of existing

15 law and not as a new enactment. If, in any year, the

16 increase in base employment within Illinois over the

17 preceding year is less than 1%, the additional credit shall

18 be limited to that percentage times a fraction, the

19 numerator of which is .5% and the denominator of which is

20 1%, but shall not exceed .5%. The investment credit shall

21 not be allowed to the extent that it would reduce a

22 taxpayer's liability in any tax year below zero, nor may

23 any credit for qualified property be allowed for any year

24 other than the year in which the property was placed in

25 service in Illinois. For tax years ending on or after

26 December 31, 1987, and on or before December 31, 1988, the

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1 credit shall be allowed for the tax year in which the

2 property is placed in service, or, if the amount of the

3 credit exceeds the tax liability for that year, whether it

4 exceeds the original liability or the liability as later

5 amended, such excess may be carried forward and applied to

6 the tax liability of the 5 taxable years following the

7 excess credit years if the taxpayer (i) makes investments

8 which cause the creation of a minimum of 2,000 full-time

9 equivalent jobs in Illinois, (ii) is located in an

10 enterprise zone established pursuant to the Illinois

11 Enterprise Zone Act and (iii) is certified by the

12 Department of Commerce and Community Affairs (now

13 Department of Commerce and Economic Opportunity) as

14 complying with the requirements specified in clause (i) and

15 (ii) by July 1, 1986. The Department of Commerce and

16 Community Affairs (now Department of Commerce and Economic

17 Opportunity) shall notify the Department of Revenue of all

18 such certifications immediately. For tax years ending

19 after December 31, 1988, the credit shall be allowed for

20 the tax year in which the property is placed in service,

21 or, if the amount of the credit exceeds the tax liability

22 for that year, whether it exceeds the original liability or

23 the liability as later amended, such excess may be carried

24 forward and applied to the tax liability of the 5 taxable

25 years following the excess credit years. The credit shall

26 be applied to the earliest year for which there is a

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1 liability. If there is credit from more than one tax year

2 that is available to offset a liability, earlier credit

3 shall be applied first.

4 (2) The term "qualified property" means property

5 which:

6 (A) is tangible, whether new or used, including

7 buildings and structural components of buildings and

8 signs that are real property, but not including land or

9 improvements to real property that are not a structural

10 component of a building such as landscaping, sewer

11 lines, local access roads, fencing, parking lots, and

12 other appurtenances;

13 (B) is depreciable pursuant to Section 167 of the

14 Internal Revenue Code, except that "3-year property"

15 as defined in Section 168(c)(2)(A) of that Code is not

16 eligible for the credit provided by this subsection

17 (e);

18 (C) is acquired by purchase as defined in Section

19 179(d) of the Internal Revenue Code;

20 (D) is used in Illinois by a taxpayer who is

21 primarily engaged in manufacturing, or in mining coal

22 or fluorite, or in retailing, or was placed in service

23 on or after July 1, 2006 in a River Edge Redevelopment

24 Zone established pursuant to the River Edge

25 Redevelopment Zone Act; and

26 (E) has not previously been used in Illinois in

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1 such a manner and by such a person as would qualify for

2 the credit provided by this subsection (e) or

3 subsection (f).

4 (3) For purposes of this subsection (e),

5 "manufacturing" means the material staging and production

6 of tangible personal property by procedures commonly

7 regarded as manufacturing, processing, fabrication, or

8 assembling which changes some existing material into new

9 shapes, new qualities, or new combinations. For purposes of

10 this subsection (e) the term "mining" shall have the same

11 meaning as the term "mining" in Section 613(c) of the

12 Internal Revenue Code. For purposes of this subsection (e),

13 the term "retailing" means the sale of tangible personal

14 property for use or consumption and not for resale, or

15 services rendered in conjunction with the sale of tangible

16 personal property for use or consumption and not for

17 resale. For purposes of this subsection (e), "tangible

18 personal property" has the same meaning as when that term

19 is used in the Retailers' Occupation Tax Act, and, for

20 taxable years ending after December 31, 2008, does not

21 include the generation, transmission, or distribution of

22 electricity.

23 (4) The basis of qualified property shall be the basis

24 used to compute the depreciation deduction for federal

25 income tax purposes.

26 (5) If the basis of the property for federal income tax

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1 depreciation purposes is increased after it has been placed

2 in service in Illinois by the taxpayer, the amount of such

3 increase shall be deemed property placed in service on the

4 date of such increase in basis.

5 (6) The term "placed in service" shall have the same

6 meaning as under Section 46 of the Internal Revenue Code.

7 (7) If during any taxable year, any property ceases to

8 be qualified property in the hands of the taxpayer within

9 48 months after being placed in service, or the situs of

10 any qualified property is moved outside Illinois within 48

11 months after being placed in service, the Personal Property

12 Tax Replacement Income Tax for such taxable year shall be

13 increased. Such increase shall be determined by (i)

14 recomputing the investment credit which would have been

15 allowed for the year in which credit for such property was

16 originally allowed by eliminating such property from such

17 computation and, (ii) subtracting such recomputed credit

18 from the amount of credit previously allowed. For the

19 purposes of this paragraph (7), a reduction of the basis of

20 qualified property resulting from a redetermination of the

21 purchase price shall be deemed a disposition of qualified

22 property to the extent of such reduction.

23 (8) Unless the investment credit is extended by law,

24 the basis of qualified property shall not include costs

25 incurred after December 31, 2018, except for costs incurred

26 pursuant to a binding contract entered into on or before

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1 December 31, 2018.

2 (9) Each taxable year ending before December 31, 2000,

3 a partnership may elect to pass through to its partners the

4 credits to which the partnership is entitled under this

5 subsection (e) for the taxable year. A partner may use the

6 credit allocated to him or her under this paragraph only

7 against the tax imposed in subsections (c) and (d) of this

8 Section. If the partnership makes that election, those

9 credits shall be allocated among the partners in the

10 partnership in accordance with the rules set forth in

11 Section 704(b) of the Internal Revenue Code, and the rules

12 promulgated under that Section, and the allocated amount of

13 the credits shall be allowed to the partners for that

14 taxable year. The partnership shall make this election on

15 its Personal Property Tax Replacement Income Tax return for

16 that taxable year. The election to pass through the credits

17 shall be irrevocable.

18 For taxable years ending on or after December 31, 2000,

19 a partner that qualifies its partnership for a subtraction

20 under subparagraph (I) of paragraph (2) of subsection (d)

21 of Section 203 or a shareholder that qualifies a Subchapter

22 S corporation for a subtraction under subparagraph (S) of

23 paragraph (2) of subsection (b) of Section 203 shall be

24 allowed a credit under this subsection (e) equal to its

25 share of the credit earned under this subsection (e) during

26 the taxable year by the partnership or Subchapter S

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1 corporation, determined in accordance with the

2 determination of income and distributive share of income

3 under Sections 702 and 704 and Subchapter S of the Internal

4 Revenue Code. This paragraph is exempt from the provisions

5 of Section 250.

6 (f) Investment credit; Enterprise Zone; River Edge

7 Redevelopment Zone.

8 (1) A taxpayer shall be allowed a credit against the

9 tax imposed by subsections (a) and (b) of this Section for

10 investment in qualified property which is placed in service

11 in an Enterprise Zone created pursuant to the Illinois

12 Enterprise Zone Act or, for property placed in service on

13 or after July 1, 2006, a River Edge Redevelopment Zone

14 established pursuant to the River Edge Redevelopment Zone

15 Act. For partners, shareholders of Subchapter S

16 corporations, and owners of limited liability companies,

17 if the liability company is treated as a partnership for

18 purposes of federal and State income taxation, there shall

19 be allowed a credit under this subsection (f) to be

20 determined in accordance with the determination of income

21 and distributive share of income under Sections 702 and 704

22 and Subchapter S of the Internal Revenue Code. The credit

23 shall be .5% of the basis for such property. The credit

24 shall be available only in the taxable year in which the

25 property is placed in service in the Enterprise Zone or

26 River Edge Redevelopment Zone and shall not be allowed to

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1 the extent that it would reduce a taxpayer's liability for

2 the tax imposed by subsections (a) and (b) of this Section

3 to below zero. For tax years ending on or after December

4 31, 1985, the credit shall be allowed for the tax year in

5 which the property is placed in service, or, if the amount

6 of the credit exceeds the tax liability for that year,

7 whether it exceeds the original liability or the liability

8 as later amended, such excess may be carried forward and

9 applied to the tax liability of the 5 taxable years

10 following the excess credit year. The credit shall be

11 applied to the earliest year for which there is a

12 liability. If there is credit from more than one tax year

13 that is available to offset a liability, the credit

14 accruing first in time shall be applied first.

15 (2) The term qualified property means property which:

16 (A) is tangible, whether new or used, including

17 buildings and structural components of buildings;

18 (B) is depreciable pursuant to Section 167 of the

19 Internal Revenue Code, except that "3-year property"

20 as defined in Section 168(c)(2)(A) of that Code is not

21 eligible for the credit provided by this subsection

22 (f);

23 (C) is acquired by purchase as defined in Section

24 179(d) of the Internal Revenue Code;

25 (D) is used in the Enterprise Zone or River Edge

26 Redevelopment Zone by the taxpayer; and

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1 (E) has not been previously used in Illinois in

2 such a manner and by such a person as would qualify for

3 the credit provided by this subsection (f) or

4 subsection (e).

5 (3) The basis of qualified property shall be the basis

6 used to compute the depreciation deduction for federal

7 income tax purposes.

8 (4) If the basis of the property for federal income tax

9 depreciation purposes is increased after it has been placed

10 in service in the Enterprise Zone or River Edge

11 Redevelopment Zone by the taxpayer, the amount of such

12 increase shall be deemed property placed in service on the

13 date of such increase in basis.

14 (5) The term "placed in service" shall have the same

15 meaning as under Section 46 of the Internal Revenue Code.

16 (6) If during any taxable year, any property ceases to

17 be qualified property in the hands of the taxpayer within

18 48 months after being placed in service, or the situs of

19 any qualified property is moved outside the Enterprise Zone

20 or River Edge Redevelopment Zone within 48 months after

21 being placed in service, the tax imposed under subsections

22 (a) and (b) of this Section for such taxable year shall be

23 increased. Such increase shall be determined by (i)

24 recomputing the investment credit which would have been

25 allowed for the year in which credit for such property was

26 originally allowed by eliminating such property from such

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1 computation, and (ii) subtracting such recomputed credit

2 from the amount of credit previously allowed. For the

3 purposes of this paragraph (6), a reduction of the basis of

4 qualified property resulting from a redetermination of the

5 purchase price shall be deemed a disposition of qualified

6 property to the extent of such reduction.

7 (7) There shall be allowed an additional credit equal

8 to 0.5% of the basis of qualified property placed in

9 service during the taxable year in a River Edge

10 Redevelopment Zone, provided such property is placed in

11 service on or after July 1, 2006, and the taxpayer's base

12 employment within Illinois has increased by 1% or more over

13 the preceding year as determined by the taxpayer's

14 employment records filed with the Illinois Department of

15 Employment Security. Taxpayers who are new to Illinois

16 shall be deemed to have met the 1% growth in base

17 employment for the first year in which they file employment

18 records with the Illinois Department of Employment

19 Security. If, in any year, the increase in base employment

20 within Illinois over the preceding year is less than 1%,

21 the additional credit shall be limited to that percentage

22 times a fraction, the numerator of which is 0.5% and the

23 denominator of which is 1%, but shall not exceed 0.5%.

24 (g) (Blank).

25 (h) Investment credit; High Impact Business.

26 (1) Subject to subsections (b) and (b-5) of Section 5.5

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1 of the Illinois Enterprise Zone Act, a taxpayer shall be

2 allowed a credit against the tax imposed by subsections (a)

3 and (b) of this Section for investment in qualified

4 property which is placed in service by a Department of

5 Commerce and Economic Opportunity designated High Impact

6 Business. The credit shall be .5% of the basis for such

7 property. The credit shall not be available (i) until the

8 minimum investments in qualified property set forth in

9 subdivision (a)(3)(A) of Section 5.5 of the Illinois

10 Enterprise Zone Act have been satisfied or (ii) until the

11 time authorized in subsection (b-5) of the Illinois

12 Enterprise Zone Act for entities designated as High Impact

13 Businesses under subdivisions (a)(3)(B), (a)(3)(C), and

14 (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone

15 Act, and shall not be allowed to the extent that it would

16 reduce a taxpayer's liability for the tax imposed by

17 subsections (a) and (b) of this Section to below zero. The

18 credit applicable to such investments shall be taken in the

19 taxable year in which such investments have been completed.

20 The credit for additional investments beyond the minimum

21 investment by a designated high impact business authorized

22 under subdivision (a)(3)(A) of Section 5.5 of the Illinois

23 Enterprise Zone Act shall be available only in the taxable

24 year in which the property is placed in service and shall

25 not be allowed to the extent that it would reduce a

26 taxpayer's liability for the tax imposed by subsections (a)

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1 and (b) of this Section to below zero. For tax years ending

2 on or after December 31, 1987, the credit shall be allowed

3 for the tax year in which the property is placed in

4 service, or, if the amount of the credit exceeds the tax

5 liability for that year, whether it exceeds the original

6 liability or the liability as later amended, such excess

7 may be carried forward and applied to the tax liability of

8 the 5 taxable years following the excess credit year. The

9 credit shall be applied to the earliest year for which

10 there is a liability. If there is credit from more than one

11 tax year that is available to offset a liability, the

12 credit accruing first in time shall be applied first.

13 Changes made in this subdivision (h)(1) by Public Act

14 88-670 restore changes made by Public Act 85-1182 and

15 reflect existing law.

16 (2) The term qualified property means property which:

17 (A) is tangible, whether new or used, including

18 buildings and structural components of buildings;

19 (B) is depreciable pursuant to Section 167 of the

20 Internal Revenue Code, except that "3-year property"

21 as defined in Section 168(c)(2)(A) of that Code is not

22 eligible for the credit provided by this subsection

23 (h);

24 (C) is acquired by purchase as defined in Section

25 179(d) of the Internal Revenue Code; and

26 (D) is not eligible for the Enterprise Zone

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1 Investment Credit provided by subsection (f) of this

2 Section.

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 a federally designated Foreign Trade Zone or

9 Sub-Zone located in Illinois by the taxpayer, the amount of

10 such increase shall be deemed property placed in service on

11 the 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 ending on or before

15 December 31, 1996, any property ceases to be qualified

16 property in the hands of the taxpayer within 48 months

17 after being placed in service, or the situs of any

18 qualified property is moved outside Illinois within 48

19 months after being placed in service, the tax imposed under

20 subsections (a) and (b) of this Section for such taxable

21 year shall be increased. Such increase shall be determined

22 by (i) recomputing the investment credit which would have

23 been allowed for the year in which credit for such property

24 was originally allowed by eliminating such property from

25 such computation, and (ii) subtracting such recomputed

26 credit from the amount of credit previously allowed. For

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1 the purposes of this paragraph (6), a reduction of the

2 basis of qualified property resulting from a

3 redetermination of the purchase price shall be deemed a

4 disposition of qualified property to the extent of such

5 reduction.

6 (7) Beginning with tax years ending after December 31,

7 1996, if a taxpayer qualifies for the credit under this

8 subsection (h) and thereby is granted a tax abatement and

9 the taxpayer relocates its entire facility in violation of

10 the explicit terms and length of the contract under Section

11 18-183 of the Property Tax Code, the tax imposed under

12 subsections (a) and (b) of this Section shall be increased

13 for the taxable year in which the taxpayer relocated its

14 facility by an amount equal to the amount of credit

15 received by the taxpayer under this subsection (h).

16 (i) Credit for Personal Property Tax Replacement Income

17 Tax. For tax years ending prior to December 31, 2003, a credit

18 shall be allowed against the tax imposed by subsections (a) and

19 (b) of this Section for the tax imposed by subsections (c) and

20 (d) of this Section. This credit shall be computed by

21 multiplying the tax imposed by subsections (c) and (d) of this

22 Section by a fraction, the numerator of which is base income

23 allocable to Illinois and the denominator of which is Illinois

24 base income, and further multiplying the product by the tax

25 rate imposed by subsections (a) and (b) of this Section.

26 Any credit earned on or after December 31, 1986 under this

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1 subsection which is unused in the year the credit is computed

2 because it exceeds the tax liability imposed by subsections (a)

3 and (b) for that year (whether it exceeds the original

4 liability or the liability as later amended) may be carried

5 forward and applied to the tax liability imposed by subsections

6 (a) and (b) of the 5 taxable years following the excess credit

7 year, provided that no credit may be carried forward to any

8 year ending on or after December 31, 2003. This credit shall be

9 applied first to the earliest year for which there is a

10 liability. If there is a credit under this subsection from more

11 than one tax year that is available to offset a liability the

12 earliest credit arising under this subsection shall be applied

13 first.

14 If, during any taxable year ending on or after December 31,

15 1986, the tax imposed by subsections (c) and (d) of this

16 Section for which a taxpayer has claimed a credit under this

17 subsection (i) is reduced, the amount of credit for such tax

18 shall also be reduced. Such reduction shall be determined by

19 recomputing the credit to take into account the reduced tax

20 imposed by subsections (c) and (d). If any portion of the

21 reduced amount of credit has been carried to a different

22 taxable year, an amended return shall be filed for such taxable

23 year to reduce the amount of credit claimed.

24 (j) Training expense credit. Beginning with tax years

25 ending on or after December 31, 1986 and prior to December 31,

26 2003, a taxpayer shall be allowed a credit against the tax

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1 imposed by subsections (a) and (b) under this Section for all

2 amounts paid or accrued, on behalf of all persons employed by

3 the taxpayer in Illinois or Illinois residents employed outside

4 of Illinois by a taxpayer, for educational or vocational

5 training in semi-technical or technical fields or semi-skilled

6 or skilled fields, which were deducted from gross income in the

7 computation of taxable income. The credit against the tax

8 imposed by subsections (a) and (b) shall be 1.6% of such

9 training expenses. For partners, shareholders of subchapter S

10 corporations, and owners of limited liability companies, if the

11 liability company is treated as a partnership for purposes of

12 federal and State income taxation, there shall be allowed a

13 credit under this subsection (j) to be determined in accordance

14 with the determination of income and distributive share of

15 income under Sections 702 and 704 and subchapter S of the

16 Internal Revenue Code.

17 Any credit allowed under this subsection which is unused in

18 the year the credit is earned may be carried forward to each of

19 the 5 taxable years following the year for which the credit is

20 first computed until it is used. This credit shall be applied

21 first to the earliest year for which there is a liability. If

22 there is a credit under this subsection from more than one tax

23 year that is available to offset a liability the earliest

24 credit arising under this subsection shall be applied first. No

25 carryforward credit may be claimed in any tax year ending on or

26 after December 31, 2003.

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1 (k) Research and development credit. For tax years ending

2 after July 1, 1990 and prior to December 31, 2003, and

3 beginning again for tax years ending on or after December 31,

4 2004, and ending prior to January 1, 2022 ~~January 1, 2016~~, a

5 taxpayer shall be allowed a credit against the tax imposed by

6 subsections (a) and (b) of this Section for increasing research

7 activities in this State. The credit allowed against the tax

8 imposed by subsections (a) and (b) shall be equal to 6 1/2% of

9 the qualifying expenditures for increasing research activities

10 in this State. For partners, shareholders of subchapter S

11 corporations, and owners of limited liability companies, if the

12 liability company is treated as a partnership for purposes of

13 federal and State income taxation, there shall be allowed a

14 credit under this subsection to be determined in accordance

15 with the determination of income and distributive share of

16 income under Sections 702 and 704 and subchapter S of the

17 Internal Revenue Code.

18 For purposes of this subsection, "qualifying expenditures"

19 means the qualifying expenditures as defined for the federal

20 credit for increasing research activities which would be

21 allowable under Section 41 of the Internal Revenue Code and

22 which are conducted in this State, "qualifying expenditures for

23 increasing research activities in this State" means the excess

24 of qualifying expenditures for the taxable year in which

25 incurred over qualifying expenditures for the base period,

26 "qualifying expenditures for the base period" means the average

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1 of the qualifying expenditures for each year in the base

2 period, and "base period" means the 3 taxable years immediately

3 preceding the taxable year for which the determination is being

4 made.

5 Any credit in excess of the tax liability for the taxable

6 year may be carried forward. A taxpayer may elect to have the

7 unused credit shown on its final completed return carried over

8 as a credit against the tax liability for the following 5

9 taxable years or until it has been fully used, whichever occurs

10 first; provided that no credit earned in a tax year ending

11 prior to December 31, 2003 may be carried forward to any year

12 ending on or after December 31, 2003.

13 If an unused credit is carried forward to a given year from

14 2 or more earlier years, that credit arising in the earliest

15 year will be applied first against the tax liability for the

16 given year. If a tax liability for the given year still

17 remains, the credit from the next earliest year will then be

18 applied, and so on, until all credits have been used or no tax

19 liability for the given year remains. Any remaining unused

20 credit or credits then will be carried forward to the next

21 following year in which a tax liability is incurred, except

22 that no credit can be carried forward to a year which is more

23 than 5 years after the year in which the expense for which the

24 credit is given was incurred.

25 No inference shall be drawn from this amendatory Act of the

26 91st General Assembly in construing this Section for taxable

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1 years beginning before January 1, 1999.

2 It is the intent of the General Assembly that the research

3 and development credit under this subsection (k) shall apply

4 continuously for all tax years ending on or after December 31,

5 2004 and ending prior to January 1, 2022, including, but not

6 limited to, the period beginning on January 1, 2016 and ending

7 on the effective date of this amendatory Act of the 100th

8 General Assembly. All actions taken in reliance on the

9 continuation of the credit under this subsection (k) by any

10 taxpayer are hereby validated.

11 (l) Environmental Remediation Tax Credit.

12 (i) For tax years ending after December 31, 1997 and on

13 or before December 31, 2001, a taxpayer shall be allowed a

14 credit against the tax imposed by subsections (a) and (b)

15 of this Section for certain amounts paid for unreimbursed

16 eligible remediation costs, as specified in this

17 subsection. For purposes of this Section, "unreimbursed

18 eligible remediation costs" means costs approved by the

19 Illinois Environmental Protection Agency ("Agency") under

20 Section 58.14 of the Environmental Protection Act that were

21 paid in performing environmental remediation at a site for

22 which a No Further Remediation Letter was issued by the

23 Agency and recorded under Section 58.10 of the

24 Environmental Protection Act. The credit must be claimed

25 for the taxable year in which Agency approval of the

26 eligible remediation costs is granted. The credit is not

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1 available to any taxpayer if the taxpayer or any related

2 party caused or contributed to, in any material respect, a

3 release of regulated substances on, in, or under the site

4 that was identified and addressed by the remedial action

5 pursuant to the Site Remediation Program of the

6 Environmental Protection Act. After the Pollution Control

7 Board rules are adopted pursuant to the Illinois

8 Administrative Procedure Act for the administration and

9 enforcement of Section 58.9 of the Environmental

10 Protection Act, determinations as to credit availability

11 for purposes of this Section shall be made consistent with

12 those rules. For purposes of this Section, "taxpayer"

13 includes a person whose tax attributes the taxpayer has

14 succeeded to under Section 381 of the Internal Revenue Code

15 and "related party" includes the persons disallowed a

16 deduction for losses by paragraphs (b), (c), and (f)(1) of

17 Section 267 of the Internal Revenue Code by virtue of being

18 a related taxpayer, as well as any of its partners. The

19 credit allowed against the tax imposed by subsections (a)

20 and (b) shall be equal to 25% of the unreimbursed eligible

21 remediation costs in excess of $100,000 per site, except

22 that the $100,000 threshold shall not apply to any site

23 contained in an enterprise zone as determined by the

24 Department of Commerce and Community Affairs (now

25 Department of Commerce and Economic Opportunity). The

26 total credit allowed shall not exceed $40,000 per year with

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1 a maximum total of $150,000 per site. For partners and

2 shareholders of subchapter S corporations, there shall be

3 allowed a credit under this subsection to be determined in

4 accordance with the determination of income and

5 distributive share of income under Sections 702 and 704 and

6 subchapter S of the Internal Revenue Code.

7 (ii) A credit allowed under this subsection that is

8 unused in the year the credit is earned may be carried

9 forward to each of the 5 taxable years following the year

10 for which the credit is first earned until it is used. The

11 term "unused credit" does not include any amounts of

12 unreimbursed eligible remediation costs in excess of the

13 maximum credit per site authorized under paragraph (i).

14 This credit shall be applied first to the earliest year for

15 which there is a liability. If there is a credit under this

16 subsection from more than one tax year that is available to

17 offset a liability, the earliest credit arising under this

18 subsection shall be applied first. A credit allowed under

19 this subsection may be sold to a buyer as part of a sale of

20 all or part of the remediation site for which the credit

21 was granted. The purchaser of a remediation site and the

22 tax credit shall succeed to the unused credit and remaining

23 carry-forward period of the seller. To perfect the

24 transfer, the assignor shall record the transfer in the

25 chain of title for the site and provide written notice to

26 the Director of the Illinois Department of Revenue of the

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1 assignor's intent to sell the remediation site and the

2 amount of the tax credit to be transferred as a portion of

3 the sale. In no event may a credit be transferred to any

4 taxpayer if the taxpayer or a related party would not be

5 eligible under the provisions of subsection (i).

6 (iii) For purposes of this Section, the term "site"

7 shall have the same meaning as under Section 58.2 of the

8 Environmental Protection Act.

9 (m) Education expense credit. Beginning with tax years

10 ending after December 31, 1999, a taxpayer who is the custodian

11 of one or more qualifying pupils shall be allowed a credit

12 against the tax imposed by subsections (a) and (b) of this

13 Section for qualified education expenses incurred on behalf of

14 the qualifying pupils. The credit shall be equal to 25% of

15 qualified education expenses, but in no event may the total

16 credit under this subsection claimed by a family that is the

17 custodian of qualifying pupils exceed (i) $500 for tax years

18 ending prior to December 31, 2017, and (ii) $750 for tax years

19 ending on or after December 31, 2017. In no event shall a

20 credit under this subsection reduce the taxpayer's liability

21 under this Act to less than zero.Notwithstanding any other

22 provision of law, for taxable years beginning on or after

23 January 1, 2017, no taxpayer may claim a credit under this

24 subsection (m) if the taxpayer's adjusted gross income for the

25 taxable year exceeds (i) $500,000, in the case of spouses

26 filing a joint federal tax return or (ii) $250,000, in the case

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1 of all other taxpayers. This subsection is exempt from the

2 provisions of Section 250 of this Act.

3 For purposes of this subsection:

4 "Qualifying pupils" means individuals who (i) are

5 residents of the State of Illinois, (ii) are under the age of

6 21 at the close of the school year for which a credit is

7 sought, and (iii) during the school year for which a credit is

8 sought were full-time pupils enrolled in a kindergarten through

9 twelfth grade education program at any school, as defined in

10 this subsection.

11 "Qualified education expense" means the amount incurred on

12 behalf of a qualifying pupil in excess of $250 for tuition,

13 book fees, and lab fees at the school in which the pupil is

14 enrolled during the regular school year.

15 "School" means any public or nonpublic elementary or

16 secondary school in Illinois that is in compliance with Title

17 VI of the Civil Rights Act of 1964 and attendance at which

18 satisfies the requirements of Section 26-1 of the School Code,

19 except that nothing shall be construed to require a child to

20 attend any particular public or nonpublic school to qualify for

21 the credit under this Section.

22 "Custodian" means, with respect to qualifying pupils, an

23 Illinois resident who is a parent, the parents, a legal

24 guardian, or the legal guardians of the qualifying pupils.

25 (n) River Edge Redevelopment Zone site remediation tax

26 credit.

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1 (i) For tax years ending on or after December 31, 2006,

2 a taxpayer shall be allowed a credit against the tax

3 imposed by subsections (a) and (b) of this Section for

4 certain amounts paid for unreimbursed eligible remediation

5 costs, as specified in this subsection. For purposes of

6 this Section, "unreimbursed eligible remediation costs"

7 means costs approved by the Illinois Environmental

8 Protection Agency ("Agency") under Section 58.14a of the

9 Environmental Protection Act that were paid in performing

10 environmental remediation at a site within a River Edge

11 Redevelopment Zone for which a No Further Remediation

12 Letter was issued by the Agency and recorded under Section

13 58.10 of the Environmental Protection Act. The credit must

14 be claimed for the taxable year in which Agency approval of

15 the eligible remediation costs is granted. The credit is

16 not available to any taxpayer if the taxpayer or any

17 related party caused or contributed to, in any material

18 respect, a release of regulated substances on, in, or under

19 the site that was identified and addressed by the remedial

20 action pursuant to the Site Remediation Program of the

21 Environmental Protection Act. Determinations as to credit

22 availability for purposes of this Section shall be made

23 consistent with rules adopted by the Pollution Control

24 Board pursuant to the Illinois Administrative Procedure

25 Act for the administration and enforcement of Section 58.9

26 of the Environmental Protection Act. For purposes of this

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1 Section, "taxpayer" includes a person whose tax attributes

2 the taxpayer has succeeded to under Section 381 of the

3 Internal Revenue Code and "related party" includes the

4 persons disallowed a deduction for losses by paragraphs

5 (b), (c), and (f)(1) of Section 267 of the Internal Revenue

6 Code by virtue of being a related taxpayer, as well as any

7 of its partners. The credit allowed against the tax imposed

8 by subsections (a) and (b) shall be equal to 25% of the

9 unreimbursed eligible remediation costs in excess of

10 $100,000 per site.

11 (ii) A credit allowed under this subsection that is

12 unused in the year the credit is earned may be carried

13 forward to each of the 5 taxable years following the year

14 for which the credit is first earned until it is used. This

15 credit shall be applied first to the earliest year for

16 which there is a liability. If there is a credit under this

17 subsection from more than one tax year that is available to

18 offset a liability, the earliest credit arising under this

19 subsection shall be applied first. A credit allowed under

20 this subsection may be sold to a buyer as part of a sale of

21 all or part of the remediation site for which the credit

22 was granted. The purchaser of a remediation site and the

23 tax credit shall succeed to the unused credit and remaining

24 carry-forward period of the seller. To perfect the

25 transfer, the assignor shall record the transfer in the

26 chain of title for the site and provide written notice to

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1 the Director of the Illinois Department of Revenue of the

2 assignor's intent to sell the remediation site and the

3 amount of the tax credit to be transferred as a portion of

4 the sale. In no event may a credit be transferred to any

5 taxpayer if the taxpayer or a related party would not be

6 eligible under the provisions of subsection (i).

7 (iii) For purposes of this Section, the term "site"

8 shall have the same meaning as under Section 58.2 of the

9 Environmental Protection Act.

10 (o) For each of taxable years during the Compassionate Use

11 of Medical Cannabis Pilot Program, a surcharge is imposed on

12 all taxpayers on income arising from the sale or exchange of

13 capital assets, depreciable business property, real property

14 used in the trade or business, and Section 197 intangibles of

15 an organization registrant under the Compassionate Use of

16 Medical Cannabis Pilot Program Act. The amount of the surcharge

17 is equal to the amount of federal income tax liability for the

18 taxable year attributable to those sales and exchanges. The

19 surcharge imposed does not apply if:

20 (1) the medical cannabis cultivation center

21 registration, medical cannabis dispensary registration, or

22 the property of a registration is transferred as a result

23 of any of the following:

24 (A) bankruptcy, a receivership, or a debt

25 adjustment initiated by or against the initial

26 registration or the substantial owners of the initial

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1 registration;

2 (B) cancellation, revocation, or termination of

3 any registration by the Illinois Department of Public

4 Health;

5 (C) a determination by the Illinois Department of

6 Public Health that transfer of the registration is in

7 the best interests of Illinois qualifying patients as

8 defined by the Compassionate Use of Medical Cannabis

9 Pilot Program Act;

10 (D) the death of an owner of the equity interest in

11 a registrant;

12 (E) the acquisition of a controlling interest in

13 the stock or substantially all of the assets of a

14 publicly traded company;

15 (F) a transfer by a parent company to a wholly

16 owned subsidiary; or

17 (G) the transfer or sale to or by one person to

18 another person where both persons were initial owners

19 of the registration when the registration was issued;

20 or

21 (2) the cannabis cultivation center registration,

22 medical cannabis dispensary registration, or the

23 controlling interest in a registrant's property is

24 transferred in a transaction to lineal descendants in which

25 no gain or loss is recognized or as a result of a

26 transaction in accordance with Section 351 of the Internal

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1 Revenue Code in which no gain or loss is recognized.

2 (Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,

3 eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,

4 eff. 7-16-14.)

5 (35 ILCS 5/202.5)

6 Sec. 202.5. Net income attributable to the period beginning

7 prior to the first day of a month and ending after the last day

8 of the preceding month ~~January 1 of any year and ending after~~

9 ~~December 31 of the preceding year~~.

10 (a) In general. With respect to the taxable year of a

11 taxpayer beginning prior to the first day of a month and ending

12 after the last day of the preceding month ~~January 1 of any year~~

13 ~~and ending after December 31 of the preceding year~~, net income

14 for the period after the last day of the preceding month

15 ~~December 31 of the preceding year~~, is that amount that bears

16 the same ratio to the taxpayer's net income for the entire

17 taxable year as the number of days in that taxable year after

18 the last day of the preceding month ~~December 31~~ bears to the

19 total number of days in that taxable year, and the net income

20 for the period prior to the first day of the month ~~January 1~~ is

21 that amount that bears the same ratio to the taxpayer's net

22 income for the entire taxable year as the number of days in

23 that taxable year prior to the first day of the month ~~January 1~~

24 bears to the total number of days in that taxable year.

25 (b) Election to attribute income and deduction items

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1 specifically to the respective portions of a taxable year prior

2 to the first day of a month and ending after the last day of the

3 preceding month ~~January 1 of any year and after December 31 of~~

4 ~~the preceding year~~. In the case of a taxpayer with a taxable

5 year beginning prior to the first day of a month and ending

6 after the last day of the preceding month ~~January 1 of any year~~

7 ~~and ending after December 31 of the preceding year~~, the

8 taxpayer may elect, instead of the procedure established in

9 subsection (a) of this Section, to determine net income on a

10 specific accounting basis for the 2 portions of the taxable

11 year:

12 (1) from the beginning of the taxable year through the

13 last day of that apportionment period ~~December 31~~; and

14 (2) from the first day of the next apportionment period

15 ~~January 1~~ through the end of the taxable year.

16 The election provided by this subsection must be made in

17 the form and manner that the Department requires by rule, and

18 must be made no later than the due date (including any

19 extensions thereof) for the filing of the return for the

20 taxable year, and is irrevocable.

21 (c) If the taxpayer elects specific accounting under

22 subsection (b):

23 (1) there shall be taken into account in computing base

24 income for each of the 2 portions of the taxable year only

25 those items earned, received, paid, incurred or accrued in

26 each such period;

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1 (2) for purposes of apportioning business income of the

2 taxpayer, the provisions in Article 3 shall be applied on

3 the basis of the taxpayer's full taxable year, without

4 regard to this Section;

5 (3) the exemption provided by Section 204 shall be

6 divided between the respective periods in amounts which

7 bear the same ratio to the total exemption allowable under

8 Section 204 (determined without regard to this Section) as

9 the total number of days in each period bears to the total

10 number of days in the taxable year;

11 (4) for purposes of this subsection, net income may not

12 be negative for either of the two portions of the taxable

13 year and positive for the other; if net income for one

14 portion of the taxable year would be positive and net

15 income for the other portion would otherwise be negative,

16 the net income for the entire taxable year shall be

17 attributed to the portion of the taxable year with positive

18 net income and the net income for the other portion of the

19 taxable year shall be zero; and

20 (5) the net loss carryforward deduction for the taxable

21 year under Section 207 may not exceed combined net income

22 of both portions of the taxable year, and shall be used

23 against the net income of the portion of the taxable year

24 from the beginning of the taxable year through the last day

25 of the preceding month ~~December 31~~ before any remaining

26 amount is used against the net income of the latter portion

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1 of the taxable year.

2 (Source: P.A. 96-1496, eff. 1-13-11.)

3 (35 ILCS 5/203) (from Ch. 120, par. 2-203)

4 Sec. 203. Base income defined.

5 (a) Individuals.

6 (1) In general. In the case of an individual, base

7 income means an amount equal to the taxpayer's adjusted

8 gross income for the taxable year as modified by paragraph

9 (2).

10 (2) Modifications. The adjusted gross income referred

11 to in paragraph (1) shall be modified by adding thereto the

12 sum of the following amounts:

13 (A) An amount equal to all amounts paid or accrued

14 to the taxpayer as interest or dividends during the

15 taxable year to the extent excluded from gross income

16 in the computation of adjusted gross income, except

17 stock dividends of qualified public utilities

18 described in Section 305(e) of the Internal Revenue

19 Code;

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 adjusted gross income for the

23 taxable year;

24 (C) An amount equal to the amount received during

25 the taxable year as a recovery or refund of real

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1 property taxes paid with respect to the taxpayer's

2 principal residence under the Revenue Act of 1939 and

3 for which a deduction was previously taken under

4 subparagraph (L) of this paragraph (2) prior to July 1,

5 1991, the retrospective application date of Article 4

6 of Public Act 87-17. In the case of multi-unit or

7 multi-use structures and farm dwellings, the taxes on

8 the taxpayer's principal residence shall be that

9 portion of the total taxes for the entire property

10 which is attributable to such principal residence;

11 (D) An amount equal to the amount of the capital

12 gain deduction allowable under the Internal Revenue

13 Code, to the extent deducted from gross income in the

14 computation of adjusted gross income;

15 (D-5) An amount, to the extent not included in

16 adjusted gross income, equal to the amount of money

17 withdrawn by the taxpayer in the taxable year from a

18 medical care savings account and the interest earned on

19 the account in the taxable year of a withdrawal

20 pursuant to subsection (b) of Section 20 of the Medical

21 Care Savings Account Act or subsection (b) of Section

22 20 of the Medical Care Savings Account Act of 2000;

23 (D-10) For taxable years ending after December 31,

24 1997, an amount equal to any eligible remediation costs

25 that the individual deducted in computing adjusted

26 gross income and for which the individual claims a

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1 credit under subsection (l) of Section 201;

2 (D-15) For taxable years 2001 and thereafter, an

3 amount equal to the bonus depreciation deduction taken

4 on the taxpayer's federal income tax return for the

5 taxable year under subsection (k) of Section 168 of the

6 Internal Revenue Code;

7 (D-16) If the taxpayer sells, transfers, abandons,

8 or otherwise disposes of property for which the

9 taxpayer was required in any taxable year to make an

10 addition modification under subparagraph (D-15), then

11 an amount equal to the aggregate amount of the

12 deductions taken in all taxable years under

13 subparagraph (Z) with respect to that property.

14 If the taxpayer continues to own property through

15 the last day of the last tax year for which the

16 taxpayer may claim a depreciation deduction for

17 federal income tax purposes and for which the taxpayer

18 was allowed in any taxable year to make a subtraction

19 modification under subparagraph (Z), then an amount

20 equal to that subtraction modification.

21 The taxpayer is required to make the addition

22 modification under this subparagraph only once with

23 respect to any one piece of property;

24 (D-17) An amount equal to the amount otherwise

25 allowed as a deduction in computing base income for

26 interest paid, accrued, or incurred, directly or

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1 indirectly, (i) for taxable years ending on or after

2 December 31, 2004, to a foreign person who would be a

3 member of the same unitary business group but for the

4 fact that foreign person's business activity outside

5 the United States is 80% or more of the foreign

6 person's total business activity and (ii) for taxable

7 years ending on or after December 31, 2008, to a person

8 who would be a member of the same unitary business

9 group but for the fact that the person is prohibited

10 under Section 1501(a)(27) from being included in the

11 unitary business group because he or she is ordinarily

12 required to apportion business income under different

13 subsections of Section 304. The addition modification

14 required by this subparagraph shall be reduced to the

15 extent that dividends were included in base income of

16 the unitary group for the same taxable year and

17 received by the taxpayer or by a member of the

18 taxpayer's unitary business group (including amounts

19 included in gross income under Sections 951 through 964

20 of the Internal Revenue Code and amounts included in

21 gross income under Section 78 of the Internal Revenue

22 Code) with respect to the stock of the same person to

23 whom the interest was paid, accrued, or incurred.

24 This paragraph shall not apply to the following:

25 (i) an item of interest paid, accrued, or

26 incurred, directly or indirectly, to a person who

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1 is subject in a foreign country or state, other

2 than a state which requires mandatory unitary

3 reporting, to a tax on or measured by net income

4 with respect to such interest; or

5 (ii) an item of interest paid, accrued, or

6 incurred, directly or indirectly, to a person if

7 the taxpayer can establish, based on a

8 preponderance of the evidence, both of the

9 following:

10 (a) the person, during the same taxable

11 year, paid, accrued, or incurred, the interest

12 to a person that is not a related member, and

13 (b) the transaction giving rise to the

14 interest expense between the taxpayer and the

15 person did not have as a principal purpose the

16 avoidance of Illinois income tax, and is paid

17 pursuant to a contract or agreement that

18 reflects an arm's-length interest rate and

19 terms; or

20 (iii) the taxpayer can establish, based on

21 clear and convincing evidence, that the interest

22 paid, accrued, or incurred relates to a contract or

23 agreement entered into at arm's-length rates and

24 terms and the principal purpose for the payment is

25 not federal or Illinois tax avoidance; or

26 (iv) an item of interest paid, accrued, or

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1 incurred, directly or indirectly, to a person if

2 the taxpayer establishes by clear and convincing

3 evidence that the adjustments are unreasonable; or

4 if the taxpayer and the Director agree in writing

5 to the application or use of an alternative method

6 of apportionment under Section 304(f).

7 Nothing in this subsection shall preclude the

8 Director from making any other adjustment

9 otherwise allowed under Section 404 of this Act for

10 any tax year beginning after the effective date of

11 this amendment provided such adjustment is made

12 pursuant to regulation adopted by the Department

13 and such regulations provide methods and standards

14 by which the Department will utilize its authority

15 under Section 404 of this Act;

16 (D-18) An amount equal to the amount of intangible

17 expenses and costs otherwise allowed as a deduction in

18 computing base income, and that were paid, accrued, or

19 incurred, directly or indirectly, (i) for taxable

20 years ending on or after December 31, 2004, to a

21 foreign person who would be a member of the same

22 unitary business group but for the fact that the

23 foreign person's business activity outside the United

24 States is 80% or more of that person's total business

25 activity and (ii) for taxable years ending on or after

26 December 31, 2008, to a person who would be a member of

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1 the same unitary business group but for the fact that

2 the person is prohibited under Section 1501(a)(27)

3 from being included in the unitary business group

4 because he or she is ordinarily required to apportion

5 business income under different subsections of Section

6 304. The addition modification required by this

7 subparagraph shall be reduced to the extent that

8 dividends were included in base income of the unitary

9 group for the same taxable year and received by the

10 taxpayer or by a member of the taxpayer's unitary

11 business group (including amounts included in gross

12 income under Sections 951 through 964 of the Internal

13 Revenue Code and amounts included in gross income under

14 Section 78 of the Internal Revenue Code) with respect

15 to the stock of the same person to whom the intangible

16 expenses and costs were directly or indirectly paid,

17 incurred, or accrued. The preceding sentence does not

18 apply to the extent that the same dividends caused a

19 reduction to the addition modification required under

20 Section 203(a)(2)(D-17) of this Act. As used in this

21 subparagraph, the term "intangible expenses and costs"

22 includes (1) expenses, losses, and costs for, or

23 related to, the direct or indirect acquisition, use,

24 maintenance or management, ownership, sale, exchange,

25 or any other disposition of intangible property; (2)

26 losses incurred, directly or indirectly, from

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1 factoring transactions or discounting transactions;

2 (3) royalty, patent, technical, and copyright fees;

3 (4) licensing fees; and (5) other similar expenses and

4 costs. For purposes of this subparagraph, "intangible

5 property" includes patents, patent applications, trade

6 names, trademarks, service marks, copyrights, mask

7 works, trade secrets, and similar types of intangible

8 assets.

9 This paragraph shall not apply to the following:

10 (i) any item of intangible expenses or costs

11 paid, accrued, or incurred, directly or

12 indirectly, from a transaction with a person who is

13 subject in a foreign country or state, other than a

14 state which requires mandatory unitary reporting,

15 to a tax on or measured by net income with respect

16 to such item; or

17 (ii) any item of intangible expense or cost

18 paid, accrued, or incurred, directly or

19 indirectly, if the taxpayer can establish, based

20 on a preponderance of the evidence, both of the

21 following:

22 (a) the person during the same taxable

23 year paid, accrued, or incurred, the

24 intangible expense or cost to a person that is

25 not a related member, and

26 (b) the transaction giving rise to the

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1 intangible expense or cost between the

2 taxpayer and the person did not have as a

3 principal purpose the avoidance of Illinois

4 income tax, and is paid pursuant to a contract

5 or agreement that reflects arm's-length terms;

6 or

7 (iii) any item of intangible expense or cost

8 paid, accrued, or incurred, directly or

9 indirectly, from a transaction with a person if the

10 taxpayer establishes by clear and convincing

11 evidence, that the adjustments are unreasonable;

12 or if the taxpayer and the Director agree in

13 writing to the application or use of an alternative

14 method of apportionment under Section 304(f);

15 Nothing in this subsection shall preclude the

16 Director from making any other adjustment

17 otherwise allowed under Section 404 of this Act for

18 any tax year beginning after the effective date of

19 this amendment provided such adjustment is made

20 pursuant to regulation adopted by the Department

21 and such regulations provide methods and standards

22 by which the Department will utilize its authority

23 under Section 404 of this Act;

24 (D-19) For taxable years ending on or after

25 December 31, 2008, an amount equal to the amount of

26 insurance premium expenses and costs otherwise allowed

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1 as a deduction in computing base income, and that were

2 paid, accrued, or incurred, directly or indirectly, to

3 a person who would be a member of the same unitary

4 business group but for the fact that the person is

5 prohibited under Section 1501(a)(27) from being

6 included in the unitary business group because he or

7 she is ordinarily required to apportion business

8 income under different subsections of Section 304. The

9 addition modification required by this subparagraph

10 shall be reduced to the extent that dividends were

11 included in base income of the unitary group for the

12 same taxable year and received by the taxpayer or by a

13 member of the taxpayer's unitary business group

14 (including amounts included in gross income under

15 Sections 951 through 964 of the Internal Revenue Code

16 and amounts included in gross income under Section 78

17 of the Internal Revenue Code) with respect to the stock

18 of the same person to whom the premiums and costs were

19 directly or indirectly paid, incurred, or accrued. The

20 preceding sentence does not apply to the extent that

21 the same dividends caused a reduction to the addition

22 modification required under Section 203(a)(2)(D-17) or

23 Section 203(a)(2)(D-18) of this Act.

24 (D-20) For taxable years beginning on or after

25 January 1, 2002 and ending on or before December 31,

26 2006, in the case of a distribution from a qualified

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1 tuition program under Section 529 of the Internal

2 Revenue Code, other than (i) a distribution from a

3 College Savings Pool created under Section 16.5 of the

4 State Treasurer Act or (ii) a distribution from the

5 Illinois Prepaid Tuition Trust Fund, an amount equal to

6 the amount excluded from gross income under Section

7 529(c)(3)(B). For taxable years beginning on or after

8 January 1, 2007, in the case of a distribution from a

9 qualified tuition program under Section 529 of the

10 Internal Revenue Code, other than (i) a distribution

11 from a College Savings Pool created under Section 16.5

12 of the State Treasurer Act, (ii) a distribution from

13 the Illinois Prepaid Tuition Trust Fund, or (iii) a

14 distribution from a qualified tuition program under

15 Section 529 of the Internal Revenue Code that (I)

16 adopts and determines that its offering materials

17 comply with the College Savings Plans Network's

18 disclosure principles and (II) has made reasonable

19 efforts to inform in-state residents of the existence

20 of in-state qualified tuition programs by informing

21 Illinois residents directly and, where applicable, to

22 inform financial intermediaries distributing the

23 program to inform in-state residents of the existence

24 of in-state qualified tuition programs at least

25 annually, an amount equal to the amount excluded from

26 gross income under Section 529(c)(3)(B).

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1 For the purposes of this subparagraph (D-20), a

2 qualified tuition program has made reasonable efforts

3 if it makes disclosures (which may use the term

4 "in-state program" or "in-state plan" and need not

5 specifically refer to Illinois or its qualified

6 programs by name) (i) directly to prospective

7 participants in its offering materials or makes a

8 public disclosure, such as a website posting; and (ii)

9 where applicable, to intermediaries selling the

10 out-of-state program in the same manner that the

11 out-of-state program distributes its offering

12 materials;

13 (D-21) For taxable years beginning on or after

14 January 1, 2007, in the case of transfer of moneys from

15 a qualified tuition program under Section 529 of the

16 Internal Revenue Code that is administered by the State

17 to an out-of-state program, an amount equal to the

18 amount of moneys previously deducted from base income

19 under subsection (a)(2)(Y) of this Section;

20 (D-22) For taxable years beginning on or after

21 January 1, 2009, in the case of a nonqualified

22 withdrawal or refund of moneys from a qualified tuition

23 program under Section 529 of the Internal Revenue Code

24 administered by the State that is not used for

25 qualified expenses at an eligible education

26 institution, an amount equal to the contribution

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1 component of the nonqualified withdrawal or refund

2 that was previously deducted from base income under

3 subsection (a)(2)(y) of this Section, provided that

4 the withdrawal or refund did not result from the

5 beneficiary's death or disability;

6 (D-23) An amount equal to the credit allowable to

7 the taxpayer under Section 218(a) of this Act,

8 determined without regard to Section 218(c) of this

9 Act;

10 (D-24) For taxable years ending on or after

11 December 31, 2017, an amount equal to the deduction

12 allowed under Section 199 of the Internal Revenue Code

13 for the taxable year;

14 and by deducting from the total so obtained the sum of the

15 following amounts:

16 (E) For taxable years ending before December 31,

17 2001, any amount included in such total in respect of

18 any compensation (including but not limited to any

19 compensation paid or accrued to a serviceman while a

20 prisoner of war or missing in action) paid to a

21 resident by reason of being on active duty in the Armed

22 Forces of the United States and in respect of any

23 compensation paid or accrued to a resident who as a

24 governmental employee was a prisoner of war or missing

25 in action, and in respect of any compensation paid to a

26 resident in 1971 or thereafter for annual training

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1 performed pursuant to Sections 502 and 503, Title 32,

2 United States Code as a member of the Illinois National

3 Guard or, beginning with taxable years ending on or

4 after December 31, 2007, the National Guard of any

5 other state. For taxable years ending on or after

6 December 31, 2001, any amount included in such total in

7 respect of any compensation (including but not limited

8 to any compensation paid or accrued to a serviceman

9 while a prisoner of war or missing in action) paid to a

10 resident by reason of being a member of any component

11 of the Armed Forces of the United States and in respect

12 of any compensation paid or accrued to a resident who

13 as a governmental employee was a prisoner of war or

14 missing in action, and in respect of any compensation

15 paid to a resident in 2001 or thereafter by reason of

16 being a member of the Illinois National Guard or,

17 beginning with taxable years ending on or after

18 December 31, 2007, the National Guard of any other

19 state. The provisions of this subparagraph (E) are

20 exempt from the provisions of Section 250;

21 (F) An amount equal to all amounts included in such

22 total pursuant to the provisions of Sections 402(a),

23 402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the

24 Internal Revenue Code, or included in such total as

25 distributions under the provisions of any retirement

26 or disability plan for employees of any governmental

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1 agency or unit, or retirement payments to retired

2 partners, which payments are excluded in computing net

3 earnings from self employment by Section 1402 of the

4 Internal Revenue Code and regulations adopted pursuant

5 thereto;

6 (G) The valuation limitation amount;

7 (H) 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 (I) An amount equal to all amounts included in such

11 total pursuant to the provisions of Section 111 of the

12 Internal Revenue Code as a recovery of items previously

13 deducted from adjusted gross income in the computation

14 of taxable income;

15 (J) An amount equal to those dividends included in

16 such total which were paid by a corporation which

17 conducts business operations in a River Edge

18 Redevelopment Zone or zones created under the River

19 Edge Redevelopment Zone Act, and conducts

20 substantially all of its operations in a River Edge

21 Redevelopment Zone or zones. This subparagraph (J) is

22 exempt from the provisions of Section 250;

23 (K) 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

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1 High Impact Business located in Illinois; provided

2 that dividends eligible for the deduction provided in

3 subparagraph (J) of paragraph (2) of this subsection

4 shall not be eligible for the deduction provided under

5 this subparagraph (K);

6 (L) For taxable years ending after December 31,

7 1983, an amount equal to all social security benefits

8 and railroad retirement benefits included in such

9 total pursuant to Sections 72(r) and 86 of the Internal

10 Revenue Code;

11 (M) With the exception of any amounts subtracted

12 under subparagraph (N), an amount equal to the sum of

13 all amounts disallowed as deductions by (i) Sections

14 171(a) (2), and 265(2) of the Internal Revenue Code,

15 and all amounts of expenses allocable to interest and

16 disallowed as deductions by Section 265(1) of the

17 Internal Revenue Code; and (ii) for taxable years

18 ending on or after August 13, 1999, Sections 171(a)(2),

19 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue

20 Code, plus, for taxable years ending on or after

21 December 31, 2011, Section 45G(e)(3) of the Internal

22 Revenue Code and, for taxable years ending on or after

23 December 31, 2008, any amount included in gross income

24 under Section 87 of the Internal Revenue Code; the

25 provisions of this subparagraph are exempt from the

26 provisions of Section 250;

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1 (N) An amount equal to all amounts included in such

2 total which are exempt from taxation by this State

3 either by reason of its statutes or Constitution or by

4 reason of the Constitution, treaties or statutes of the

5 United States; provided that, in the case of any

6 statute of this State that exempts income derived from

7 bonds or other obligations from the tax imposed under

8 this Act, the amount exempted shall be the interest net

9 of bond premium amortization;

10 (O) An amount equal to any contribution made to a

11 job training project established pursuant to the Tax

12 Increment Allocation Redevelopment Act;

13 (P) An amount equal to the amount of the deduction

14 used to compute the federal income tax credit for

15 restoration of substantial amounts held under claim of

16 right for the taxable year pursuant to Section 1341 of

17 the Internal Revenue Code or of any itemized deduction

18 taken from adjusted gross income in the computation of

19 taxable income for restoration of substantial amounts

20 held under claim of right for the taxable year;

21 (Q) An amount equal to any amounts included in such

22 total, received by the taxpayer as an acceleration in

23 the payment of life, endowment or annuity benefits in

24 advance of the time they would otherwise be payable as

25 an indemnity for a terminal illness;

26 (R) An amount equal to the amount of any federal or

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1 State bonus paid to veterans of the Persian Gulf War;

2 (S) An amount, to the extent included in adjusted

3 gross income, equal to the amount of a contribution

4 made in the taxable year on behalf of the taxpayer to a

5 medical care savings account established under the

6 Medical Care Savings Account Act or the Medical Care

7 Savings Account Act of 2000 to the extent the

8 contribution is accepted by the account administrator

9 as provided in that Act;

10 (T) An amount, to the extent included in adjusted

11 gross income, equal to the amount of interest earned in

12 the taxable year on a medical care savings account

13 established under the Medical Care Savings Account Act

14 or the Medical Care Savings Account Act of 2000 on

15 behalf of the taxpayer, other than interest added

16 pursuant to item (D-5) of this paragraph (2);

17 (U) For one taxable year beginning on or after

18 January 1, 1994, an amount equal to the total amount of

19 tax imposed and paid under subsections (a) and (b) of

20 Section 201 of this Act on grant amounts received by

21 the taxpayer under the Nursing Home Grant Assistance

22 Act during the taxpayer's taxable years 1992 and 1993;

23 (V) Beginning with tax years ending on or after

24 December 31, 1995 and ending with tax years ending on

25 or before December 31, 2004, an amount equal to the

26 amount paid by a taxpayer who is a self-employed

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1 taxpayer, a partner of a partnership, or a shareholder

2 in a Subchapter S corporation for health insurance or

3 long-term care insurance for that taxpayer or that

4 taxpayer's spouse or dependents, to the extent that the

5 amount paid for that health insurance or long-term care

6 insurance may be deducted under Section 213 of the

7 Internal Revenue Code, has not been deducted on the

8 federal income tax return of the taxpayer, and does not

9 exceed the taxable income attributable to that

10 taxpayer's income, self-employment income, or

11 Subchapter S corporation income; except that no

12 deduction shall be allowed under this item (V) if the

13 taxpayer is eligible to participate in any health

14 insurance or long-term care insurance plan of an

15 employer of the taxpayer or the taxpayer's spouse. The

16 amount of the health insurance and long-term care

17 insurance subtracted under this item (V) shall be

18 determined by multiplying total health insurance and

19 long-term care insurance premiums paid by the taxpayer

20 times a number that represents the fractional

21 percentage of eligible medical expenses under Section

22 213 of the Internal Revenue Code of 1986 not actually

23 deducted on the taxpayer's federal income tax return;

24 (W) For taxable years beginning on or after January

25 1, 1998, all amounts included in the taxpayer's federal

26 gross income in the taxable year from amounts converted

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1 from a regular IRA to a Roth IRA. This paragraph is

2 exempt from the provisions of Section 250;

3 (X) For taxable year 1999 and thereafter, an amount

4 equal to the amount of any (i) distributions, to the

5 extent includible in gross income for federal income

6 tax purposes, made to the taxpayer because of his or

7 her status as a victim of persecution for racial or

8 religious reasons by Nazi Germany or any other Axis

9 regime or as an heir of the victim and (ii) items of

10 income, to the extent includible in gross income for

11 federal income tax purposes, attributable to, derived

12 from or in any way related to assets stolen from,

13 hidden from, or otherwise lost to a victim of

14 persecution for racial or religious reasons by Nazi

15 Germany or any other Axis regime immediately prior to,

16 during, and immediately after World War II, including,

17 but not limited to, interest on the proceeds receivable

18 as insurance under policies issued to a victim of

19 persecution for racial or religious reasons by Nazi

20 Germany or any other Axis regime by European insurance

21 companies immediately prior to and during World War II;

22 provided, however, this subtraction from federal

23 adjusted gross income does not apply to assets acquired

24 with such assets or with the proceeds from the sale of

25 such assets; provided, further, this paragraph shall

26 only apply to a taxpayer who was the first recipient of

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1 such assets after their recovery and who is a victim of

2 persecution for racial or religious reasons by Nazi

3 Germany or any other Axis regime or as an heir of the

4 victim. The amount of and the eligibility for any

5 public assistance, benefit, or similar entitlement is

6 not affected by the inclusion of items (i) and (ii) of

7 this paragraph in gross income for federal income tax

8 purposes. This paragraph is exempt from the provisions

9 of Section 250;

10 (Y) For taxable years beginning on or after January

11 1, 2002 and ending on or before December 31, 2004,

12 moneys contributed in the taxable year to a College

13 Savings Pool account under Section 16.5 of the State

14 Treasurer Act, except that amounts excluded from gross

15 income under Section 529(c)(3)(C)(i) of the Internal

16 Revenue Code shall not be considered moneys

17 contributed under this subparagraph (Y). For taxable

18 years beginning on or after January 1, 2005, a maximum

19 of $10,000 contributed in the taxable year to (i) a

20 College Savings Pool account under Section 16.5 of the

21 State Treasurer Act or (ii) the Illinois Prepaid

22 Tuition Trust Fund, except that amounts excluded from

23 gross income under Section 529(c)(3)(C)(i) of the

24 Internal Revenue Code shall not be considered moneys

25 contributed under this subparagraph (Y). For purposes

26 of this subparagraph, contributions made by an

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1 employer on behalf of an employee, or matching

2 contributions made by an employee, shall be treated as

3 made by the employee. This subparagraph (Y) is exempt

4 from the provisions of Section 250;

5 (Z) For taxable years 2001 and thereafter, for the

6 taxable year in which the bonus depreciation deduction

7 is taken on the taxpayer's federal income tax return

8 under subsection (k) of Section 168 of the Internal

9 Revenue Code and for each applicable taxable year

10 thereafter, an amount equal to "x", where:

11 (1) "y" equals the amount of the depreciation

12 deduction taken for the taxable year on the

13 taxpayer's federal income tax return on property

14 for which the bonus depreciation deduction was

15 taken in any year under subsection (k) of Section

16 168 of the Internal Revenue Code, but not including

17 the bonus depreciation deduction;

18 (2) for taxable years ending on or before

19 December 31, 2005, "x" equals "y" multiplied by 30

20 and then divided by 70 (or "y" multiplied by

21 0.429); and

22 (3) for taxable years ending after December

23 31, 2005:

24 (i) for property on which a bonus

25 depreciation deduction of 30% of the adjusted

26 basis was taken, "x" equals "y" multiplied by

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1 30 and then divided by 70 (or "y" multiplied by

2 0.429); and

3 (ii) for property on which a bonus

4 depreciation deduction of 50% of the adjusted

5 basis was taken, "x" equals "y" multiplied by

6 1.0.

7 The aggregate amount deducted under this

8 subparagraph in all taxable years for any one piece of

9 property may not exceed the amount of the bonus

10 depreciation deduction taken on that property on the

11 taxpayer's federal income tax return under subsection

12 (k) of Section 168 of the Internal Revenue Code. This

13 subparagraph (Z) is exempt from the provisions of

14 Section 250;

15 (AA) If the taxpayer sells, transfers, abandons,

16 or otherwise disposes of property for which the

17 taxpayer was required in any taxable year to make an

18 addition modification under subparagraph (D-15), then

19 an amount equal to that addition modification.

20 If the taxpayer continues to own property through

21 the last day of the last tax year for which the

22 taxpayer may claim a depreciation deduction for

23 federal income tax purposes and for which the taxpayer

24 was required in any taxable year to make an addition

25 modification under subparagraph (D-15), then an amount

26 equal to that addition modification.

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1 The taxpayer is allowed to take the deduction under

2 this subparagraph only once with respect to any one

3 piece of property.

4 This subparagraph (AA) is exempt from the

5 provisions of Section 250;

6 (BB) Any amount included in adjusted gross income,

7 other than salary, received by a driver in a

8 ridesharing arrangement using a motor vehicle;

9 (CC) The amount of (i) any interest income (net of

10 the deductions allocable thereto) taken into account

11 for the taxable year with respect to a transaction with

12 a taxpayer that is required to make an addition

13 modification with respect to such transaction under

14 Section 203(a)(2)(D-17), 203(b)(2)(E-12),

15 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

16 the amount of that addition modification, and (ii) any

17 income from intangible property (net of the deductions

18 allocable thereto) taken into account for the taxable

19 year with respect to a transaction with a taxpayer that

20 is required to make an addition modification with

21 respect to such transaction under Section

22 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

23 203(d)(2)(D-8), but not to exceed the amount of that

24 addition modification. This subparagraph (CC) is

25 exempt from the provisions of Section 250;

26 (DD) An amount equal to the interest income taken

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1 into account for the taxable year (net of the

2 deductions allocable thereto) with respect to

3 transactions with (i) a foreign person who would be a

4 member of the taxpayer's unitary business group but for

5 the fact that the foreign person's business activity

6 outside the United States is 80% or more of that

7 person's total business activity and (ii) for taxable

8 years ending on or after December 31, 2008, to a person

9 who would be a member of the same unitary business

10 group but for the fact that the person is prohibited

11 under Section 1501(a)(27) from being included in the

12 unitary business group because he or she is ordinarily

13 required to apportion business income under different

14 subsections of Section 304, but not to exceed the

15 addition modification required to be made for the same

16 taxable year under Section 203(a)(2)(D-17) for

17 interest paid, accrued, or incurred, directly or

18 indirectly, to the same person. This subparagraph (DD)

19 is exempt from the provisions of Section 250;

20 (EE) An amount equal to the income from intangible

21 property taken into account for the taxable year (net

22 of the deductions allocable thereto) with respect to

23 transactions with (i) a foreign person who would be a

24 member of the taxpayer's unitary business group but for

25 the fact that the foreign person's business activity

26 outside the United States is 80% or more of that

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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, but not to exceed the

9 addition modification required to be made for the same

10 taxable year under Section 203(a)(2)(D-18) for

11 intangible expenses and costs paid, accrued, or

12 incurred, directly or indirectly, to the same foreign

13 person. This subparagraph (EE) is exempt from the

14 provisions of Section 250;

15 (FF) An amount equal to any amount awarded to the

16 taxpayer during the taxable year by the Court of Claims

17 under subsection (c) of Section 8 of the Court of

18 Claims Act for time unjustly served in a State prison.

19 This subparagraph (FF) is exempt from the provisions of

20 Section 250; and

21 (GG) For taxable years ending on or after December

22 31, 2011, in the case of a taxpayer who was required to

23 add back any insurance premiums under Section

24 203(a)(2)(D-19), such taxpayer may elect to subtract

25 that part of a reimbursement received from the

26 insurance company equal to the amount of the expense or

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1 loss (including expenses incurred by the insurance

2 company) that would have been taken into account as a

3 deduction for federal income tax purposes if the

4 expense or loss had been uninsured. If a taxpayer makes

5 the election provided for by this subparagraph (GG),

6 the insurer to which the premiums were paid must add

7 back to income the amount subtracted by the taxpayer

8 pursuant to this subparagraph (GG). This subparagraph

9 (GG) is exempt from the provisions of Section 250.

10 (b) Corporations.

11 (1) In general. In the case of a corporation, base

12 income means an amount equal to the taxpayer's taxable

13 income for the taxable year as modified by paragraph (2).

14 (2) Modifications. The taxable income referred to in

15 paragraph (1) shall be modified by adding thereto the sum

16 of the following amounts:

17 (A) An amount equal to all amounts paid or accrued

18 to the taxpayer as interest and all distributions

19 received from regulated investment companies during

20 the taxable year to the extent excluded from gross

21 income in the computation of taxable income;

22 (B) 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 (C) In the case of a regulated investment company,

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1 an amount equal to the excess of (i) the net long-term

2 capital gain for the taxable year, over (ii) the amount

3 of the capital gain dividends designated as such in

4 accordance with Section 852(b)(3)(C) of the Internal

5 Revenue Code and any amount designated under Section

6 852(b)(3)(D) of the Internal Revenue Code,

7 attributable to the taxable year (this amendatory Act

8 of 1995 (Public Act 89-89) is declarative of existing

9 law and is not a new enactment);

10 (D) The amount of any net operating loss deduction

11 taken in arriving at taxable income, other than a net

12 operating loss carried forward from a taxable year

13 ending prior to December 31, 1986;

14 (E) For taxable years in which a net operating loss

15 carryback or carryforward from a taxable year ending

16 prior to December 31, 1986 is an element of taxable

17 income under paragraph (1) of subsection (e) or

18 subparagraph (E) of paragraph (2) of subsection (e),

19 the amount by which addition modifications other than

20 those provided by this subparagraph (E) exceeded

21 subtraction modifications in such earlier taxable

22 year, with the following limitations applied in the

23 order that they are listed:

24 (i) the addition modification relating to the

25 net operating loss carried back or forward to the

26 taxable year from any taxable year ending prior to

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1 December 31, 1986 shall be reduced by the amount of

2 addition modification under this subparagraph (E)

3 which related to that net operating loss and which

4 was taken into account in calculating the base

5 income of an earlier taxable year, and

6 (ii) the addition modification relating to the

7 net operating loss carried back or forward to the

8 taxable year from any taxable year ending prior to

9 December 31, 1986 shall not exceed the amount of

10 such carryback or carryforward;

11 For taxable years in which there is a net operating

12 loss carryback or carryforward from more than one other

13 taxable year ending prior to December 31, 1986, the

14 addition modification provided in this subparagraph

15 (E) shall be the sum of the amounts computed

16 independently under the preceding provisions of this

17 subparagraph (E) for each such taxable year;

18 (E-5) For taxable years ending after December 31,

19 1997, an amount equal to any eligible remediation costs

20 that the corporation deducted in computing adjusted

21 gross income and for which the corporation claims a

22 credit under subsection (l) of Section 201;

23 (E-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

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1 Internal Revenue Code;

2 (E-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 (E-10), then

6 an amount equal to the aggregate amount of the

7 deductions taken in all taxable years under

8 subparagraph (T) 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 (T), 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 (E-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 the foreign person's business activity outside

26 the United States is 80% or more of the foreign

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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

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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

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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 (E-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

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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(b)(2)(E-12) of

17 this Act. As used in this subparagraph, the term

18 "intangible expenses and costs" includes (1) expenses,

19 losses, and costs for, or related to, the direct or

20 indirect acquisition, use, maintenance or management,

21 ownership, sale, exchange, or any other disposition of

22 intangible property; (2) losses incurred, directly or

23 indirectly, from factoring transactions or discounting

24 transactions; (3) royalty, patent, technical, and

25 copyright fees; (4) licensing fees; and (5) other

26 similar expenses and costs. For purposes of this

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1 subparagraph, "intangible property" includes patents,

2 patent applications, trade names, trademarks, service

3 marks, copyrights, mask works, trade secrets, and

4 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

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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 (E-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

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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(b)(2)(E-12) or

19 Section 203(b)(2)(E-13) of this Act;

20 (E-15) For taxable years beginning after December

21 31, 2008, any deduction for dividends paid by a captive

22 real estate investment trust that is allowed to a real

23 estate investment trust under Section 857(b)(2)(B) of

24 the Internal Revenue Code for dividends paid;

25 (E-16) An amount equal to the credit allowable to

26 the taxpayer under Section 218(a) of this Act,

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1 determined without regard to Section 218(c) of this

2 Act;

3 (E-17) For taxable years ending on or after

4 December 31, 2017, an amount equal to the deduction

5 allowed under Section 199 of the Internal Revenue Code

6 for the taxable year;

7 and by deducting from the total so obtained the sum of the

8 following amounts:

9 (F) An amount equal to the amount of any tax

10 imposed by this Act which was refunded to the taxpayer

11 and included in such total for the taxable year;

12 (G) An amount equal to any amount included in such

13 total under Section 78 of the Internal Revenue Code;

14 (H) In the case of a regulated investment company,

15 an amount equal to the amount of exempt interest

16 dividends as defined in subsection (b) (5) of Section

17 852 of the Internal Revenue Code, paid to shareholders

18 for the taxable year;

19 (I) With the exception of any amounts subtracted

20 under subparagraph (J), an amount equal to the sum of

21 all amounts disallowed as deductions by (i) Sections

22 171(a) (2), and 265(a)(2) and amounts disallowed as

23 interest expense by Section 291(a)(3) of the Internal

24 Revenue Code, and all amounts of expenses allocable to

25 interest and disallowed as deductions by Section

26 265(a)(1) of the Internal Revenue Code; and (ii) for

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1 taxable years ending on or after August 13, 1999,

2 Sections 171(a)(2), 265, 280C, 291(a)(3), and

3 832(b)(5)(B)(i) of the Internal Revenue Code, plus,

4 for tax years ending on or after December 31, 2011,

5 amounts disallowed as deductions by Section 45G(e)(3)

6 of the Internal Revenue Code and, for taxable years

7 ending on or after December 31, 2008, any amount

8 included in gross income under Section 87 of the

9 Internal Revenue Code and the policyholders' share of

10 tax-exempt interest of a life insurance company under

11 Section 807(a)(2)(B) of the Internal Revenue Code (in

12 the case of a life insurance company with gross income

13 from a decrease in reserves for the tax year) or

14 Section 807(b)(1)(B) of the Internal Revenue Code (in

15 the case of a life insurance company allowed a

16 deduction for an increase in reserves for the tax

17 year); the provisions of this subparagraph are exempt

18 from the provisions of Section 250;

19 (J) An amount equal to all amounts included in such

20 total which are exempt from taxation by this State

21 either by reason of its statutes or Constitution or by

22 reason of the Constitution, treaties or statutes of the

23 United States; provided that, in the case of any

24 statute of this State that exempts income derived from

25 bonds or other obligations from the tax imposed under

26 this Act, the amount exempted shall be the interest net

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1 of bond premium amortization;

2 (K) An amount equal to those dividends included in

3 such total which were paid by a corporation which

4 conducts business operations in a River Edge

5 Redevelopment Zone or zones created under the River

6 Edge Redevelopment Zone Act and conducts substantially

7 all of its operations in a River Edge Redevelopment

8 Zone or zones. This subparagraph (K) is exempt from the

9 provisions of Section 250;

10 (L) An amount equal to those dividends included in

11 such total that were paid by a corporation that

12 conducts business operations in a federally designated

13 Foreign Trade Zone or Sub-Zone and that is designated a

14 High Impact Business located in Illinois; provided

15 that dividends eligible for the deduction provided in

16 subparagraph (K) of paragraph 2 of this subsection

17 shall not be eligible for the deduction provided under

18 this subparagraph (L);

19 (M) For any taxpayer that is a financial

20 organization within the meaning of Section 304(c) of

21 this Act, an amount included in such total as interest

22 income from a loan or loans made by such taxpayer to a

23 borrower, to the extent that such a loan is secured by

24 property which is eligible for the River Edge

25 Redevelopment Zone Investment Credit. To determine the

26 portion of a loan or loans that is secured by property

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1 eligible for a Section 201(f) investment credit to the

2 borrower, the entire principal amount of the loan or

3 loans between the taxpayer and the borrower should be

4 divided into the basis of the Section 201(f) investment

5 credit property which secures the loan or loans, using

6 for this purpose the original basis of such property on

7 the date that it was placed in service in the River

8 Edge Redevelopment Zone. The subtraction modification

9 available to taxpayer in any year under this subsection

10 shall be that portion of the total interest paid by the

11 borrower with respect to such loan attributable to the

12 eligible property as calculated under the previous

13 sentence. This subparagraph (M) is exempt from the

14 provisions of Section 250;

15 (M-1) For any taxpayer that is a financial

16 organization within the meaning of Section 304(c) of

17 this Act, an amount included in such total as interest

18 income from a loan or loans made by such taxpayer to a

19 borrower, to the extent that such a loan is secured by

20 property which is eligible for the High Impact Business

21 Investment Credit. To determine the portion of a loan

22 or loans that is secured by property eligible for a

23 Section 201(h) investment credit to the borrower, the

24 entire principal amount of the loan or loans between

25 the taxpayer and the borrower should be divided into

26 the basis of the Section 201(h) investment credit

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1 property which secures the loan or loans, using for

2 this purpose the original basis of such property on the

3 date that it was placed in service in a federally

4 designated Foreign Trade Zone or Sub-Zone located in

5 Illinois. No taxpayer that is eligible for the

6 deduction provided in subparagraph (M) of paragraph

7 (2) of this subsection shall be eligible for the

8 deduction provided under this subparagraph (M-1). The

9 subtraction modification available to taxpayers in any

10 year under this subsection shall be that portion of the

11 total interest paid by the borrower with respect to

12 such loan attributable to the eligible property as

13 calculated under the previous sentence;

14 (N) Two times any contribution made during the

15 taxable year to a designated zone organization to the

16 extent that the contribution (i) qualifies as a

17 charitable contribution under subsection (c) of

18 Section 170 of the Internal Revenue Code and (ii) must,

19 by its terms, be used for a project approved by the

20 Department of Commerce and Economic Opportunity under

21 Section 11 of the Illinois Enterprise Zone Act or under

22 Section 10-10 of the River Edge Redevelopment Zone Act.

23 This subparagraph (N) is exempt from the provisions of

24 Section 250;

25 (O) An amount equal to: (i) 85% for taxable years

26 ending on or before December 31, 1992, or, a percentage

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1 equal to the percentage allowable under Section

2 243(a)(1) of the Internal Revenue Code of 1986 for

3 taxable years ending after December 31, 1992, of the

4 amount by which dividends included in taxable income

5 and received from a corporation that is not created or

6 organized under the laws of the United States or any

7 state or political subdivision thereof, including, for

8 taxable years ending on or after December 31, 1988,

9 dividends received or deemed received or paid or deemed

10 paid under Sections 951 through 965 of the Internal

11 Revenue Code, exceed the amount of the modification

12 provided under subparagraph (G) of paragraph (2) of

13 this subsection (b) which is related to such dividends,

14 and including, for taxable years ending on or after

15 December 31, 2008, dividends received from a captive

16 real estate investment trust; plus (ii) 100% of the

17 amount by which dividends, included in taxable income

18 and received, including, for taxable years ending on or

19 after December 31, 1988, dividends received or deemed

20 received or paid or deemed paid under Sections 951

21 through 964 of the Internal Revenue Code and including,

22 for taxable years ending on or after December 31, 2008,

23 dividends received from a captive real estate

24 investment trust, from any such corporation specified

25 in clause (i) that would but for the provisions of

26 Section 1504 (b) (3) of the Internal Revenue Code be

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1 treated as a member of the affiliated group which

2 includes the dividend recipient, exceed the amount of

3 the modification provided under subparagraph (G) of

4 paragraph (2) of this subsection (b) which is related

5 to such dividends. This subparagraph (O) is exempt from

6 the provisions of Section 250 of this Act;

7 (P) An amount equal to any contribution made to a

8 job training project established pursuant to the Tax

9 Increment Allocation Redevelopment Act;

10 (Q) An amount equal to the amount of the deduction

11 used to compute the federal income tax credit for

12 restoration of substantial amounts held under claim of

13 right for the taxable year pursuant to Section 1341 of

14 the Internal Revenue Code;

15 (R) On and after July 20, 1999, in the case of an

16 attorney-in-fact with respect to whom an interinsurer

17 or a reciprocal insurer has made the election under

18 Section 835 of the Internal Revenue Code, 26 U.S.C.

19 835, an amount equal to the excess, if any, of the

20 amounts paid or incurred by that interinsurer or

21 reciprocal insurer in the taxable year to the

22 attorney-in-fact over the deduction allowed to that

23 interinsurer or reciprocal insurer with respect to the

24 attorney-in-fact under Section 835(b) of the Internal

25 Revenue Code for the taxable year; the provisions of

26 this subparagraph are exempt from the provisions of

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1 Section 250;

2 (S) For taxable years ending on or after December

3 31, 1997, in the case of a Subchapter S corporation, an

4 amount equal to all amounts of income allocable to a

5 shareholder subject to the Personal Property Tax

6 Replacement Income Tax imposed by subsections (c) and

7 (d) of Section 201 of this Act, including amounts

8 allocable to organizations exempt from federal income

9 tax by reason of Section 501(a) of the Internal Revenue

10 Code. This subparagraph (S) is exempt from the

11 provisions of Section 250;

12 (T) For taxable years 2001 and thereafter, for the

13 taxable year in which the bonus depreciation deduction

14 is taken on the taxpayer's federal income tax return

15 under subsection (k) of Section 168 of the Internal

16 Revenue Code and for each applicable taxable year

17 thereafter, an amount equal to "x", where:

18 (1) "y" equals the amount of the depreciation

19 deduction taken for the taxable year on the

20 taxpayer's federal income tax return on property

21 for which the bonus depreciation deduction was

22 taken in any year under subsection (k) of Section

23 168 of the Internal Revenue Code, but not including

24 the bonus depreciation deduction;

25 (2) for taxable years ending on or before

26 December 31, 2005, "x" equals "y" multiplied by 30

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1 and then divided by 70 (or "y" multiplied by

2 0.429); and

3 (3) for taxable years ending after December

4 31, 2005:

5 (i) for property on which a bonus

6 depreciation deduction of 30% of the adjusted

7 basis was taken, "x" equals "y" multiplied by

8 30 and then divided by 70 (or "y" multiplied by

9 0.429); and

10 (ii) for property on which a bonus

11 depreciation deduction of 50% of the adjusted

12 basis was taken, "x" equals "y" multiplied by

13 1.0.

14 The aggregate amount deducted under this

15 subparagraph in all taxable years for any one piece of

16 property may not exceed the amount of the bonus

17 depreciation deduction taken on that property on the

18 taxpayer's federal income tax return under subsection

19 (k) of Section 168 of the Internal Revenue Code. This

20 subparagraph (T) is exempt from the provisions of

21 Section 250;

22 (U) If the taxpayer sells, transfers, abandons, or

23 otherwise disposes of property for which the taxpayer

24 was required in any taxable year to make an addition

25 modification under subparagraph (E-10), then an amount

26 equal to that addition modification.

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1 If the taxpayer continues to own property through

2 the last day of the last tax year for which the

3 taxpayer may claim a depreciation deduction for

4 federal income tax purposes and for which the taxpayer

5 was required in any taxable year to make an addition

6 modification under subparagraph (E-10), then an amount

7 equal to that addition modification.

8 The taxpayer is allowed to take the deduction under

9 this subparagraph only once with respect to any one

10 piece of property.

11 This subparagraph (U) is exempt from the

12 provisions of Section 250;

13 (V) The amount of: (i) any interest income (net of

14 the deductions allocable thereto) taken into account

15 for the taxable year with respect to a transaction with

16 a taxpayer that is required to make an addition

17 modification with respect to such transaction under

18 Section 203(a)(2)(D-17), 203(b)(2)(E-12),

19 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

20 the amount of such addition modification, (ii) any

21 income from intangible property (net of the deductions

22 allocable thereto) taken into account for the taxable

23 year with respect to a transaction with a taxpayer that

24 is required to make an addition modification with

25 respect to such transaction under Section

26 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

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1 203(d)(2)(D-8), but not to exceed the amount of such

2 addition modification, and (iii) any insurance premium

3 income (net of deductions allocable thereto) taken

4 into account for the taxable year with respect to a

5 transaction with a taxpayer that is required to make an

6 addition modification with respect to such transaction

7 under Section 203(a)(2)(D-19), Section

8 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section

9 203(d)(2)(D-9), but not to exceed the amount of that

10 addition modification. This subparagraph (V) is exempt

11 from the provisions of Section 250;

12 (W) An amount equal to the interest income taken

13 into account for the taxable year (net of the

14 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

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1 addition modification required to be made for the same

2 taxable year under Section 203(b)(2)(E-12) for

3 interest paid, accrued, or incurred, directly or

4 indirectly, to the same person. This subparagraph (W)

5 is exempt from the provisions of Section 250;

6 (X) An amount equal to the income from intangible

7 property taken into account for the taxable year (net

8 of the deductions allocable thereto) with respect to

9 transactions with (i) a foreign person who would be a

10 member of the taxpayer's unitary business group but for

11 the fact that the foreign person's business activity

12 outside the United States is 80% or more of that

13 person's total business activity and (ii) for taxable

14 years ending on or after December 31, 2008, to a person

15 who would be a member of the same unitary business

16 group but for the fact that the person is prohibited

17 under Section 1501(a)(27) from being included in the

18 unitary business group because he or she is ordinarily

19 required to apportion business income under different

20 subsections of Section 304, but not to exceed the

21 addition modification required to be made for the same

22 taxable year under Section 203(b)(2)(E-13) for

23 intangible expenses and costs paid, accrued, or

24 incurred, directly or indirectly, to the same foreign

25 person. This subparagraph (X) is exempt from the

26 provisions of Section 250;

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1 (Y) For taxable years ending on or after December

2 31, 2011, in the case of a taxpayer who was required to

3 add back any insurance premiums under Section

4 203(b)(2)(E-14), such taxpayer may elect to subtract

5 that part of a reimbursement received from the

6 insurance company equal to the amount of the expense or

7 loss (including expenses incurred by the insurance

8 company) that would have been taken into account as a

9 deduction for federal income tax purposes if the

10 expense or loss had been uninsured. If a taxpayer makes

11 the election provided for by this subparagraph (Y), the

12 insurer to which the premiums were paid must add back

13 to income the amount subtracted by the taxpayer

14 pursuant to this subparagraph (Y). This subparagraph

15 (Y) is exempt from the provisions of Section 250; and

16 (Z) The difference between the nondeductible

17 controlled foreign corporation dividends under Section

18 965(e)(3) of the Internal Revenue Code over the taxable

19 income of the taxpayer, computed without regard to

20 Section 965(e)(2)(A) of the Internal Revenue Code, and

21 without regard to any net operating loss deduction.

22 This subparagraph (Z) is exempt from the provisions of

23 Section 250.

24 (3) Special rule. For purposes of paragraph (2) (A),

25 "gross income" in the case of a life insurance company, for

26 tax years ending on and after December 31, 1994, and prior

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1 to December 31, 2011, shall mean the gross investment

2 income for the taxable year and, for tax years ending on or

3 after December 31, 2011, shall mean all amounts included in

4 life insurance gross income under Section 803(a)(3) of the

5 Internal Revenue Code.

6 (c) Trusts and estates.

7 (1) In general. In the case of a trust or estate, base

8 income means an amount equal to the taxpayer's taxable

9 income for the taxable year as modified by paragraph (2).

10 (2) Modifications. Subject to the provisions of

11 paragraph (3), the taxable income referred to in paragraph

12 (1) shall be modified by adding thereto the sum of the

13 following amounts:

14 (A) An amount equal to all amounts paid or accrued

15 to the taxpayer as interest or dividends during the

16 taxable year to the extent excluded from gross income

17 in the computation of taxable income;

18 (B) In the case of (i) an estate, $600; (ii) a

19 trust which, under its governing instrument, is

20 required to distribute all of its income currently,

21 $300; and (iii) any other trust, $100, but in each such

22 case, only to the extent such amount was deducted in

23 the computation of taxable income;

24 (C) An amount equal to the amount of tax imposed by

25 this Act to the extent deducted from gross income in

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1 the computation of taxable income for the taxable year;

2 (D) The amount of any net operating loss deduction

3 taken in arriving at taxable income, other than a net

4 operating loss carried forward from a taxable year

5 ending prior to December 31, 1986;

6 (E) For taxable years in which a net operating loss

7 carryback or carryforward from a taxable year ending

8 prior to December 31, 1986 is an element of taxable

9 income under paragraph (1) of subsection (e) or

10 subparagraph (E) of paragraph (2) of subsection (e),

11 the amount by which addition modifications other than

12 those provided by this subparagraph (E) exceeded

13 subtraction modifications in such taxable year, with

14 the following limitations applied in the order that

15 they are listed:

16 (i) the addition modification relating to the

17 net operating loss carried back or forward to the

18 taxable year from any taxable year ending prior to

19 December 31, 1986 shall be reduced by the amount of

20 addition modification under this subparagraph (E)

21 which related to that net operating loss and which

22 was taken into account in calculating the base

23 income of an earlier taxable year, and

24 (ii) the addition modification relating to the

25 net operating loss carried back or forward to the

26 taxable year from any taxable year ending prior to

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1 December 31, 1986 shall not exceed the amount of

2 such carryback or carryforward;

3 For taxable years in which there is a net operating

4 loss carryback or carryforward from more than one other

5 taxable year ending prior to December 31, 1986, the

6 addition modification provided in this subparagraph

7 (E) shall be the sum of the amounts computed

8 independently under the preceding provisions of this

9 subparagraph (E) for each such taxable year;

10 (F) For taxable years ending on or after January 1,

11 1989, an amount equal to the tax deducted pursuant to

12 Section 164 of the Internal Revenue Code if the trust

13 or estate is claiming the same tax for purposes of the

14 Illinois foreign tax credit under Section 601 of this

15 Act;

16 (G) An amount equal to the amount of the capital

17 gain deduction allowable under the Internal Revenue

18 Code, to the extent deducted from gross income in the

19 computation of taxable income;

20 (G-5) For taxable years ending after December 31,

21 1997, an amount equal to any eligible remediation costs

22 that the trust or estate deducted in computing adjusted

23 gross income and for which the trust or estate claims a

24 credit under subsection (l) of Section 201;

25 (G-10) For taxable years 2001 and thereafter, an

26 amount equal to the bonus depreciation deduction taken

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1 on the taxpayer's federal income tax return for the

2 taxable year under subsection (k) of Section 168 of the

3 Internal Revenue Code; and

4 (G-11) If the taxpayer sells, transfers, abandons,

5 or otherwise disposes of property for which the

6 taxpayer was required in any taxable year to make an

7 addition modification under subparagraph (G-10), then

8 an amount equal to the aggregate amount of the

9 deductions taken in all taxable years under

10 subparagraph (R) with respect to that property.

11 If the taxpayer continues to own property through

12 the last day of the last tax year for which the

13 taxpayer may claim a depreciation deduction for

14 federal income tax purposes and for which the taxpayer

15 was allowed in any taxable year to make a subtraction

16 modification under subparagraph (R), then an amount

17 equal to that subtraction modification.

18 The taxpayer is required to make the addition

19 modification under this subparagraph only once with

20 respect to any one piece of property;

21 (G-12) An amount equal to the amount otherwise

22 allowed as a deduction in computing base income for

23 interest paid, accrued, or incurred, directly or

24 indirectly, (i) for taxable years ending on or after

25 December 31, 2004, to a foreign person who would be a

26 member of the same unitary business group but for the

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1 fact that the foreign person's business activity

2 outside the United States is 80% or more of the foreign

3 person's total business activity and (ii) for taxable

4 years ending on or after December 31, 2008, to a person

5 who would be a member of the same unitary business

6 group but for the fact that the person is prohibited

7 under Section 1501(a)(27) from being included in the

8 unitary business group because he or she is ordinarily

9 required to apportion business income under different

10 subsections of Section 304. The addition modification

11 required by this subparagraph shall be reduced to the

12 extent that dividends were included in base income of

13 the unitary group for the same taxable year and

14 received by the taxpayer or by a member of the

15 taxpayer's unitary business group (including amounts

16 included in gross income pursuant to Sections 951

17 through 964 of the Internal Revenue Code and amounts

18 included in gross income under Section 78 of the

19 Internal Revenue Code) with respect to the stock of the

20 same person to whom the interest was paid, accrued, or

21 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

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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

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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 (G-13) 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)

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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 pursuant to Sections 951 through 964 of the

11 Internal Revenue Code and amounts included in gross

12 income under Section 78 of the Internal Revenue Code)

13 with respect to the stock of the same person to whom

14 the intangible expenses and costs were directly or

15 indirectly paid, incurred, or accrued. The preceding

16 sentence shall not apply to the extent that the same

17 dividends caused a reduction to the addition

18 modification required under Section 203(c)(2)(G-12) of

19 this Act. As used in this subparagraph, the term

20 "intangible expenses and costs" includes: (1)

21 expenses, losses, and costs for or related to the

22 direct or indirect acquisition, use, maintenance or

23 management, ownership, sale, exchange, or any other

24 disposition of intangible property; (2) losses

25 incurred, directly or indirectly, from factoring

26 transactions or discounting transactions; (3) royalty,

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1 patent, technical, and copyright fees; (4) licensing

2 fees; and (5) other similar expenses and costs. For

3 purposes of this subparagraph, "intangible property"

4 includes patents, patent applications, trade names,

5 trademarks, service marks, copyrights, mask works,

6 trade secrets, and similar types of intangible 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

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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 (G-14) 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

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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(c)(2)(G-12) or

21 Section 203(c)(2)(G-13) of this Act;

22 (G-15) An amount equal to the credit allowable to

23 the taxpayer under Section 218(a) of this Act,

24 determined without regard to Section 218(c) of this

25 Act;

26 (G-16) For taxable years ending on or after

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1 December 31, 2017, an amount equal to the deduction

2 allowed under Section 199 of the Internal Revenue Code

3 for the taxable year;

4 and by deducting from the total so obtained the sum of the

5 following amounts:

6 (H) An amount equal to all amounts included in such

7 total pursuant to the provisions of Sections 402(a),

8 402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the

9 Internal Revenue Code or included in such total as

10 distributions under the provisions of any retirement

11 or disability plan for employees of any governmental

12 agency or unit, or retirement payments to retired

13 partners, which payments are excluded in computing net

14 earnings from self employment by Section 1402 of the

15 Internal Revenue Code and regulations adopted pursuant

16 thereto;

17 (I) The valuation limitation amount;

18 (J) An amount equal to the amount of any tax

19 imposed by this Act which was refunded to the taxpayer

20 and included in such total for the taxable year;

21 (K) An amount equal to all amounts included in

22 taxable income as modified by subparagraphs (A), (B),

23 (C), (D), (E), (F) and (G) which are exempt from

24 taxation by this State either by reason of its statutes

25 or Constitution or by reason of the Constitution,

26 treaties or statutes of the United States; provided

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1 that, in the case of any statute of this State that

2 exempts income derived from bonds or other obligations

3 from the tax imposed under this Act, the amount

4 exempted shall be the interest net of bond premium

5 amortization;

6 (L) With the exception of any amounts subtracted

7 under subparagraph (K), an amount equal to the sum of

8 all amounts disallowed as deductions by (i) Sections

9 171(a) (2) and 265(a)(2) of the Internal Revenue Code,

10 and all amounts of expenses allocable to interest and

11 disallowed as deductions by Section 265(1) of the

12 Internal Revenue Code; and (ii) for taxable years

13 ending on or after August 13, 1999, Sections 171(a)(2),

14 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue

15 Code, plus, (iii) for taxable years ending on or after

16 December 31, 2011, Section 45G(e)(3) of the Internal

17 Revenue Code and, for taxable years ending on or after

18 December 31, 2008, any amount included in gross income

19 under Section 87 of the Internal Revenue Code; the

20 provisions of this subparagraph are exempt from the

21 provisions of Section 250;

22 (M) An amount equal to those dividends included in

23 such total which were paid by a corporation which

24 conducts business operations in a River Edge

25 Redevelopment Zone or zones created under the River

26 Edge Redevelopment Zone Act and conducts substantially

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1 all of its operations in a River Edge Redevelopment

2 Zone or zones. This subparagraph (M) is exempt from the

3 provisions of Section 250;

4 (N) An amount equal to any contribution made to a

5 job training project established pursuant to the Tax

6 Increment Allocation Redevelopment Act;

7 (O) An amount equal to those dividends included in

8 such total that were paid by a corporation that

9 conducts business operations in a federally designated

10 Foreign Trade Zone or Sub-Zone and that is designated a

11 High Impact Business located in Illinois; provided

12 that dividends eligible for the deduction provided in

13 subparagraph (M) of paragraph (2) of this subsection

14 shall not be eligible for the deduction provided under

15 this subparagraph (O);

16 (P) An amount equal to the amount of the deduction

17 used to compute the federal income tax credit for

18 restoration of substantial amounts held under claim of

19 right for the taxable year pursuant to Section 1341 of

20 the Internal Revenue Code;

21 (Q) For taxable year 1999 and thereafter, an amount

22 equal to the amount of any (i) distributions, to the

23 extent includible in gross income for federal income

24 tax purposes, made to the taxpayer because of his or

25 her status as a victim of persecution for racial or

26 religious reasons by Nazi Germany or any other Axis

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1 regime or as an heir of the victim and (ii) items of

2 income, to the extent includible in gross income for

3 federal income tax purposes, attributable to, derived

4 from or in any way related to assets stolen from,

5 hidden from, or otherwise lost to a victim of

6 persecution for racial or religious reasons by Nazi

7 Germany or any other Axis regime immediately prior to,

8 during, and immediately after World War II, including,

9 but not limited to, interest on the proceeds receivable

10 as insurance under policies issued to a victim of

11 persecution for racial or religious reasons by Nazi

12 Germany or any other Axis regime by European insurance

13 companies immediately prior to and during World War II;

14 provided, however, this subtraction from federal

15 adjusted gross income does not apply to assets acquired

16 with such assets or with the proceeds from the sale of

17 such assets; provided, further, this paragraph shall

18 only apply to a taxpayer who was the first recipient of

19 such assets after their recovery and who is a victim of

20 persecution for racial or religious reasons by Nazi

21 Germany or any other Axis regime or as an heir of the

22 victim. The amount of and the eligibility for any

23 public assistance, benefit, or similar entitlement is

24 not affected by the inclusion of items (i) and (ii) of

25 this paragraph in gross income for federal income tax

26 purposes. This paragraph is exempt from the provisions

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1 of Section 250;

2 (R) For taxable years 2001 and thereafter, for the

3 taxable year in which the bonus depreciation deduction

4 is taken on the taxpayer's federal income tax return

5 under subsection (k) of Section 168 of the Internal

6 Revenue Code and for each applicable taxable year

7 thereafter, an amount equal to "x", where:

8 (1) "y" equals the amount of the depreciation

9 deduction taken for the taxable year on the

10 taxpayer's federal income tax return on property

11 for which the bonus depreciation deduction was

12 taken in any year under subsection (k) of Section

13 168 of the Internal Revenue Code, but not including

14 the bonus depreciation deduction;

15 (2) for taxable years ending on or before

16 December 31, 2005, "x" equals "y" multiplied by 30

17 and then divided by 70 (or "y" multiplied by

18 0.429); and

19 (3) for taxable years ending after December

20 31, 2005:

21 (i) for property on which a bonus

22 depreciation deduction of 30% of the adjusted

23 basis was taken, "x" equals "y" multiplied by

24 30 and then divided by 70 (or "y" multiplied by

25 0.429); and

26 (ii) for property on which a bonus

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1 depreciation deduction of 50% of the adjusted

2 basis was taken, "x" equals "y" multiplied by

3 1.0.

4 The aggregate amount deducted under this

5 subparagraph in all taxable years for any one piece of

6 property may not exceed the amount of the bonus

7 depreciation deduction taken on that property on the

8 taxpayer's federal income tax return under subsection

9 (k) of Section 168 of the Internal Revenue Code. This

10 subparagraph (R) is exempt from the provisions of

11 Section 250;

12 (S) If the taxpayer sells, transfers, abandons, or

13 otherwise disposes of property for which the taxpayer

14 was required in any taxable year to make an addition

15 modification under subparagraph (G-10), then an amount

16 equal to that addition modification.

17 If the taxpayer continues to own property through

18 the last day of the last tax year for which the

19 taxpayer may claim a depreciation deduction for

20 federal income tax purposes and for which the taxpayer

21 was required in any taxable year to make an addition

22 modification under subparagraph (G-10), then an amount

23 equal to that addition modification.

24 The taxpayer is allowed to take the deduction under

25 this subparagraph only once with respect to any one

26 piece of property.

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1 This subparagraph (S) is exempt from the

2 provisions of Section 250;

3 (T) The amount of (i) any interest income (net of

4 the deductions allocable thereto) taken into account

5 for the taxable year with respect to a transaction with

6 a taxpayer that is required to make an addition

7 modification with respect to such transaction under

8 Section 203(a)(2)(D-17), 203(b)(2)(E-12),

9 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

10 the amount of such addition modification and (ii) any

11 income from intangible property (net of the deductions

12 allocable thereto) taken into account for the taxable

13 year with respect to a transaction with a taxpayer that

14 is required to make an addition modification with

15 respect to such transaction under Section

16 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

17 203(d)(2)(D-8), but not to exceed the amount of such

18 addition modification. This subparagraph (T) is exempt

19 from the provisions of Section 250;

20 (U) An amount equal to the interest income taken

21 into account for the taxable year (net of the

22 deductions allocable thereto) with respect to

23 transactions with (i) a foreign person who would be a

24 member of the taxpayer's unitary business group but for

25 the fact the foreign person's business activity

26 outside the United States is 80% or more of that

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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, but not to exceed the

9 addition modification required to be made for the same

10 taxable year under Section 203(c)(2)(G-12) for

11 interest paid, accrued, or incurred, directly or

12 indirectly, to the same person. This subparagraph (U)

13 is exempt from the provisions of Section 250;

14 (V) An amount equal to the income from intangible

15 property taken into account for the taxable year (net

16 of the deductions allocable thereto) with respect to

17 transactions with (i) a foreign person who would be a

18 member of the taxpayer's unitary business group but for

19 the fact that the foreign person's business activity

20 outside the United States is 80% or more of that

21 person's total business activity and (ii) for taxable

22 years ending on or after December 31, 2008, to a person

23 who would be a member of the same unitary business

24 group but for the fact that the person is prohibited

25 under Section 1501(a)(27) from being included in the

26 unitary business group because he or she is ordinarily

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1 required to apportion business income under different

2 subsections of Section 304, but not to exceed the

3 addition modification required to be made for the same

4 taxable year under Section 203(c)(2)(G-13) for

5 intangible expenses and costs paid, accrued, or

6 incurred, directly or indirectly, to the same foreign

7 person. This subparagraph (V) is exempt from the

8 provisions of Section 250;

9 (W) in the case of an estate, an amount equal to

10 all amounts included in such total pursuant to the

11 provisions of Section 111 of the Internal Revenue Code

12 as a recovery of items previously deducted by the

13 decedent from adjusted gross income in the computation

14 of taxable income. This subparagraph (W) is exempt from

15 Section 250;

16 (X) an amount equal to the refund included in such

17 total of any tax deducted for federal income tax

18 purposes, to the extent that deduction was added back

19 under subparagraph (F). This subparagraph (X) is

20 exempt from the provisions of Section 250; and

21 (Y) For taxable years ending on or after December

22 31, 2011, in the case of a taxpayer who was required to

23 add back any insurance premiums under Section

24 203(c)(2)(G-14), such taxpayer may elect to subtract

25 that part of a reimbursement received from the

26 insurance company equal to the amount of the expense or

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1 loss (including expenses incurred by the insurance

2 company) that would have been taken into account as a

3 deduction for federal income tax purposes if the

4 expense or loss had been uninsured. If a taxpayer makes

5 the election provided for by this subparagraph (Y), the

6 insurer to which the premiums were paid must add back

7 to income the amount subtracted by the taxpayer

8 pursuant to this subparagraph (Y). This subparagraph

9 (Y) is exempt from the provisions of Section 250.

10 (3) Limitation. The amount of any modification

11 otherwise required under this subsection shall, under

12 regulations prescribed by the Department, be adjusted by

13 any amounts included therein which were properly paid,

14 credited, or required to be distributed, or permanently set

15 aside for charitable purposes pursuant to Internal Revenue

16 Code Section 642(c) during the taxable year.

17 (d) Partnerships.

18 (1) In general. In the case of a partnership, base

19 income means an amount equal to the taxpayer's taxable

20 income for the taxable year as modified by paragraph (2).

21 (2) Modifications. The taxable income referred to in

22 paragraph (1) shall be modified by adding thereto the sum

23 of the following amounts:

24 (A) An amount equal to all amounts paid or accrued

25 to the taxpayer as interest or dividends during the

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1 taxable year to the extent excluded from gross income

2 in the computation of taxable income;

3 (B) An amount equal to the amount of tax imposed by

4 this Act to the extent deducted from gross income for

5 the taxable year;

6 (C) The amount of deductions allowed to the

7 partnership pursuant to Section 707 (c) of the Internal

8 Revenue Code in calculating its taxable income;

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 taxable income;

13 (D-5) For taxable years 2001 and thereafter, an

14 amount equal to the bonus depreciation deduction taken

15 on the taxpayer's federal income tax return for the

16 taxable year under subsection (k) of Section 168 of the

17 Internal Revenue Code;

18 (D-6) If the taxpayer sells, transfers, abandons,

19 or otherwise disposes of property for which the

20 taxpayer was required in any taxable year to make an

21 addition modification under subparagraph (D-5), then

22 an amount equal to the aggregate amount of the

23 deductions taken in all taxable years under

24 subparagraph (O) with respect to that property.

25 If the taxpayer continues to own property through

26 the last day of the last tax year for which the

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1 taxpayer may claim a depreciation deduction for

2 federal income tax purposes and for which the taxpayer

3 was allowed in any taxable year to make a subtraction

4 modification under subparagraph (O), then an amount

5 equal to that subtraction modification.

6 The taxpayer is required to make the addition

7 modification under this subparagraph only once with

8 respect to any one piece of property;

9 (D-7) An amount equal to the amount otherwise

10 allowed as a deduction in computing base income for

11 interest paid, accrued, or incurred, directly or

12 indirectly, (i) for taxable years ending on or after

13 December 31, 2004, to a foreign person who would be a

14 member of the same unitary business group but for the

15 fact the foreign person's business activity outside

16 the United States is 80% or more of the foreign

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. The addition modification

25 required by this subparagraph shall be reduced to the

26 extent that dividends were included in base income of

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1 the unitary group for the same taxable year and

2 received by the taxpayer or by a member of the

3 taxpayer's unitary business group (including amounts

4 included in gross income pursuant to Sections 951

5 through 964 of the Internal Revenue Code and amounts

6 included in gross income under Section 78 of the

7 Internal Revenue Code) with respect to the stock of the

8 same person to whom the interest was paid, accrued, or

9 incurred.

10 This paragraph shall not apply to the following:

11 (i) an item of interest paid, accrued, or

12 incurred, directly or indirectly, to a person who

13 is subject in a foreign country or state, other

14 than a state which requires mandatory unitary

15 reporting, to a tax on or measured by net income

16 with respect to such interest; or

17 (ii) an item of interest paid, accrued, or

18 incurred, directly or indirectly, to a person if

19 the taxpayer can establish, based on a

20 preponderance of the evidence, both of the

21 following:

22 (a) the person, during the same taxable

23 year, paid, accrued, or incurred, the interest

24 to a person that is not a related member, and

25 (b) the transaction giving rise to the

26 interest expense between the taxpayer and the

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1 person did not have as a principal purpose the

2 avoidance of Illinois income tax, and is paid

3 pursuant to a contract or agreement that

4 reflects an arm's-length interest rate and

5 terms; or

6 (iii) the taxpayer can establish, based on

7 clear and convincing evidence, that the interest

8 paid, accrued, or incurred relates to a contract or

9 agreement entered into at arm's-length rates and

10 terms and the principal purpose for the payment is

11 not federal or Illinois tax avoidance; or

12 (iv) an item of interest paid, accrued, or

13 incurred, directly or indirectly, to a person if

14 the taxpayer establishes by clear and convincing

15 evidence that the adjustments are unreasonable; or

16 if the taxpayer and the Director agree in writing

17 to the application or use of an alternative method

18 of apportionment under Section 304(f).

19 Nothing in this subsection shall preclude the

20 Director from making any other adjustment

21 otherwise allowed under Section 404 of this Act for

22 any tax year beginning after the effective date of

23 this amendment provided such adjustment is made

24 pursuant to regulation adopted by the Department

25 and such regulations provide methods and standards

26 by which the Department will utilize its authority

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1 under Section 404 of this Act; and

2 (D-8) An amount equal to the amount of intangible

3 expenses and costs otherwise allowed as a deduction in

4 computing base income, and that were paid, accrued, or

5 incurred, directly or indirectly, (i) for taxable

6 years ending on or after December 31, 2004, to a

7 foreign person who would be a member of the same

8 unitary business group but for the fact that the

9 foreign person's business activity outside the United

10 States is 80% or more of that person's total business

11 activity and (ii) for taxable years ending on or after

12 December 31, 2008, to a person who would be a member of

13 the same unitary business group but for the fact that

14 the person is prohibited under Section 1501(a)(27)

15 from being included in the unitary business group

16 because he or she is ordinarily required to apportion

17 business income under different subsections of Section

18 304. The addition modification required by this

19 subparagraph shall be reduced to the extent that

20 dividends were included in base income of the unitary

21 group for the same taxable year and received by the

22 taxpayer or by a member of the taxpayer's unitary

23 business group (including amounts included in gross

24 income pursuant to Sections 951 through 964 of the

25 Internal Revenue Code and amounts included in gross

26 income under Section 78 of the Internal Revenue Code)

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LRB100 06347 HLH 27908 a

1 with respect to the stock of the same person to whom

2 the intangible expenses and costs were directly or

3 indirectly paid, incurred or accrued. The preceding

4 sentence shall not apply to the extent that the same

5 dividends caused a reduction to the addition

6 modification required under Section 203(d)(2)(D-7) of

7 this Act. As used in this subparagraph, the term

8 "intangible expenses and costs" includes (1) expenses,

9 losses, and costs for, or related to, the direct or

10 indirect acquisition, use, maintenance or management,

11 ownership, sale, exchange, or any other disposition of

12 intangible property; (2) losses incurred, directly or

13 indirectly, from factoring transactions or discounting

14 transactions; (3) royalty, patent, technical, and

15 copyright fees; (4) licensing fees; and (5) other

16 similar expenses and costs. For purposes of this

17 subparagraph, "intangible property" includes patents,

18 patent applications, trade names, trademarks, service

19 marks, copyrights, mask works, trade secrets, and

20 similar types of intangible assets;

21 This paragraph shall not apply to the following:

22 (i) any item of intangible expenses or costs

23 paid, accrued, or incurred, directly or

24 indirectly, from a transaction with a person who is

25 subject in a foreign country or state, other than a

26 state which requires mandatory unitary reporting,

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LRB100 06347 HLH 27908 a

1 to a tax on or measured by net income with respect

2 to such item; or

3 (ii) any item of intangible expense or cost

4 paid, accrued, or incurred, directly or

5 indirectly, if the taxpayer can establish, based

6 on a preponderance of the evidence, both of the

7 following:

8 (a) the person during the same taxable

9 year paid, accrued, or incurred, the

10 intangible expense or cost to a person that is

11 not a related member, and

12 (b) the transaction giving rise to the

13 intangible expense or cost between the

14 taxpayer and the person did not have as a

15 principal purpose the avoidance of Illinois

16 income tax, and is paid pursuant to a contract

17 or agreement that reflects arm's-length terms;

18 or

19 (iii) any item of intangible expense or cost

20 paid, accrued, or incurred, directly or

21 indirectly, from a transaction with a person if the

22 taxpayer establishes by clear and convincing

23 evidence, that the adjustments are unreasonable;

24 or if the taxpayer and the Director agree in

25 writing to the application or use of an alternative

26 method of apportionment under Section 304(f);

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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 (D-9) For taxable years ending on or after December

11 31, 2008, an amount equal to the amount of insurance

12 premium expenses and costs otherwise allowed as a

13 deduction in computing base income, and that were paid,

14 accrued, or incurred, directly or indirectly, to a

15 person who would be a member of the same unitary

16 business group but for the fact that the person is

17 prohibited under Section 1501(a)(27) from being

18 included in the unitary business group because he or

19 she is ordinarily required to apportion business

20 income under different subsections of Section 304. The

21 addition modification required by this subparagraph

22 shall be reduced to the extent that dividends were

23 included in base income of the unitary group for the

24 same taxable year and received by the taxpayer or by a

25 member of the taxpayer's unitary business group

26 (including amounts included in gross income under

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1 Sections 951 through 964 of the Internal Revenue Code

2 and amounts included in gross income under Section 78

3 of the Internal Revenue Code) with respect to the stock

4 of the same person to whom the premiums and costs were

5 directly or indirectly paid, incurred, or accrued. The

6 preceding sentence does not apply to the extent that

7 the same dividends caused a reduction to the addition

8 modification required under Section 203(d)(2)(D-7) or

9 Section 203(d)(2)(D-8) of this Act;

10 (D-10) An amount equal to the credit allowable to

11 the taxpayer under Section 218(a) of this Act,

12 determined without regard to Section 218(c) of this

13 Act;

14 (D-11) For taxable years ending on or after

15 December 31, 2017, an amount equal to the deduction

16 allowed under Section 199 of the Internal Revenue Code

17 for the taxable year;

18 and by deducting from the total so obtained the following

19 amounts:

20 (E) The valuation limitation amount;

21 (F) An amount equal to the amount of any tax

22 imposed by this Act which was refunded to the taxpayer

23 and included in such total for the taxable year;

24 (G) An amount equal to all amounts included in

25 taxable income as modified by subparagraphs (A), (B),

26 (C) and (D) which are exempt from taxation by this

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1 State either by reason of its statutes or Constitution

2 or by reason of the Constitution, treaties or statutes

3 of the 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 (H) Any income of the partnership which

9 constitutes personal service income as defined in

10 Section 1348 (b) (1) of the Internal Revenue Code (as

11 in effect December 31, 1981) or a reasonable allowance

12 for compensation paid or accrued for services rendered

13 by partners to the partnership, whichever is greater;

14 this subparagraph (H) is exempt from the provisions of

15 Section 250;

16 (I) An amount equal to all amounts of income

17 distributable to an entity subject to the Personal

18 Property Tax Replacement Income Tax imposed by

19 subsections (c) and (d) of Section 201 of this Act

20 including amounts distributable to organizations

21 exempt from federal income tax by reason of Section

22 501(a) of the Internal Revenue Code; this subparagraph

23 (I) is exempt from the provisions of Section 250;

24 (J) With the exception of any amounts subtracted

25 under subparagraph (G), an amount equal to the sum of

26 all amounts disallowed as deductions by (i) Sections

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1 171(a) (2), and 265(2) of the Internal Revenue Code,

2 and all amounts of expenses allocable to interest and

3 disallowed as deductions by Section 265(1) of the

4 Internal Revenue Code; and (ii) for taxable years

5 ending on or after August 13, 1999, Sections 171(a)(2),

6 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue

7 Code, plus, (iii) for taxable years ending on or after

8 December 31, 2011, Section 45G(e)(3) of the Internal

9 Revenue Code and, for taxable years ending on or after

10 December 31, 2008, any amount included in gross income

11 under Section 87 of the Internal Revenue Code; the

12 provisions of this subparagraph are exempt from the

13 provisions of Section 250;

14 (K) An amount equal to those dividends included in

15 such total which were paid by a corporation which

16 conducts business operations in a River Edge

17 Redevelopment Zone or zones created under the River

18 Edge Redevelopment Zone Act and conducts substantially

19 all of its operations from a River Edge Redevelopment

20 Zone or zones. This subparagraph (K) is exempt from the

21 provisions of Section 250;

22 (L) An amount equal to any contribution made to a

23 job training project established pursuant to the Real

24 Property Tax Increment Allocation Redevelopment Act;

25 (M) An amount equal to those dividends included in

26 such total that were paid by a corporation that

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1 conducts business operations in a federally designated

2 Foreign Trade Zone or Sub-Zone and that is designated a

3 High Impact Business located in Illinois; provided

4 that dividends eligible for the deduction provided in

5 subparagraph (K) of paragraph (2) of this subsection

6 shall not be eligible for the deduction provided under

7 this subparagraph (M);

8 (N) 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 (O) For taxable years 2001 and thereafter, for the

14 taxable year in which the bonus depreciation deduction

15 is taken on the taxpayer's federal income tax return

16 under subsection (k) of Section 168 of the Internal

17 Revenue Code and for each applicable taxable year

18 thereafter, an amount equal to "x", where:

19 (1) "y" equals the amount of the depreciation

20 deduction taken for the taxable year on the

21 taxpayer's federal income tax return on property

22 for which the bonus depreciation deduction was

23 taken in any year under subsection (k) of Section

24 168 of the Internal Revenue Code, but not including

25 the bonus depreciation deduction;

26 (2) for taxable years ending on or before

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1 December 31, 2005, "x" equals "y" multiplied by 30

2 and then divided by 70 (or "y" multiplied by

3 0.429); and

4 (3) for taxable years ending after December

5 31, 2005:

6 (i) for property on which a bonus

7 depreciation deduction of 30% of the adjusted

8 basis was taken, "x" equals "y" multiplied by

9 30 and then divided by 70 (or "y" multiplied by

10 0.429); and

11 (ii) for property on which a bonus

12 depreciation deduction of 50% of the adjusted

13 basis was taken, "x" equals "y" multiplied by

14 1.0.

15 The aggregate amount deducted under this

16 subparagraph in all taxable years for any one piece of

17 property may not exceed the amount of the bonus

18 depreciation deduction taken on that property on the

19 taxpayer's federal income tax return under subsection

20 (k) of Section 168 of the Internal Revenue Code. This

21 subparagraph (O) is exempt from the provisions of

22 Section 250;

23 (P) If the taxpayer sells, transfers, abandons, or

24 otherwise disposes of property for which the taxpayer

25 was required in any taxable year to make an addition

26 modification under subparagraph (D-5), then an amount

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1 equal to that addition modification.

2 If the taxpayer continues to own property through

3 the last day of the last tax year for which the

4 taxpayer may claim a depreciation deduction for

5 federal income tax purposes and for which the taxpayer

6 was required in any taxable year to make an addition

7 modification under subparagraph (D-5), then an amount

8 equal to that addition modification.

9 The taxpayer is allowed to take the deduction under

10 this subparagraph only once with respect to any one

11 piece of property.

12 This subparagraph (P) is exempt from the

13 provisions of Section 250;

14 (Q) The amount of (i) any interest income (net of

15 the deductions allocable thereto) taken into account

16 for the taxable year with respect to a transaction with

17 a taxpayer that is required to make an addition

18 modification with respect to such transaction under

19 Section 203(a)(2)(D-17), 203(b)(2)(E-12),

20 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

21 the amount of such addition modification and (ii) any

22 income from intangible property (net of the deductions

23 allocable thereto) taken into account for the taxable

24 year with respect to a transaction with a taxpayer that

25 is required to make an addition modification with

26 respect to such transaction under Section

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1 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

2 203(d)(2)(D-8), but not to exceed the amount of such

3 addition modification. This subparagraph (Q) is exempt

4 from Section 250;

5 (R) An amount equal to the interest income taken

6 into account for the taxable year (net of the

7 deductions allocable thereto) with respect to

8 transactions with (i) a foreign person who would be a

9 member of the taxpayer's unitary business group but for

10 the fact that the foreign person's business activity

11 outside the United States is 80% or more of that

12 person's total business activity and (ii) for taxable

13 years ending on or after December 31, 2008, to a person

14 who would be a member of the same unitary business

15 group but for the fact that the person is prohibited

16 under Section 1501(a)(27) from being included in the

17 unitary business group because he or she is ordinarily

18 required to apportion business income under different

19 subsections of Section 304, but not to exceed the

20 addition modification required to be made for the same

21 taxable year under Section 203(d)(2)(D-7) for interest

22 paid, accrued, or incurred, directly or indirectly, to

23 the same person. This subparagraph (R) is exempt from

24 Section 250;

25 (S) An amount equal to the income from intangible

26 property taken into account for the taxable year (net

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1 of the deductions allocable thereto) with respect to

2 transactions with (i) a foreign person who would be a

3 member of the taxpayer's unitary business group but for

4 the fact that the foreign person's business activity

5 outside the United States is 80% or more of that

6 person's total business activity and (ii) for taxable

7 years ending on or after December 31, 2008, to a person

8 who would be a member of the same unitary business

9 group but for the fact that the person is prohibited

10 under Section 1501(a)(27) from being included in the

11 unitary business group because he or she is ordinarily

12 required to apportion business income under different

13 subsections of Section 304, but not to exceed the

14 addition modification required to be made for the same

15 taxable year under Section 203(d)(2)(D-8) for

16 intangible expenses and costs paid, accrued, or

17 incurred, directly or indirectly, to the same person.

18 This subparagraph (S) is exempt from Section 250; and

19 (T) 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(d)(2)(D-9), 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

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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 (T), 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 (T). This subparagraph

7 (T) is exempt from the provisions of Section 250.

8 (e) Gross income; adjusted gross income; taxable income.

9 (1) In general. Subject to the provisions of paragraph

10 (2) and subsection (b) (3), for purposes of this Section

11 and Section 803(e), a taxpayer's gross income, adjusted

12 gross income, or taxable income for the taxable year shall

13 mean the amount of gross income, adjusted gross income or

14 taxable income properly reportable for federal income tax

15 purposes for the taxable year under the provisions of the

16 Internal Revenue Code. Taxable income may be less than

17 zero. However, for taxable years ending on or after

18 December 31, 1986, net operating loss carryforwards from

19 taxable years ending prior to December 31, 1986, may not

20 exceed the sum of federal taxable income for the taxable

21 year before net operating loss deduction, plus the excess

22 of addition modifications over subtraction modifications

23 for the taxable year. For taxable years ending prior to

24 December 31, 1986, taxable income may never be an amount in

25 excess of the net operating loss for the taxable year as

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1 defined in subsections (c) and (d) of Section 172 of the

2 Internal Revenue Code, provided that when taxable income of

3 a corporation (other than a Subchapter S corporation),

4 trust, or estate is less than zero and addition

5 modifications, other than those provided by subparagraph

6 (E) of paragraph (2) of subsection (b) for corporations or

7 subparagraph (E) of paragraph (2) of subsection (c) for

8 trusts and estates, exceed subtraction modifications, an

9 addition modification must be made under those

10 subparagraphs for any other taxable year to which the

11 taxable income less than zero (net operating loss) is

12 applied under Section 172 of the Internal Revenue Code or

13 under subparagraph (E) of paragraph (2) of this subsection

14 (e) applied in conjunction with Section 172 of the Internal

15 Revenue Code.

16 (2) Special rule. For purposes of paragraph (1) of this

17 subsection, the taxable income properly reportable for

18 federal income tax purposes shall mean:

19 (A) Certain life insurance companies. In the case

20 of a life insurance company subject to the tax imposed

21 by Section 801 of the Internal Revenue Code, life

22 insurance company taxable income, plus the amount of

23 distribution from pre-1984 policyholder surplus

24 accounts as calculated under Section 815a of the

25 Internal Revenue Code;

26 (B) Certain other insurance companies. In the case

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1 of mutual insurance companies subject to the tax

2 imposed by Section 831 of the Internal Revenue Code,

3 insurance company taxable income;

4 (C) Regulated investment companies. In the case of

5 a regulated investment company subject to the tax

6 imposed by Section 852 of the Internal Revenue Code,

7 investment company taxable income;

8 (D) Real estate investment trusts. In the case of a

9 real estate investment trust subject to the tax imposed

10 by Section 857 of the Internal Revenue Code, real

11 estate investment trust taxable income;

12 (E) Consolidated corporations. In the case of a

13 corporation which is a member of an affiliated group of

14 corporations filing a consolidated income tax return

15 for the taxable year for federal income tax purposes,

16 taxable income determined as if such corporation had

17 filed a separate return for federal income tax purposes

18 for the taxable year and each preceding taxable year

19 for which it was a member of an affiliated group. For

20 purposes of this subparagraph, the taxpayer's separate

21 taxable income shall be determined as if the election

22 provided by Section 243(b) (2) of the Internal Revenue

23 Code had been in effect for all such years;

24 (F) Cooperatives. In the case of a cooperative

25 corporation or association, the taxable income of such

26 organization determined in accordance with the

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1 provisions of Section 1381 through 1388 of the Internal

2 Revenue Code, but without regard to the prohibition

3 against offsetting losses from patronage activities

4 against income from nonpatronage activities; except

5 that a cooperative corporation or association may make

6 an election to follow its federal income tax treatment

7 of patronage losses and nonpatronage losses. In the

8 event such election is made, such losses shall be

9 computed and carried over in a manner consistent with

10 subsection (a) of Section 207 of this Act and

11 apportioned by the apportionment factor reported by

12 the cooperative on its Illinois income tax return filed

13 for the taxable year in which the losses are incurred.

14 The election shall be effective for all taxable years

15 with original returns due on or after the date of the

16 election. In addition, the cooperative may file an

17 amended return or returns, as allowed under this Act,

18 to provide that the election shall be effective for

19 losses incurred or carried forward for taxable years

20 occurring prior to the date of the election. Once made,

21 the election may only be revoked upon approval of the

22 Director. The Department shall adopt rules setting

23 forth requirements for documenting the elections and

24 any resulting Illinois net loss and the standards to be

25 used by the Director in evaluating requests to revoke

26 elections. Public Act 96-932 is declaratory of

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1 existing law;

2 (G) Subchapter S corporations. In the case of: (i)

3 a Subchapter S corporation for which there is in effect

4 an election for the taxable year under Section 1362 of

5 the Internal Revenue Code, the taxable income of such

6 corporation determined in accordance with Section

7 1363(b) of the Internal Revenue Code, except that

8 taxable income shall take into account those items

9 which are required by Section 1363(b)(1) of the

10 Internal Revenue Code to be separately stated; and (ii)

11 a Subchapter S corporation for which there is in effect

12 a federal election to opt out of the provisions of the

13 Subchapter S Revision Act of 1982 and have applied

14 instead the prior federal Subchapter S rules as in

15 effect on July 1, 1982, the taxable income of such

16 corporation determined in accordance with the federal

17 Subchapter S rules as in effect on July 1, 1982; and

18 (H) Partnerships. In the case of a partnership,

19 taxable income determined in accordance with Section

20 703 of the Internal Revenue Code, except that taxable

21 income shall take into account those items which are

22 required by Section 703(a)(1) to be separately stated

23 but which would be taken into account by an individual

24 in calculating his taxable income.

25 (3) Recapture of business expenses on disposition of

26 asset or business. Notwithstanding any other law to the

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1 contrary, if in prior years income from an asset or

2 business has been classified as business income and in a

3 later year is demonstrated to be non-business income, then

4 all expenses, without limitation, deducted in such later

5 year and in the 2 immediately preceding taxable years

6 related to that asset or business that generated the

7 non-business income shall be added back and recaptured as

8 business income in the year of the disposition of the asset

9 or business. Such amount shall be apportioned to Illinois

10 using the greater of the apportionment fraction computed

11 for the business under Section 304 of this Act for the

12 taxable year or the average of the apportionment fractions

13 computed for the business under Section 304 of this Act for

14 the taxable year and for the 2 immediately preceding

15 taxable years.

16 (f) Valuation limitation amount.

17 (1) In general. The valuation limitation amount

18 referred to in subsections (a) (2) (G), (c) (2) (I) and

19 (d)(2) (E) is an amount equal to:

20 (A) The sum of the pre-August 1, 1969 appreciation

21 amounts (to the extent consisting of gain reportable

22 under the provisions of Section 1245 or 1250 of the

23 Internal Revenue Code) for all property in respect of

24 which such gain was reported for the taxable year; plus

25 (B) The lesser of (i) the sum of the pre-August 1,

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1 1969 appreciation amounts (to the extent consisting of

2 capital gain) for all property in respect of which such

3 gain was reported for federal income tax purposes for

4 the taxable year, or (ii) the net capital gain for the

5 taxable year, reduced in either case by any amount of

6 such gain included in the amount determined under

7 subsection (a) (2) (F) or (c) (2) (H).

8 (2) Pre-August 1, 1969 appreciation amount.

9 (A) If the fair market value of property referred

10 to in paragraph (1) was readily ascertainable on August

11 1, 1969, the pre-August 1, 1969 appreciation amount for

12 such property is the lesser of (i) the excess of such

13 fair market value over the taxpayer's basis (for

14 determining gain) for such property on that date

15 (determined under the Internal Revenue Code as in

16 effect on that date), or (ii) the total gain realized

17 and reportable for federal income tax purposes in

18 respect of the sale, exchange or other disposition of

19 such property.

20 (B) If the fair market value of property referred

21 to in paragraph (1) was not readily ascertainable on

22 August 1, 1969, the pre-August 1, 1969 appreciation

23 amount for such property is that amount which bears the

24 same ratio to the total gain reported in respect of the

25 property for federal income tax purposes for the

26 taxable year, as the number of full calendar months in

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1 that part of the taxpayer's holding period for the

2 property ending July 31, 1969 bears to the number of

3 full calendar months in the taxpayer's entire holding

4 period for the property.

5 (C) The Department shall prescribe such

6 regulations as may be necessary to carry out the

7 purposes of this paragraph.

8 (g) Double deductions. Unless specifically provided

9 otherwise, nothing in this Section shall permit the same item

10 to be deducted more than once.

11 (h) Legislative intention. Except as expressly provided by

12 this Section there shall be no modifications or limitations on

13 the amounts of income, gain, loss or deduction taken into

14 account in determining gross income, adjusted gross income or

15 taxable income for federal income tax purposes for the taxable

16 year, or in the amount of such items entering into the

17 computation of base income and net income under this Act for

18 such taxable year, whether in respect of property values as of

19 August 1, 1969 or otherwise.

20 (Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,

21 eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;

22 96-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.

23 6-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,

24 eff. 8-23-11; 97-905, eff. 8-7-12.)

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1 (35 ILCS 5/204) (from Ch. 120, par. 2-204)

2 Sec. 204. Standard Exemption.

3 (a) Allowance of exemption. In computing net income under

4 this Act, there shall be allowed as an exemption the sum of the

5 amounts determined under subsections (b), (c) and (d),

6 multiplied by a fraction the numerator of which is the amount

7 of the taxpayer's base income allocable to this State for the

8 taxable year and the denominator of which is the taxpayer's

9 total base income for the taxable year.

10 (b) Basic amount. For the purpose of subsection (a) of this

11 Section, except as provided by subsection (a) of Section 205

12 and in this subsection, each taxpayer shall be allowed a basic

13 amount of $1000, except that for corporations the basic amount

14 shall be zero for tax years ending on or after December 31,

15 2003, and for individuals the basic amount shall be:

16 (1) for taxable years ending on or after December 31,

17 1998 and prior to December 31, 1999, $1,300;

18 (2) for taxable years ending on or after December 31,

19 1999 and prior to December 31, 2000, $1,650;

20 (3) for taxable years ending on or after December 31,

21 2000 and prior to December 31, 2012, $2,000;

22 (4) for taxable years ending on or after December 31,

23 2012 and prior to December 31, 2013, $2,050;

24 (5) for taxable years ending on or after December 31,

25 2013, $2,050 plus the cost-of-living adjustment under

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1 subsection (d-5).

2 For taxable years ending on or after December 31, 1992, a

3 taxpayer whose Illinois base income exceeds the basic amount

4 and who is claimed as a dependent on another person's tax

5 return under the Internal Revenue Code shall not be allowed any

6 basic amount under this subsection.

7 (c) Additional amount for individuals. In the case of an

8 individual taxpayer, there shall be allowed for the purpose of

9 subsection (a), in addition to the basic amount provided by

10 subsection (b), an additional exemption equal to the basic

11 amount for each exemption in excess of one allowable to such

12 individual taxpayer for the taxable year under Section 151 of

13 the Internal Revenue Code.

14 (d) Additional exemptions for an individual taxpayer and

15 his or her spouse. In the case of an individual taxpayer and

16 his or her spouse, he or she shall each be allowed additional

17 exemptions as follows:

18 (1) Additional exemption for taxpayer or spouse 65

19 years of age or older.

20 (A) For taxpayer. An additional exemption of

21 $1,000 for the taxpayer if he or she has attained the

22 age of 65 before the end of the taxable year.

23 (B) For spouse when a joint return is not filed. An

24 additional exemption of $1,000 for the spouse of the

25 taxpayer if a joint return is not made by the taxpayer

26 and his spouse, and if the spouse has attained the age

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1 of 65 before the end of such taxable year, and, for the

2 calendar year in which the taxable year of the taxpayer

3 begins, has no gross income and is not the dependent of

4 another taxpayer.

5 (2) Additional exemption for blindness of taxpayer or

6 spouse.

7 (A) For taxpayer. An additional exemption of

8 $1,000 for the taxpayer if he or she is blind at the

9 end of the taxable year.

10 (B) For spouse when a joint return is not filed. An

11 additional exemption of $1,000 for the spouse of the

12 taxpayer if a separate return is made by the taxpayer,

13 and if the spouse is blind and, for the calendar year

14 in which the taxable year of the taxpayer begins, has

15 no gross income and is not the dependent of another

16 taxpayer. For purposes of this paragraph, the

17 determination of whether the spouse is blind shall be

18 made as of the end of the taxable year of the taxpayer;

19 except that if the spouse dies during such taxable year

20 such determination shall be made as of the time of such

21 death.

22 (C) Blindness defined. For purposes of this

23 subsection, an individual is blind only if his or her

24 central visual acuity does not exceed 20/200 in the

25 better eye with correcting lenses, or if his or her

26 visual acuity is greater than 20/200 but is accompanied

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1 by a limitation in the fields of vision such that the

2 widest diameter of the visual fields subtends an angle

3 no greater than 20 degrees.

4 (d-5) Cost-of-living adjustment. For purposes of item (5)

5 of subsection (b), the cost-of-living adjustment for any

6 calendar year and for taxable years ending prior to the end of

7 the subsequent calendar year is equal to $2,050 times the

8 percentage (if any) by which:

9 (1) the Consumer Price Index for the preceding calendar

10 year, exceeds

11 (2) the Consumer Price Index for the calendar year

12 2011.

13 The Consumer Price Index for any calendar year is the

14 average of the Consumer Price Index as of the close of the

15 12-month period ending on August 31 of that calendar year.

16 The term "Consumer Price Index" means the last Consumer

17 Price Index for All Urban Consumers published by the United

18 States Department of Labor or any successor agency.

19 If any cost-of-living adjustment is not a multiple of $25,

20 that adjustment shall be rounded to the next lowest multiple of

21 $25.

22 (e) Cross reference. See Article 3 for the manner of

23 determining base income allocable to this State.

24 (f) Application of Section 250. Section 250 does not apply

25 to the amendments to this Section made by Public Act 90-613.

26 (g) Notwithstanding any other provision of law, for taxable

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1 years beginning on or after January 1, 2017, no taxpayer may

2 claim an exemption under this Section if the taxpayer's

3 adjusted gross income for the taxable year exceeds (i)

4 $500,000, in the case of spouses filing a joint federal tax

5 return or (ii) $250,000, in the case of all other taxpayers.

6 (Source: P.A. 97-507, eff. 8-23-11; 97-652, eff. 6-1-12.)

7 (35 ILCS 5/208) (from Ch. 120, par. 2-208)

8 Sec. 208. Tax credit for residential real property taxes.

9 Beginning with tax years ending on or after December 31, 1991,

10 every individual taxpayer shall be entitled to a tax credit

11 equal to 5% of real property taxes paid by such taxpayer during

12 the taxable year on the principal residence of the taxpayer. In

13 the case of multi-unit or multi-use structures and farm

14 dwellings, the taxes on the taxpayer's principal residence

15 shall be that portion of the total taxes which is attributable

16 to such principal residence.Notwithstanding any other

17 provision of law, for taxable years beginning on or after

18 January 1, 2017, no taxpayer may claim a credit under this

19 Section if the taxpayer's adjusted gross income for the taxable

20 year exceeds (i) $500,000, in the case of spouses filing a

21 joint federal tax return, or (ii) $250,000, in the case of all

22 other taxpayers.

23 (Source: P.A. 87-17.)

24 (35 ILCS 5/212)

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1 Sec. 212. Earned income tax credit.

2 (a) With respect to the federal earned income tax credit

3 allowed for the taxable year under Section 32 of the federal

4 Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer

5 is entitled to a credit against the tax imposed by subsections

6 (a) and (b) of Section 201 in an amount equal to (i) 5% of the

7 federal tax credit for each taxable year beginning on or after

8 January 1, 2000 and ending prior to December 31, 2012, (ii)

9 7.5% of the federal tax credit for each taxable year beginning

10 on or after January 1, 2012 and ending prior to December 31,

11 2013, ~~and~~ (iii) 10% of the federal tax credit for each taxable

12 year beginning on or after January 1, 2013 and beginning prior

13 to January 1, 2017, (iv) 14% of the federal tax credit for each

14 taxable year beginning on or after January 1, 2017 and

15 beginning prior to January 1, 2018, and (v) 18% of the federal

16 tax credit for each taxable year beginning on or after January

17 1, 2018.

18 For a non-resident or part-year resident, the amount of the

19 credit under this Section shall be in proportion to the amount

20 of income attributable to this State.

21 (b) For taxable years beginning before January 1, 2003, in

22 no event shall a credit under this Section reduce the

23 taxpayer's liability to less than zero. For each taxable year

24 beginning on or after January 1, 2003, if the amount of the

25 credit exceeds the income tax liability for the applicable tax

26 year, then the excess credit shall be refunded to the taxpayer.

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1 The amount of a refund shall not be included in the taxpayer's

2 income or resources for the purposes of determining eligibility

3 or benefit level in any means-tested benefit program

4 administered by a governmental entity unless required by

5 federal law.

6 (c) This Section is exempt from the provisions of Section

7 250.

8 (Source: P.A. 97-652, eff. 6-1-12.)

9 (35 ILCS 5/225 new)

10 Sec. 225. Credit for instructional materials and supplies.

11 For taxable years beginning on and after January 1, 2017, a

12 taxpayer shall be allowed a credit in the amount paid by the

13 taxpayer during the taxable year for instructional materials

14 and supplies with respect to classroom based instruction in a

15 qualified school, or $250, whichever is less, provided that the

16 taxpayer is a teacher, instructor, counselor, principal, or

17 aide in a qualified school for at least 900 hours during a

18 school year.

19 The credit may not be carried back and may not reduce the

20 taxpayer's liability to less than zero. If the amount of the

21 credit exceeds the tax liability for the year, the excess may

22 be carried forward and applied to the tax liability of the 5

23 taxable years following the excess credit year. The tax credit

24 shall be applied to the earliest year for which there is a tax

25 liability. If there are credits for more than one year that are

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1 available to offset a liability, the earlier credit shall be

2 applied first.

3 For purposes of this Section, the term "materials and

4 supplies" means amounts paid for instructional materials or

5 supplies that are designated for classroom use in any qualified

6 school. For purposes of this Section, the term "qualified

7 school" means a public school or non-public school located in

8 Illinois.

9 This Section is exempt from the provisions of Section 250.

10 (35 ILCS 5/901) (from Ch. 120, par. 9-901)

11 Sec. 901. Collection authority.

12 (a) In general.

13 The Department shall collect the taxes imposed by this Act.

14 The Department shall collect certified past due child support

15 amounts under Section 2505-650 of the Department of Revenue Law

16 (20 ILCS 2505/2505-650). Except as provided in subsections (c),

17 (e), (f), (g), and (h) of this Section, money collected

18 pursuant to subsections (a) and (b) of Section 201 of this Act

19 shall be paid into the General Revenue Fund in the State

20 treasury; money collected pursuant to subsections (c) and (d)

21 of Section 201 of this Act shall be paid into the Personal

22 Property Tax Replacement Fund, a special fund in the State

23 Treasury; and money collected under Section 2505-650 of the

24 Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid

25 into the Child Support Enforcement Trust Fund, a special fund

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1 outside the State Treasury, or to the State Disbursement Unit

2 established under Section 10-26 of the Illinois Public Aid

3 Code, as directed by the Department of Healthcare and Family

4 Services.

5 (b) Local Government Distributive Fund.

6 Beginning August 1, 1969, and continuing through June 30,

7 1994, the Treasurer shall transfer each month from the General

8 Revenue Fund to a special fund in the State treasury, to be

9 known as the "Local Government Distributive Fund", an amount

10 equal to 1/12 of the net revenue realized from the tax imposed

11 by subsections (a) and (b) of Section 201 of this Act during

12 the preceding month. Beginning July 1, 1994, and continuing

13 through June 30, 1995, the Treasurer shall transfer each month

14 from the General Revenue Fund to the Local Government

15 Distributive Fund an amount equal to 1/11 of the net revenue

16 realized from the tax imposed by subsections (a) and (b) of

17 Section 201 of this Act during the preceding month. Beginning

18 July 1, 1995 and continuing through January 31, 2011, the

19 Treasurer shall transfer each month from the General Revenue

20 Fund to the Local Government Distributive Fund an amount equal

21 to the net of (i) 1/10 of the net revenue realized from the tax

22 imposed by subsections (a) and (b) of Section 201 of the

23 Illinois Income Tax Act during the preceding month (ii) minus,

24 beginning July 1, 2003 and ending June 30, 2004, $6,666,666,

25 and beginning July 1, 2004, zero. Beginning February 1, 2011,

26 and continuing through January 31, 2015, the Treasurer shall

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1 transfer each month from the General Revenue Fund to the Local

2 Government Distributive Fund an amount equal to the sum of (i)

3 6% (10% of the ratio of the 3% individual income tax rate prior

4 to 2011 to the 5% individual income tax rate after 2010) of the

5 net revenue realized from the tax imposed by subsections (a)

6 and (b) of Section 201 of this Act upon individuals, trusts,

7 and estates during the preceding month and (ii) 6.86% (10% of

8 the ratio of the 4.8% corporate income tax rate prior to 2011

9 to the 7% corporate income tax rate after 2010) of the net

10 revenue realized from the tax imposed by subsections (a) and

11 (b) of Section 201 of this Act upon corporations during the

12 preceding month. Beginning February 1, 2015 and continuing

13 through July 31, 2017 ~~January 31, 2025~~, the Treasurer shall

14 transfer each month from the General Revenue Fund to the Local

15 Government Distributive Fund an amount equal to the sum of (i)

16 8% (10% of the ratio of the 3% individual income tax rate prior

17 to 2011 to the 3.75% individual income tax rate after 2014) of

18 the net revenue realized from the tax imposed by subsections

19 (a) and (b) of Section 201 of this Act upon individuals,

20 trusts, and estates during the preceding month and (ii) 9.14%

21 (10% of the ratio of the 4.8% corporate income tax rate prior

22 to 2011 to the 5.25% corporate income tax rate after 2014) of

23 the net revenue realized from the tax imposed by subsections

24 (a) and (b) of Section 201 of this Act upon corporations during

25 the preceding month. Beginning August 1, 2017 ~~February 1, 2025~~,

26 the Treasurer shall transfer each month from the General

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1 Revenue Fund to the Local Government Distributive Fund an

2 amount equal to the sum of (i) 6.06% ~~9.23%~~ (10% of the ratio of

3 the 3% individual income tax rate prior to 2011 to the 4.95%

4 ~~3.25%~~ individual income tax rate after July 1, 2017 ~~2024~~) of

5 the net revenue realized from the tax imposed by subsections

6 (a) and (b) of Section 201 of this Act upon individuals,

7 trusts, and estates during the preceding month and (ii) 6.85%

8 (10% of the ratio of the 4.8% corporate income tax rate prior

9 to 2011 to the 7% corporate income tax rate after July 1, 2017)

10 ~~10%~~ of the net revenue realized from the tax imposed by

11 subsections (a) and (b) of Section 201 of this Act upon

12 corporations during the preceding month. Net revenue realized

13 for a month shall be defined as the revenue from the tax

14 imposed by subsections (a) and (b) of Section 201 of this Act

15 which is deposited in the General Revenue Fund, the Education

16 Assistance Fund, the Income Tax Surcharge Local Government

17 Distributive Fund, the Fund for the Advancement of Education,

18 and the Commitment to Human Services Fund during the month

19 minus the amount paid out of the General Revenue Fund in State

20 warrants during that same month as refunds to taxpayers for

21 overpayment of liability under the tax imposed by subsections

22 (a) and (b) of Section 201 of this Act.

23 Beginning on August 26, 2014 (the effective date of Public

24 Act 98-1052), the Comptroller shall perform the transfers

25 required by this subsection (b) no later than 60 days after he

26 or she receives the certification from the Treasurer as

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1 provided in Section 1 of the State Revenue Sharing Act.

2 (c) Deposits Into Income Tax Refund Fund.

3 (1) Beginning on January 1, 1989 and thereafter, the

4 Department shall deposit a percentage of the amounts

5 collected pursuant to subsections (a) and (b)(1), (2), and

6 (3), of Section 201 of this Act into a fund in the State

7 treasury known as the Income Tax Refund Fund. The

8 Department shall deposit 6% of such amounts during the

9 period beginning January 1, 1989 and ending on June 30,

10 1989. Beginning with State fiscal year 1990 and for each

11 fiscal year thereafter, the percentage deposited into the

12 Income Tax Refund Fund during a fiscal year shall be the

13 Annual Percentage. For fiscal years 1999 through 2001, the

14 Annual Percentage shall be 7.1%. For fiscal year 2003, the

15 Annual Percentage shall be 8%. For fiscal year 2004, the

16 Annual Percentage shall be 11.7%. Upon the effective date

17 of this amendatory Act of the 93rd General Assembly, the

18 Annual Percentage shall be 10% for fiscal year 2005. For

19 fiscal year 2006, the Annual Percentage shall be 9.75%. For

20 fiscal year 2007, the Annual Percentage shall be 9.75%. For

21 fiscal year 2008, the Annual Percentage shall be 7.75%. For

22 fiscal year 2009, the Annual Percentage shall be 9.75%. For

23 fiscal year 2010, the Annual Percentage shall be 9.75%. For

24 fiscal year 2011, the Annual Percentage shall be 8.75%. For

25 fiscal year 2012, the Annual Percentage shall be 8.75%. For

26 fiscal year 2013, the Annual Percentage shall be 9.75%. For

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1 fiscal year 2014, the Annual Percentage shall be 9.5%. For

2 fiscal year 2015, the Annual Percentage shall be 10%. For

3 all other fiscal years, the Annual Percentage shall be

4 calculated as a fraction, the numerator of which shall be

5 the amount of refunds approved for payment by the

6 Department during the preceding fiscal year as a result of

7 overpayment of tax liability under subsections (a) and

8 (b)(1), (2), and (3) of Section 201 of this Act plus the

9 amount of such refunds remaining approved but unpaid at the

10 end of the preceding fiscal year, minus the amounts

11 transferred into the Income Tax Refund Fund from the

12 Tobacco Settlement Recovery Fund, and the denominator of

13 which shall be the amounts which will be collected pursuant

14 to subsections (a) and (b)(1), (2), and (3) of Section 201

15 of this Act during the preceding fiscal year; except that

16 in State fiscal year 2002, the Annual Percentage shall in

17 no event exceed 7.6%. The Director of Revenue shall certify

18 the Annual Percentage to the Comptroller on the last

19 business day of the fiscal year immediately preceding the

20 fiscal year for which it is to be effective.

21 (2) Beginning on January 1, 1989 and thereafter, the

22 Department shall deposit a percentage of the amounts

23 collected pursuant to subsections (a) and (b)(6), (7), and

24 (8), (c) and (d) of Section 201 of this Act into a fund in

25 the State treasury known as the Income Tax Refund Fund. The

26 Department shall deposit 18% of such amounts during the

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1 period beginning January 1, 1989 and ending on June 30,

2 1989. Beginning with State fiscal year 1990 and for each

3 fiscal year thereafter, the percentage deposited into the

4 Income Tax Refund Fund during a fiscal year shall be the

5 Annual Percentage. For fiscal years 1999, 2000, and 2001,

6 the Annual Percentage shall be 19%. For fiscal year 2003,

7 the Annual Percentage shall be 27%. For fiscal year 2004,

8 the Annual Percentage shall be 32%. Upon the effective date

9 of this amendatory Act of the 93rd General Assembly, the

10 Annual Percentage shall be 24% for fiscal year 2005. For

11 fiscal year 2006, the Annual Percentage shall be 20%. For

12 fiscal year 2007, the Annual Percentage shall be 17.5%. For

13 fiscal year 2008, the Annual Percentage shall be 15.5%. For

14 fiscal year 2009, the Annual Percentage shall be 17.5%. For

15 fiscal year 2010, the Annual Percentage shall be 17.5%. For

16 fiscal year 2011, the Annual Percentage shall be 17.5%. For

17 fiscal year 2012, the Annual Percentage shall be 17.5%. For

18 fiscal year 2013, the Annual Percentage shall be 14%. For

19 fiscal year 2014, the Annual Percentage shall be 13.4%. For

20 fiscal year 2015, the Annual Percentage shall be 14%. For

21 all other fiscal years, the Annual Percentage shall be

22 calculated as a fraction, the numerator of which shall be

23 the amount of refunds approved for payment by the

24 Department during the preceding fiscal year as a result of

25 overpayment of tax liability under subsections (a) and

26 (b)(6), (7), and (8), (c) and (d) of Section 201 of this

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1 Act plus the amount of such refunds remaining approved but

2 unpaid at the end of the preceding fiscal year, and the

3 denominator of which shall be the amounts which will be

4 collected pursuant to subsections (a) and (b)(6), (7), and

5 (8), (c) and (d) of Section 201 of this Act during the

6 preceding fiscal year; except that in State fiscal year

7 2002, the Annual Percentage shall in no event exceed 23%.

8 The Director of Revenue shall certify the Annual Percentage

9 to the Comptroller on the last business day of the fiscal

10 year immediately preceding the fiscal year for which it is

11 to be effective.

12 (3) The Comptroller shall order transferred and the

13 Treasurer shall transfer from the Tobacco Settlement

14 Recovery Fund to the Income Tax Refund Fund (i) $35,000,000

15 in January, 2001, (ii) $35,000,000 in January, 2002, and

16 (iii) $35,000,000 in January, 2003.

17 (d) Expenditures from Income Tax Refund Fund.

18 (1) Beginning January 1, 1989, money in the Income Tax

19 Refund Fund shall be expended exclusively for the purpose

20 of paying refunds resulting from overpayment of tax

21 liability under Section 201 of this Act, for paying rebates

22 under Section 208.1 in the event that the amounts in the

23 Homeowners' Tax Relief Fund are insufficient for that

24 purpose, and for making transfers pursuant to this

25 subsection (d).

26 (2) The Director shall order payment of refunds

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1 resulting from overpayment of tax liability under Section

2 201 of this Act from the Income Tax Refund Fund only to the

3 extent that amounts collected pursuant to Section 201 of

4 this Act and transfers pursuant to this subsection (d) and

5 item (3) of subsection (c) have been deposited and retained

6 in the Fund.

7 (3) As soon as possible after the end of each fiscal

8 year, the Director shall order transferred and the State

9 Treasurer and State Comptroller shall transfer from the

10 Income Tax Refund Fund to the Personal Property Tax

11 Replacement Fund an amount, certified by the Director to

12 the Comptroller, equal to the excess of the amount

13 collected pursuant to subsections (c) and (d) of Section

14 201 of this Act deposited into the Income Tax Refund Fund

15 during the fiscal year over the amount of refunds resulting

16 from overpayment of tax liability under subsections (c) and

17 (d) of Section 201 of this Act paid from the Income Tax

18 Refund Fund during the fiscal year.

19 (4) As soon as possible after the end of each fiscal

20 year, the Director shall order transferred and the State

21 Treasurer and State Comptroller shall transfer from the

22 Personal Property Tax Replacement Fund to the Income Tax

23 Refund Fund an amount, certified by the Director to the

24 Comptroller, equal to the excess of the amount of refunds

25 resulting from overpayment of tax liability under

26 subsections (c) and (d) of Section 201 of this Act paid

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1 from the Income Tax Refund Fund during the fiscal year over

2 the amount collected pursuant to subsections (c) and (d) of

3 Section 201 of this Act deposited into the Income Tax

4 Refund Fund during the fiscal year.

5 (4.5) As soon as possible after the end of fiscal year

6 1999 and of each fiscal year thereafter, the Director shall

7 order transferred and the State Treasurer and State

8 Comptroller shall transfer from the Income Tax Refund Fund

9 to the General Revenue Fund any surplus remaining in the

10 Income Tax Refund Fund as of the end of such fiscal year;

11 excluding for fiscal years 2000, 2001, and 2002 amounts

12 attributable to transfers under item (3) of subsection (c)

13 less refunds resulting from the earned income tax credit.

14 (5) This Act shall constitute an irrevocable and

15 continuing appropriation from the Income Tax Refund Fund

16 for the purpose of paying refunds upon the order of the

17 Director in accordance with the provisions of this Section.

18 (e) Deposits into the Education Assistance Fund and the

19 Income Tax Surcharge Local Government Distributive Fund.

20 On July 1, 1991, and thereafter, of the amounts collected

21 pursuant to subsections (a) and (b) of Section 201 of this Act,

22 minus deposits into the Income Tax Refund Fund, the Department

23 shall deposit 7.3% into the Education Assistance Fund in the

24 State Treasury. Beginning July 1, 1991, and continuing through

25 January 31, 1993, of the amounts collected pursuant to

26 subsections (a) and (b) of Section 201 of the Illinois Income

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1 Tax Act, minus deposits into the Income Tax Refund Fund, the

2 Department shall deposit 3.0% into the Income Tax Surcharge

3 Local Government Distributive Fund in the State Treasury.

4 Beginning February 1, 1993 and continuing through June 30,

5 1993, of the amounts collected pursuant to subsections (a) and

6 (b) of Section 201 of the Illinois Income Tax Act, minus

7 deposits into the Income Tax Refund Fund, the Department shall

8 deposit 4.4% into the Income Tax Surcharge Local Government

9 Distributive Fund in the State Treasury. Beginning July 1,

10 1993, and continuing through June 30, 1994, of the amounts

11 collected under subsections (a) and (b) of Section 201 of this

12 Act, minus deposits into the Income Tax Refund Fund, the

13 Department shall deposit 1.475% into the Income Tax Surcharge

14 Local Government Distributive Fund in the State Treasury.

15 (f) Deposits into the Fund for the Advancement of

16 Education. Beginning February 1, 2015, the Department shall

17 deposit the following portions of the revenue realized from the

18 tax imposed upon individuals, trusts, and estates by

19 subsections (a) and (b) of Section 201 of this Act during the

20 preceding month, minus deposits into the Income Tax Refund

21 Fund, into the Fund for the Advancement of Education:

22 (1) beginning February 1, 2015, and prior to February

23 1, 2025, 1/30; and

24 (2) beginning February 1, 2025, 1/26.

25 If the rate of tax imposed by subsection (a) and (b) of

26 Section 201 is reduced pursuant to Section 201.5 of this Act,

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1 the Department shall not make the deposits required by this

2 subsection (f) on or after the effective date of the reduction.

3 (g) Deposits into the Commitment to Human Services Fund.

4 Beginning February 1, 2015, the Department shall deposit the

5 following portions of the revenue realized from the tax imposed

6 upon individuals, trusts, and estates by subsections (a) and

7 (b) of Section 201 of this Act during the preceding month,

8 minus deposits into the Income Tax Refund Fund, into the

9 Commitment to Human Services Fund:

10 (1) beginning February 1, 2015, and prior to February

11 1, 2025, 1/30; and

12 (2) beginning February 1, 2025, 1/26.

13 If the rate of tax imposed by subsection (a) and (b) of

14 Section 201 is reduced pursuant to Section 201.5 of this Act,

15 the Department shall not make the deposits required by this

16 subsection (g) on or after the effective date of the reduction.

17 (h) Deposits into the Tax Compliance and Administration

18 Fund. Beginning on the first day of the first calendar month to

19 occur on or after August 26, 2014 (the effective date of Public

20 Act 98-1098), each month the Department shall pay into the Tax

21 Compliance and Administration Fund, to be used, subject to

22 appropriation, to fund additional auditors and compliance

23 personnel at the Department, an amount equal to 1/12 of 5% of

24 the cash receipts collected during the preceding fiscal year by

25 the Audit Bureau of the Department from the tax imposed by

26 subsections (a), (b), (c), and (d) of Section 201 of this Act,

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1 net of deposits into the Income Tax Refund Fund made from those

2 cash receipts.

3 (Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;

4 98-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.

5 7-20-15.)

6 (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)

7 Sec. 1501. Definitions.

8 (a) In general. When used in this Act, where not otherwise

9 distinctly expressed or manifestly incompatible with the

10 intent thereof:

11 (1) Business income. The term "business income" means

12 all income that may be treated as apportionable business

13 income under the Constitution of the United States.

14 Business income is net of the deductions allocable thereto.

15 Such term does not include compensation or the deductions

16 allocable thereto. For each taxable year beginning on or

17 after January 1, 2003, a taxpayer may elect to treat all

18 income other than compensation as business income. This

19 election shall be made in accordance with rules adopted by

20 the Department and, once made, shall be irrevocable.

21 (1.5) Captive real estate investment trust:

22 (A) The term "captive real estate investment

23 trust" means a corporation, trust, or association:

24 (i) that is considered a real estate

25 investment trust for the taxable year under

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1 Section 856 of the Internal Revenue Code;

2 (ii) the certificates of beneficial interest

3 or shares of which are not regularly traded on an

4 established securities market; and

5 (iii) of which more than 50% of the voting

6 power or value of the beneficial interest or

7 shares, at any time during the last half of the

8 taxable year, is owned or controlled, directly,

9 indirectly, or constructively, by a single

10 corporation.

11 (B) The term "captive real estate investment

12 trust" does not include:

13 (i) a real estate investment trust of which

14 more than 50% of the voting power or value of the

15 beneficial interest or shares is owned or

16 controlled, directly, indirectly, or

17 constructively, by:

18 (a) a real estate investment trust, other

19 than a captive real estate investment trust;

20 (b) a person who is exempt from taxation

21 under Section 501 of the Internal Revenue Code,

22 and who is not required to treat income

23 received from the real estate investment trust

24 as unrelated business taxable income under

25 Section 512 of the Internal Revenue Code;

26 (c) a listed Australian property trust, if

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1 no more than 50% of the voting power or value

2 of the beneficial interest or shares of that

3 trust, at any time during the last half of the

4 taxable year, is owned or controlled, directly

5 or indirectly, by a single person;

6 (d) an entity organized as a trust,

7 provided a listed Australian property trust

8 described in subparagraph (c) owns or

9 controls, directly or indirectly, or

10 constructively, 75% or more of the voting power

11 or value of the beneficial interests or shares

12 of such entity; or

13 (e) an entity that is organized outside of

14 the laws of the United States and that

15 satisfies all of the following criteria:

16 (1) at least 75% of the entity's total

17 asset value at the close of its taxable

18 year is represented by real estate assets

19 (as defined in Section 856(c)(5)(B) of the

20 Internal Revenue Code, thereby including

21 shares or certificates of beneficial

22 interest in any real estate investment

23 trust), cash and cash equivalents, and

24 U.S. Government securities;

25 (2) the entity is not subject to tax on

26 amounts that are distributed to its

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1 beneficial owners or is exempt from

2 entity-level taxation;

3 (3) the entity distributes at least

4 85% of its taxable income (as computed in

5 the jurisdiction in which it is organized)

6 to the holders of its shares or

7 certificates of beneficial interest on an

8 annual basis;

9 (4) either (i) the shares or

10 beneficial interests of the entity are

11 regularly traded on an established

12 securities market or (ii) not more than 10%

13 of the voting power or value in the entity

14 is held, directly, indirectly, or

15 constructively, by a single entity or

16 individual; and

17 (5) the entity is organized in a

18 country that has entered into a tax treaty

19 with the United States; or

20 (ii) during its first taxable year for which it

21 elects to be treated as a real estate investment

22 trust under Section 856(c)(1) of the Internal

23 Revenue Code, a real estate investment trust the

24 certificates of beneficial interest or shares of

25 which are not regularly traded on an established

26 securities market, but only if the certificates of

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1 beneficial interest or shares of the real estate

2 investment trust are regularly traded on an

3 established securities market prior to the earlier

4 of the due date (including extensions) for filing

5 its return under this Act for that first taxable

6 year or the date it actually files that return.

7 (C) For the purposes of this subsection (1.5), the

8 constructive ownership rules prescribed under Section

9 318(a) of the Internal Revenue Code, as modified by

10 Section 856(d)(5) of the Internal Revenue Code, apply

11 in determining the ownership of stock, assets, or net

12 profits of any person.

13 (D) For the purposes of this item (1.5), for

14 taxable years ending on or after August 16, 2007, the

15 voting power or value of the beneficial interest or

16 shares of a real estate investment trust does not

17 include any voting power or value of beneficial

18 interest or shares in a real estate investment trust

19 held directly or indirectly in a segregated asset

20 account by a life insurance company (as described in

21 Section 817 of the Internal Revenue Code) to the extent

22 such voting power or value is for the benefit of

23 entities or persons who are either immune from taxation

24 or exempt from taxation under subtitle A of the

25 Internal Revenue Code.

26 (2) Commercial domicile. The term "commercial

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1 domicile" means the principal place from which the trade or

2 business of the taxpayer is directed or managed.

3 (3) Compensation. The term "compensation" means wages,

4 salaries, commissions and any other form of remuneration

5 paid to employees for personal services.

6 (4) Corporation. The term "corporation" includes

7 associations, joint-stock companies, insurance companies

8 and cooperatives. Any entity, including a limited

9 liability company formed under the Illinois Limited

10 Liability Company Act, shall be treated as a corporation if

11 it is so classified for federal income tax purposes.

12 (5) Department. The term "Department" means the

13 Department of Revenue of this State.

14 (6) Director. The term "Director" means the Director of

15 Revenue of this State.

16 (7) Fiduciary. The term "fiduciary" means a guardian,

17 trustee, executor, administrator, receiver, or any person

18 acting in any fiduciary capacity for any person.

19 (8) Financial organization.

20 (A) The term "financial organization" means any

21 bank, bank holding company, trust company, savings

22 bank, industrial bank, land bank, safe deposit

23 company, private banker, savings and loan association,

24 building and loan association, credit union, currency

25 exchange, cooperative bank, small loan company, sales

26 finance company, investment company, or any person

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1 which is owned by a bank or bank holding company. For

2 the purpose of this Section a "person" will include

3 only those persons which a bank holding company may

4 acquire and hold an interest in, directly or

5 indirectly, under the provisions of the Bank Holding

6 Company Act of 1956 (12 U.S.C. 1841, et seq.), except

7 where interests in any person must be disposed of

8 within certain required time limits under the Bank

9 Holding Company Act of 1956.

10 (B) For purposes of subparagraph (A) of this

11 paragraph, the term "bank" includes (i) any entity that

12 is regulated by the Comptroller of the Currency under

13 the National Bank Act, or by the Federal Reserve Board,

14 or by the Federal Deposit Insurance Corporation and

15 (ii) any federally or State chartered bank operating as

16 a credit card bank.

17 (C) For purposes of subparagraph (A) of this

18 paragraph, the term "sales finance company" has the

19 meaning provided in the following item (i) or (ii):

20 (i) A person primarily engaged in one or more

21 of the following businesses: the business of

22 purchasing customer receivables, the business of

23 making loans upon the security of customer

24 receivables, the business of making loans for the

25 express purpose of funding purchases of tangible

26 personal property or services by the borrower, or

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1 the business of finance leasing. For purposes of

2 this item (i), "customer receivable" means:

3 (a) a retail installment contract or

4 retail charge agreement within the meaning of

5 the Sales Finance Agency Act, the Retail

6 Installment Sales Act, or the Motor Vehicle

7 Retail Installment Sales Act;

8 (b) an installment, charge, credit, or

9 similar contract or agreement arising from the

10 sale of tangible personal property or services

11 in a transaction involving a deferred payment

12 price payable in one or more installments

13 subsequent to the sale; or

14 (c) the outstanding balance of a contract

15 or agreement described in provisions (a) or (b)

16 of this item (i).

17 A customer receivable need not provide for

18 payment of interest on deferred payments. A sales

19 finance company may purchase a customer receivable

20 from, or make a loan secured by a customer

21 receivable to, the seller in the original

22 transaction or to a person who purchased the

23 customer receivable directly or indirectly from

24 that seller.

25 (ii) A corporation meeting each of the

26 following criteria:

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1 (a) the corporation must be a member of an

2 "affiliated group" within the meaning of

3 Section 1504(a) of the Internal Revenue Code,

4 determined without regard to Section 1504(b)

5 of the Internal Revenue Code;

6 (b) more than 50% of the gross income of

7 the corporation for the taxable year must be

8 interest income derived from qualifying loans.

9 A "qualifying loan" is a loan made to a member

10 of the corporation's affiliated group that

11 originates customer receivables (within the

12 meaning of item (i)) or to whom customer

13 receivables originated by a member of the

14 affiliated group have been transferred, to the

15 extent the average outstanding balance of

16 loans from that corporation to members of its

17 affiliated group during the taxable year do not

18 exceed the limitation amount for that

19 corporation. The "limitation amount" for a

20 corporation is the average outstanding

21 balances during the taxable year of customer

22 receivables (within the meaning of item (i))

23 originated by all members of the affiliated

24 group. If the average outstanding balances of

25 the loans made by a corporation to members of

26 its affiliated group exceed the limitation

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1 amount, the interest income of that

2 corporation from qualifying loans shall be

3 equal to its interest income from loans to

4 members of its affiliated groups times a

5 fraction equal to the limitation amount

6 divided by the average outstanding balances of

7 the loans made by that corporation to members

8 of its affiliated group;

9 (c) the total of all shareholder's equity

10 (including, without limitation, paid-in

11 capital on common and preferred stock and

12 retained earnings) of the corporation plus the

13 total of all of its loans, advances, and other

14 obligations payable or owed to members of its

15 affiliated group may not exceed 20% of the

16 total assets of the corporation at any time

17 during the tax year; and

18 (d) more than 50% of all interest-bearing

19 obligations of the affiliated group payable to

20 persons outside the group determined in

21 accordance with generally accepted accounting

22 principles must be obligations of the

23 corporation.

24 This amendatory Act of the 91st General Assembly is

25 declaratory of existing law.

26 (D) Subparagraphs (B) and (C) of this paragraph are

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1 declaratory of existing law and apply retroactively,

2 for all tax years beginning on or before December 31,

3 1996, to all original returns, to all amended returns

4 filed no later than 30 days after the effective date of

5 this amendatory Act of 1996, and to all notices issued

6 on or before the effective date of this amendatory Act

7 of 1996 under subsection (a) of Section 903, subsection

8 (a) of Section 904, subsection (e) of Section 909, or

9 Section 912. A taxpayer that is a "financial

10 organization" that engages in any transaction with an

11 affiliate shall be a "financial organization" for all

12 purposes of this Act.

13 (E) For all tax years beginning on or before

14 December 31, 1996, a taxpayer that falls within the

15 definition of a "financial organization" under

16 subparagraphs (B) or (C) of this paragraph, but who

17 does not fall within the definition of a "financial

18 organization" under the Proposed Regulations issued by

19 the Department of Revenue on July 19, 1996, may

20 irrevocably elect to apply the Proposed Regulations

21 for all of those years as though the Proposed

22 Regulations had been lawfully promulgated, adopted,

23 and in effect for all of those years. For purposes of

24 applying subparagraphs (B) or (C) of this paragraph to

25 all of those years, the election allowed by this

26 subparagraph applies only to the taxpayer making the

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1 election and to those members of the taxpayer's unitary

2 business group who are ordinarily required to

3 apportion business income under the same subsection of

4 Section 304 of this Act as the taxpayer making the

5 election. No election allowed by this subparagraph

6 shall be made under a claim filed under subsection (d)

7 of Section 909 more than 30 days after the effective

8 date of this amendatory Act of 1996.

9 (F) Finance Leases. For purposes of this

10 subsection, a finance lease shall be treated as a loan

11 or other extension of credit, rather than as a lease,

12 regardless of how the transaction is characterized for

13 any other purpose, including the purposes of any

14 regulatory agency to which the lessor is subject. A

15 finance lease is any transaction in the form of a lease

16 in which the lessee is treated as the owner of the

17 leased asset entitled to any deduction for

18 depreciation allowed under Section 167 of the Internal

19 Revenue Code.

20 (9) Fiscal year. The term "fiscal year" means an

21 accounting period of 12 months ending on the last day of

22 any month other than December.

23 (9.5) Fixed place of business. The term "fixed place of

24 business" has the same meaning as that term is given in

25 Section 864 of the Internal Revenue Code and the related

26 Treasury regulations.

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1 (10) Includes and including. The terms "includes" and

2 "including" when used in a definition contained in this Act

3 shall not be deemed to exclude other things otherwise

4 within the meaning of the term defined.

5 (11) Internal Revenue Code. The term "Internal Revenue

6 Code" means the United States Internal Revenue Code of 1954

7 or any successor law or laws relating to federal income

8 taxes in effect for the taxable year.

9 (11.5) Investment partnership.

10 (A) The term "investment partnership" means any

11 entity that is treated as a partnership for federal

12 income tax purposes that meets the following

13 requirements:

14 (i) no less than 90% of the partnership's cost

15 of its total assets consists of qualifying

16 investment securities, deposits at banks or other

17 financial institutions, and office space and

18 equipment reasonably necessary to carry on its

19 activities as an investment partnership;

20 (ii) no less than 90% of its gross income

21 consists of interest, dividends, and gains from

22 the sale or exchange of qualifying investment

23 securities; and

24 (iii) the partnership is not a dealer in

25 qualifying investment securities.

26 (B) For purposes of this paragraph (11.5), the term

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1 "qualifying investment securities" includes all of the

2 following:

3 (i) common stock, including preferred or debt

4 securities convertible into common stock, and

5 preferred stock;

6 (ii) bonds, debentures, and other debt

7 securities;

8 (iii) foreign and domestic currency deposits

9 secured by federal, state, or local governmental

10 agencies;

11 (iv) mortgage or asset-backed securities

12 secured by federal, state, or local governmental

13 agencies;

14 (v) repurchase agreements and loan

15 participations;

16 (vi) foreign currency exchange contracts and

17 forward and futures contracts on foreign

18 currencies;

19 (vii) stock and bond index securities and

20 futures contracts and other similar financial

21 securities and futures contracts on those

22 securities;

23 (viii) options for the purchase or sale of any

24 of the securities, currencies, contracts, or

25 financial instruments described in items (i) to

26 (vii), inclusive;

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1 (ix) regulated futures contracts;

2 (x) commodities (not described in Section

3 1221(a)(1) of the Internal Revenue Code) or

4 futures, forwards, and options with respect to

5 such commodities, provided, however, that any item

6 of a physical commodity to which title is actually

7 acquired in the partnership's capacity as a dealer

8 in such commodity shall not be a qualifying

9 investment security;

10 (xi) derivatives; and

11 (xii) a partnership interest in another

12 partnership that is an investment partnership.

13 (12) Mathematical error. The term "mathematical error"

14 includes the following types of errors, omissions, or

15 defects in a return filed by a taxpayer which prevents

16 acceptance of the return as filed for processing:

17 (A) arithmetic errors or incorrect computations on

18 the return or supporting schedules;

19 (B) entries on the wrong lines;

20 (C) omission of required supporting forms or

21 schedules or the omission of the information in whole

22 or in part called for thereon; and

23 (D) an attempt to claim, exclude, deduct, or

24 improperly report, in a manner directly contrary to the

25 provisions of the Act and regulations thereunder any

26 item of income, exemption, deduction, or credit.

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1 (13) Nonbusiness income. The term "nonbusiness income"

2 means all income other than business income or

3 compensation.

4 (14) Nonresident. The term "nonresident" means a

5 person who is not a resident.

6 (15) Paid, incurred and accrued. The terms "paid",

7 "incurred" and "accrued" shall be construed according to

8 the method of accounting upon the basis of which the

9 person's base income is computed under this Act.

10 (16) Partnership and partner. The term "partnership"

11 includes a syndicate, group, pool, joint venture or other

12 unincorporated organization, through or by means of which

13 any business, financial operation, or venture is carried

14 on, and which is not, within the meaning of this Act, a

15 trust or estate or a corporation; and the term "partner"

16 includes a member in such syndicate, group, pool, joint

17 venture or organization.

18 The term "partnership" includes any entity, including

19 a limited liability company formed under the Illinois

20 Limited Liability Company Act, classified as a partnership

21 for federal income tax purposes.

22 The term "partnership" does not include a syndicate,

23 group, pool, joint venture, or other unincorporated

24 organization established for the sole purpose of playing

25 the Illinois State Lottery.

26 (17) Part-year resident. The term "part-year resident"

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1 means an individual who became a resident during the

2 taxable year or ceased to be a resident during the taxable

3 year. Under Section 1501(a)(20)(A)(i) residence commences

4 with presence in this State for other than a temporary or

5 transitory purpose and ceases with absence from this State

6 for other than a temporary or transitory purpose. Under

7 Section 1501(a)(20)(A)(ii) residence commences with the

8 establishment of domicile in this State and ceases with the

9 establishment of domicile in another State.

10 (18) Person. The term "person" shall be construed to

11 mean and include an individual, a trust, estate,

12 partnership, association, firm, company, corporation,

13 limited liability company, or fiduciary. For purposes of

14 Section 1301 and 1302 of this Act, a "person" means (i) an

15 individual, (ii) a corporation, (iii) an officer, agent, or

16 employee of a corporation, (iv) a member, agent or employee

17 of a partnership, or (v) a member, manager, employee,

18 officer, director, or agent of a limited liability company

19 who in such capacity commits an offense specified in

20 Section 1301 and 1302.

21 (18A) Records. The term "records" includes all data

22 maintained by the taxpayer, whether on paper, microfilm,

23 microfiche, or any type of machine-sensible data

24 compilation.

25 (19) Regulations. The term "regulations" includes

26 rules promulgated and forms prescribed by the Department.

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1 (20) Resident. The term "resident" means:

2 (A) an individual (i) who is in this State for

3 other than a temporary or transitory purpose during the

4 taxable year; or (ii) who is domiciled in this State

5 but is absent from the State for a temporary or

6 transitory purpose during the taxable year;

7 (B) The estate of a decedent who at his or her

8 death was domiciled in this State;

9 (C) A trust created by a will of a decedent who at

10 his death was domiciled in this State; and

11 (D) An irrevocable trust, the grantor of which was

12 domiciled in this State at the time such trust became

13 irrevocable. For purpose of this subparagraph, a trust

14 shall be considered irrevocable to the extent that the

15 grantor is not treated as the owner thereof under

16 Sections 671 through 678 of the Internal Revenue Code.

17 (21) Sales. The term "sales" means all gross receipts

18 of the taxpayer not allocated under Sections 301, 302 and

19 303.

20 (22) State. The term "state" when applied to a

21 jurisdiction other than this State means any state of the

22 United States, the District of Columbia, the Commonwealth

23 of Puerto Rico, any Territory or Possession of the United

24 States, and any foreign country, or any political

25 subdivision of any of the foregoing. For purposes of the

26 foreign tax credit under Section 601, the term "state"

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1 means any state of the United States, the District of

2 Columbia, the Commonwealth of Puerto Rico, and any

3 territory or possession of the United States, or any

4 political subdivision of any of the foregoing, effective

5 for tax years ending on or after December 31, 1989.

6 (23) Taxable year. The term "taxable year" means the

7 calendar year, or the fiscal year ending during such

8 calendar year, upon the basis of which the base income is

9 computed under this Act. "Taxable year" means, in the case

10 of a return made for a fractional part of a year under the

11 provisions of this Act, the period for which such return is

12 made.

13 (24) Taxpayer. The term "taxpayer" means any person

14 subject to the tax imposed by this Act.

15 (25) International banking facility. The term

16 international banking facility shall have the same meaning

17 as is set forth in the Illinois Banking Act or as is set

18 forth in the laws of the United States or regulations of

19 the Board of Governors of the Federal Reserve System.

20 (26) Income Tax Return Preparer.

21 (A) The term "income tax return preparer" means any

22 person who prepares for compensation, or who employs

23 one or more persons to prepare for compensation, any

24 return of tax imposed by this Act or any claim for

25 refund of tax imposed by this Act. The preparation of a

26 substantial portion of a return or claim for refund

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1 shall be treated as the preparation of that return or

2 claim for refund.

3 (B) A person is not an income tax return preparer

4 if all he or she does is

5 (i) furnish typing, reproducing, or other

6 mechanical assistance;

7 (ii) prepare returns or claims for refunds for

8 the employer by whom he or she is regularly and

9 continuously employed;

10 (iii) prepare as a fiduciary returns or claims

11 for refunds for any person; or

12 (iv) prepare claims for refunds for a taxpayer

13 in response to any notice of deficiency issued to

14 that taxpayer or in response to any waiver of

15 restriction after the commencement of an audit of

16 that taxpayer or of another taxpayer if a

17 determination in the audit of the other taxpayer

18 directly or indirectly affects the tax liability

19 of the taxpayer whose claims he or she is

20 preparing.

21 (27) Unitary business group.

22 (A) The term "unitary business group" means a group

23 of persons related through common ownership whose

24 business activities are integrated with, dependent

25 upon and contribute to each other. The group will not

26 include those members whose business activity outside

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1 the United States is 80% or more of any such member's

2 total business activity; for purposes of this

3 paragraph and clause (a)(3)(B)(ii) of Section 304,

4 business activity within the United States shall be

5 measured by means of the factors ordinarily applicable

6 under subsections (a), (b), (c), (d), or (h) of Section

7 304 except that, in the case of members ordinarily

8 required to apportion business income by means of the 3

9 factor formula of property, payroll and sales

10 specified in subsection (a) of Section 304, including

11 the formula as weighted in subsection (h) of Section

12 304, such members shall not use the sales factor in the

13 computation and the results of the property and payroll

14 factor computations of subsection (a) of Section 304

15 shall be divided by 2 (by one if either the property or

16 payroll factor has a denominator of zero). The

17 computation required by the preceding sentence shall,

18 in each case, involve the division of the member's

19 property, payroll, or revenue miles in the United

20 States, insurance premiums on property or risk in the

21 United States, or financial organization business

22 income from sources within the United States, as the

23 case may be, by the respective worldwide figures for

24 such items. Common ownership in the case of

25 corporations is the direct or indirect control or

26 ownership of more than 50% of the outstanding voting

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1 stock of the persons carrying on unitary business

2 activity. Unitary business activity can ordinarily be

3 illustrated where the activities of the members are:

4 (1) in the same general line (such as manufacturing,

5 wholesaling, retailing of tangible personal property,

6 insurance, transportation or finance); or (2) are

7 steps in a vertically structured enterprise or process

8 (such as the steps involved in the production of

9 natural resources, which might include exploration,

10 mining, refining, and marketing); and, in either

11 instance, the members are functionally integrated

12 through the exercise of strong centralized management

13 (where, for example, authority over such matters as

14 purchasing, financing, tax compliance, product line,

15 personnel, marketing and capital investment is not

16 left to each member).

17 (B) In no event, for taxable years ending prior to

18 December 31, 2017,shall any unitary business group

19 include members which are ordinarily required to

20 apportion business income under different subsections

21 of Section 304 except that for tax years ending on or

22 after December 31, 1987 this prohibition shall not

23 apply to a holding company that would otherwise be a

24 member of a unitary business group with taxpayers that

25 apportion business income under any of subsections

26 (b), (c), (c-1), or (d) of Section 304. If a unitary

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1 business group would, but for the preceding sentence,

2 include members that are ordinarily required to

3 apportion business income under different subsections

4 of Section 304, then for each subsection of Section 304

5 for which there are two or more members, there shall be

6 a separate unitary business group composed of such

7 members. For purposes of the preceding two sentences, a

8 member is "ordinarily required to apportion business

9 income" under a particular subsection of Section 304 if

10 it would be required to use the apportionment method

11 prescribed by such subsection except for the fact that

12 it derives business income solely from Illinois. As

13 used in this paragraph, for taxable years ending before

14 December 31, 2017, the phrase "United States" means

15 only the 50 states and the District of Columbia, but

16 does not include any territory or possession of the

17 United States or any area over which the United States

18 has asserted jurisdiction or claimed exclusive rights

19 with respect to the exploration for or exploitation of

20 natural resources.For taxable years ending on or after

21 December 31, 2017, the phrase "United States", as used

22 in this paragraph, means only the 50 states, the

23 District of Columbia, and any area over which the

24 United States has asserted jurisdiction or claimed

25 exclusive rights with respect to the exploration for or

26 exploitation of natural resources, but does not

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1 include any territory or possession of the United

2 States.

3 (C) Holding companies.

4 (i) For purposes of this subparagraph, a

5 "holding company" is a corporation (other than a

6 corporation that is a financial organization under

7 paragraph (8) of this subsection (a) of Section

8 1501 because it is a bank holding company under the

9 provisions of the Bank Holding Company Act of 1956

10 (12 U.S.C. 1841, et seq.) or because it is owned by

11 a bank or a bank holding company) that owns a

12 controlling interest in one or more other

13 taxpayers ("controlled taxpayers"); that, during

14 the period that includes the taxable year and the 2

15 immediately preceding taxable years or, if the

16 corporation was formed during the current or

17 immediately preceding taxable year, the taxable

18 years in which the corporation has been in

19 existence, derived substantially all its gross

20 income from dividends, interest, rents, royalties,

21 fees or other charges received from controlled

22 taxpayers for the provision of services, and gains

23 on the sale or other disposition of interests in

24 controlled taxpayers or in property leased or

25 licensed to controlled taxpayers or used by the

26 taxpayer in providing services to controlled

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1 taxpayers; and that incurs no substantial expenses

2 other than expenses (including interest and other

3 costs of borrowing) incurred in connection with

4 the acquisition and holding of interests in

5 controlled taxpayers and in the provision of

6 services to controlled taxpayers or in the leasing

7 or licensing of property to controlled taxpayers.

8 (ii) The income of a holding company which is a

9 member of more than one unitary business group

10 shall be included in each unitary business group of

11 which it is a member on a pro rata basis, by

12 including in each unitary business group that

13 portion of the base income of the holding company

14 that bears the same proportion to the total base

15 income of the holding company as the gross receipts

16 of the unitary business group bears to the combined

17 gross receipts of all unitary business groups (in

18 both cases without regard to the holding company)

19 or on any other reasonable basis, consistently

20 applied.

21 (iii) A holding company shall apportion its

22 business income under the subsection of Section

23 304 used by the other members of its unitary

24 business group. The apportionment factors of a

25 holding company which would be a member of more

26 than one unitary business group shall be included

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1 with the apportionment factors of each unitary

2 business group of which it is a member on a pro

3 rata basis using the same method used in clause

4 (ii).

5 (iv) The provisions of this subparagraph (C)

6 are intended to clarify existing law.

7 (D) If including the base income and factors of a

8 holding company in more than one unitary business group

9 under subparagraph (C) does not fairly reflect the

10 degree of integration between the holding company and

11 one or more of the unitary business groups, the

12 dependence of the holding company and one or more of

13 the unitary business groups upon each other, or the

14 contributions between the holding company and one or

15 more of the unitary business groups, the holding

16 company may petition the Director, under the

17 procedures provided under Section 304(f), for

18 permission to include all base income and factors of

19 the holding company only with members of a unitary

20 business group apportioning their business income

21 under one subsection of subsections (a), (b), (c), or

22 (d) of Section 304. If the petition is granted, the

23 holding company shall be included in a unitary business

24 group only with persons apportioning their business

25 income under the selected subsection of Section 304

26 until the Director grants a petition of the holding

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1 company either to be included in more than one unitary

2 business group under subparagraph (C) or to include its

3 base income and factors only with members of a unitary

4 business group apportioning their business income

5 under a different subsection of Section 304.

6 (E) If the unitary business group members'

7 accounting periods differ, the common parent's

8 accounting period or, if there is no common parent, the

9 accounting period of the member that is expected to

10 have, on a recurring basis, the greatest Illinois

11 income tax liability must be used to determine whether

12 to use the apportionment method provided in subsection

13 (a) or subsection (h) of Section 304. The prohibition

14 against membership in a unitary business group for

15 taxpayers ordinarily required to apportion income

16 under different subsections of Section 304 does not

17 apply to taxpayers required to apportion income under

18 subsection (a) and subsection (h) of Section 304. The

19 provisions of this amendatory Act of 1998 apply to tax

20 years ending on or after December 31, 1998.

21 (28) Subchapter S corporation. The term "Subchapter S

22 corporation" means a corporation for which there is in

23 effect an election under Section 1362 of the Internal

24 Revenue Code, or for which there is a federal election to

25 opt out of the provisions of the Subchapter S Revision Act

26 of 1982 and have applied instead the prior federal

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1 Subchapter S rules as in effect on July 1, 1982.

2 (30) Foreign person. The term "foreign person" means

3 any person who is a nonresident alien individual and any

4 nonindividual entity, regardless of where created or

5 organized, whose business activity outside the United

6 States is 80% or more of the entity's total business

7 activity.

8 (b) Other definitions.

9 (1) Words denoting number, gender, and so forth, when

10 used in this Act, where not otherwise distinctly expressed

11 or manifestly incompatible with the intent thereof:

12 (A) Words importing the singular include and apply

13 to several persons, parties or things;

14 (B) Words importing the plural include the

15 singular; and

16 (C) Words importing the masculine gender include

17 the feminine as well.

18 (2) "Company" or "association" as including successors

19 and assigns. The word "company" or "association", when used

20 in reference to a corporation, shall be deemed to embrace

21 the words "successors and assigns of such company or

22 association", and in like manner as if these last-named

23 words, or words of similar import, were expressed.

24 (3) Other terms. Any term used in any Section of this

25 Act with respect to the application of, or in connection

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1 with, the provisions of any other Section of this Act shall

2 have the same meaning as in such other Section.

3 (Source: P.A. 99-213, eff. 7-31-15.)

4 ARTICLE 25. AMENDATORY PROVISIONS; STATE TAX LIEN REGISTRY

5 Section 25-5. The Illinois Income Tax Act is amended by

6 changing Sections 1102, 1103, and 1105 as follows:

7 (35 ILCS 5/1102) (from Ch. 120, par. 11-1102)

8 Sec. 1102. Jeopardy Assessments.

9 (a) Jeopardy assessment and lien.

10 (1) Assessment. If the Department finds that a taxpayer

11 is about to depart from the State, or to conceal himself or

12 his property, or to do any other act tending to prejudice

13 or to render wholly or partly ineffectual proceedings to

14 collect any amount of tax or penalties imposed under this

15 Act unless court proceedings are brought without delay, or

16 if the Department finds that the collection of such amount

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 amount, whereupon such

20 amount shall be deemed assessed and shall become

21 immediately due and payable.

22 (2) Filing of lien. If the taxpayer, within 5 days

23 after such notice (or within such extension of time as the

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1 Department may grant), does not comply with such notice or

2 show to the Department that the findings in such notice are

3 erroneous, the Department may file a notice of jeopardy

4 assessment lien in the State Tax Lien Registry ~~office of~~

5 ~~the recorder of the county in which any property of the~~

6 ~~taxpayer may be located~~and shall notify the taxpayer of

7 such filing. Such jeopardy assessment lien shall have the

8 same scope and effect as a statutory lien under this Act.

9 The taxpayer is liable for any administrative fee imposed

10 by the Department by rule in connection with the State Tax

11 Lien Registry ~~the filing fee incurred by the Department for~~

12 ~~filing the lien and the filing fee incurred by the~~

13 ~~Department to file the release of that lien~~. The filing

14 fees shall be paid to the Department in addition to payment

15 of the tax, penalty, and interest included in the amount of

16 the lien.

17 (b) Termination of taxable year. In the case of a tax for a

18 current taxable year, the Director shall declare the taxable

19 period of the taxpayer immediately terminated and his notice

20 and demand for a return and immediate payment of the tax shall

21 relate to the period declared terminated, including therein

22 income accrued and deductions incurred up to the date of

23 termination if not otherwise properly includible or deductible

24 in respect of such taxable year.

25 (c) Protest. If the taxpayer believes that he does not owe

26 some or all of the amount for which the jeopardy assessment

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1 lien against him has been filed, or that no jeopardy to the

2 revenue in fact exists, he may protest within 20 days after

3 being notified by the Department of the filing of such jeopardy

4 assessment lien and request a hearing, whereupon the Department

5 shall hold a hearing in conformity with the provisions of

6 section 908 and, pursuant thereto, shall notify the taxpayer of

7 its decision as to whether or not such jeopardy assessment lien

8 will be released.

9 (Source: P.A. 92-826, eff. 1-1-03.)

10 (35 ILCS 5/1103) (from Ch. 120, par. 11-1103)

11 Sec. 1103. Filing and Priority of Liens.

12 (a) Filing in the State Tax Lien Registry ~~with Recorder~~.

13 Nothing in this Article shall be construed to give the

14 Department a preference over the rights of any bona fide

15 purchaser, holder of a security interest, mechanics lienor,

16 mortgagee, or judgment lien creditor arising prior to the

17 filing of a regular notice of lien or a notice of jeopardy

18 assessment lien in the State Tax Lien Registry ~~office of the~~

19 ~~recorder in the county in which the property subject to the~~

20 ~~lien is located~~. For purposes of thisSection ~~section~~, the term

21 "bona fide," shall not include any mortgage of real or personal

22 property or any other credit transaction that results in the

23 mortgagee or the holder of the security acting as trustee for

24 unsecured creditors of the taxpayer mentioned in the notice of

25 lien who executed such chattel or real property mortgage or the

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1 document evidencing such credit transaction. Such lien shall be

2 inferior to the lien of general taxes, special assessments and

3 special taxes heretofore or hereafter levied by any political

4 subdivision of this State.

5 (b) Filing in the State Tax Lien Registry ~~with Registrar~~.

6 In case title to land to be affected by the notice of lien or

7 notice of jeopardy assessment lien is registered under the

8 provisions of "An Act concerning land titles," approved May 1,

9 1897, as amended, such notice shall also be filed in the State

10 Tax Lien Registry ~~office of the Registrar of Titles of the~~

11 ~~county within which the property subject to the lien is~~

12 ~~situated and shall be entered upon the register of titles as a~~

13 ~~memorial of charge upon each folium of the register of titles~~

14 ~~affected by such notice~~, and the Department shall not have a

15 preference over the rights of any bona fide purchaser,

16 mortgagee, judgment creditor or other lien holder arising prior

17 to the registration of such notice.

18 (c) Index. The Department of Revenue shall maintain a State

19 Tax Lien Index of all tax liens filed in the State Tax Lien

20 Registry as provided for by the State Tax Lien Registration

21 Act. ~~The recorder of each county shall procure a file labeled~~

22 ~~"State Tax Lien Notices" and an index book labeled "State Tax~~

23 ~~Lien Index." When notice of any lien or jeopardy assessment~~

24 ~~lien is presented to him for filing, he shall file it in~~

25 ~~numerical order in the file and shall enter it alphabetically~~

26 ~~in the index. The entry shall show the name and last known~~

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1 ~~address of the person named in the notice, the serial number of~~

2 ~~the notice, the date and hour of filing, whether it is a~~

3 ~~regular lien or a jeopardy assessment lien, and the amount of~~

4 ~~tax and penalty due and unpaid, plus the amount of interest due~~

5 ~~at the time when the notice of lien or jeopardy assessment is~~

6 ~~filed.~~

7 (d) (Blank). ~~No recorder or registrar of titles of any~~

8 ~~county shall require that the Department pay any costs or fees~~

9 ~~in connection with recordation of any notice or other document~~

10 ~~filed by the Department under this Act at the time such notice~~

11 ~~or other document is presented for recordation. The recorder or~~

12 ~~registrar of each county, in order to receive payment for fees~~

13 ~~or costs incurred by the Department, shall present the~~

14 ~~Department with monthly statements indicating the amount of~~

15 ~~fees and costs incurred by the Department and for which no~~

16 ~~payment has been received. This amendatory Act of 1987 applies~~

17 ~~to all liens heretofore or hereafter filed.~~

18 (e) The taxpayer is liable for any ~~the~~ filing fees imposed

19 ~~fee incurred~~by the Department for filing the lienin the State

20 Tax Lien Registry and any ~~the~~ filing fees imposed ~~fee incurred~~

21 by the Department for ~~to file~~the release of that lien. The

22 filing fees shall be paid to the Department in addition to

23 payment of the tax, penalty, and interest included in the

24 amount of the lien.

25 (Source: P.A. 92-826, eff. 1-1-03.)

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1 (35 ILCS 5/1105) (from Ch. 120, par. 11-1105)

2 Sec. 1105. Release of Liens.

3 (a) In general. Upon payment by the taxpayer to the

4 Department in cash or by guaranteed remittance of an amount

5 representing the filing fees and charges for the lien and the

6 filing fees and charges for the release of that lien, the

7 Department shall release all or any portion of the property

8 subject to any lien provided for in this Act and file that

9 complete or partial release of lien in the State Tax Lien

10 Registry ~~with the recorder of the county where that lien was~~

11 ~~filed~~if it determines that the release will not endanger or

12 jeopardize the collection of the amount secured thereby.

13 (b) Judicial determination. If on judicial review the final

14 judgment of the court is that the taxpayer does not owe some or

15 all of the amount secured by the lien against him, or that no

16 jeopardy to the revenue exists, the Department shall release

17 its lien to the extent of such finding of nonliability, or to

18 the extent of such finding of no jeopardy to the revenue. The

19 taxpayer shall, however, be liable for the filing fee imposed

20 ~~paid~~by the Department to file the lien and the filing fee

21 imposed to release ~~required to file a release of~~the lien. The

22 filing fees shall be paid to the Department.

23 (c) Payment. The Department shall also release its jeopardy

24 assessment lien against the taxpayer whenever the tax and

25 penalty covered by such lien, plus any interest which may be

26 due and an amount representing the filing fee to file the lien

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1 and the filing feeimposed to release ~~required to file a~~

2 ~~release of~~that lien, are paid by the taxpayer to the

3 Department in cash or by guaranteed remittance.

4 (d) Certificate of release. The Department shall issue a

5 certificate of complete or partial release of the lien upon

6 payment by the taxpayer to the Department in cash or by

7 guaranteed remittance of an amount representing the filing fee

8 imposed ~~paid~~by the Department to file the lien and the filing

9 fee imposed to release ~~required to file the release of~~ that

10 lien:

11 (1) 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 (2) to the extent that such lien shall become

15 unenforceable;

16 (3) to the extent that the amount of such lien is paid

17 by the person whose property is subject to such lien,

18 together with any interest and penalty which may become due

19 under this Act between the date when the notice of lien is

20 filed and the date when the amount of such lien is paid;

21 (4) to the extent that there is furnished to the

22 Department on a form to be approved and with a surety or

23 sureties satisfactory to the Department a bond that is

24 conditioned upon the payment of the amount of such lien,

25 together with any interest which may become due under this

26 Act after the notice of lien is filed, but before the

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1 amount thereof is fully paid;

2 (5) to the extent and under the circumstances specified

3 in this Section.

4 A certificate of complete or partial release of any lien

5 shall be held conclusive that the lien upon the property

6 covered by the certificate is extinguished to the extent

7 indicated by such certificate.

8 Such release of lien shall be issued to the person, or his

9 agent, against whom the lien was obtained and shall contain in

10 legible letters a statement as follows:

11 FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

12 BE FILED IN THE STATE TAX LIEN REGISTRY ~~WITH THE RECORDER~~

13 ~~OR THE REGISTRAR~~

14 ~~OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED~~.

15 (e) Filing. When a certificate of complete or partial

16 release of lien issued by the Department isfiled in the State

17 Tax Lien Registry, the Department ~~presented for filing in the~~

18 ~~office of the recorder or Registrar of Titles where a notice of~~

19 ~~lien or notice of jeopardy assessment lien was filed:~~

20 ~~(1) the recorder, in the case of nonregistered~~

21 ~~property,~~shall permanently attach the certificate of

22 release to the notice of lien or notice of jeopardy

23 assessment lien and shall enter the certificate of release

24 and the date in the "State Tax Lien Index" on the line

25 where the notice of lien or notice of jeopardy assessment

26 lien is entered. ~~; and~~

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1 ~~(2) in the case of registered property, the Registrar~~

2 ~~of Titles shall file and enter upon each folium of the~~

3 ~~register of titles affected thereby a memorial of the~~

4 ~~certificate of release which memorial when so entered shall~~

5 ~~act as a release pro tanto of any memorial of such notice~~

6 ~~of lien or notice of jeopardy assessment lien previously~~

7 ~~filed and registered.~~

8 (Source: P.A. 92-826, eff. 1-1-03.)

9 Section 25-10. The Retailers' Occupation Tax Act is amended

10 by changing Sections 5a, 5b, and 5c as follows:

11 (35 ILCS 120/5a) (from Ch. 120, par. 444a)

12 Sec. 5a. The Department shall have a lien for the tax

13 herein imposed or any portion thereof, or for any penalty

14 provided for in this Act, or for any amount of interest which

15 may be due as provided for in Section 5 of this Act, upon all

16 the real and personal property of any person to whom a final

17 assessment or revised final assessment has been issued as

18 provided in this Act, or whenever a return is filed without

19 payment of the tax or penalty shown therein to be due,

20 including all such property of such persons acquired after

21 receipt of such assessment or filing of such return. The

22 taxpayer is liable for the filing fee imposed ~~incurred~~ by the

23 Department for filing the lien and the filing feeimposed

24 ~~incurred~~ by the Department to ~~file the~~releasethe ~~of that~~

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1 lien. The filing fees shall be paid to the Department in

2 addition to payment of the tax, penalty, and interest included

3 in the amount of the lien.

4 However, where the lien arises because of the issuance of a

5 final assessment or revised final assessment by the Department,

6 such lien shall not attach and the notice hereinafter referred

7 to in this Section shall not be filed until all proceedings in

8 court for review of such final assessment or revised final

9 assessment have terminated or the time for the taking thereof

10 has expired without such proceedings being instituted.

11 Upon the granting of a rehearing or departmental review

12 pursuant to Section 4 or Section 5 of this Act after a lien has

13 attached, such lien shall remain in full force except to the

14 extent to which the final assessment may be reduced by a

15 revised final assessment following such rehearing or review.

16 The lien created by the issuance of a final assessment

17 shall terminate unless a notice of lien is filed, as provided

18 in Section 5b hereof, within 3 years from the date all

19 proceedings in court for the review of such final assessment

20 have terminated or the time for the taking thereof has expired

21 without such proceedings being instituted, or (in the case of a

22 revised final assessment issued pursuant to a rehearing or

23 departmental review) within 3 years from the date all

24 proceedings in court for the review of such revised final

25 assessment have terminated or the time for the taking thereof

26 has expired without such proceedings being instituted; and

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1 where the lien results from the filing of a return without

2 payment of the tax or penalty shown therein to be due, the lien

3 shall terminate unless a notice of lien is filed, as provided

4 in Section 5b hereof, within 3 years from the date when such

5 return is filed with the Department: Provided that the time

6 limitation period on the Department's right to file a notice of

7 lien shall not run (1) during any period of time in which the

8 order of any court has the effect of enjoining or restraining

9 the Department from filing such notice of lien, or (2) during

10 the term of a repayment plan that taxpayer has entered into

11 with the Department, as long as taxpayer remains in compliance

12 with the terms of the repayment plan.

13 If the Department finds that a taxpayer is about to depart

14 from the State, or to conceal himself or his property, or to do

15 any other act tending to prejudice or to render wholly or

16 partly ineffectual proceedings to collect such tax unless such

17 proceedings are brought without delay, or if the Department

18 finds that the collection of the amount due from any taxpayer

19 will be jeopardized by delay, the Department shall give the

20 taxpayer notice of such findings and shall make demand for

21 immediate return and payment of such tax, whereupon such tax

22 shall become immediately due and payable. If the taxpayer,

23 within 5 days after such notice (or within such extension of

24 time as the Department may grant), does not comply with such

25 notice or show to the Department that the findings in such

26 notice are erroneous, the Department may file a notice of

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1 jeopardy assessment lien in theState Tax Lien Registry ~~office~~

2 ~~of the recorder of the county in which any property of the~~

3 ~~taxpayer may be located~~ and shall notify the taxpayer of such

4 filing. Such jeopardy assessment lien shall have the same scope

5 and effect as the statutory lien hereinbefore provided for in

6 this Section.

7 If the taxpayer believes that he does not owe some or all

8 of the tax for which the jeopardy assessment lien against him

9 has been filed, or that no jeopardy to the revenue in fact

10 exists, he may protest within 20 days after being notified by

11 the Department of the filing of such jeopardy assessment lien

12 and request a hearing, whereupon the Department shall hold a

13 hearing in conformity with the provisions of this Act and,

14 pursuant thereto, shall notify the taxpayer of its findings as

15 to whether or not such jeopardy assessment lien will be

16 released. If not, and if the taxpayer is aggrieved by this

17 decision, he may file an action for judicial review of such

18 final determination of the Department in accordance with

19 Section 12 of this Act and the Administrative Review Law.

20 On and after July 1, 2013, protests concerning matters that

21 are subject to the jurisdiction of the Illinois Independent Tax

22 Tribunal shall be filed with the Tribunal, and hearings on

23 those matters shall be held before the Tribunal in accordance

24 with the Illinois Independent Tax Tribunal Act of 2012. The

25 Tribunal shall notify the taxpayer of its findings as to

26 whether or not such jeopardy assessment lien will be released.

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1 If not, and if the taxpayer is aggrieved by this decision, he

2 may file an action for judicial review of such final

3 determination of the Department in accordance with Section 12

4 of this Act and the Illinois Independent Tax Tribunal Act of

5 2012.

6 With respect to protests filed with the Department prior to

7 July 1, 2013 that would otherwise be subject to the

8 jurisdiction of the Illinois Independent Tax Tribunal, the

9 taxpayer may elect to be subject to the provisions of the

10 Illinois Independent Tax Tribunal Act of 2012 at any time on or

11 after July 1, 2013, but not later than 30 days after the date

12 on which the protest was filed. If made, the election shall be

13 irrevocable.

14 If, pursuant to such hearing (or after an independent

15 determination of the facts by the Department without a

16 hearing), the Department or the Tribunal determines that some

17 or all of the tax covered by the jeopardy assessment lien is

18 not owed by the taxpayer, or that no jeopardy to the revenue

19 exists, or if on judicial review the final judgment of the

20 court is that the taxpayer does not owe some or all of the tax

21 covered by the jeopardy assessment lien against him, or that no

22 jeopardy to the revenue exists, the Department shall release

23 its jeopardy assessment lien to the extent of such finding of

24 nonliability for the tax, or to the extent of such finding of

25 no jeopardy to the revenue.

26 The Department shall also release its jeopardy assessment

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1 lien against the taxpayer whenever the tax and penalty covered

2 by such lien, plus any interest which may be due, are paid and

3 the taxpayer has paid the Department in cash or by guaranteed

4 remittance an amount representing the filing fee for the lien

5 and the filing fee for the release of that lien. The Department

6 shall file that release of lien in the State Tax Lien Registry

7 ~~with the recorder of the county where that lien was filed~~.

8 Nothing in this Section shall be construed to give the

9 Department a preference over the rights of any bona fide

10 purchaser, holder of a security interest, mechanics

11 lienholder, mortgagee, or judgment lien creditor arising prior

12 to the filing of a regular notice of lien or a notice of

13 jeopardy assessment lien in the State Tax Lien Registry ~~office~~

14 ~~of the recorder in the county in which the property subject to~~

15 ~~the lien is located~~: Provided, however, that the word "bona

16 fide", as used in this Section shall not include any mortgage

17 of real or personal property or any other credit transaction

18 that results in the mortgagee or the holder of the security

19 acting as trustee for unsecured creditors of the taxpayer

20 mentioned in the notice of lien who executed such chattel or

21 real property mortgage or the document evidencing such credit

22 transaction. Such lien shall be inferior to the lien of general

23 taxes, special assessments and special taxes heretofore or

24 hereafter levied by any political subdivision of this State.

25 In case title to land to be affected by the notice of lien

26 or notice of jeopardy assessment lien is registered under the

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1 provisions of "An Act concerning land titles", approved May 1,

2 1897, as amended, such notice shallalso be filed in the State

3 Tax Lien Registry ~~office of the Registrar of Titles of the~~

4 ~~county within which the property subject to the lien is~~

5 ~~situated and shall be entered upon the register of titles as a~~

6 ~~memorial or charge upon each folium of the register of titles~~

7 ~~affected by such notice~~, and the Department shall not have a

8 preference over the rights of any bona fide purchaser,

9 mortgagee, judgment creditor or other lien holder arising prior

10 to the registration of such notice: Provided, however, that the

11 word "bona fide" shall not include any mortgage of real or

12 personal property or any other credit transaction that results

13 in the mortgagee or the holder of the security acting as

14 trustee for unsecured creditors of the taxpayer mentioned in

15 the notice of lien who executed such chattel or real property

16 mortgage or the document evidencing such credit transaction.

17 Such regular lien or jeopardy assessment lien shall not be

18 effective against any purchaser with respect to any item in a

19 retailer's stock in trade purchased from the retailer in the

20 usual course of such retailer's business.

21 (Source: P.A. 97-1129, eff. 8-28-12; 98-446, eff. 8-16-13.)

22 (35 ILCS 120/5b) (from Ch. 120, par. 444b)

23 Sec. 5b. State Tax Lien Index. The Department of Revenue

24 shall maintain a State Tax Lien Index of all tax liens filed in

25 the State Tax Lien Registry as provided for by the State Tax

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1 Lien Registration Act. ~~The recorder of each county shall~~

2 ~~procure a file labeled "State Tax Lien Notices" and an index~~

3 ~~book labeled "State Tax Lien Index". When notice of any lien or~~

4 ~~jeopardy assessment lien is presented to him for filing, he~~

5 ~~shall file it in numerical order in the file and shall enter it~~

6 ~~alphabetically in the index. The entry shall show the name and~~

7 ~~last known business address of the person named in the notice,~~

8 ~~the serial number of the notice, the date and hour of filing,~~

9 ~~whether it is a regular lien or a jeopardy assessment lien, and~~

10 ~~the amount of tax and penalty due and unpaid, plus the amount~~

11 ~~of interest due under Section 5 of this Act at the time when~~

12 ~~the notice of lien or jeopardy assessment lien is filed.~~

13 ~~No recorder or registrar of titles of any county shall~~

14 ~~require that the Department pay any costs or fees in connection~~

15 ~~with recordation of any notice or other document filed by the~~

16 ~~Department under this Act at the time such notice or other~~

17 ~~document is presented for recordation. The recorder or~~

18 ~~registrar of each county, in order to receive payment for fees~~

19 ~~or costs incurred by the Department, shall present the~~

20 ~~Department with monthly statements indicating the amount of~~

21 ~~fees and costs incurred by the Department and for which no~~

22 ~~payment has been received.~~

23 A notice of lien may be filed after the issuance of a

24 revised final assessment pursuant to a rehearing or

25 departmental review under Section 4 or Section 5 of this Act.

26 When the lien obtained pursuant to this Act has been

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1 satisfied and the taxpayer has paid the Department in cash or

2 by guaranteed remittance an amount representing the filing fee

3 for the lien and the filing fee for the release of that lien,

4 the Department shall issue a release of lien and file that

5 release of lien in the State Tax Lien Registry ~~with the~~

6 ~~recorder of the county where that lien was filed~~. The release

7 of lien shall contain in legible letters a statement as

8 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 When a certificate of complete or partial release of lien

14 issued by the Department isfiled in the State Tax Lien

15 Registry, the Department of Revenue ~~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, the~~

18 ~~recorder, in the case of nonregistered property,~~ shall

19 permanently attach the certificate of release to the notice of

20 lien or notice of jeopardy assessment lien and shall enter the

21 certificate of release and the date in the "State Tax Lien

22 Index" on the line where the notice of lien or notice of

23 jeopardy assessment lien is entered.

24 ~~In the case of registered property, the Registrar of Titles~~

25 ~~shall file and enter upon each folium of the register of titles~~

26 ~~affected thereby a memorial of the certificate of release which~~

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1 ~~memorial when so entered shall act as a release pro tanto of~~

2 ~~any memorial of such notice of lien or notice of jeopardy~~

3 ~~assessment lien previously filed and registered.~~

4 (Source: P.A. 92-826, eff. 1-1-03.)

5 (35 ILCS 120/5c) (from Ch. 120, par. 444c)

6 Sec. 5c. Upon payment by the taxpayer to the Department in

7 cash or by guaranteed remittance of an amount representing the

8 filing fee for the lien and the filing fee for the release of

9 that lien, the Department shall issue a certificate of complete

10 or partial release of the lien and file that complete or

11 partial release of lien in the State Tax Lien Registry ~~with the~~

12 ~~recorder of the county where the lien was filed~~:

13 (a) to the extent that the fair market value of any

14 property subject to the lien exceeds the amount of the lien

15 plus the amount of all prior liens upon such property;

16 (b) to the extent that such lien shall become

17 unenforceable;

18 (c) to the extent that the amount of such lien is paid

19 by the retailer whose property is subject to such lien,

20 together with any interest which may become due under

21 Section 5 of this Act between the date when the notice of

22 lien is filed and the date when the amount of such lien is

23 paid;

24 (d) to the extent that there is furnished to the

25 Department on a form to be approved and with a surety or

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1 sureties satisfactory to the Department a bond that is

2 conditioned upon the payment of the amount of such lien,

3 together with any interest which may become due under

4 Section 5 of this Act after the notice of lien is filed,

5 but before the amount thereof is fully paid;

6 (e) to the extent and under the circumstances specified

7 in Section 5a of this Act in the case of jeopardy

8 assessment liens;

9 (f) to the extent to which an assessment is reduced

10 pursuant to a rehearing or departmental review under

11 Section 4 or Section 5 of this Act.

12 A certificate of complete or partial release of any lien

13 shall be held conclusive that the lien upon the property

14 covered by the certificate is extinguished to the extent

15 indicated by such certificate.

16 (Source: P.A. 92-826, eff. 1-1-03.)

17 Section 25-15. The Cannabis and Controlled Substances Tax

18 Act is amended by changing Sections 16, 17, and 19 as follows:

19 (35 ILCS 520/16) (from Ch. 120, par. 2166)

20 Sec. 16. All assessments are Jeopardy Assessments - lien.

21 (a) Assessment. An assessment for a dealer not possessing

22 valid stamps or other official indicia showing that the tax has

23 been paid shall be considered a jeopardy assessment or

24 collection, as provided by Section 1102 of the Illinois Income

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1 Tax Act. The Department shall determine and assess a tax and

2 applicable penalties and interest according to the best

3 judgment and information available to the Department, which

4 amount so fixed by the Department shall be prima facie correct

5 and shall be prima facie evidence of the correctness of the

6 amount of tax due, as shown in such determination. When,

7 according to the best judgment and information available to the

8 Department with regard to all real and personal property and

9 rights to property of the dealer, there is no reasonable

10 expectation of collection of the amount of tax and penalty to

11 be assessed, the Department may issue an assessment under this

12 Section for the amount of tax without penalty.

13 (b) Filing of Lien. Upon issuance of a jeopardy assessment

14 as provided by subsection (a) of this Section, the Department

15 may file a notice of jeopardy assessment lien in theState Tax

16 Lien Registry ~~office of the recorder of the county in which any~~

17 ~~property of the taxpayer may be located~~and shall notify the

18 taxpayer of such filing.

19 (c) Protest. If the taxpayer believes that he does not owe

20 some or all of the amount for which the jeopardy assessment

21 lien against him has been filed, he may protest within 20 days

22 after being notified by the Department of the filing of such

23 jeopardy assessment lien and request a hearing, whereupon the

24 Department shall hold a hearing in conformity with the

25 provisions of Section 908 of the Illinois Income Tax Act and,

26 pursuant thereto, shall notify the taxpayer of its decision as

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1 to whether or not such jeopardy assessment lien will be

2 released.

3 After the expiration of the period within which the person

4 assessed may file an action for judicial review without such

5 action being filed, a certified copy of the final assessment or

6 revised final assessment of the Department may be filed with

7 the Circuit Court of the county in which the dealer resides, or

8 of Cook County in the case of a dealer who does not reside in

9 this State, or in the county where the violation of this Act

10 took place. The certified copy of the final assessment or

11 revised final assessment shall be accompanied by a

12 certification which recites facts that are sufficient to show

13 that the Department complied with the jurisdictional

14 requirements of the Act in arriving at its final assessment or

15 its revised final assessment and that the dealer had this

16 opportunity for an administrative hearing and for judicial

17 review, whether he availed himself or herself of either or both

18 of these opportunities or not. If the court is satisfied that

19 the Department complied with the jurisdictional requirements

20 of the Act in arriving at its final assessment or its revised

21 final assessment and that the taxpayer had his opportunity for

22 an administrative hearing and for judicial review, whether he

23 availed himself of either or both of these opportunities or

24 not, the court shall render judgment in favor of the Department

25 and against the taxpayer for the amount shown to be due by the

26 final assessment or the revised final assessment, plus any

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1 interest which may be due, and such judgment shall be entered

2 in the judgment docket of the court. Such judgment shall bear

3 the same rate of interest and shall have the same effect as

4 other judgments. The judgment may be enforced, and all laws

5 applicable to sales for the enforcement of a judgment shall be

6 applicable to sales made under such judgments. The Department

7 shall file the certified copy of its assessment, as herein

8 provided, with the Circuit Court within 2 years after such

9 assessment becomes final except when the taxpayer consents in

10 writing to an extension of such filing period, and except that

11 the time limitation period on the Department's right to file

12 the certified copy of its assessment with the Circuit Court

13 shall not run during any period of time in which the order of

14 any court has the effect of enjoining or restraining the

15 Department from filing such certified copy of its assessment

16 with the Circuit Court.

17 If, when the cause of action for a proceeding in court

18 accrues against a person, he or she is out of the State, the

19 action may be commenced within the times herein limited, after

20 his or her coming into or returning to the State; and if, after

21 the cause of action accrues, he or she departs from and remains

22 out of the State, the time of his or her absence from the

23 State, the time of his or her absence is no part of the time

24 limited for the commencement of the action; but the foregoing

25 provisions concerning absence from the State shall not apply to

26 any case in which, at the time the cause of action accrues, the

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1 party against whom the cause of action accrues is not a

2 resident of this State. The time within which a court action is

3 to be commenced by the Department hereunder shall not run from

4 the date the taxpayer files a petition in bankruptcy under the

5 Federal Bankruptcy Act until 30 days after notice of

6 termination or expiration of the automatic stay imposed by the

7 Federal Bankruptcy Act.

8 No claim shall be filed against the estate of any deceased

9 person or any person under legal disability for any tax or

10 penalty or part of either, or interest, except in the manner

11 prescribed and within the time limited by the Probate Act of

12 1975, as amended.

13 The collection of tax or penalty or interest by any means

14 provided for herein shall not be a bar to any prosecution under

15 this Act.

16 In addition to any penalty provided for in this Act, any

17 amount of tax which is not paid when due shall bear interest at

18 the rate determined in accordance with the Uniform Penalty and

19 Interest Act, per month or fraction thereof from the date when

20 such tax becomes past due until such tax is paid or a judgment

21 therefor is obtained by the Department. If the time for making

22 or completing an audit of a taxpayer's books and records is

23 extended with the taxpayer's consent, at the request of and for

24 the convenience of the Department, beyond the date on which the

25 statute of limitations upon the issuance of a notice of tax

26 liability by the Department otherwise run, no interest shall

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1 accrue during the period of such extension. Interest shall be

2 collected in the same manner and as part of the tax.

3 If the Department determines that an amount of tax or

4 penalty or interest was incorrectly assessed, whether as the

5 result of a mistake of fact or an error of law, the Department

6 shall waive the amount of tax or penalty or interest that

7 accrued due to the incorrect assessment.

8 (Source: P.A. 97-1129, eff. 8-28-12.)

9 (35 ILCS 520/17) (from Ch. 120, par. 2167)

10 Sec. 17. Filing and Priority of Liens. (a) Filing in the

11 State Tax Lien Registry ~~with Recorder~~. Nothing in this Act

12 shall be construed to give the Department a preference over the

13 rights of any bona fide purchaser, holder of a security

14 interest, mechanics lienholder, mortgagee, or judgment lien

15 creditor arising prior to the filing of a regular notice of

16 lien or a notice of jeopardy assessment lien in theState Tax

17 Lien Registry ~~office of the recorder in the county in which the~~

18 ~~property subject to the lien is located~~. For purposes of this

19 section, the term "bona fide," shall not include any mortgage

20 of real or personal property or any other credit transaction

21 that results in the mortgagee or the holder of the security

22 acting as trustee for unsecured creditors of the taxpayer

23 mentioned in the notice of lien who executed such chattel or

24 real property mortgage or the document evidencing such credit

25 transaction. Such lien shall be inferior to the lien of general

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1 taxes, special assessments and special taxes heretofore or

2 hereafter levied by any political subdivision of this State.

3 (b) ~~Filing with Registrar.~~ In case title to land to be

4 affected by the notice of lien or notice of jeopardy assessment

5 lien is registered under the provisions of "An Act concerning

6 land titles," approved May 1, 1897, as amended, such notice

7 shall also be filed in the State Tax Lien Registry ~~office of~~

8 ~~the Registrar of Titles of the county within which the property~~

9 ~~subject to the lien is situated and shall be entered upon the~~

10 ~~register of titles as a memorial of charge upon each folium of~~

11 ~~the register of titles affected by such notice~~, and the

12 Department shall not have a preference over the rights of any

13 bona fide purchaser, mortgagee, judgment creditor or other lien

14 holder arising prior to the registration of such notice.

15 (c) (Blank). ~~No recorder or registrar of titles of any~~

16 ~~county shall require that the Department pay any costs or fees~~

17 ~~in connection with recordation of any notice or other document~~

18 ~~filed by the Department under this Act at the time such notice~~

19 ~~or other document is presented for recordation.~~

20 (Source: P.A. 86-905.)

21 (35 ILCS 520/19) (from Ch. 120, par. 2169)

22 Sec. 19. Release of Liens.

23 (a) In general. The Department shall release all or any

24 portion of the property subject to any lien provided for in

25 this Act if it determines that the release will not endanger or

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1 jeopardize the collection of the amount secured thereby. The

2 Department shall release its lien on property which is the

3 subject of forfeiture proceedings under the Narcotics Profit

4 Forfeiture Act, the Criminal Code of 2012, or the Drug Asset

5 Forfeiture Procedure Act until all forfeiture proceedings are

6 concluded. Property forfeited shall not be subject to a lien

7 under this Act.

8 (b) Judicial determination. If on judicial review the final

9 judgment of the court is that the taxpayer does not owe some or

10 all of the amount secured by the lien against him, or that no

11 jeopardy to the revenue exists, the Department shall release

12 its lien to the extent of such finding of nonliability, or to

13 the extent of such finding of no jeopardy to the revenue.

14 (c) Payment. The Department shall also release its jeopardy

15 assessment lien against the taxpayer whenever the tax and

16 penalty covered by such lien, plus any interest which may be

17 due, are paid.

18 (d) Certificate of release. The Department shall issue a

19 certificate of complete or partial release of the lien:

20 (1) To the extent that the fair market value of any

21 property subject to the lien exceeds the amount of the lien

22 plus the amount of all prior liens upon such property;

23 (2) To the extent that such lien shall become

24 unenforceable;

25 (3) To the extent that the amount of such lien is paid

26 by the person whose property is subject to such lien,

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1 together with any interest and penalty which may become due

2 under this Act between the date when the notice of lien is

3 filed and the date when the amount of such lien is paid;

4 (4) To the extent and under the circumstances specified

5 in this Section. A certificate of complete or partial

6 release of any lien shall be held conclusive that the lien

7 upon the property covered by the certificate is

8 extinguished to the extent indicated by such certificate.

9 Such release of lien shall be issued to the person, or his

10 agent, against whom the lien was obtained and shall contain in

11 legible letters a statement as follows:

12 FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

13 BE FILED IN THE STATE TAX LIEN REGISTRY ~~WITH THE RECORDER~~

14 ~~OR THE REGISTRAR~~

15 ~~OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED~~.

16 (e) Filing. When a certificate of complete or partial

17 release of lien issued by the Department isfiled in the State

18 Tax Lien Registry, the Department ~~presented for filing in the~~

19 ~~office of the recorder or Registrar of Titles where a notice of~~

20 ~~lien or notice of jeopardy assessment lien was filed:~~

21 ~~(1) The recorder, in the case of nonregistered~~

22 ~~property,~~shall permanently attach the certificate of

23 release to the notice of lien or notice of jeopardy

24 assessment lien and shall enter the certificate of release

25 and the date in the "State Tax Lien Index" on the line

26 where the notice of lien or notice of jeopardy assessment

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1 lien is entered. ~~; and~~

2 ~~(2) In the case of registered property, the Registrar~~

3 ~~of Titles shall file and enter upon each folium of the~~

4 ~~register of titles affected thereby a memorial of the~~

5 ~~certificate of release which memorial when so entered shall~~

6 ~~act as a release pro tanto of any memorial of such notice~~

7 ~~of lien or notice of jeopardy assessment lien previously~~

8 ~~filed and registered.~~

9 (Source: P.A. 97-1150, eff. 1-25-13.)

10 Section 25-20. The Illinois Municipal Code is amended by

11 changing Section 8-3-15 as follows:

12 (65 ILCS 5/8-3-15) (from Ch. 24, par. 8-3-15)

13 Sec. 8-3-15. The corporate authorities of each

14 municipality shall have all powers necessary to enforce the

15 collection of any tax imposed and collected by such

16 municipality, whether such tax was imposed pursuant to its home

17 rule powers or statutory authorization, including but not

18 limited to subpoena power and the power to create and enforce

19 liens. No such lien shall affect the rights of bona fide

20 purchasers, mortgagees, judgment creditors or other

21 lienholders who acquire their interests in such property prior

22 to the time a notice of such lien is placed on record in the

23 office of the recorder or the registrar of titles of the county

24 in which the property is located. However, nothing in this

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1 Section shall permit a municipality to place a lien upon

2 property not located or found within its corporate boundaries.

3 A municipality creating a lien may provide that the procedures

4 for its notice and enforcement shall be the same as that

5 provided in the Retailers' Occupation Tax Act, asthat Act

6 existed prior to the adoption of the State Tax Lien

7 Registration Act ~~now or hereafter amended~~, for State tax liens,

8 and any recorder or registrar of titles with whom a notice of

9 such lien is filed shall treat such lien as a State tax lien

10 for recording purposes.

11 (Source: P.A. 86-680.)

12 Section 25-25. The Title Insurance Act is amended by

13 changing Section 22 as follows:

14 (215 ILCS 155/22) (from Ch. 73, par. 1422)

15 Sec. 22. Tax indemnity; notice.A corporation authorized to

16 do business under this Act shall notify the Director of Revenue

17 of the State of Illinois, by notice directed to his office in

18 the City of Chicago, of each trust account or similar account

19 established which relates to title exceptions due to a judgment

20 lien or any other lien arising under any tax Act administered

21 by the Illinois Department of Revenue, when notice of such lien

22 has been filed with the registrar of titles or recorderor in

23 the State Tax Lien Registry, as the case may be, in the manner

24 prescribed by law. Such notice shall contain the name, address,

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1 and tax identification number of the debtor, the permanent real

2 estate index numbers, if any, and the address and legal

3 description of the property, the type of lien claimed by the

4 Department and identification of any trust fund or similar

5 account held by such corporation or any agent thereof relating

6 to such lien. Any trust fund or similar account established by

7 such corporation or agent relating to any such lien shall

8 include provisions requiring such corporation or agent to apply

9 such fund in satisfaction or release of such lien upon written

10 demand therefor by the Department of Revenue.

11 (Source: P.A. 94-893, eff. 6-20-06.)

12 ARTICLE 30. GASOHOL; ETHANOL FUEL

13 Section 30-5. The Use Tax Act is amended by changing

14 Section 3-10 as follows:

15 (35 ILCS 105/3-10)

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 either the selling price or the fair market value, if any, of

19 the tangible personal property. In all cases where property

20 functionally used or consumed is the same as the property that

21 was purchased at retail, then the tax is imposed on the selling

22 price of the property. In all cases where property functionally

23 used or consumed is a by-product or waste product that has been

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1 refined, manufactured, or produced from property purchased at

2 retail, then the tax is imposed on the lower of the fair market

3 value, if any, of the specific property so used in this State

4 or on the selling price of the property purchased at retail.

5 For purposes of this Section "fair market value" means the

6 price at which property would change hands between a willing

7 buyer and a willing seller, neither being under any compulsion

8 to buy or sell and both having reasonable knowledge of the

9 relevant facts. The fair market value shall be established by

10 Illinois sales by the taxpayer of the same property as that

11 functionally used or consumed, or if there are no such sales by

12 the taxpayer, then comparable sales or purchases of property of

13 like kind and character in Illinois.

14 Beginning on July 1, 2000 and through December 31, 2000,

15 with respect to motor fuel, as defined in Section 1.1 of the

16 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

17 the Use Tax Act, the tax is imposed at the rate of 1.25%.

18 Beginning on August 6, 2010 through August 15, 2010, with

19 respect to sales tax holiday items as defined in Section 3-6 of

20 this Act, the tax is imposed at the rate of 1.25%.

21 With respect to gasohol, the tax imposed by this Act

22 applies to (i) 70% of the proceeds of sales made on or after

23 January 1, 1990, and before July 1, 2003, (ii) 80% of the

24 proceeds of sales made on or after July 1, 2003 and on or

25 before July 1, 2017 ~~December 31, 2018~~, and (iii) 100% of the

26 proceeds of sales made thereafter. If, at any time, however,

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1 the tax under this Act on sales of gasohol is imposed at the

2 rate of 1.25%, then the tax imposed by this Act applies to 100%

3 of the proceeds of sales of gasohol made during that time.

4 With respect to majority blended ethanol fuel, the tax

5 imposed by this Act does not apply to the proceeds of sales

6 made on or after July 1, 2003 and on or beforeDecember 31,

7 2023 ~~December 31, 2018~~ but applies to 100% of the proceeds of

8 sales made thereafter.

9 With respect to biodiesel blends with no less than 1% and

10 no more than 10% biodiesel, the tax imposed by this Act applies

11 to (i) 80% of the proceeds of sales made on or after July 1,

12 2003 and on or before December 31, 2018 and (ii) 100% of the

13 proceeds of sales made thereafter. If, at any time, however,

14 the tax under this Act on sales of biodiesel blends with no

15 less than 1% and no more than 10% biodiesel is imposed at the

16 rate of 1.25%, then the tax imposed by this Act applies to 100%

17 of the proceeds of sales of biodiesel blends with no less than

18 1% and no more than 10% biodiesel made during that time.

19 With respect to 100% biodiesel and biodiesel blends with

20 more than 10% but no more than 99% biodiesel, the tax imposed

21 by this Act does not apply to the proceeds of sales made on or

22 after July 1, 2003 and on or beforeDecember 31, 2023 ~~December~~

23 ~~31, 2018~~but applies to 100% of the proceeds of sales made

24 thereafter.

25 With respect to food for human consumption that is to be

26 consumed off the premises where it is sold (other than

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1 alcoholic beverages, soft drinks, and food that has been

2 prepared for immediate consumption) and prescription and

3 nonprescription medicines, drugs, medical appliances, products

4 classified as Class III medical devices by the United States

5 Food and Drug Administration that are used for cancer treatment

6 pursuant to a prescription, as well as any accessories and

7 components related to those devices, modifications to a motor

8 vehicle for the purpose of rendering it usable by a person with

9 a disability, and insulin, urine testing materials, syringes,

10 and needles used by diabetics, for human use, the tax is

11 imposed at the rate of 1%. For the purposes of this Section,

12 until September 1, 2009: the term "soft drinks" means any

13 complete, finished, ready-to-use, non-alcoholic drink, whether

14 carbonated or not, including but not limited to soda water,

15 cola, fruit juice, vegetable juice, carbonated water, and all

16 other preparations commonly known as soft drinks of whatever

17 kind or description that are contained in any closed or sealed

18 bottle, can, carton, or container, regardless of size; but

19 "soft drinks" does not include coffee, tea, non-carbonated

20 water, infant formula, milk or milk products as defined in the

21 Grade A Pasteurized Milk and Milk Products Act, or drinks

22 containing 50% or more natural fruit or vegetable juice.

23 Notwithstanding any other provisions of this Act,

24 beginning September 1, 2009, "soft drinks" means non-alcoholic

25 beverages that contain natural or artificial sweeteners. "Soft

26 drinks" do not include beverages that contain milk or milk

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1 products, soy, rice or similar milk substitutes, or greater

2 than 50% of vegetable or fruit juice by volume.

3 Until August 1, 2009, and notwithstanding any other

4 provisions of this Act, "food for human consumption that is to

5 be consumed off the premises where it is sold" includes all

6 food sold through a vending machine, except soft drinks and

7 food products that are dispensed hot from a vending machine,

8 regardless of the location of the vending machine. Beginning

9 August 1, 2009, and notwithstanding any other provisions of

10 this Act, "food for human consumption that is to be consumed

11 off the premises where it is sold" includes all food sold

12 through a vending machine, except soft drinks, candy, and food

13 products that are dispensed hot from a vending machine,

14 regardless of the location of the vending machine.

15 Notwithstanding any other provisions of this Act,

16 beginning September 1, 2009, "food for human consumption that

17 is to be consumed off the premises where it is sold" does not

18 include candy. For purposes of this Section, "candy" means a

19 preparation of sugar, honey, or other natural or artificial

20 sweeteners in combination with chocolate, fruits, nuts or other

21 ingredients or flavorings in the form of bars, drops, or

22 pieces. "Candy" does not include any preparation that contains

23 flour or requires refrigeration.

24 Notwithstanding any other provisions of this Act,

25 beginning September 1, 2009, "nonprescription medicines and

26 drugs" does not include grooming and hygiene products. For

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1 purposes of this Section, "grooming and hygiene products"

2 includes, but is not limited to, soaps and cleaning solutions,

3 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

4 lotions and screens, unless those products are available by

5 prescription only, regardless of whether the products meet the

6 definition of "over-the-counter-drugs". For the purposes of

7 this paragraph, "over-the-counter-drug" means a drug for human

8 use that contains a label that identifies the product as a drug

9 as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"

10 label includes:

11 (A) A "Drug Facts" panel; or

12 (B) A statement of the "active ingredient(s)" with a

13 list of those ingredients contained in the compound,

14 substance or preparation.

15 Beginning on the effective date of this amendatory Act of

16 the 98th General Assembly, "prescription and nonprescription

17 medicines and drugs" includes medical cannabis purchased from a

18 registered dispensing organization under the Compassionate Use

19 of Medical Cannabis Pilot Program Act.

20 If the property that is purchased at retail from a retailer

21 is acquired outside Illinois and used outside Illinois before

22 being brought to Illinois for use here and is taxable under

23 this Act, the "selling price" on which the tax is computed

24 shall be reduced by an amount that represents a reasonable

25 allowance for depreciation for the period of prior out-of-state

26 use.

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1 (Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;

2 99-858, eff. 8-19-16.)

3 Section 30-10. The Service Use Tax Act is amended by

4 changing Section 3-10 as follows:

5 (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)

6 Sec. 3-10. Rate of tax. Unless otherwise provided in this

7 Section, the tax imposed by this Act is at the rate of 6.25% of

8 the selling price of tangible personal property transferred as

9 an incident to the sale of service, but, for the purpose of

10 computing this tax, in no event shall the selling price be less

11 than the cost price of the property to the serviceman.

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 With respect to gasohol, as defined in the Use Tax Act, the

17 tax imposed by this Act applies to (i) 70% of the selling price

18 of property transferred as an incident to the sale of service

19 on or after January 1, 1990, and before July 1, 2003, (ii) 80%

20 of the selling price of property transferred as an incident to

21 the sale of service on or after July 1, 2003 and on or before

22 July 1, 2017 ~~December 31, 2018~~, and (iii) 100% of the selling

23 price thereafter. If, at any time, however, the tax under this

24 Act on sales of gasohol, as defined in the Use Tax Act, is

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1 imposed at the rate of 1.25%, then the tax imposed by this Act

2 applies to 100% of the proceeds of sales of gasohol made during

3 that time.

4 With respect to majority blended ethanol fuel, as defined

5 in the Use Tax Act, the tax imposed by this Act does not apply

6 to the selling price of property transferred as an incident to

7 the sale of service on or after July 1, 2003 and on or before

8 December 31, 2023 ~~December 31, 2018~~ but applies to 100% of the

9 selling price thereafter.

10 With respect to biodiesel blends, as defined in the Use Tax

11 Act, with no less than 1% and no more than 10% biodiesel, the

12 tax imposed by this Act applies to (i) 80% of the selling price

13 of property transferred as an incident to the sale of service

14 on or after July 1, 2003 and on or before December 31, 2018 and

15 (ii) 100% of the proceeds of the selling price thereafter. If,

16 at any time, however, the tax under this Act on sales of

17 biodiesel blends, as defined in the Use Tax Act, with no less

18 than 1% and no more than 10% biodiesel is imposed at the rate

19 of 1.25%, then the tax imposed by this Act applies to 100% of

20 the proceeds of sales of biodiesel blends with no less than 1%

21 and no more than 10% biodiesel made during that time.

22 With respect to 100% biodiesel, as defined in the Use Tax

23 Act, and biodiesel blends, as defined in the Use Tax Act, with

24 more than 10% but no more than 99% biodiesel, the tax imposed

25 by this Act does not apply to the proceeds of the selling price

26 of property transferred as an incident to the sale of service

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1 on or after July 1, 2003 and on or beforeDecember 31, 2023

2 ~~December 31, 2018~~ but applies to 100% of the selling price

3 thereafter.

4 At the election of any registered serviceman made for each

5 fiscal year, sales of service in which the aggregate annual

6 cost price of tangible personal property transferred as an

7 incident to the sales of service is less than 35%, or 75% in

8 the case of servicemen transferring prescription drugs or

9 servicemen engaged in graphic arts production, of the aggregate

10 annual total gross receipts from all sales of service, the tax

11 imposed by this Act shall be based on the serviceman's cost

12 price of the tangible personal property transferred as an

13 incident to the sale of those services.

14 The tax shall be imposed at the rate of 1% on food prepared

15 for immediate consumption and transferred incident to a sale of

16 service subject to this Act or the Service Occupation Tax Act

17 by an entity licensed under the Hospital Licensing Act, the

18 Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD

19 Act, the Specialized Mental Health Rehabilitation Act of 2013,

20 or the Child Care Act of 1969. The tax shall also be imposed at

21 the rate of 1% on food for human consumption that is to be

22 consumed off the premises where it is sold (other than

23 alcoholic beverages, soft drinks, and food that has been

24 prepared for immediate consumption and is not otherwise

25 included in this paragraph) and prescription and

26 nonprescription medicines, drugs, medical appliances, products

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LRB100 06347 HLH 27908 a

1 classified as Class III medical devices by the United States

2 Food and Drug Administration that are used for cancer treatment

3 pursuant to a prescription, as well as any accessories and

4 components related to those devices, modifications to a motor

5 vehicle for the purpose of rendering it usable by a person with

6 a disability, and insulin, urine testing materials, syringes,

7 and needles used by diabetics, for human use. For the purposes

8 of this Section, until September 1, 2009: the term "soft

9 drinks" means any complete, finished, ready-to-use,

10 non-alcoholic drink, whether carbonated or not, including but

11 not limited to soda water, cola, fruit juice, vegetable juice,

12 carbonated water, and all other preparations commonly known as

13 soft drinks of whatever kind or description that are contained

14 in any closed or sealed bottle, can, carton, or container,

15 regardless of size; but "soft drinks" does not include coffee,

16 tea, non-carbonated water, infant formula, milk or milk

17 products as defined in the Grade A Pasteurized Milk and Milk

18 Products Act, or drinks containing 50% or more natural fruit or

19 vegetable juice.

20 Notwithstanding any other provisions of this Act,

21 beginning September 1, 2009, "soft drinks" means non-alcoholic

22 beverages that contain natural or artificial sweeteners. "Soft

23 drinks" do not include beverages that contain milk or milk

24 products, soy, rice or similar milk substitutes, or greater

25 than 50% of vegetable or fruit juice by volume.

26 Until August 1, 2009, and notwithstanding any other

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LRB100 06347 HLH 27908 a

1 provisions of this Act, "food for human consumption that is to

2 be consumed off the premises where it is sold" includes all

3 food sold through a vending machine, except soft drinks and

4 food products that are dispensed hot from a vending machine,

5 regardless of the location of the vending machine. Beginning

6 August 1, 2009, and notwithstanding any other provisions of

7 this Act, "food for human consumption that is to be consumed

8 off the premises where it is sold" includes all food sold

9 through a vending machine, except soft drinks, candy, and food

10 products that are dispensed hot from a vending machine,

11 regardless of the location of the vending machine.

12 Notwithstanding any other provisions of this Act,

13 beginning September 1, 2009, "food for human consumption that

14 is to be consumed off the premises where it is sold" does not

15 include candy. For purposes of this Section, "candy" means a

16 preparation of sugar, honey, or other natural or artificial

17 sweeteners in combination with chocolate, fruits, nuts or other

18 ingredients or flavorings in the form of bars, drops, or

19 pieces. "Candy" does not include any preparation that contains

20 flour or requires refrigeration.

21 Notwithstanding any other provisions of this Act,

22 beginning September 1, 2009, "nonprescription medicines and

23 drugs" does not include grooming and hygiene products. For

24 purposes of this Section, "grooming and hygiene products"

25 includes, but is not limited to, soaps and cleaning solutions,

26 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

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LRB100 06347 HLH 27908 a

1 lotions and screens, unless those products are available by

2 prescription only, regardless of whether the products meet the

3 definition of "over-the-counter-drugs". For the purposes of

4 this paragraph, "over-the-counter-drug" means a drug for human

5 use that contains a label that identifies the product as a drug

6 as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"

7 label includes:

8 (A) A "Drug Facts" panel; or

9 (B) A statement of the "active ingredient(s)" with a

10 list of those ingredients contained in the compound,

11 substance or preparation.

12 Beginning on January 1, 2014 (the effective date of Public

13 Act 98-122), "prescription and nonprescription medicines and

14 drugs" includes medical cannabis purchased from a registered

15 dispensing organization under the Compassionate Use of Medical

16 Cannabis Pilot Program Act.

17 If the property that is acquired from a serviceman is

18 acquired outside Illinois and used outside Illinois before

19 being brought to Illinois for use here and is taxable under

20 this Act, the "selling price" on which the tax is computed

21 shall be reduced by an amount that represents a reasonable

22 allowance for depreciation for the period of prior out-of-state

23 use.

24 (Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;

25 98-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.

26 7-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16.)

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LRB100 06347 HLH 27908 a

1 Section 30-15. The Service Occupation Tax Act is amended by

2 changing Section 3-10 as follows:

3 (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)

4 Sec. 3-10. Rate of tax. Unless otherwise provided in this

5 Section, the tax imposed by this Act is at the rate of 6.25% of

6 the "selling price", as defined in Section 2 of the Service Use

7 Tax Act, of the tangible personal property. For the purpose of

8 computing this tax, in no event shall the "selling price" be

9 less than the cost price to the serviceman of the tangible

10 personal property transferred. The selling price of each item

11 of tangible personal property transferred as an incident of a

12 sale of service may be shown as a distinct and separate item on

13 the serviceman's billing to the service customer. If the

14 selling price is not so shown, the selling price of the

15 tangible personal property is deemed to be 50% of the

16 serviceman's entire billing to the service customer. When,

17 however, a serviceman contracts to design, develop, and produce

18 special order machinery or equipment, the tax imposed by this

19 Act shall be based on the serviceman's cost price of the

20 tangible personal property transferred incident to the

21 completion of the contract.

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

24 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

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LRB100 06347 HLH 27908 a

1 the Use Tax Act, the tax is imposed at the rate of 1.25%.

2 With respect to gasohol, as defined in the Use Tax Act, the

3 tax imposed by this Act shall apply to (i) 70% of the cost

4 price of property transferred as an incident to the sale of

5 service on or after January 1, 1990, and before July 1, 2003,

6 (ii) 80% of the selling price of property transferred as an

7 incident to the sale of service on or after July 1, 2003 and on

8 or before July 1, 2017 ~~December 31, 2018~~, and (iii) 100% of the

9 cost price thereafter. If, at any time, however, the tax under

10 this Act on sales of gasohol, as defined in the Use Tax Act, is

11 imposed at the rate of 1.25%, then the tax imposed by this Act

12 applies to 100% of the proceeds of sales of gasohol made during

13 that time.

14 With respect to majority blended ethanol fuel, as defined

15 in the Use Tax Act, the tax imposed by this Act does not apply

16 to the selling price of property transferred as an incident to

17 the sale of service on or after July 1, 2003 and on or before

18 December 31, 2023 ~~December 31, 2018~~ but applies to 100% of the

19 selling price thereafter.

20 With respect to biodiesel blends, as defined in the Use Tax

21 Act, with no less than 1% and no more than 10% biodiesel, the

22 tax imposed by this Act applies to (i) 80% of the selling price

23 of property transferred as an incident to the sale of service

24 on or after July 1, 2003 and on or before December 31, 2018 and

25 (ii) 100% of the proceeds of the selling price thereafter. If,

26 at any time, however, the tax under this Act on sales of

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LRB100 06347 HLH 27908 a

1 biodiesel blends, as defined in the Use Tax Act, with no less

2 than 1% and no more than 10% biodiesel is imposed at the rate

3 of 1.25%, then the tax imposed by this Act applies to 100% of

4 the proceeds of sales of biodiesel blends with no less than 1%

5 and no more than 10% biodiesel made during that time.

6 With respect to 100% biodiesel, as defined in the Use Tax

7 Act, and biodiesel blends, as defined in the Use Tax Act, with

8 more than 10% but no more than 99% biodiesel material, the tax

9 imposed by this Act does not apply to the proceeds of the

10 selling price of property transferred as an incident to the

11 sale of service on or after July 1, 2003 and on or before

12 December 31, 2023 ~~December 31, 2018~~ but applies to 100% of the

13 selling price thereafter.

14 At the election of any registered serviceman made for each

15 fiscal year, sales of service in which the aggregate annual

16 cost price of tangible personal property transferred as an

17 incident to the sales of service is less than 35%, or 75% in

18 the case of servicemen transferring prescription drugs or

19 servicemen engaged in graphic arts production, of the aggregate

20 annual total gross receipts from all sales of service, the tax

21 imposed by this Act shall be based on the serviceman's cost

22 price of the tangible personal property transferred incident to

23 the sale of those services.

24 The tax shall be imposed at the rate of 1% on food prepared

25 for immediate consumption and transferred incident to a sale of

26 service subject to this Act or the Service Occupation Tax Act

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LRB100 06347 HLH 27908 a

1 by an entity licensed under the Hospital Licensing Act, the

2 Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD

3 Act, the Specialized Mental Health Rehabilitation Act of 2013,

4 or the Child Care Act of 1969. The tax shall also be imposed at

5 the rate of 1% on 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 is not otherwise

9 included in this paragraph) and prescription and

10 nonprescription medicines, drugs, medical appliances, products

11 classified as Class III medical devices by the United States

12 Food and Drug Administration that are used for cancer treatment

13 pursuant to a prescription, as well as any accessories and

14 components related to those devices, modifications to a motor

15 vehicle for the purpose of rendering it usable by a person with

16 a disability, and insulin, urine testing materials, syringes,

17 and needles used by diabetics, for human use. For the purposes

18 of this Section, until September 1, 2009: the term "soft

19 drinks" means any complete, finished, ready-to-use,

20 non-alcoholic drink, whether carbonated or not, including but

21 not limited to soda water, cola, fruit juice, vegetable juice,

22 carbonated water, and all other preparations commonly known as

23 soft drinks of whatever kind or description that are contained

24 in any closed or sealed can, carton, or container, regardless

25 of size; but "soft drinks" does not include coffee, tea,

26 non-carbonated water, infant formula, milk or milk products as

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1 defined in the Grade A Pasteurized Milk and Milk Products Act,

2 or drinks containing 50% or more natural fruit or vegetable

3 juice.

4 Notwithstanding any other provisions of this Act,

5 beginning September 1, 2009, "soft drinks" means non-alcoholic

6 beverages that contain natural or artificial sweeteners. "Soft

7 drinks" do not include beverages that contain milk or milk

8 products, soy, rice or similar milk substitutes, or greater

9 than 50% of vegetable or fruit juice by volume.

10 Until August 1, 2009, and notwithstanding any other

11 provisions of this Act, "food for human consumption that is to

12 be consumed off the premises where it is sold" includes all

13 food sold through a vending machine, except soft drinks and

14 food products that are dispensed hot from a vending machine,

15 regardless of the location of the vending machine. Beginning

16 August 1, 2009, and notwithstanding any other provisions of

17 this Act, "food for human consumption that is to be consumed

18 off the premises where it is sold" includes all food sold

19 through a vending machine, except soft drinks, candy, and food

20 products that are dispensed hot from a vending machine,

21 regardless of the location of the vending machine.

22 Notwithstanding any other provisions of this Act,

23 beginning September 1, 2009, "food for human consumption that

24 is to be consumed off the premises where it is sold" does not

25 include candy. For purposes of this Section, "candy" means a

26 preparation of sugar, honey, or other natural or artificial

10000SB0009ham003

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LRB100 06347 HLH 27908 a

1 sweeteners in combination with chocolate, fruits, nuts or other

2 ingredients or flavorings in the form of bars, drops, or

3 pieces. "Candy" does not include any preparation that contains

4 flour or requires refrigeration.

5 Notwithstanding any other provisions of this Act,

6 beginning September 1, 2009, "nonprescription medicines and

7 drugs" does not include grooming and hygiene products. For

8 purposes of this Section, "grooming and hygiene products"

9 includes, but is not limited to, soaps and cleaning solutions,

10 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

11 lotions and screens, unless those products are available by

12 prescription only, regardless of whether the products meet the

13 definition of "over-the-counter-drugs". For the purposes of

14 this paragraph, "over-the-counter-drug" means a drug for human

15 use that contains a label that identifies the product as a drug

16 as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"

17 label includes:

18 (A) A "Drug Facts" panel; or

19 (B) A statement of the "active ingredient(s)" with a

20 list of those ingredients contained in the compound,

21 substance or preparation.

22 Beginning on January 1, 2014 (the effective date of Public

23 Act 98-122), "prescription and nonprescription medicines and

24 drugs" includes medical cannabis purchased from a registered

25 dispensing organization under the Compassionate Use of Medical

26 Cannabis Pilot Program Act.

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1 (Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;

2 98-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.

3 7-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16.)

4 Section 30-20. The Retailers' Occupation Tax Act is amended

5 by changing Section 2-10 as follows:

6 (35 ILCS 120/2-10)

7 Sec. 2-10. Rate of tax. Unless otherwise provided in this

8 Section, the tax imposed by this Act is at the rate of 6.25% of

9 gross receipts from sales of tangible personal property made in

10 the course of business.

11 Beginning on July 1, 2000 and through December 31, 2000,

12 with respect to motor fuel, as defined in Section 1.1 of the

13 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

14 the Use Tax Act, the tax is imposed at the rate of 1.25%.

15 Beginning on August 6, 2010 through August 15, 2010, with

16 respect to sales tax holiday items as defined in Section 2-8 of

17 this Act, the tax is imposed at the rate of 1.25%.

18 Within 14 days after the effective date of this amendatory

19 Act of the 91st General Assembly, each retailer of motor fuel

20 and gasohol shall cause the following notice to be posted in a

21 prominently visible place on each retail dispensing device that

22 is used to dispense motor fuel or gasohol in the State of

23 Illinois: "As of July 1, 2000, the State of Illinois has

24 eliminated the State's share of sales tax on motor fuel and

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1 gasohol through December 31, 2000. The price on this pump

2 should reflect the elimination of the tax." The notice shall be

3 printed in bold print on a sign that is no smaller than 4

4 inches by 8 inches. The sign shall be clearly visible to

5 customers. Any retailer who fails to post or maintain a

6 required sign through December 31, 2000 is guilty of a petty

7 offense for which the fine shall be $500 per day per each

8 retail premises where a violation occurs.

9 With respect to gasohol, as defined in the Use Tax Act, the

10 tax imposed by this Act applies to (i) 70% of the proceeds of

11 sales made on or after January 1, 1990, and before July 1,

12 2003, (ii) 80% of the proceeds of sales made on or after July

13 1, 2003 and on or before July 1, 2017 ~~December 31, 2018~~, and

14 (iii) 100% of the proceeds of sales made thereafter. If, at any

15 time, however, the tax under this Act on sales of gasohol, as

16 defined in the Use Tax Act, is imposed at the rate of 1.25%,

17 then the tax imposed by this Act applies to 100% of the

18 proceeds of sales of gasohol made during that 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 proceeds of sales made on or after July 1, 2003 and on or

22 before December 31, 2023 ~~December 31, 2018~~ but applies to 100%

23 of the proceeds of sales made thereafter.

24 With respect to biodiesel blends, as defined in the Use Tax

25 Act, with no less than 1% and no more than 10% biodiesel, the

26 tax imposed by this Act applies to (i) 80% of the proceeds of

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LRB100 06347 HLH 27908 a

1 sales made on or after July 1, 2003 and on or before December

2 31, 2018 and (ii) 100% of the proceeds of sales made

3 thereafter. If, at any time, however, the tax under this Act on

4 sales of biodiesel blends, as defined in the Use Tax Act, with

5 no less than 1% and no more than 10% biodiesel is imposed at

6 the rate of 1.25%, then the tax imposed by this Act applies to

7 100% of the proceeds of sales of biodiesel blends with no less

8 than 1% and no more than 10% biodiesel made during that time.

9 With respect to 100% biodiesel, as defined in the Use Tax

10 Act, and biodiesel blends, as defined in the Use Tax Act, with

11 more than 10% but no more than 99% biodiesel, the tax imposed

12 by this Act does not apply to the proceeds of sales made on or

13 after July 1, 2003 and on or beforeDecember 31, 2023 ~~December~~

14 ~~31, 2018~~but applies to 100% of the proceeds of sales made

15 thereafter.

16 With respect to 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 prescription and

20 nonprescription medicines, drugs, medical appliances, products

21 classified as Class III medical devices by the United States

22 Food and Drug Administration that are used for cancer treatment

23 pursuant to a prescription, as well as any accessories and

24 components related to those devices, modifications to a motor

25 vehicle for the purpose of rendering it usable by a person with

26 a disability, and insulin, urine testing materials, syringes,

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1 and needles used by diabetics, for human use, the tax is

2 imposed at the rate of 1%. For the purposes of this Section,

3 until September 1, 2009: the term "soft drinks" means any

4 complete, finished, ready-to-use, non-alcoholic drink, whether

5 carbonated or not, including but not limited to soda water,

6 cola, fruit juice, vegetable juice, carbonated water, and all

7 other preparations commonly known as soft drinks of whatever

8 kind or description that are contained in any closed or sealed

9 bottle, can, carton, or container, regardless of size; but

10 "soft drinks" does not include coffee, tea, non-carbonated

11 water, infant formula, milk or milk products as defined in the

12 Grade A Pasteurized Milk and Milk Products Act, or drinks

13 containing 50% or more natural fruit or vegetable juice.

14 Notwithstanding any other provisions of this Act,

15 beginning September 1, 2009, "soft drinks" means non-alcoholic

16 beverages that contain natural or artificial sweeteners. "Soft

17 drinks" do not include beverages that contain milk or milk

18 products, soy, rice or similar milk substitutes, or greater

19 than 50% of vegetable or fruit juice by volume.

20 Until August 1, 2009, and notwithstanding any other

21 provisions of this Act, "food for human consumption that is to

22 be consumed off the premises where it is sold" includes all

23 food sold through a vending machine, except soft drinks and

24 food products that are dispensed hot from a vending machine,

25 regardless of the location of the vending machine. Beginning

26 August 1, 2009, and notwithstanding any other provisions of

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1 this Act, "food for human consumption that is to be consumed

2 off the premises where it is sold" includes all food sold

3 through a vending machine, except soft drinks, candy, and food

4 products that are dispensed hot from a vending machine,

5 regardless of the location of the vending machine.

6 Notwithstanding any other provisions of this Act,

7 beginning September 1, 2009, "food for human consumption that

8 is to be consumed off the premises where it is sold" does not

9 include candy. For purposes of this Section, "candy" means a

10 preparation of sugar, honey, or other natural or artificial

11 sweeteners in combination with chocolate, fruits, nuts or other

12 ingredients or flavorings in the form of bars, drops, or

13 pieces. "Candy" does not include any preparation that contains

14 flour or requires refrigeration.

15 Notwithstanding any other provisions of this Act,

16 beginning September 1, 2009, "nonprescription medicines and

17 drugs" does not include grooming and hygiene products. For

18 purposes of this Section, "grooming and hygiene products"

19 includes, but is not limited to, soaps and cleaning solutions,

20 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

21 lotions and screens, unless those products are available by

22 prescription only, regardless of whether the products meet the

23 definition of "over-the-counter-drugs". For the purposes of

24 this paragraph, "over-the-counter-drug" means a drug for human

25 use that contains a label that identifies the product as a drug

26 as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"

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1 label includes:

2 (A) A "Drug Facts" panel; or

3 (B) A statement of the "active ingredient(s)" with a

4 list of those ingredients contained in the compound,

5 substance or preparation.

6 Beginning on the effective date of this amendatory Act of

7 the 98th General Assembly, "prescription and nonprescription

8 medicines and drugs" includes medical cannabis purchased from a

9 registered dispensing organization under the Compassionate Use

10 of Medical Cannabis Pilot Program Act.

11 (Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;

12 99-858, eff. 8-19-16.)

13 ARTICLE 35. GRAPHIC ARTS

14 Section 35-5. The Use Tax Act is amended by changing

15 Sections 3-5 and 3-50 as follows:

16 (35 ILCS 105/3-5)

17 Sec. 3-5. Exemptions. Use of the following tangible

18 personal property is exempt from the tax imposed by this Act:

19 (1) Personal property purchased from a corporation,

20 society, association, foundation, institution, or

21 organization, other than a limited liability company, that is

22 organized and operated as a not-for-profit service enterprise

23 for the benefit of persons 65 years of age or older if the

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1 personal property was not purchased by the enterprise for the

2 purpose of resale by the enterprise.

3 (2) Personal property purchased by a not-for-profit

4 Illinois county fair association for use in conducting,

5 operating, or promoting the county fair.

6 (3) Personal property purchased by a not-for-profit arts or

7 cultural organization that establishes, by proof required by

8 the Department by rule, that it has received an exemption under

9 Section 501(c)(3) of the Internal Revenue Code and that is

10 organized and operated primarily for the presentation or

11 support of arts or cultural programming, activities, or

12 services. These organizations include, but are not limited to,

13 music and dramatic arts organizations such as symphony

14 orchestras and theatrical groups, arts and cultural service

15 organizations, local arts councils, visual arts organizations,

16 and media arts organizations. On and after the effective date

17 of this amendatory Act of the 92nd General Assembly, however,

18 an entity otherwise eligible for this exemption shall not make

19 tax-free purchases unless it has an active identification

20 number issued by the Department.

21 (4) Personal property purchased by a governmental body, by

22 a corporation, society, association, foundation, or

23 institution organized and operated exclusively for charitable,

24 religious, or educational purposes, or by a not-for-profit

25 corporation, society, association, foundation, institution, or

26 organization that has no compensated officers or employees and

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1 that is organized and operated primarily for the recreation of

2 persons 55 years of age or older. A limited liability company

3 may qualify for the exemption under this paragraph only if the

4 limited liability company is organized and operated

5 exclusively for educational purposes. On and after July 1,

6 1987, however, no entity otherwise eligible for this exemption

7 shall make tax-free purchases unless it has an active exemption

8 identification number issued by the Department.

9 (5) Until July 1, 2003, a passenger car that is a

10 replacement vehicle to the extent that the purchase price of

11 the car is subject to the Replacement Vehicle Tax.

12 (6) Until July 1, 2003 and beginning again on September 1,

13 2004 through August 30, 2014, graphic arts machinery and

14 equipment, including repair and replacement parts, both new and

15 used, and including that manufactured on special order,

16 certified by the purchaser to be used primarily for graphic

17 arts production, and including machinery and equipment

18 purchased for lease. Equipment includes chemicals or chemicals

19 acting as catalysts but only if the chemicals or chemicals

20 acting as catalysts effect a direct and immediate change upon a

21 graphic arts product. Beginning on July 1, 2017, graphic arts

22 machinery and equipment is included in the manufacturing and

23 assembling machinery and equipment exemption under paragraph

24 (18).

25 (7) Farm chemicals.

26 (8) Legal tender, currency, medallions, or gold or silver

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1 coinage issued by the State of Illinois, the government of the

2 United States of America, or the government of any foreign

3 country, and bullion.

4 (9) Personal property purchased from a teacher-sponsored

5 student organization affiliated with an elementary or

6 secondary school located in Illinois.

7 (10) A motor vehicle that is used for automobile renting,

8 as defined in the Automobile Renting Occupation and Use Tax

9 Act.

10 (11) Farm machinery and equipment, both new and used,

11 including that manufactured on special order, certified by the

12 purchaser to be used primarily for production agriculture or

13 State or federal agricultural programs, including individual

14 replacement parts for the machinery and equipment, including

15 machinery and equipment purchased for lease, and including

16 implements of husbandry defined in Section 1-130 of the

17 Illinois Vehicle Code, farm machinery and agricultural

18 chemical and fertilizer spreaders, and nurse wagons required to

19 be registered under Section 3-809 of the Illinois Vehicle Code,

20 but excluding other motor vehicles required to be registered

21 under the Illinois Vehicle Code. Horticultural polyhouses or

22 hoop houses used for propagating, growing, or overwintering

23 plants shall be considered farm machinery and equipment under

24 this item (11). Agricultural chemical tender tanks and dry

25 boxes shall include units sold separately from a motor vehicle

26 required to be licensed and units sold mounted on a motor

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1 vehicle required to be licensed if the selling price of the

2 tender is separately stated.

3 Farm machinery and equipment shall include precision

4 farming equipment that is installed or purchased to be

5 installed on farm machinery and equipment including, but not

6 limited to, tractors, harvesters, sprayers, planters, seeders,

7 or spreaders. Precision farming equipment includes, but is not

8 limited to, soil testing sensors, computers, monitors,

9 software, global positioning and mapping systems, and other

10 such equipment.

11 Farm machinery and equipment also includes computers,

12 sensors, software, and related equipment used primarily in the

13 computer-assisted operation of production agriculture

14 facilities, equipment, and activities such as, but not limited

15 to, the collection, monitoring, and correlation of animal and

16 crop data for the purpose of formulating animal diets and

17 agricultural chemicals. This item (11) is exempt from the

18 provisions of Section 3-90.

19 (12) Until June 30, 2013, fuel and petroleum products sold

20 to or used by an air common carrier, certified by the carrier

21 to be used for consumption, shipment, or storage in the conduct

22 of its business as an air common carrier, for a flight destined

23 for or returning from a location or locations outside the

24 United States without regard to previous or subsequent domestic

25 stopovers.

26 Beginning July 1, 2013, fuel and petroleum products sold to

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1 or used by an air carrier, certified by the carrier to be used

2 for consumption, shipment, or storage in the conduct of its

3 business as an air common carrier, for a flight that (i) is

4 engaged in foreign trade or is engaged in trade between the

5 United States and any of its possessions and (ii) transports at

6 least one individual or package for hire from the city of

7 origination to the city of final destination on the same

8 aircraft, without regard to a change in the flight number of

9 that aircraft.

10 (13) Proceeds of mandatory service charges separately

11 stated on customers' bills for the purchase and consumption of

12 food and beverages purchased at retail from a retailer, to the

13 extent that the proceeds of the service charge are in fact

14 turned over as tips or as a substitute for tips to the

15 employees who participate directly in preparing, serving,

16 hosting or cleaning up the food or beverage function with

17 respect to which the service charge is imposed.

18 (14) Until July 1, 2003, oil field exploration, drilling,

19 and production equipment, including (i) rigs and parts of rigs,

20 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

21 tubular goods, including casing and drill strings, (iii) pumps

22 and pump-jack units, (iv) storage tanks and flow lines, (v) any

23 individual replacement part for oil field exploration,

24 drilling, and production equipment, and (vi) machinery and

25 equipment purchased for lease; but excluding motor vehicles

26 required to be registered under the Illinois Vehicle Code.

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1 (15) Photoprocessing machinery and equipment, including

2 repair and replacement parts, both new and used, including that

3 manufactured on special order, certified by the purchaser to be

4 used primarily for photoprocessing, and including

5 photoprocessing machinery and equipment purchased for lease.

6 (16) Coal and aggregate exploration, mining, off-highway

7 hauling, processing, maintenance, and reclamation equipment,

8 including replacement parts and equipment, and including

9 equipment purchased for lease, but excluding motor vehicles

10 required to be registered under the Illinois Vehicle Code. The

11 changes made to this Section by Public Act 97-767 apply on and

12 after July 1, 2003, but no claim for credit or refund is

13 allowed on or after August 16, 2013 (the effective date of

14 Public Act 98-456) for such taxes paid during the period

15 beginning July 1, 2003 and ending on August 16, 2013 (the

16 effective date of Public Act 98-456).

17 (17) Until July 1, 2003, distillation machinery and

18 equipment, sold as a unit or kit, assembled or installed by the

19 retailer, certified by the user to be used only for the

20 production of ethyl alcohol that will be used for consumption

21 as motor fuel or as a component of motor fuel for the personal

22 use of the user, and not subject to sale or resale.

23 (18) Manufacturing and assembling machinery and equipment

24 used primarily in the process of manufacturing or assembling

25 tangible personal property for wholesale or retail sale or

26 lease, whether that sale or lease is made directly by the

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1 manufacturer or by some other person, whether the materials

2 used in the process are owned by the manufacturer or some other

3 person, or whether that sale or lease is made apart from or as

4 an incident to the seller's engaging in the service occupation

5 of producing machines, tools, dies, jigs, patterns, gauges, or

6 other similar items of no commercial value on special order for

7 a particular purchaser. The exemption provided by this

8 paragraph (18) does not include machinery and equipment used in

9 (i) the generation of electricity for wholesale or retail sale;

10 (ii) the generation or treatment of natural or artificial gas

11 for wholesale or retail sale that is delivered to customers

12 through pipes, pipelines, or mains; or (iii) the treatment of

13 water for wholesale or retail sale that is delivered to

14 customers through pipes, pipelines, or mains. The provisions of

15 Public Act 98-583 are declaratory of existing law as to the

16 meaning and scope of this exemption. Beginning on July 1, 2017,

17 the exemption provided by this paragraph (18) includes, but is

18 not limited to, graphic arts machinery and equipment, as

19 defined in paragraph (6) of this Section.

20 (19) Personal property delivered to a purchaser or

21 purchaser's donee inside Illinois when the purchase order for

22 that personal property was received by a florist located

23 outside Illinois who has a florist located inside Illinois

24 deliver the personal property.

25 (20) Semen used for artificial insemination of livestock

26 for direct agricultural production.

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1 (21) Horses, or interests in horses, registered with and

2 meeting the requirements of any of the Arabian Horse Club

3 Registry of America, Appaloosa Horse Club, American Quarter

4 Horse Association, United States Trotting Association, or

5 Jockey Club, as appropriate, used for purposes of breeding or

6 racing for prizes. This item (21) is exempt from the provisions

7 of Section 3-90, and the exemption provided for under this item

8 (21) applies for all periods beginning May 30, 1995, but no

9 claim for credit or refund is allowed on or after January 1,

10 2008 for such taxes paid during the period beginning May 30,

11 2000 and ending on January 1, 2008.

12 (22) Computers and communications equipment utilized for

13 any hospital purpose and equipment used in the diagnosis,

14 analysis, or treatment of hospital patients purchased by a

15 lessor who leases the equipment, under a lease of one year or

16 longer executed or in effect at the time the lessor would

17 otherwise be subject to the tax imposed by this Act, to a

18 hospital that has been issued an active tax exemption

19 identification number by the Department under Section 1g of the

20 Retailers' Occupation Tax Act. If the equipment is leased in a

21 manner that does not qualify for this exemption or is used in

22 any other non-exempt manner, the lessor shall be liable for the

23 tax imposed under this Act or the Service Use Tax Act, as the

24 case may be, based on the fair market value of the property at

25 the time the non-qualifying use occurs. No lessor shall collect

26 or attempt to collect an amount (however designated) that

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1 purports to reimburse that lessor for the tax imposed by this

2 Act or the Service Use Tax Act, as the case may be, if the tax

3 has not been paid by the lessor. If a lessor improperly

4 collects any such amount from the lessee, the lessee shall have

5 a legal right to claim a refund of that amount from the lessor.

6 If, however, that amount is not refunded to the lessee for any

7 reason, the lessor is liable to pay that amount to the

8 Department.

9 (23) Personal property purchased by a lessor who leases the

10 property, under a lease of one year or longer executed or in

11 effect at the time the lessor would otherwise be subject to the

12 tax imposed by this Act, to a governmental body that has been

13 issued an active sales tax exemption identification number by

14 the Department under Section 1g of the Retailers' Occupation

15 Tax Act. If the property is leased in a manner that does not

16 qualify for this exemption or used in any other non-exempt

17 manner, the lessor shall be liable for the tax imposed under

18 this Act or the Service Use Tax Act, as the case may be, based

19 on the fair market value of the property at the time the

20 non-qualifying use occurs. No lessor shall collect or attempt

21 to collect an amount (however designated) that purports to

22 reimburse that lessor for the tax imposed by this Act or the

23 Service Use Tax Act, as the case may be, if the tax has not been

24 paid by the lessor. If a lessor improperly collects any such

25 amount from the lessee, the lessee shall have a legal right to

26 claim a refund of that amount from the lessor. If, however,

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1 that amount is not refunded to the lessee for any reason, the

2 lessor is liable to pay that amount to the Department.

3 (24) Beginning with taxable years ending on or after

4 December 31, 1995 and ending with taxable years ending on or

5 before December 31, 2004, personal property that is donated for

6 disaster relief to be used in a State or federally declared

7 disaster area in Illinois or bordering Illinois by a

8 manufacturer or retailer that is registered in this State to a

9 corporation, society, association, foundation, or institution

10 that has been issued a sales tax exemption identification

11 number by the Department that assists victims of the disaster

12 who reside within the declared disaster area.

13 (25) Beginning with taxable years ending on or after

14 December 31, 1995 and ending with taxable years ending on or

15 before December 31, 2004, personal property that is used in the

16 performance of infrastructure repairs in this State, including

17 but not limited to municipal roads and streets, access roads,

18 bridges, sidewalks, waste disposal systems, water and sewer

19 line extensions, water distribution and purification

20 facilities, storm water drainage and retention facilities, and

21 sewage treatment facilities, resulting from a State or

22 federally declared disaster in Illinois or bordering Illinois

23 when such repairs are initiated on facilities located in the

24 declared disaster area within 6 months after the disaster.

25 (26) Beginning July 1, 1999, game or game birds purchased

26 at a "game breeding and hunting preserve area" as that term is

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1 used in the Wildlife Code. This paragraph is exempt from the

2 provisions of Section 3-90.

3 (27) A motor vehicle, as that term is defined in Section

4 1-146 of the Illinois Vehicle Code, that is donated to a

5 corporation, limited liability company, society, association,

6 foundation, or institution that is determined by the Department

7 to be organized and operated exclusively for educational

8 purposes. For purposes of this exemption, "a corporation,

9 limited liability company, society, association, foundation,

10 or institution organized and operated exclusively for

11 educational purposes" means all tax-supported public schools,

12 private schools that offer systematic instruction in useful

13 branches of learning by methods common to public schools and

14 that compare favorably in their scope and intensity with the

15 course of study presented in tax-supported schools, and

16 vocational or technical schools or institutes organized and

17 operated exclusively to provide a course of study of not less

18 than 6 weeks duration and designed to prepare individuals to

19 follow a trade or to pursue a manual, technical, mechanical,

20 industrial, business, or commercial occupation.

21 (28) Beginning January 1, 2000, personal property,

22 including food, purchased through fundraising events for the

23 benefit of a public or private elementary or secondary school,

24 a group of those schools, or one or more school districts if

25 the events are sponsored by an entity recognized by the school

26 district that consists primarily of volunteers and includes

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1 parents and teachers of the school children. This paragraph

2 does not apply to fundraising events (i) for the benefit of

3 private home instruction or (ii) for which the fundraising

4 entity purchases the personal property sold at the events from

5 another individual or entity that sold the property for the

6 purpose of resale by the fundraising entity and that profits

7 from the sale to the fundraising entity. This paragraph is

8 exempt from the provisions of Section 3-90.

9 (29) Beginning January 1, 2000 and through December 31,

10 2001, new or used automatic vending machines that prepare and

11 serve hot food and beverages, including coffee, soup, and other

12 items, and replacement parts for these machines. Beginning

13 January 1, 2002 and through June 30, 2003, machines and parts

14 for machines used in commercial, coin-operated amusement and

15 vending business if a use or occupation tax is paid on the

16 gross receipts derived from the use of the commercial,

17 coin-operated amusement and vending machines. This paragraph

18 is exempt from the provisions of Section 3-90.

19 (30) Beginning January 1, 2001 and through June 30, 2016,

20 food for human consumption that is to be consumed off the

21 premises where it is sold (other than alcoholic beverages, soft

22 drinks, and food that has been prepared for immediate

23 consumption) and prescription and nonprescription medicines,

24 drugs, medical appliances, and insulin, urine testing

25 materials, syringes, and needles used by diabetics, for human

26 use, when purchased for use by a person receiving medical

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1 assistance under Article V of the Illinois Public Aid Code who

2 resides in a licensed long-term care facility, as defined in

3 the Nursing Home Care Act, or in a licensed facility as defined

4 in the ID/DD Community Care Act, the MC/DD Act, or the

5 Specialized Mental Health Rehabilitation Act of 2013.

6 (31) Beginning on the effective date of this amendatory Act

7 of the 92nd General Assembly, computers and communications

8 equipment utilized for any hospital purpose and equipment used

9 in the diagnosis, analysis, or treatment of hospital patients

10 purchased by a lessor who leases the equipment, under a lease

11 of one year or longer executed or in effect at the time the

12 lessor would otherwise be subject to the tax imposed by this

13 Act, to a hospital that has been issued an active tax exemption

14 identification number by the Department under Section 1g of the

15 Retailers' Occupation Tax Act. If the equipment is leased in a

16 manner that does not qualify for this exemption or is used in

17 any other nonexempt manner, the lessor shall be liable for the

18 tax imposed under this Act or the Service Use Tax Act, as the

19 case may be, based on the fair market value of the property at

20 the time the nonqualifying use occurs. No lessor shall collect

21 or attempt to collect an amount (however designated) that

22 purports to reimburse that lessor for the tax imposed by this

23 Act or the Service Use Tax Act, as the case may be, if the tax

24 has not been paid by the lessor. If a lessor improperly

25 collects any such amount from the lessee, the lessee shall have

26 a legal right to claim a refund of that amount from the lessor.

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1 If, however, that amount is not refunded to the lessee for any

2 reason, the lessor is liable to pay that amount to the

3 Department. This paragraph is exempt from the provisions of

4 Section 3-90.

5 (32) Beginning on the effective date of this amendatory Act

6 of the 92nd General Assembly, personal property purchased by a

7 lessor who leases the property, under a lease of one year or

8 longer executed or in effect at the time the lessor would

9 otherwise be subject to the tax imposed by this Act, to a

10 governmental body that has been issued an active sales tax

11 exemption identification number by the Department under

12 Section 1g of the Retailers' Occupation Tax Act. If the

13 property is leased in a manner that does not qualify for this

14 exemption or used in any other nonexempt manner, the lessor

15 shall be liable for the tax imposed under this Act or the

16 Service Use Tax Act, as the case may be, based on the fair

17 market value of the property at the time the nonqualifying use

18 occurs. No lessor shall collect or attempt to collect an amount

19 (however designated) that purports to reimburse that lessor for

20 the tax imposed by this Act or the Service Use Tax Act, as the

21 case may be, if the tax has not been paid by the lessor. If a

22 lessor improperly collects any such amount from the lessee, the

23 lessee shall have a legal right to claim a refund of that

24 amount from the lessor. If, however, that amount is not

25 refunded to the lessee for any reason, the lessor is liable to

26 pay that amount to the Department. This paragraph is exempt

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1 from the provisions of Section 3-90.

2 (33) On and after July 1, 2003 and through June 30, 2004,

3 the use in this State of motor vehicles of the second division

4 with a gross vehicle weight in excess of 8,000 pounds and that

5 are subject to the commercial distribution fee imposed under

6 Section 3-815.1 of the Illinois Vehicle Code. Beginning on July

7 1, 2004 and through June 30, 2005, the use in this State of

8 motor vehicles of the second division: (i) with a gross vehicle

9 weight rating in excess of 8,000 pounds; (ii) that are subject

10 to the commercial distribution fee imposed under Section

11 3-815.1 of the Illinois Vehicle Code; and (iii) that are

12 primarily used for commercial purposes. Through June 30, 2005,

13 this exemption applies to repair and replacement parts added

14 after the initial purchase of such a motor vehicle if that

15 motor vehicle is used in a manner that would qualify for the

16 rolling stock exemption otherwise provided for in this Act. For

17 purposes of this paragraph, the term "used for commercial

18 purposes" means the transportation of persons or property in

19 furtherance of any commercial or industrial enterprise,

20 whether for-hire or not.

21 (34) Beginning January 1, 2008, tangible personal property

22 used in the construction or maintenance of a community water

23 supply, as defined under Section 3.145 of the Environmental

24 Protection Act, that is operated by a not-for-profit

25 corporation that holds a valid water supply permit issued under

26 Title IV of the Environmental Protection Act. This paragraph is

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1 exempt from the provisions of Section 3-90.

2 (35) Beginning January 1, 2010, materials, parts,

3 equipment, components, and furnishings incorporated into or

4 upon an aircraft as part of the modification, refurbishment,

5 completion, replacement, repair, or maintenance of the

6 aircraft. This exemption includes consumable supplies used in

7 the modification, refurbishment, completion, replacement,

8 repair, and maintenance of aircraft, but excludes any

9 materials, parts, equipment, components, and consumable

10 supplies used in the modification, replacement, repair, and

11 maintenance of aircraft engines or power plants, whether such

12 engines or power plants are installed or uninstalled upon any

13 such aircraft. "Consumable supplies" include, but are not

14 limited to, adhesive, tape, sandpaper, general purpose

15 lubricants, cleaning solution, latex gloves, and protective

16 films. This exemption applies only to the use of qualifying

17 tangible personal property by persons who modify, refurbish,

18 complete, repair, replace, or maintain aircraft and who (i)

19 hold an Air Agency Certificate and are empowered to operate an

20 approved repair station by the Federal Aviation

21 Administration, (ii) have a Class IV Rating, and (iii) conduct

22 operations in accordance with Part 145 of the Federal Aviation

23 Regulations. The exemption does not include aircraft operated

24 by a commercial air carrier providing scheduled passenger air

25 service pursuant to authority issued under Part 121 or Part 129

26 of the Federal Aviation Regulations. The changes made to this

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1 paragraph (35) by Public Act 98-534 are declarative of existing

2 law.

3 (36) Tangible personal property purchased by a

4 public-facilities corporation, as described in Section

5 11-65-10 of the Illinois Municipal Code, for purposes of

6 constructing or furnishing a municipal convention hall, but

7 only if the legal title to the municipal convention hall is

8 transferred to the municipality without any further

9 consideration by or on behalf of the municipality at the time

10 of the completion of the municipal convention hall or upon the

11 retirement or redemption of any bonds or other debt instruments

12 issued by the public-facilities corporation in connection with

13 the development of the municipal convention hall. This

14 exemption includes existing public-facilities corporations as

15 provided in Section 11-65-25 of the Illinois Municipal Code.

16 This paragraph is exempt from the provisions of Section 3-90.

17 (37) Beginning January 1, 2017, menstrual pads, tampons,

18 and menstrual cups.

19 (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;

20 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.

21 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.

22 7-29-15; 99-855, eff. 8-19-16.)

23 (35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)

24 Sec. 3-50. Manufacturing and assembly exemption. The

25 manufacturing and assembling machinery and equipment exemption

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1 includes machinery and equipment that replaces machinery and

2 equipment in an existing manufacturing facility as well as

3 machinery and equipment that are for use in an expanded or new

4 manufacturing facility. The machinery and equipment exemption

5 also includes machinery and equipment used in the general

6 maintenance or repair of exempt machinery and equipment or for

7 in-house manufacture of exempt machinery and equipment.

8 Beginning on July 1, 2017, the manufacturing and assembling

9 machinery and equipment exemption also includes graphic arts

10 machinery and equipment, as defined in paragraph (6) of Section

11 3-5. The machinery and equipment exemption does not include

12 machinery and equipment used in (i) the generation of

13 electricity for wholesale or retail sale; (ii) the generation

14 or treatment of natural or artificial gas for wholesale or

15 retail sale that is delivered to customers through pipes,

16 pipelines, or mains; or (iii) the treatment of water for

17 wholesale or retail sale that is delivered to customers through

18 pipes, pipelines, or mains. The provisions of this amendatory

19 Act of the 98th General Assembly are declaratory of existing

20 law as to the meaning and scope of this exemption. For the

21 purposes of this exemption, terms have the following meanings:

22 (1) "Manufacturing process" means the production of an

23 article of tangible personal property, whether the article

24 is a finished product or an article for use in the process

25 of manufacturing or assembling a different article of

26 tangible personal property, by a procedure commonly

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1 regarded as manufacturing, processing, fabricating, or

2 refining that changes some existing material into a

3 material with a different form, use, or name. In relation

4 to a recognized integrated business composed of a series of

5 operations that collectively constitute manufacturing, or

6 individually constitute manufacturing operations, the

7 manufacturing process commences with the first operation

8 or stage of production in the series and does not end until

9 the completion of the final product in the last operation

10 or stage of production in the series. For purposes of this

11 exemption, photoprocessing is a manufacturing process of

12 tangible personal property for wholesale or retail sale.

13 (2) "Assembling process" means the production of an

14 article of tangible personal property, whether the article

15 is a finished product or an article for use in the process

16 of manufacturing or assembling a different article of

17 tangible personal property, by the combination of existing

18 materials in a manner commonly regarded as assembling that

19 results in an article or material of a different form, use,

20 or name.

21 (3) "Machinery" means major mechanical machines or

22 major components of those machines contributing to a

23 manufacturing or assembling process.

24 (4) "Equipment" includes an independent device or tool

25 separate from machinery but essential to an integrated

26 manufacturing or assembly process; including computers

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1 used primarily in a manufacturer's computer assisted

2 design, computer assisted manufacturing (CAD/CAM) system;

3 any subunit or assembly comprising a component of any

4 machinery or auxiliary, adjunct, or attachment parts of

5 machinery, such as tools, dies, jigs, fixtures, patterns,

6 and molds; and any parts that require periodic replacement

7 in the course of normal operation; but does not include

8 hand tools. Equipment includes chemicals or chemicals

9 acting as catalysts but only if the chemicals or chemicals

10 acting as catalysts effect a direct and immediate change

11 upon a product being manufactured or assembled for

12 wholesale or retail sale or lease.

13 (5) "Production related tangible personal property"

14 means all tangible personal property that is used or

15 consumed by the purchaser in a manufacturing facility in

16 which a manufacturing process takes place and includes,

17 without limitation, tangible personal property that is

18 purchased for incorporation into real estate within a

19 manufacturing facility and tangible personal property that

20 is used or consumed in activities such as research and

21 development, preproduction material handling, receiving,

22 quality control, inventory control, storage, staging, and

23 packaging for shipping and transportation purposes.

24 "Production related tangible personal property" does not

25 include (i) tangible personal property that is used, within

26 or without a manufacturing facility, in sales, purchasing,

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1 accounting, fiscal management, marketing, personnel

2 recruitment or selection, or landscaping or (ii) tangible

3 personal property that is required to be titled or

4 registered with a department, agency, or unit of federal,

5 State, or local government.

6 The manufacturing and assembling machinery and equipment

7 exemption includes production related tangible personal

8 property that is purchased on or after July 1, 2007 and on or

9 before June 30, 2008. The exemption for production related

10 tangible personal property is subject to both of the following

11 limitations:

12 (1) The maximum amount of the exemption for any one

13 taxpayer may not exceed 5% of the purchase price of

14 production related tangible personal property that is

15 purchased on or after July 1, 2007 and on or before June

16 30, 2008. A credit under Section 3-85 of this Act may not

17 be earned by the purchase of production related tangible

18 personal property for which an exemption is received under

19 this Section.

20 (2) The maximum aggregate amount of the exemptions for

21 production related tangible personal property awarded

22 under this Act and the Retailers' Occupation Tax Act to all

23 taxpayers may not exceed $10,000,000. If the claims for the

24 exemption exceed $10,000,000, then the Department shall

25 reduce the amount of the exemption to each taxpayer on a

26 pro rata basis.

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1 The Department may adopt rules to implement and administer the

2 exemption for production related tangible personal property.

3 The manufacturing and assembling machinery and equipment

4 exemption includes the sale of materials to a purchaser who

5 produces exempted types of machinery, equipment, or tools and

6 who rents or leases that machinery, equipment, or tools to a

7 manufacturer of tangible personal property. This exemption

8 also includes the sale of materials to a purchaser who

9 manufactures those materials into an exempted type of

10 machinery, equipment, or tools that the purchaser uses himself

11 or herself in the manufacturing of tangible personal property.

12 This exemption includes the sale of exempted types of machinery

13 or equipment to a purchaser who is not the manufacturer, but

14 who rents or leases the use of the property to a manufacturer.

15 The purchaser of the machinery and equipment who has an active

16 resale registration number shall furnish that number to the

17 seller at the time of purchase. A user of the machinery,

18 equipment, or tools without an active resale registration

19 number shall prepare a certificate of exemption for each

20 transaction stating facts establishing the exemption for that

21 transaction, and that certificate shall be available to the

22 Department for inspection or audit. The Department shall

23 prescribe the form of the certificate. Informal rulings,

24 opinions, or letters issued by the Department in response to an

25 inquiry or request for an opinion from any person regarding the

26 coverage and applicability of this exemption to specific

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1 devices shall be published, maintained as a public record, and

2 made available for public inspection and copying. If the

3 informal ruling, opinion, or letter contains trade secrets or

4 other confidential information, where possible, the Department

5 shall delete that information before publication. Whenever

6 informal rulings, opinions, or letters contain a policy of

7 general applicability, the Department shall formulate and

8 adopt that policy as a rule in accordance with the Illinois

9 Administrative Procedure Act.

10 The manufacturing and assembling machinery and equipment

11 exemption is exempt from the provisions of Section 3-90.

12 (Source: P.A. 98-583, eff. 1-1-14.)

13 Section 35-10. The Service Use Tax Act is amended by

14 changing Sections 2 and 3-5 as follows:

15 (35 ILCS 110/2) (from Ch. 120, par. 439.32)

16 Sec. 2. Definitions.

17 "Use" means the exercise by any person of any right or

18 power over tangible personal property incident to the ownership

19 of that property, but does not include the sale or use for

20 demonstration by him of that property in any form as tangible

21 personal property in the regular course of business. "Use" does

22 not mean the interim use of tangible personal property nor the

23 physical incorporation of tangible personal property, as an

24 ingredient or constituent, into other tangible personal

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1 property, (a) which is sold in the regular course of business

2 or (b) which the person incorporating such ingredient or

3 constituent therein has undertaken at the time of such purchase

4 to cause to be transported in interstate commerce to

5 destinations outside the State of Illinois.

6 "Purchased from a serviceman" means the acquisition of the

7 ownership of, or title to, tangible personal property through a

8 sale of service.

9 "Purchaser" means any person who, through a sale of

10 service, acquires the ownership of, or title to, any tangible

11 personal property.

12 "Cost price" means the consideration paid by the serviceman

13 for a purchase valued in money, whether paid in money or

14 otherwise, including cash, credits and services, and shall be

15 determined without any deduction on account of the supplier's

16 cost of the property sold or on account of any other expense

17 incurred by the supplier. When a serviceman contracts out part

18 or all of the services required in his sale of service, it

19 shall be presumed that the cost price to the serviceman of the

20 property transferred to him or her by his or her subcontractor

21 is equal to 50% of the subcontractor's charges to the

22 serviceman in the absence of proof of the consideration paid by

23 the subcontractor for the purchase of such property.

24 "Selling price" means the consideration for a sale valued

25 in money whether received in money or otherwise, including

26 cash, credits and service, and shall be determined without any

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1 deduction on account of the serviceman's cost of the property

2 sold, the cost of materials used, labor or service cost or any

3 other expense whatsoever, but does not include interest or

4 finance charges which appear as separate items on the bill of

5 sale or sales contract nor charges that are added to prices by

6 sellers on account of the seller's duty to collect, from the

7 purchaser, the tax that is imposed by this Act.

8 "Department" means the Department of Revenue.

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

10 association, joint stock company, joint venture, public or

11 private corporation, limited liability company, and any

12 receiver, executor, trustee, guardian or other representative

13 appointed by order of any court.

14 "Sale of service" means any transaction except:

15 (1) a retail sale of tangible personal property taxable

16 under the Retailers' Occupation Tax Act or under the Use

17 Tax Act.

18 (2) a sale of tangible personal property for the

19 purpose of resale made in compliance with Section 2c of the

20 Retailers' Occupation Tax Act.

21 (3) except as hereinafter provided, a sale or transfer

22 of tangible personal property as an incident to the

23 rendering of service for or by any governmental body, or

24 for or by any corporation, society, association,

25 foundation or institution organized and operated

26 exclusively for charitable, religious or educational

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1 purposes or any not-for-profit corporation, society,

2 association, foundation, institution or organization which

3 has no compensated officers or employees and which is

4 organized and operated primarily for the recreation of

5 persons 55 years of age or older. A limited liability

6 company may qualify for the exemption under this paragraph

7 only if the limited liability company is organized and

8 operated exclusively for educational purposes.

9 (4) a sale or transfer of tangible personal property as

10 an incident to the rendering of service for interstate

11 carriers for hire for use as rolling stock moving in

12 interstate commerce or by lessors under a lease of one year

13 or longer, executed or in effect at the time of purchase of

14 personal property, to interstate carriers for hire for use

15 as rolling stock moving in interstate commerce so long as

16 so used by such interstate carriers for hire, and equipment

17 operated by a telecommunications provider, licensed as a

18 common carrier by the Federal Communications Commission,

19 which is permanently installed in or affixed to aircraft

20 moving in interstate commerce.

21 (4a) a sale or transfer of tangible personal property

22 as an incident to the rendering of service for owners,

23 lessors, or shippers of tangible personal property which is

24 utilized by interstate carriers for hire for use as rolling

25 stock moving in interstate commerce so long as so used by

26 interstate carriers for hire, and equipment operated by a

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1 telecommunications provider, licensed as a common carrier

2 by the Federal Communications Commission, which is

3 permanently installed in or affixed to aircraft moving in

4 interstate commerce.

5 (4a-5) on and after July 1, 2003 and through June 30,

6 2004, a sale or transfer of a motor vehicle of the second

7 division with a gross vehicle weight in excess of 8,000

8 pounds as an incident to the rendering of service if that

9 motor vehicle is subject to the commercial distribution fee

10 imposed under Section 3-815.1 of the Illinois Vehicle Code.

11 Beginning on July 1, 2004 and through June 30, 2005, the

12 use in this State of motor vehicles of the second division:

13 (i) with a gross vehicle weight rating in excess of 8,000

14 pounds; (ii) that are subject to the commercial

15 distribution fee imposed under Section 3-815.1 of the

16 Illinois Vehicle Code; and (iii) that are primarily used

17 for commercial purposes. Through June 30, 2005, this

18 exemption applies to repair and replacement parts added

19 after the initial purchase of such a motor vehicle if that

20 motor vehicle is used in a manner that would qualify for

21 the rolling stock exemption otherwise provided for in this

22 Act. For purposes of this paragraph, "used for commercial

23 purposes" means the transportation of persons or property

24 in furtherance of any commercial or industrial enterprise

25 whether for-hire or not.

26 (5) a sale or transfer of machinery and equipment used

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1 primarily in the process of the manufacturing or

2 assembling, either in an existing, an expanded or a new

3 manufacturing facility, of tangible personal property for

4 wholesale or retail sale or lease, whether such sale or

5 lease is made directly by the manufacturer or by some other

6 person, whether the materials used in the process are owned

7 by the manufacturer or some other person, or whether such

8 sale or lease is made apart from or as an incident to the

9 seller's engaging in a service occupation and the

10 applicable tax is a Service Use Tax or Service Occupation

11 Tax, rather than Use Tax or Retailers' Occupation Tax. The

12 exemption provided by this paragraph (5) does not include

13 machinery and equipment used in (i) the generation of

14 electricity for wholesale or retail sale; (ii) the

15 generation or treatment of natural or artificial gas for

16 wholesale or retail sale that is delivered to customers

17 through pipes, pipelines, or mains; or (iii) the treatment

18 of water for wholesale or retail sale that is delivered to

19 customers through pipes, pipelines, or mains. The

20 provisions of this amendatory Act of the 98th General

21 Assembly are declaratory of existing law as to the meaning

22 and scope of this exemption. The exemption under this

23 paragraph (5) is exempt from the provisions of Section

24 3-75.

25 (5a) the repairing, reconditioning or remodeling, for

26 a common carrier by rail, of tangible personal property

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1 which belongs to such carrier for hire, and as to which

2 such carrier receives the physical possession of the

3 repaired, reconditioned or remodeled item of tangible

4 personal property in Illinois, and which such carrier

5 transports, or shares with another common carrier in the

6 transportation of such property, out of Illinois on a

7 standard uniform bill of lading showing the person who

8 repaired, reconditioned or remodeled the property to a

9 destination outside Illinois, for use outside Illinois.

10 (5b) a sale or transfer of tangible personal property

11 which is produced by the seller thereof on special order in

12 such a way as to have made the applicable tax the Service

13 Occupation Tax or the Service Use Tax, rather than the

14 Retailers' Occupation Tax or the Use Tax, for an interstate

15 carrier by rail which receives the physical possession of

16 such property in Illinois, and which transports such

17 property, or shares with another common carrier in the

18 transportation of such property, out of Illinois on a

19 standard uniform bill of lading showing the seller of the

20 property as the shipper or consignor of such property to a

21 destination outside Illinois, for use outside Illinois.

22 (6) until July 1, 2003, a sale or transfer of

23 distillation machinery and equipment, sold as a unit or kit

24 and assembled or installed by the retailer, which machinery

25 and equipment is certified by the user to be used only for

26 the production of ethyl alcohol that will be used for

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1 consumption as motor fuel or as a component of motor fuel

2 for the personal use of such user and not subject to sale

3 or resale.

4 (7) at the election of any serviceman not required to

5 be otherwise registered as a retailer under Section 2a of

6 the Retailers' Occupation Tax Act, made for each fiscal

7 year sales of service in which the aggregate annual cost

8 price of tangible personal property transferred as an

9 incident to the sales of service is less than 35%, or 75%

10 in the case of servicemen transferring prescription drugs

11 or servicemen engaged in graphic arts production, of the

12 aggregate annual total gross receipts from all sales of

13 service. The purchase of such tangible personal property by

14 the serviceman shall be subject to tax under the Retailers'

15 Occupation Tax Act and the Use Tax Act. However, if a

16 primary serviceman who has made the election described in

17 this paragraph subcontracts service work to a secondary

18 serviceman who has also made the election described in this

19 paragraph, the primary serviceman does not incur a Use Tax

20 liability if the secondary serviceman (i) has paid or will

21 pay Use Tax on his or her cost price of any tangible

22 personal property transferred to the primary serviceman

23 and (ii) certifies that fact in writing to the primary

24 serviceman.

25 Tangible personal property transferred incident to the

26 completion of a maintenance agreement is exempt from the tax

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1 imposed pursuant to this Act.

2 Exemption (5) also includes machinery and equipment used in

3 the general maintenance or repair of such exempt machinery and

4 equipment or for in-house manufacture of exempt machinery and

5 equipment. On and after July 1, 2017, exemption (5) also

6 includes graphic arts machinery and equipment, as defined in

7 paragraph (5) of Section 3-5. The machinery and equipment

8 exemption does not include machinery and equipment used in (i)

9 the generation of electricity for wholesale or retail sale;

10 (ii) the generation or treatment of natural or artificial gas

11 for wholesale or retail sale that is delivered to customers

12 through pipes, pipelines, or mains; or (iii) the treatment of

13 water for wholesale or retail sale that is delivered to

14 customers through pipes, pipelines, or mains. The provisions of

15 this amendatory Act of the 98th General Assembly are

16 declaratory of existing law as to the meaning and scope of this

17 exemption. For the purposes of exemption (5), each of these

18 terms shall have the following meanings: (1) "manufacturing

19 process" shall mean the production of any article of tangible

20 personal property, whether such article is a finished product

21 or an article for use in the process of manufacturing or

22 assembling a different article of tangible personal property,

23 by procedures commonly regarded as manufacturing, processing,

24 fabricating, or refining which changes some existing material

25 or materials into a material with a different form, use or

26 name. In relation to a recognized integrated business composed

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1 of a series of operations which collectively constitute

2 manufacturing, or individually constitute manufacturing

3 operations, the manufacturing process shall be deemed to

4 commence with the first operation or stage of production in the

5 series, and shall not be deemed to end until the completion of

6 the final product in the last operation or stage of production

7 in the series; and further, for purposes of exemption (5),

8 photoprocessing is deemed to be a manufacturing process of

9 tangible personal property for wholesale or retail sale; (2)

10 "assembling process" shall mean the production of any article

11 of tangible personal property, whether such article is a

12 finished product or an article for use in the process of

13 manufacturing or assembling a different article of tangible

14 personal property, by the combination of existing materials in

15 a manner commonly regarded as assembling which results in a

16 material of a different form, use or name; (3) "machinery"

17 shall mean major mechanical machines or major components of

18 such machines contributing to a manufacturing or assembling

19 process; and (4) "equipment" shall include any independent

20 device or tool separate from any machinery but essential to an

21 integrated manufacturing or assembly process; including

22 computers used primarily in a manufacturer's computer assisted

23 design, computer assisted manufacturing (CAD/CAM) system; or

24 any subunit or assembly comprising a component of any machinery

25 or auxiliary, adjunct or attachment parts of machinery, such as

26 tools, dies, jigs, fixtures, patterns and molds; or any parts

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1 which require periodic replacement in the course of normal

2 operation; but shall not include hand tools. Equipment includes

3 chemicals or chemicals acting as catalysts but only if the

4 chemicals or chemicals acting as catalysts effect a direct and

5 immediate change upon a product being manufactured or assembled

6 for wholesale or retail sale or lease. The purchaser of such

7 machinery and equipment who has an active resale registration

8 number shall furnish such number to the seller at the time of

9 purchase. The user of such machinery and equipment and tools

10 without an active resale registration number shall prepare a

11 certificate of exemption for each transaction stating facts

12 establishing the exemption for that transaction, which

13 certificate shall be available to the Department for inspection

14 or audit. The Department shall prescribe the form of the

15 certificate.

16 Any informal rulings, opinions or letters issued by the

17 Department in response to an inquiry or request for any opinion

18 from any person regarding the coverage and applicability of

19 exemption (5) to specific devices shall be published,

20 maintained as a public record, and made available for public

21 inspection and copying. If the informal ruling, opinion or

22 letter contains trade secrets or other confidential

23 information, where possible the Department shall delete such

24 information prior to publication. Whenever such informal

25 rulings, opinions, or letters contain any policy of general

26 applicability, the Department shall formulate and adopt such

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1 policy as a rule in accordance with the provisions of the

2 Illinois Administrative Procedure Act.

3 On and after July 1, 1987, no entity otherwise eligible

4 under exemption (3) of this Section shall make tax free

5 purchases unless it has an active exemption identification

6 number issued by the Department.

7 The purchase, employment and transfer of such tangible

8 personal property as newsprint and ink for the primary purpose

9 of conveying news (with or without other information) is not a

10 purchase, use or sale of service or of tangible personal

11 property within the meaning of this Act.

12 "Serviceman" means any person who is engaged in the

13 occupation of making sales of service.

14 "Sale at retail" means "sale at retail" as defined in the

15 Retailers' Occupation Tax Act.

16 "Supplier" means any person who makes sales of tangible

17 personal property to servicemen for the purpose of resale as an

18 incident to a sale of service.

19 "Serviceman maintaining a place of business in this State",

20 or any like term, means and includes any serviceman:

21 1. having or maintaining within this State, directly or

22 by a subsidiary, an office, distribution house, sales

23 house, warehouse or other place of business, or any agent

24 or other representative operating within this State under

25 the authority of the serviceman or its subsidiary,

26 irrespective of whether such place of business or agent or

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1 other representative is located here permanently or

2 temporarily, or whether such serviceman or subsidiary is

3 licensed to do business in this State;

4 1.1. having a contract with a person located in this

5 State under which the person, for a commission or other

6 consideration based on the sale of service by the

7 serviceman, directly or indirectly refers potential

8 customers to the serviceman by providing to the potential

9 customers a promotional code or other mechanism that allows

10 the serviceman to track purchases referred by such persons.

11 Examples of mechanisms that allow the serviceman to track

12 purchases referred by such persons include but are not

13 limited to the use of a link on the person's Internet

14 website, promotional codes distributed through the

15 person's hand-delivered or mailed material, and

16 promotional codes distributed by the person through radio

17 or other broadcast media. The provisions of this paragraph

18 1.1 shall apply only if the cumulative gross receipts from

19 sales of service by the serviceman to customers who are

20 referred to the serviceman by all persons in this State

21 under such contracts exceed $10,000 during the preceding 4

22 quarterly periods ending on the last day of March, June,

23 September, and December; a serviceman meeting the

24 requirements of this paragraph 1.1 shall be presumed to be

25 maintaining a place of business in this State but may rebut

26 this presumption by submitting proof that the referrals or

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1 other activities pursued within this State by such persons

2 were not sufficient to meet the nexus standards of the

3 United States Constitution during the preceding 4

4 quarterly periods;

5 1.2. beginning July 1, 2011, having a contract with a

6 person located in this State under which:

7 A. the serviceman sells the same or substantially

8 similar line of services as the person located in this

9 State and does so using an identical or substantially

10 similar name, trade name, or trademark as the person

11 located in this State; and

12 B. the serviceman provides a commission or other

13 consideration to the person located in this State based

14 upon the sale of services by the serviceman.

15 The provisions of this paragraph 1.2 shall apply only if

16 the cumulative gross receipts from sales of service by the

17 serviceman to customers in this State under all such

18 contracts exceed $10,000 during the preceding 4 quarterly

19 periods ending on the last day of March, June, September,

20 and December;

21 2. soliciting orders for tangible personal property by

22 means of a telecommunication or television shopping system

23 (which utilizes toll free numbers) which is intended by the

24 retailer to be broadcast by cable television or other means

25 of broadcasting, to consumers located in this State;

26 3. pursuant to a contract with a broadcaster or

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1 publisher located in this State, soliciting orders for

2 tangible personal property by means of advertising which is

3 disseminated primarily to consumers located in this State

4 and only secondarily to bordering jurisdictions;

5 4. soliciting orders for tangible personal property by

6 mail if the solicitations are substantial and recurring and

7 if the retailer benefits from any banking, financing, debt

8 collection, telecommunication, or marketing activities

9 occurring in this State or benefits from the location in

10 this State of authorized installation, servicing, or

11 repair facilities;

12 5. being owned or controlled by the same interests

13 which own or control any retailer engaging in business in

14 the same or similar line of business in this State;

15 6. having a franchisee or licensee operating under its

16 trade name if the franchisee or licensee is required to

17 collect the tax under this Section;

18 7. pursuant to a contract with a cable television

19 operator located in this State, soliciting orders for

20 tangible personal property by means of advertising which is

21 transmitted or distributed over a cable television system

22 in this State; or

23 8. engaging in activities in Illinois, which

24 activities in the state in which the supply business

25 engaging in such activities is located would constitute

26 maintaining a place of business in that state.

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1 (Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)

2 (35 ILCS 110/3-5)

3 Sec. 3-5. Exemptions. Use of the following tangible

4 personal property is exempt from the tax imposed by this Act:

5 (1) Personal property purchased from a corporation,

6 society, association, foundation, institution, or

7 organization, other than a limited liability company, that is

8 organized and operated as a not-for-profit service enterprise

9 for the benefit of persons 65 years of age or older if the

10 personal property was not purchased by the enterprise for the

11 purpose of resale by the enterprise.

12 (2) Personal property purchased by a non-profit Illinois

13 county fair association for use in conducting, operating, or

14 promoting the county fair.

15 (3) Personal property purchased by a not-for-profit arts or

16 cultural organization that establishes, by proof required by

17 the Department by rule, that it has received an exemption under

18 Section 501(c)(3) of the Internal Revenue Code and that is

19 organized and operated primarily for the presentation or

20 support of arts or cultural programming, activities, or

21 services. These organizations include, but are not limited to,

22 music and dramatic arts organizations such as symphony

23 orchestras and theatrical groups, arts and cultural service

24 organizations, local arts councils, visual arts organizations,

25 and media arts organizations. On and after the effective date

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1 of this amendatory Act of the 92nd General Assembly, however,

2 an entity otherwise eligible for this exemption shall not make

3 tax-free purchases unless it has an active identification

4 number issued by the Department.

5 (4) Legal tender, currency, medallions, or gold or silver

6 coinage issued by the State of Illinois, the government of the

7 United States of America, or the government of any foreign

8 country, and bullion.

9 (5) Until July 1, 2003 and beginning again on September 1,

10 2004 through August 30, 2014, graphic arts machinery and

11 equipment, including repair and replacement parts, both new and

12 used, and including that manufactured on special order or

13 purchased for lease, certified by the purchaser to be used

14 primarily for graphic arts production. Equipment includes

15 chemicals or chemicals acting as catalysts but only if the

16 chemicals or chemicals acting as catalysts effect a direct and

17 immediate change upon a graphic arts product.Beginning on July

18 1, 2017, graphic arts machinery and equipment is included in

19 the manufacturing and assembling machinery and equipment

20 exemption under Section 2 of this Act.

21 (6) Personal property purchased from a teacher-sponsored

22 student organization affiliated with an elementary or

23 secondary school located in Illinois.

24 (7) Farm machinery and equipment, both new and used,

25 including that manufactured on special order, certified by the

26 purchaser to be used primarily for production agriculture or

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1 State or federal agricultural programs, including individual

2 replacement parts for the machinery and equipment, including

3 machinery and equipment purchased for lease, and including

4 implements of husbandry defined in Section 1-130 of the

5 Illinois Vehicle Code, farm machinery and agricultural

6 chemical and fertilizer spreaders, and nurse wagons required to

7 be registered under Section 3-809 of the Illinois Vehicle Code,

8 but excluding other motor vehicles required to be registered

9 under the Illinois Vehicle Code. Horticultural polyhouses or

10 hoop houses used for propagating, growing, or overwintering

11 plants shall be considered farm machinery and equipment under

12 this item (7). Agricultural chemical tender tanks and dry boxes

13 shall include units sold separately from a motor vehicle

14 required to be licensed and units sold mounted on a motor

15 vehicle required to be licensed if the selling price of the

16 tender is separately stated.

17 Farm machinery and equipment shall include precision

18 farming equipment that is installed or purchased to be

19 installed on farm machinery and equipment including, but not

20 limited to, tractors, harvesters, sprayers, planters, seeders,

21 or spreaders. Precision farming equipment includes, but is not

22 limited to, soil testing sensors, computers, monitors,

23 software, global positioning and mapping systems, and other

24 such equipment.

25 Farm machinery and equipment also includes computers,

26 sensors, software, and related equipment used primarily in the

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1 computer-assisted operation of production agriculture

2 facilities, equipment, and activities such as, but not limited

3 to, the collection, monitoring, and correlation of animal and

4 crop data for the purpose of formulating animal diets and

5 agricultural chemicals. This item (7) is exempt from the

6 provisions of Section 3-75.

7 (8) Until June 30, 2013, fuel and petroleum products sold

8 to or used by an air common carrier, certified by the carrier

9 to be used for consumption, shipment, or storage in the conduct

10 of its business as an air common carrier, for a flight destined

11 for or returning from a location or locations outside the

12 United States without regard to previous or subsequent domestic

13 stopovers.

14 Beginning July 1, 2013, fuel and petroleum products sold to

15 or used by an air carrier, certified by the carrier to be used

16 for consumption, shipment, or storage in the conduct of its

17 business as an air common carrier, for a flight that (i) is

18 engaged in foreign trade or is engaged in trade between the

19 United States and any of its possessions and (ii) transports at

20 least one individual or package for hire from the city of

21 origination to the city of final destination on the same

22 aircraft, without regard to a change in the flight number of

23 that aircraft.

24 (9) Proceeds of mandatory service charges separately

25 stated on customers' bills for the purchase and consumption of

26 food and beverages acquired as an incident to the purchase of a

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1 service from a serviceman, to the extent that the proceeds of

2 the service charge are in fact turned over as tips or as a

3 substitute for tips to the employees who participate directly

4 in preparing, serving, hosting or cleaning up the food or

5 beverage function with respect to which the service charge is

6 imposed.

7 (10) Until July 1, 2003, oil field exploration, drilling,

8 and production equipment, including (i) rigs and parts of rigs,

9 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

10 tubular goods, including casing and drill strings, (iii) pumps

11 and pump-jack units, (iv) storage tanks and flow lines, (v) any

12 individual replacement part for oil field exploration,

13 drilling, and production equipment, and (vi) machinery and

14 equipment purchased for lease; but excluding motor vehicles

15 required to be registered under the Illinois Vehicle Code.

16 (11) Proceeds from the sale of photoprocessing machinery

17 and equipment, including repair and replacement parts, both new

18 and used, including that manufactured on special order,

19 certified by the purchaser to be used primarily for

20 photoprocessing, and including photoprocessing machinery and

21 equipment purchased for lease.

22 (12) Coal and aggregate exploration, mining, off-highway

23 hauling, processing, maintenance, and reclamation equipment,

24 including replacement parts and equipment, and including

25 equipment purchased for lease, but excluding motor vehicles

26 required to be registered under the Illinois Vehicle Code. The

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1 changes made to this Section by Public Act 97-767 apply on and

2 after July 1, 2003, but no claim for credit or refund is

3 allowed on or after August 16, 2013 (the effective date of

4 Public Act 98-456) for such taxes paid during the period

5 beginning July 1, 2003 and ending on August 16, 2013 (the

6 effective date of Public Act 98-456).

7 (13) Semen used for artificial insemination of livestock

8 for direct agricultural production.

9 (14) Horses, or interests in horses, registered with and

10 meeting the requirements of any of the Arabian Horse Club

11 Registry of America, Appaloosa Horse Club, American Quarter

12 Horse Association, United States Trotting Association, or

13 Jockey Club, as appropriate, used for purposes of breeding or

14 racing for prizes. This item (14) is exempt from the provisions

15 of Section 3-75, and the exemption provided for under this item

16 (14) applies for all periods beginning May 30, 1995, but no

17 claim for credit or refund is allowed on or after the effective

18 date of this amendatory Act of the 95th General Assembly for

19 such taxes paid during the period beginning May 30, 2000 and

20 ending on the effective date of this amendatory Act of the 95th

21 General Assembly.

22 (15) Computers and communications equipment utilized for

23 any hospital purpose and equipment used in the diagnosis,

24 analysis, or treatment of hospital patients purchased by a

25 lessor who leases the equipment, under a lease of one year or

26 longer executed or in effect at the time the lessor would

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1 otherwise be subject to the tax imposed by this Act, to a

2 hospital that has been issued an active tax exemption

3 identification number by the Department under Section 1g of the

4 Retailers' Occupation Tax Act. If the equipment is leased in a

5 manner that does not qualify for this exemption or is used in

6 any other non-exempt manner, the lessor shall be liable for the

7 tax imposed under this Act or the Use Tax Act, as the case may

8 be, based on the fair market value of the property at the time

9 the non-qualifying use occurs. No lessor shall collect or

10 attempt to collect an amount (however designated) that purports

11 to reimburse that lessor for the tax imposed by this Act or the

12 Use Tax Act, as the case may be, if the tax has not been paid by

13 the lessor. If a lessor improperly collects any such amount

14 from the lessee, the lessee shall have a legal right to claim a

15 refund of that amount from the lessor. If, however, that amount

16 is not refunded to the lessee for any reason, the lessor is

17 liable to pay that amount to the Department.

18 (16) Personal property purchased by a lessor who leases the

19 property, under a lease of one year or longer executed or in

20 effect at the time the lessor would otherwise be subject to the

21 tax imposed by this Act, to a governmental body that has been

22 issued an active tax exemption identification number by the

23 Department under Section 1g of the Retailers' Occupation Tax

24 Act. If the property is leased in a manner that does not

25 qualify for this exemption or is used in any other non-exempt

26 manner, the lessor shall be liable for the tax imposed under

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1 this Act or the Use Tax Act, as the case may be, based on the

2 fair market value of the property at the time the

3 non-qualifying use occurs. No lessor shall collect or attempt

4 to collect an amount (however designated) that purports to

5 reimburse that lessor for the tax imposed by this Act or the

6 Use Tax Act, as the case may be, if the tax has not been paid by

7 the lessor. If a lessor improperly collects any such amount

8 from the lessee, the lessee shall have a legal right to claim a

9 refund of that amount from the lessor. If, however, that amount

10 is not refunded to the lessee for any reason, the lessor is

11 liable to pay that amount to the Department.

12 (17) Beginning with taxable years ending on or after

13 December 31, 1995 and ending with taxable years ending on or

14 before December 31, 2004, personal property that is donated for

15 disaster relief to be used in a State or federally declared

16 disaster area in Illinois or bordering Illinois by a

17 manufacturer or retailer that is registered in this State to a

18 corporation, society, association, foundation, or institution

19 that has been issued a sales tax exemption identification

20 number by the Department that assists victims of the disaster

21 who reside within the declared disaster area.

22 (18) Beginning with taxable years ending on or after

23 December 31, 1995 and ending with taxable years ending on or

24 before December 31, 2004, personal property that is used in the

25 performance of infrastructure repairs in this State, including

26 but not limited to municipal roads and streets, access roads,

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1 bridges, sidewalks, waste disposal systems, water and sewer

2 line extensions, water distribution and purification

3 facilities, storm water drainage and retention facilities, and

4 sewage treatment facilities, resulting from a State or

5 federally declared disaster in Illinois or bordering Illinois

6 when such repairs are initiated on facilities located in the

7 declared disaster area within 6 months after the disaster.

8 (19) Beginning July 1, 1999, game or game birds purchased

9 at a "game breeding and hunting preserve area" as that term is

10 used in the Wildlife Code. This paragraph is exempt from the

11 provisions of Section 3-75.

12 (20) A motor vehicle, as that term is defined in Section

13 1-146 of the Illinois Vehicle Code, that is donated to a

14 corporation, limited liability company, society, association,

15 foundation, or institution that is determined by the Department

16 to be organized and operated exclusively for educational

17 purposes. For purposes of this exemption, "a corporation,

18 limited liability company, society, association, foundation,

19 or institution organized and operated exclusively for

20 educational purposes" means all tax-supported public schools,

21 private schools that offer systematic instruction in useful

22 branches of learning by methods common to public schools and

23 that compare favorably in their scope and intensity with the

24 course of study presented in tax-supported schools, and

25 vocational or technical schools or institutes organized and

26 operated exclusively to provide a course of study of not less

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1 than 6 weeks duration and designed to prepare individuals to

2 follow a trade or to pursue a manual, technical, mechanical,

3 industrial, business, or commercial occupation.

4 (21) Beginning January 1, 2000, personal property,

5 including food, purchased through fundraising events for the

6 benefit of a public or private elementary or secondary school,

7 a group of those schools, or one or more school districts if

8 the events are sponsored by an entity recognized by the school

9 district that consists primarily of volunteers and includes

10 parents and teachers of the school children. This paragraph

11 does not apply to fundraising events (i) for the benefit of

12 private home instruction or (ii) for which the fundraising

13 entity purchases the personal property sold at the events from

14 another individual or entity that sold the property for the

15 purpose of resale by the fundraising entity and that profits

16 from the sale to the fundraising entity. This paragraph is

17 exempt from the provisions of Section 3-75.

18 (22) Beginning January 1, 2000 and through December 31,

19 2001, new or used automatic vending machines that prepare and

20 serve hot food and beverages, including coffee, soup, and other

21 items, and replacement parts for these machines. Beginning

22 January 1, 2002 and through June 30, 2003, machines and parts

23 for machines used in commercial, coin-operated amusement and

24 vending business if a use or occupation tax is paid on the

25 gross receipts derived from the use of the commercial,

26 coin-operated amusement and vending machines. This paragraph

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1 is exempt from the provisions of Section 3-75.

2 (23) Beginning August 23, 2001 and through June 30, 2016,

3 food for human consumption that is to be consumed off the

4 premises where it is sold (other than alcoholic beverages, soft

5 drinks, and food that has been prepared for immediate

6 consumption) and prescription and nonprescription medicines,

7 drugs, medical appliances, and insulin, urine testing

8 materials, syringes, and needles used by diabetics, for human

9 use, when purchased for use by a person receiving medical

10 assistance under Article V of the Illinois Public Aid Code who

11 resides in a licensed long-term care facility, as defined in

12 the Nursing Home Care Act, or in a licensed facility as defined

13 in the ID/DD Community Care Act, the MC/DD Act, or the

14 Specialized Mental Health Rehabilitation Act of 2013.

15 (24) Beginning on the effective date of this amendatory Act

16 of the 92nd General Assembly, computers and communications

17 equipment utilized for any hospital purpose and equipment used

18 in the diagnosis, analysis, or treatment of hospital patients

19 purchased by a lessor who leases the equipment, under a lease

20 of one year or longer executed or in effect at the time the

21 lessor would otherwise be subject to the tax imposed by this

22 Act, to a hospital that has been issued an active tax exemption

23 identification number by the Department under Section 1g of the

24 Retailers' Occupation Tax Act. If the equipment is leased in a

25 manner that does not qualify for this exemption or is used in

26 any other nonexempt manner, the lessor shall be liable for the

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1 tax imposed under this Act or the Use Tax Act, as the case may

2 be, based on the fair market value of the property at the time

3 the nonqualifying use occurs. No lessor shall collect or

4 attempt to collect an amount (however designated) that purports

5 to reimburse that lessor for the tax imposed by this Act or the

6 Use Tax Act, as the case may be, if the tax has not been paid by

7 the lessor. If a lessor improperly collects any such amount

8 from the lessee, the lessee shall have a legal right to claim a

9 refund of that amount from the lessor. If, however, that amount

10 is not refunded to the lessee for any reason, the lessor is

11 liable to pay that amount to the Department. This paragraph is

12 exempt from the provisions of Section 3-75.

13 (25) Beginning on the effective date of this amendatory Act

14 of the 92nd General Assembly, personal property purchased by a

15 lessor who leases the property, under a lease of one year or

16 longer executed or in effect at the time the lessor would

17 otherwise be subject to the tax imposed by this Act, to a

18 governmental body that has been issued an active tax exemption

19 identification number by the Department under Section 1g of the

20 Retailers' Occupation Tax Act. If the property is leased in a

21 manner that does not qualify for this exemption or is used in

22 any other nonexempt manner, the lessor shall be liable for the

23 tax imposed under this Act or the Use Tax Act, as the case may

24 be, based on the fair market value of the property at the time

25 the nonqualifying use occurs. No lessor shall collect or

26 attempt to collect an amount (however designated) that purports

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1 to reimburse that lessor for the tax imposed by this Act or the

2 Use Tax Act, as the case may be, if the tax has not been paid by

3 the lessor. If a lessor improperly collects any such amount

4 from the lessee, the lessee shall have a legal right to claim a

5 refund of that amount from the lessor. If, however, that amount

6 is not refunded to the lessee for any reason, the lessor is

7 liable to pay that amount to the Department. This paragraph is

8 exempt from the provisions of Section 3-75.

9 (26) Beginning January 1, 2008, tangible personal property

10 used in the construction or maintenance of a community water

11 supply, as defined under Section 3.145 of the Environmental

12 Protection Act, that is operated by a not-for-profit

13 corporation that holds a valid water supply permit issued under

14 Title IV of the Environmental Protection Act. This paragraph is

15 exempt from the provisions of Section 3-75.

16 (27) Beginning January 1, 2010, materials, parts,

17 equipment, components, and furnishings incorporated into or

18 upon an aircraft as part of the modification, refurbishment,

19 completion, replacement, repair, or maintenance of the

20 aircraft. This exemption includes consumable supplies used in

21 the modification, refurbishment, completion, replacement,

22 repair, and maintenance of aircraft, but excludes any

23 materials, parts, equipment, components, and consumable

24 supplies used in the modification, replacement, repair, and

25 maintenance of aircraft engines or power plants, whether such

26 engines or power plants are installed or uninstalled upon any

10000SB0009ham003

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1 such aircraft. "Consumable supplies" include, but are not

2 limited to, adhesive, tape, sandpaper, general purpose

3 lubricants, cleaning solution, latex gloves, and protective

4 films. This exemption applies only to the use of qualifying

5 tangible personal property transferred incident to the

6 modification, refurbishment, completion, replacement, repair,

7 or maintenance of aircraft by persons who (i) hold an Air

8 Agency Certificate and are empowered to operate an approved

9 repair station by the Federal Aviation Administration, (ii)

10 have a Class IV Rating, and (iii) conduct operations in

11 accordance with Part 145 of the Federal Aviation Regulations.

12 The exemption does not include aircraft operated by a

13 commercial air carrier providing scheduled passenger air

14 service pursuant to authority issued under Part 121 or Part 129

15 of the Federal Aviation Regulations. The changes made to this

16 paragraph (27) by Public Act 98-534 are declarative of existing

17 law.

18 (28) Tangible personal property purchased by a

19 public-facilities corporation, as described in Section

20 11-65-10 of the Illinois Municipal Code, for purposes of

21 constructing or furnishing a municipal convention hall, but

22 only if the legal title to the municipal convention hall is

23 transferred to the municipality without any further

24 consideration by or on behalf of the municipality at the time

25 of the completion of the municipal convention hall or upon the

26 retirement or redemption of any bonds or other debt instruments

10000SB0009ham003

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1 issued by the public-facilities corporation in connection with

2 the development of the municipal convention hall. This

3 exemption includes existing public-facilities corporations as

4 provided in Section 11-65-25 of the Illinois Municipal Code.

5 This paragraph is exempt from the provisions of Section 3-75.

6 (29) Beginning January 1, 2017, menstrual pads, tampons,

7 and menstrual cups.

8 (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;

9 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.

10 7-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)

11 Section 35-15. The Service Occupation Tax Act is amended by

12 changing Sections 2 and 3-5 as follows:

13 (35 ILCS 115/2) (from Ch. 120, par. 439.102)

14 Sec. 2. "Transfer" means any transfer of the title to

15 property or of the ownership of property whether or not the

16 transferor retains title as security for the payment of amounts

17 due him from the transferee.

18 "Cost Price" means the consideration paid by the serviceman

19 for a purchase valued in money, whether paid in money or

20 otherwise, including cash, credits and services, and shall be

21 determined without any deduction on account of the supplier's

22 cost of the property sold or on account of any other expense

23 incurred by the supplier. When a serviceman contracts out part

24 or all of the services required in his sale of service, it

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1 shall be presumed that the cost price to the serviceman of the

2 property transferred to him by his or her subcontractor is

3 equal to 50% of the subcontractor's charges to the serviceman

4 in the absence of proof of the consideration paid by the

5 subcontractor for the purchase of such property.

6 "Department" means the Department of Revenue.

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

8 association, joint stock company, joint venture, public or

9 private corporation, limited liability company, and any

10 receiver, executor, trustee, guardian or other representative

11 appointed by order of any court.

12 "Sale of Service" means any transaction except:

13 (a) A retail sale of tangible personal property taxable

14 under the Retailers' Occupation Tax Act or under the Use Tax

15 Act.

16 (b) A sale of tangible personal property for the purpose of

17 resale made in compliance with Section 2c of the Retailers'

18 Occupation Tax Act.

19 (c) Except as hereinafter provided, a sale or transfer of

20 tangible personal property as an incident to the rendering of

21 service for or by any governmental body or for or by any

22 corporation, society, association, foundation or institution

23 organized and operated exclusively for charitable, religious

24 or educational purposes or any not-for-profit corporation,

25 society, association, foundation, institution or organization

26 which has no compensated officers or employees and which is

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1 organized and operated primarily for the recreation of persons

2 55 years of age or older. A limited liability company may

3 qualify for the exemption under this paragraph only if the

4 limited liability company is organized and operated

5 exclusively for educational purposes.

6 (d) A sale or transfer of tangible personal property as an

7 incident to the rendering of service for interstate carriers

8 for hire for use as rolling stock moving in interstate commerce

9 or lessors under leases of one year or longer, executed or in

10 effect at the time of purchase, to interstate carriers for hire

11 for use as rolling stock moving in interstate commerce, and

12 equipment operated by a telecommunications provider, licensed

13 as a common carrier by the Federal Communications Commission,

14 which is permanently installed in or affixed to aircraft moving

15 in interstate commerce.

16 (d-1) A sale or transfer of tangible personal property as

17 an incident to the rendering of service for owners, lessors or

18 shippers of tangible personal property which is utilized by

19 interstate carriers for hire for use as rolling stock moving in

20 interstate commerce, and equipment operated by a

21 telecommunications provider, licensed as a common carrier by

22 the Federal Communications Commission, which is permanently

23 installed in or affixed to aircraft moving in interstate

24 commerce.

25 (d-1.1) On and after July 1, 2003 and through June 30,

26 2004, a sale or transfer of a motor vehicle of the second

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1 division with a gross vehicle weight in excess of 8,000 pounds

2 as an incident to the rendering of service if that motor

3 vehicle is subject to the commercial distribution fee imposed

4 under Section 3-815.1 of the Illinois Vehicle Code. Beginning

5 on July 1, 2004 and through June 30, 2005, the use in this

6 State of motor vehicles of the second division: (i) with a

7 gross vehicle weight rating in excess of 8,000 pounds; (ii)

8 that are subject to the commercial distribution fee imposed

9 under Section 3-815.1 of the Illinois Vehicle Code; and (iii)

10 that are primarily used for commercial purposes. Through June

11 30, 2005, this exemption applies to repair and replacement

12 parts added after the initial purchase of such a motor vehicle

13 if that motor vehicle is used in a manner that would qualify

14 for the rolling stock exemption otherwise provided for in this

15 Act. For purposes of this paragraph, "used for commercial

16 purposes" means the transportation of persons or property in

17 furtherance of any commercial or industrial enterprise whether

18 for-hire or not.

19 (d-2) The repairing, reconditioning or remodeling, for a

20 common carrier by rail, of tangible personal property which

21 belongs to such carrier for hire, and as to which such carrier

22 receives the physical possession of the repaired,

23 reconditioned or remodeled item of tangible personal property

24 in Illinois, and which such carrier transports, or shares with

25 another common carrier in the transportation of such property,

26 out of Illinois on a standard uniform bill of lading showing

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1 the person who repaired, reconditioned or remodeled the

2 property as the shipper or consignor of such property to a

3 destination outside Illinois, for use outside Illinois.

4 (d-3) A sale or transfer of tangible personal property

5 which is produced by the seller thereof on special order in

6 such a way as to have made the applicable tax the Service

7 Occupation Tax or the Service Use Tax, rather than the

8 Retailers' Occupation Tax or the Use Tax, for an interstate

9 carrier by rail which receives the physical possession of such

10 property in Illinois, and which transports such property, or

11 shares with another common carrier in the transportation of

12 such property, out of Illinois on a standard uniform bill of

13 lading showing the seller of the property as the shipper or

14 consignor of such property to a destination outside Illinois,

15 for use outside Illinois.

16 (d-4) Until January 1, 1997, a sale, by a registered

17 serviceman paying tax under this Act to the Department, of

18 special order printed materials delivered outside Illinois and

19 which are not returned to this State, if delivery is made by

20 the seller or agent of the seller, including an agent who

21 causes the product to be delivered outside Illinois by a common

22 carrier or the U.S. postal service.

23 (e) A sale or transfer of machinery and equipment used

24 primarily in the process of the manufacturing or assembling,

25 either in an existing, an expanded or a new manufacturing

26 facility, of tangible personal property for wholesale or retail

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1 sale or lease, whether such sale or lease is made directly by

2 the manufacturer or by some other person, whether the materials

3 used in the process are owned by the manufacturer or some other

4 person, or whether such sale or lease is made apart from or as

5 an incident to the seller's engaging in a service occupation

6 and the applicable tax is a Service Occupation Tax or Service

7 Use Tax, rather than Retailers' Occupation Tax or Use Tax. The

8 exemption provided by this paragraph (e) does not include

9 machinery and equipment used in (i) the generation of

10 electricity for wholesale or retail sale; (ii) the generation

11 or treatment of natural or artificial gas for wholesale or

12 retail sale that is delivered to customers through pipes,

13 pipelines, or mains; or (iii) the treatment of water for

14 wholesale or retail sale that is delivered to customers through

15 pipes, pipelines, or mains. The provisions of this amendatory

16 Act of the 98th General Assembly are declaratory of existing

17 law as to the meaning and scope of this exemption. The

18 exemption under this subsection (e) is exempt from the

19 provisions of Section 3-75.

20 (f) Until July 1, 2003, the sale or transfer of

21 distillation machinery and equipment, sold as a unit or kit and

22 assembled or installed by the retailer, which machinery and

23 equipment is certified by the user to be used only for the

24 production of ethyl alcohol that will be used for consumption

25 as motor fuel or as a component of motor fuel for the personal

26 use of such user and not subject to sale or resale.

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1 (g) At the election of any serviceman not required to be

2 otherwise registered as a retailer under Section 2a of the

3 Retailers' Occupation Tax Act, made for each fiscal year sales

4 of service in which the aggregate annual cost price of tangible

5 personal property transferred as an incident to the sales of

6 service is less than 35% (75% in the case of servicemen

7 transferring prescription drugs or servicemen engaged in

8 graphic arts production) of the aggregate annual total gross

9 receipts from all sales of service. The purchase of such

10 tangible personal property by the serviceman shall be subject

11 to tax under the Retailers' Occupation Tax Act and the Use Tax

12 Act. However, if a primary serviceman who has made the election

13 described in this paragraph subcontracts service work to a

14 secondary serviceman who has also made the election described

15 in this paragraph, the primary serviceman does not incur a Use

16 Tax liability if the secondary serviceman (i) has paid or will

17 pay Use Tax on his or her cost price of any tangible personal

18 property transferred to the primary serviceman and (ii)

19 certifies that fact in writing to the primary serviceman.

20 Tangible personal property transferred incident to the

21 completion of a maintenance agreement is exempt from the tax

22 imposed pursuant to this Act.

23 Exemption (e) also includes machinery and equipment used in

24 the general maintenance or repair of such exempt machinery and

25 equipment or for in-house manufacture of exempt machinery and

26 equipment.On and after July 1, 2017, exemption (e) also

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1 includes graphic arts machinery and equipment, as defined in

2 paragraph (5) of Section 3-5. The machinery and equipment

3 exemption does not include machinery and equipment used in (i)

4 the generation of electricity for wholesale or retail sale;

5 (ii) the generation or treatment of natural or artificial gas

6 for wholesale or retail sale that is delivered to customers

7 through pipes, pipelines, or mains; or (iii) the treatment of

8 water for wholesale or retail sale that is delivered to

9 customers through pipes, pipelines, or mains. The provisions of

10 this amendatory Act of the 98th General Assembly are

11 declaratory of existing law as to the meaning and scope of this

12 exemption. For the purposes of exemption (e), each of these

13 terms shall have the following meanings: (1) "manufacturing

14 process" shall mean the production of any article of tangible

15 personal property, whether such article is a finished product

16 or an article for use in the process of manufacturing or

17 assembling a different article of tangible personal property,

18 by procedures commonly regarded as manufacturing, processing,

19 fabricating, or refining which changes some existing material

20 or materials into a material with a different form, use or

21 name. In relation to a recognized integrated business composed

22 of a series of operations which collectively constitute

23 manufacturing, or individually constitute manufacturing

24 operations, the manufacturing process shall be deemed to

25 commence with the first operation or stage of production in the

26 series, and shall not be deemed to end until the completion of

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1 the final product in the last operation or stage of production

2 in the series; and further for purposes of exemption (e),

3 photoprocessing is deemed to be a manufacturing process of

4 tangible personal property for wholesale or retail sale; (2)

5 "assembling process" shall mean the production of any article

6 of tangible personal property, whether such article is a

7 finished product or an article for use in the process of

8 manufacturing or assembling a different article of tangible

9 personal property, by the combination of existing materials in

10 a manner commonly regarded as assembling which results in a

11 material of a different form, use or name; (3) "machinery"

12 shall mean major mechanical machines or major components of

13 such machines contributing to a manufacturing or assembling

14 process; and (4) "equipment" shall include any independent

15 device or tool separate from any machinery but essential to an

16 integrated manufacturing or assembly process; including

17 computers used primarily in a manufacturer's computer assisted

18 design, computer assisted manufacturing (CAD/CAM) system; or

19 any subunit or assembly comprising a component of any machinery

20 or auxiliary, adjunct or attachment parts of machinery, such as

21 tools, dies, jigs, fixtures, patterns and molds; or any parts

22 which require periodic replacement in the course of normal

23 operation; but shall not include hand tools. Equipment includes

24 chemicals or chemicals acting as catalysts but only if the

25 chemicals or chemicals acting as catalysts effect a direct and

26 immediate change upon a product being manufactured or assembled

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1 for wholesale or retail sale or lease. The purchaser of such

2 machinery and equipment who has an active resale registration

3 number shall furnish such number to the seller at the time of

4 purchase. The purchaser of such machinery and equipment and

5 tools without an active resale registration number shall

6 furnish to the seller a certificate of exemption for each

7 transaction stating facts establishing the exemption for that

8 transaction, which certificate shall be available to the

9 Department for inspection or audit.

10 Except as provided in Section 2d of this Act, the rolling

11 stock exemption applies to rolling stock used by an interstate

12 carrier for hire, even just between points in Illinois, if such

13 rolling stock transports, for hire, persons whose journeys or

14 property whose shipments originate or terminate outside

15 Illinois.

16 Any informal rulings, opinions or letters issued by the

17 Department in response to an inquiry or request for any opinion

18 from any person regarding the coverage and applicability of

19 exemption (e) to specific devices shall be published,

20 maintained as a public record, and made available for public

21 inspection and copying. If the informal ruling, opinion or

22 letter contains trade secrets or other confidential

23 information, where possible the Department shall delete such

24 information prior to publication. Whenever such informal

25 rulings, opinions, or letters contain any policy of general

26 applicability, the Department shall formulate and adopt such

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1 policy as a rule in accordance with the provisions of the

2 Illinois Administrative Procedure Act.

3 On and after July 1, 1987, no entity otherwise eligible

4 under exemption (c) of this Section shall make tax free

5 purchases unless it has an active exemption identification

6 number issued by the Department.

7 "Serviceman" means any person who is engaged in the

8 occupation of making sales of service.

9 "Sale at Retail" means "sale at retail" as defined in the

10 Retailers' Occupation Tax Act.

11 "Supplier" means any person who makes sales of tangible

12 personal property to servicemen for the purpose of resale as an

13 incident to a sale of service.

14 (Source: P.A. 98-583, eff. 1-1-14.)

15 (35 ILCS 115/3-5)

16 Sec. 3-5. Exemptions. The following tangible personal

17 property is exempt from the tax imposed by this Act:

18 (1) Personal property sold by a corporation, society,

19 association, foundation, institution, or organization, other

20 than a limited liability company, that is organized and

21 operated as a not-for-profit service enterprise for the benefit

22 of persons 65 years of age or older if the personal property

23 was not purchased by the enterprise for the purpose of resale

24 by the enterprise.

25 (2) Personal property purchased by a not-for-profit

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1 Illinois county fair association for use in conducting,

2 operating, or promoting the county fair.

3 (3) Personal property purchased by any not-for-profit arts

4 or cultural organization that establishes, by proof required by

5 the Department by rule, that it has received an exemption under

6 Section 501(c)(3) of the Internal Revenue Code and that is

7 organized and operated primarily for the presentation or

8 support of arts or cultural programming, activities, or

9 services. These organizations include, but are not limited to,

10 music and dramatic arts organizations such as symphony

11 orchestras and theatrical groups, arts and cultural service

12 organizations, local arts councils, visual arts organizations,

13 and media arts organizations. On and after the effective date

14 of this amendatory Act of the 92nd General Assembly, however,

15 an entity otherwise eligible for this exemption shall not make

16 tax-free purchases unless it has an active identification

17 number issued by the Department.

18 (4) Legal tender, currency, medallions, or gold or silver

19 coinage issued by the State of Illinois, the government of the

20 United States of America, or the government of any foreign

21 country, and bullion.

22 (5) Until July 1, 2003 and beginning again on September 1,

23 2004 through August 30, 2014, graphic arts machinery and

24 equipment, including repair and replacement parts, both new and

25 used, and including that manufactured on special order or

26 purchased for lease, certified by the purchaser to be used

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1 primarily for graphic arts production. Equipment includes

2 chemicals or chemicals acting as catalysts but only if the

3 chemicals or chemicals acting as catalysts effect a direct and

4 immediate change upon a graphic arts product.Beginning on July

5 1, 2017, graphic arts machinery and equipment is included in

6 the manufacturing and assembling machinery and equipment

7 exemption under Section 2 of this Act.

8 (6) Personal property sold by a teacher-sponsored student

9 organization affiliated with an elementary or secondary school

10 located in Illinois.

11 (7) Farm machinery and equipment, both new and used,

12 including that manufactured on special order, certified by the

13 purchaser to be used primarily for production agriculture or

14 State or federal agricultural programs, including individual

15 replacement parts for the machinery and equipment, including

16 machinery and equipment purchased for lease, and including

17 implements of husbandry defined in Section 1-130 of the

18 Illinois Vehicle Code, farm machinery and agricultural

19 chemical and fertilizer spreaders, and nurse wagons required to

20 be registered under Section 3-809 of the Illinois Vehicle Code,

21 but excluding other motor vehicles required to be registered

22 under the Illinois Vehicle Code. Horticultural polyhouses or

23 hoop houses used for propagating, growing, or overwintering

24 plants shall be considered farm machinery and equipment under

25 this item (7). Agricultural chemical tender tanks and dry boxes

26 shall include units sold separately from a motor vehicle

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1 required to be licensed and units sold mounted on a motor

2 vehicle required to be licensed if the selling price of the

3 tender is separately stated.

4 Farm machinery and equipment shall include precision

5 farming equipment that is installed or purchased to be

6 installed on farm machinery and equipment including, but not

7 limited to, tractors, harvesters, sprayers, planters, seeders,

8 or spreaders. Precision farming equipment includes, but is not

9 limited to, soil testing sensors, computers, monitors,

10 software, global positioning and mapping systems, and other

11 such equipment.

12 Farm machinery and equipment also includes computers,

13 sensors, software, and related equipment used primarily in the

14 computer-assisted operation of production agriculture

15 facilities, equipment, and activities such as, but not limited

16 to, the collection, monitoring, and correlation of animal and

17 crop data for the purpose of formulating animal diets and

18 agricultural chemicals. This item (7) is exempt from the

19 provisions of Section 3-55.

20 (8) Until June 30, 2013, fuel and petroleum products sold

21 to or used by an air common carrier, certified by the carrier

22 to be used for consumption, shipment, or storage in the conduct

23 of its business as an air common carrier, for a flight destined

24 for or returning from a location or locations outside the

25 United States without regard to previous or subsequent domestic

26 stopovers.

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1 Beginning July 1, 2013, fuel and petroleum products sold to

2 or used by an air carrier, certified by the carrier to be used

3 for consumption, shipment, or storage in the conduct of its

4 business as an air common carrier, for a flight that (i) is

5 engaged in foreign trade or is engaged in trade between the

6 United States and any of its possessions and (ii) transports at

7 least one individual or package for hire from the city of

8 origination to the city of final destination on the same

9 aircraft, without regard to a change in the flight number of

10 that aircraft.

11 (9) Proceeds of mandatory service charges separately

12 stated on customers' bills for the purchase and consumption of

13 food and beverages, to the extent that the proceeds of the

14 service charge are in fact turned over as tips or as a

15 substitute for tips to the employees who participate directly

16 in preparing, serving, hosting or cleaning up the food or

17 beverage function with respect to which the service charge is

18 imposed.

19 (10) Until July 1, 2003, oil field exploration, drilling,

20 and production equipment, including (i) rigs and parts of rigs,

21 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

22 tubular goods, including casing and drill strings, (iii) pumps

23 and pump-jack units, (iv) storage tanks and flow lines, (v) any

24 individual replacement part for oil field exploration,

25 drilling, and production equipment, and (vi) machinery and

26 equipment purchased for lease; but excluding motor vehicles

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1 required to be registered under the Illinois Vehicle Code.

2 (11) Photoprocessing machinery and equipment, including

3 repair and replacement parts, both new and used, including that

4 manufactured on special order, certified by the purchaser to be

5 used primarily for photoprocessing, and including

6 photoprocessing machinery and equipment purchased for lease.

7 (12) Coal and aggregate exploration, mining, off-highway

8 hauling, processing, maintenance, and reclamation equipment,

9 including replacement parts and equipment, and including

10 equipment purchased for lease, but excluding motor vehicles

11 required to be registered under the Illinois Vehicle Code. The

12 changes made to this Section by Public Act 97-767 apply on and

13 after July 1, 2003, but no claim for credit or refund is

14 allowed on or after August 16, 2013 (the effective date of

15 Public Act 98-456) for such taxes paid during the period

16 beginning July 1, 2003 and ending on August 16, 2013 (the

17 effective date of Public Act 98-456).

18 (13) Beginning January 1, 1992 and through June 30, 2016,

19 food for human consumption that is to be consumed off the

20 premises where it is sold (other than alcoholic beverages, soft

21 drinks and food that has been prepared for immediate

22 consumption) and prescription and non-prescription medicines,

23 drugs, medical appliances, and insulin, urine testing

24 materials, syringes, and needles used by diabetics, for human

25 use, when purchased for use by a person receiving medical

26 assistance under Article V of the Illinois Public Aid Code who

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1 resides in a licensed long-term care facility, as defined in

2 the Nursing Home Care Act, or in a licensed facility as defined

3 in the ID/DD Community Care Act, the MC/DD Act, or the

4 Specialized Mental Health Rehabilitation Act of 2013.

5 (14) Semen used for artificial insemination of livestock

6 for direct agricultural production.

7 (15) Horses, or interests in horses, registered with and

8 meeting the requirements of any of the Arabian Horse Club

9 Registry of America, Appaloosa Horse Club, American Quarter

10 Horse Association, United States Trotting Association, or

11 Jockey Club, as appropriate, used for purposes of breeding or

12 racing for prizes. This item (15) is exempt from the provisions

13 of Section 3-55, and the exemption provided for under this item

14 (15) applies for all periods beginning May 30, 1995, but no

15 claim for credit or refund is allowed on or after January 1,

16 2008 (the effective date of Public Act 95-88) for such taxes

17 paid during the period beginning May 30, 2000 and ending on

18 January 1, 2008 (the effective date of Public Act 95-88).

19 (16) Computers and communications equipment utilized for

20 any hospital purpose and equipment used in the diagnosis,

21 analysis, or treatment of hospital patients sold to a lessor

22 who leases the equipment, under a lease of one year or longer

23 executed or in effect at the time of the purchase, to a

24 hospital that has been issued an active tax exemption

25 identification number by the Department under Section 1g of the

26 Retailers' Occupation Tax Act.

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1 (17) Personal property sold to a lessor who leases the

2 property, under a lease of one year or longer executed or in

3 effect at the time of the purchase, to a governmental body that

4 has been issued an active tax exemption identification number

5 by the Department under Section 1g of the Retailers' Occupation

6 Tax Act.

7 (18) Beginning with taxable years ending on or after

8 December 31, 1995 and ending with taxable years ending on or

9 before December 31, 2004, personal property that is donated for

10 disaster relief to be used in a State or federally declared

11 disaster area in Illinois or bordering Illinois by a

12 manufacturer or retailer that is registered in this State to a

13 corporation, society, association, foundation, or institution

14 that has been issued a sales tax exemption identification

15 number by the Department that assists victims of the disaster

16 who reside within the declared disaster area.

17 (19) Beginning with taxable years ending on or after

18 December 31, 1995 and ending with taxable years ending on or

19 before December 31, 2004, personal property that is used in the

20 performance of infrastructure repairs in this State, including

21 but not limited to municipal roads and streets, access roads,

22 bridges, sidewalks, waste disposal systems, water and sewer

23 line extensions, water distribution and purification

24 facilities, storm water drainage and retention facilities, and

25 sewage treatment facilities, resulting from a State or

26 federally declared disaster in Illinois or bordering Illinois

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1 when such repairs are initiated on facilities located in the

2 declared disaster area within 6 months after the disaster.

3 (20) Beginning July 1, 1999, game or game birds sold at a

4 "game breeding and hunting preserve area" as that term is used

5 in the Wildlife Code. This paragraph is exempt from the

6 provisions of Section 3-55.

7 (21) A motor vehicle, as that term is defined in Section

8 1-146 of the Illinois Vehicle Code, that is donated to a

9 corporation, limited liability company, society, association,

10 foundation, or institution that is determined by the Department

11 to be organized and operated exclusively for educational

12 purposes. For purposes of this exemption, "a corporation,

13 limited liability company, society, association, foundation,

14 or institution organized and operated exclusively for

15 educational purposes" means all tax-supported public schools,

16 private schools that offer systematic instruction in useful

17 branches of learning by methods common to public schools and

18 that compare favorably in their scope and intensity with the

19 course of study presented in tax-supported schools, and

20 vocational or technical schools or institutes organized and

21 operated exclusively to provide a course of study of not less

22 than 6 weeks duration and designed to prepare individuals to

23 follow a trade or to pursue a manual, technical, mechanical,

24 industrial, business, or commercial occupation.

25 (22) Beginning January 1, 2000, personal property,

26 including food, purchased through fundraising events for the

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1 benefit of a public or private elementary or secondary school,

2 a group of those schools, or one or more school districts if

3 the events are sponsored by an entity recognized by the school

4 district that consists primarily of volunteers and includes

5 parents and teachers of the school children. This paragraph

6 does not apply to fundraising events (i) for the benefit of

7 private home instruction or (ii) for which the fundraising

8 entity purchases the personal property sold at the events from

9 another individual or entity that sold the property for the

10 purpose of resale by the fundraising entity and that profits

11 from the sale to the fundraising entity. This paragraph is

12 exempt from the provisions of Section 3-55.

13 (23) Beginning January 1, 2000 and through December 31,

14 2001, new or used automatic vending machines that prepare and

15 serve hot food and beverages, including coffee, soup, and other

16 items, and replacement parts for these machines. Beginning

17 January 1, 2002 and through June 30, 2003, machines and parts

18 for machines used in commercial, coin-operated amusement and

19 vending business if a use or occupation tax is paid on the

20 gross receipts derived from the use of the commercial,

21 coin-operated amusement and vending machines. This paragraph

22 is exempt from the provisions of Section 3-55.

23 (24) Beginning on the effective date of this amendatory Act

24 of the 92nd General Assembly, computers and communications

25 equipment utilized for any hospital purpose and equipment used

26 in the diagnosis, analysis, or treatment of hospital patients

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1 sold to a lessor who leases the equipment, under a lease of one

2 year or longer executed or in effect at the time of the

3 purchase, to a hospital that has been issued an active tax

4 exemption identification number by the Department under

5 Section 1g of the Retailers' Occupation Tax Act. This paragraph

6 is exempt from the provisions of Section 3-55.

7 (25) Beginning on the effective date of this amendatory Act

8 of the 92nd General Assembly, personal property sold to a

9 lessor who leases the property, under a lease of one year or

10 longer executed or in effect at the time of the purchase, to a

11 governmental body that has been issued an active tax exemption

12 identification number by the Department under Section 1g of the

13 Retailers' Occupation Tax Act. This paragraph is exempt from

14 the provisions of Section 3-55.

15 (26) Beginning on January 1, 2002 and through June 30,

16 2016, tangible personal property purchased from an Illinois

17 retailer by a taxpayer engaged in centralized purchasing

18 activities in Illinois who will, upon receipt of the property

19 in Illinois, temporarily store the property in Illinois (i) for

20 the purpose of subsequently transporting it outside this State

21 for use or consumption thereafter solely outside this State or

22 (ii) for the purpose of being processed, fabricated, or

23 manufactured into, attached to, or incorporated into other

24 tangible personal property to be transported outside this State

25 and thereafter used or consumed solely outside this State. The

26 Director of Revenue shall, pursuant to rules adopted in

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1 accordance with the Illinois Administrative Procedure Act,

2 issue a permit to any taxpayer in good standing with the

3 Department who is eligible for the exemption under this

4 paragraph (26). The permit issued under this paragraph (26)

5 shall authorize the holder, to the extent and in the manner

6 specified in the rules adopted under this Act, to purchase

7 tangible personal property from a retailer exempt from the

8 taxes imposed by this Act. Taxpayers shall maintain all

9 necessary books and records to substantiate the use and

10 consumption of all such tangible personal property outside of

11 the State of Illinois.

12 (27) Beginning January 1, 2008, tangible personal property

13 used in the construction or maintenance of a community water

14 supply, as defined under Section 3.145 of the Environmental

15 Protection Act, that is operated by a not-for-profit

16 corporation that holds a valid water supply permit issued under

17 Title IV of the Environmental Protection Act. This paragraph is

18 exempt from the provisions of Section 3-55.

19 (28) Tangible personal property sold to a

20 public-facilities corporation, as described in Section

21 11-65-10 of the Illinois Municipal Code, for purposes of

22 constructing or furnishing a municipal convention hall, but

23 only if the legal title to the municipal convention hall is

24 transferred to the municipality without any further

25 consideration by or on behalf of the municipality at the time

26 of the completion of the municipal convention hall or upon the

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1 retirement or redemption of any bonds or other debt instruments

2 issued by the public-facilities corporation in connection with

3 the development of the municipal convention hall. This

4 exemption includes existing public-facilities corporations as

5 provided in Section 11-65-25 of the Illinois Municipal Code.

6 This paragraph is exempt from the provisions of Section 3-55.

7 (29) Beginning January 1, 2010, materials, parts,

8 equipment, components, and furnishings incorporated into or

9 upon an aircraft as part of the modification, refurbishment,

10 completion, replacement, repair, or maintenance of the

11 aircraft. This exemption includes consumable supplies used in

12 the modification, refurbishment, completion, replacement,

13 repair, and maintenance of aircraft, but excludes any

14 materials, parts, equipment, components, and consumable

15 supplies used in the modification, replacement, repair, and

16 maintenance of aircraft engines or power plants, whether such

17 engines or power plants are installed or uninstalled upon any

18 such aircraft. "Consumable supplies" include, but are not

19 limited to, adhesive, tape, sandpaper, general purpose

20 lubricants, cleaning solution, latex gloves, and protective

21 films. This exemption applies only to the transfer of

22 qualifying tangible personal property incident to the

23 modification, refurbishment, completion, replacement, repair,

24 or maintenance of an aircraft by persons who (i) hold an Air

25 Agency Certificate and are empowered to operate an approved

26 repair station by the Federal Aviation Administration, (ii)

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1 have a Class IV Rating, and (iii) conduct operations in

2 accordance with Part 145 of the Federal Aviation Regulations.

3 The exemption does not include aircraft operated by a

4 commercial air carrier providing scheduled passenger air

5 service pursuant to authority issued under Part 121 or Part 129

6 of the Federal Aviation Regulations. The changes made to this

7 paragraph (29) by Public Act 98-534 are declarative of existing

8 law.

9 (30) Beginning January 1, 2017, menstrual pads, tampons,

10 and menstrual cups.

11 (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;

12 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.

13 7-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)

14 Section 35-20. The Retailers' Occupation Tax Act is amended

15 by changing Sections 2-5 and 2-45 as follows:

16 (35 ILCS 120/2-5)

17 Sec. 2-5. Exemptions. Gross receipts from proceeds from the

18 sale of the following tangible personal property are exempt

19 from the tax imposed by this Act:

20 (1) Farm chemicals.

21 (2) Farm machinery and equipment, both new and used,

22 including that manufactured on special order, certified by the

23 purchaser to be used primarily for production agriculture or

24 State or federal agricultural programs, including individual

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1 replacement parts for the machinery and equipment, including

2 machinery and equipment purchased for lease, and including

3 implements of husbandry defined in Section 1-130 of the

4 Illinois Vehicle Code, farm machinery and agricultural

5 chemical and fertilizer spreaders, and nurse wagons required to

6 be registered under Section 3-809 of the Illinois Vehicle Code,

7 but excluding other motor vehicles required to be registered

8 under the Illinois Vehicle Code. Horticultural polyhouses or

9 hoop houses used for propagating, growing, or overwintering

10 plants shall be considered farm machinery and equipment under

11 this item (2). Agricultural chemical tender tanks and dry boxes

12 shall include units sold separately from a motor vehicle

13 required to be licensed and units sold mounted on a motor

14 vehicle required to be licensed, if the selling price of the

15 tender is separately stated.

16 Farm machinery and equipment shall include precision

17 farming equipment that is installed or purchased to be

18 installed on farm machinery and equipment including, but not

19 limited to, tractors, harvesters, sprayers, planters, seeders,

20 or spreaders. Precision farming equipment includes, but is not

21 limited to, soil testing sensors, computers, monitors,

22 software, global positioning and mapping systems, and other

23 such equipment.

24 Farm machinery and equipment also includes computers,

25 sensors, software, and related equipment used primarily in the

26 computer-assisted operation of production agriculture

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1 facilities, equipment, and activities such as, but not limited

2 to, the collection, monitoring, and correlation of animal and

3 crop data for the purpose of formulating animal diets and

4 agricultural chemicals. This item (2) is exempt from the

5 provisions of Section 2-70.

6 (3) Until July 1, 2003, distillation machinery and

7 equipment, sold as a unit or kit, assembled or installed by the

8 retailer, certified by the user to be used only for the

9 production of ethyl alcohol that will be used for consumption

10 as motor fuel or as a component of motor fuel for the personal

11 use of the user, and not subject to sale or resale.

12 (4) Until July 1, 2003 and beginning again September 1,

13 2004 through August 30, 2014, graphic arts machinery and

14 equipment, including repair and replacement parts, both new and

15 used, and including that manufactured on special order or

16 purchased for lease, certified by the purchaser to be used

17 primarily for graphic arts production. Equipment includes

18 chemicals or chemicals acting as catalysts but only if the

19 chemicals or chemicals acting as catalysts effect a direct and

20 immediate change upon a graphic arts product.Beginning on July

21 1, 2017, graphic arts machinery and equipment is included in

22 the manufacturing and assembling machinery and equipment

23 exemption under paragraph (14).

24 (5) A motor vehicle that is used for automobile renting, as

25 defined in the Automobile Renting Occupation and Use Tax Act.

26 This paragraph is exempt from the provisions of Section 2-70.

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1 (6) Personal property sold by a teacher-sponsored student

2 organization affiliated with an elementary or secondary school

3 located in Illinois.

4 (7) Until July 1, 2003, proceeds of that portion of the

5 selling price of a passenger car the sale of which is subject

6 to the Replacement Vehicle Tax.

7 (8) Personal property sold to an Illinois county fair

8 association for use in conducting, operating, or promoting the

9 county fair.

10 (9) Personal property sold to a not-for-profit arts or

11 cultural organization that establishes, by proof required by

12 the Department by rule, that it has received an exemption under

13 Section 501(c)(3) of the Internal Revenue Code and that is

14 organized and operated primarily for the presentation or

15 support of arts or cultural programming, activities, or

16 services. These organizations include, but are not limited to,

17 music and dramatic arts organizations such as symphony

18 orchestras and theatrical groups, arts and cultural service

19 organizations, local arts councils, visual arts organizations,

20 and media arts organizations. On and after the effective date

21 of this amendatory Act of the 92nd General Assembly, however,

22 an entity otherwise eligible for this exemption shall not make

23 tax-free purchases unless it has an active identification

24 number issued by the Department.

25 (10) Personal property sold by a corporation, society,

26 association, foundation, institution, or organization, other

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1 than a limited liability company, that is organized and

2 operated as a not-for-profit service enterprise for the benefit

3 of persons 65 years of age or older if the personal property

4 was not purchased by the enterprise for the purpose of resale

5 by the enterprise.

6 (11) Personal property sold to a governmental body, to a

7 corporation, society, association, foundation, or institution

8 organized and operated exclusively for charitable, religious,

9 or educational purposes, or to a not-for-profit corporation,

10 society, association, foundation, institution, or organization

11 that has no compensated officers or employees and that is

12 organized and operated primarily for the recreation of persons

13 55 years of age or older. A limited liability company may

14 qualify for the exemption under this paragraph only if the

15 limited liability company is organized and operated

16 exclusively for educational purposes. On and after July 1,

17 1987, however, no entity otherwise eligible for this exemption

18 shall make tax-free purchases unless it has an active

19 identification number issued by the Department.

20 (12) Tangible personal property sold to interstate

21 carriers for hire for use as rolling stock moving in interstate

22 commerce or to lessors under leases of one year or longer

23 executed or in effect at the time of purchase by interstate

24 carriers for hire for use as rolling stock moving in interstate

25 commerce and equipment operated by a telecommunications

26 provider, licensed as a common carrier by the Federal

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1 Communications Commission, which is permanently installed in

2 or affixed to aircraft moving in interstate commerce.

3 (12-5) On and after July 1, 2003 and through June 30, 2004,

4 motor vehicles of the second division with a gross vehicle

5 weight in excess of 8,000 pounds that are subject to the

6 commercial distribution fee imposed under Section 3-815.1 of

7 the Illinois Vehicle Code. Beginning on July 1, 2004 and

8 through June 30, 2005, the use in this State of motor vehicles

9 of the second division: (i) with a gross vehicle weight rating

10 in excess of 8,000 pounds; (ii) that are subject to the

11 commercial distribution fee imposed under Section 3-815.1 of

12 the Illinois Vehicle Code; and (iii) that are primarily used

13 for commercial purposes. Through June 30, 2005, this exemption

14 applies to repair and replacement parts added after the initial

15 purchase of such a motor vehicle if that motor vehicle is used

16 in a manner that would qualify for the rolling stock exemption

17 otherwise provided for in this Act. For purposes of this

18 paragraph, "used for commercial purposes" means the

19 transportation of persons or property in furtherance of any

20 commercial or industrial enterprise whether for-hire or not.

21 (13) Proceeds from sales to owners, lessors, or shippers of

22 tangible personal property that is utilized by interstate

23 carriers for hire for use as rolling stock moving in interstate

24 commerce and equipment operated by a telecommunications

25 provider, licensed as a common carrier by the Federal

26 Communications Commission, which is permanently installed in

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1 or affixed to aircraft moving in interstate commerce.

2 (14) Machinery and equipment that will be used by the

3 purchaser, or a lessee of the purchaser, primarily in the

4 process of manufacturing or assembling tangible personal

5 property for wholesale or retail sale or lease, whether the

6 sale or lease is made directly by the manufacturer or by some

7 other person, whether the materials used in the process are

8 owned by the manufacturer or some other person, or whether the

9 sale or lease is made apart from or as an incident to the

10 seller's engaging in the service occupation of producing

11 machines, tools, dies, jigs, patterns, gauges, or other similar

12 items of no commercial value on special order for a particular

13 purchaser. The exemption provided by this paragraph (14) does

14 not include machinery and equipment used in (i) the generation

15 of electricity for wholesale or retail sale; (ii) the

16 generation or treatment of natural or artificial gas for

17 wholesale or retail sale that is delivered to customers through

18 pipes, pipelines, or mains; or (iii) the treatment of water for

19 wholesale or retail sale that is delivered to customers through

20 pipes, pipelines, or mains. The provisions of Public Act 98-583

21 are declaratory of existing law as to the meaning and scope of

22 this exemption. Beginning on July 1, 2017, the exemption

23 provided by this paragraph (14) includes, but is not limited

24 to, graphic arts machinery and equipment, as defined in

25 paragraph (4) of this Section.

26 (15) Proceeds of mandatory service charges separately

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1 stated on customers' bills for purchase and consumption of food

2 and beverages, to the extent that the proceeds of the service

3 charge are in fact turned over as tips or as a substitute for

4 tips to the employees who participate directly in preparing,

5 serving, hosting or cleaning up the food or beverage function

6 with respect to which the service charge is imposed.

7 (16) Petroleum products sold to a purchaser if the seller

8 is prohibited by federal law from charging tax to the

9 purchaser.

10 (17) Tangible personal property sold to a common carrier by

11 rail or motor that receives the physical possession of the

12 property in Illinois and that transports the property, or

13 shares with another common carrier in the transportation of the

14 property, out of Illinois on a standard uniform bill of lading

15 showing the seller of the property as the shipper or consignor

16 of the property to a destination outside Illinois, for use

17 outside Illinois.

18 (18) Legal tender, currency, medallions, or gold or silver

19 coinage issued by the State of Illinois, the government of the

20 United States of America, or the government of any foreign

21 country, and bullion.

22 (19) Until July 1 2003, oil field exploration, drilling,

23 and production equipment, including (i) rigs and parts of rigs,

24 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

25 tubular goods, including casing and drill strings, (iii) pumps

26 and pump-jack units, (iv) storage tanks and flow lines, (v) any

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1 individual replacement part for oil field exploration,

2 drilling, and production equipment, and (vi) machinery and

3 equipment purchased for lease; but excluding motor vehicles

4 required to be registered under the Illinois Vehicle Code.

5 (20) Photoprocessing machinery and equipment, including

6 repair and replacement parts, both new and used, including that

7 manufactured on special order, certified by the purchaser to be

8 used primarily for photoprocessing, and including

9 photoprocessing machinery and equipment purchased for lease.

10 (21) Coal and aggregate exploration, mining, off-highway

11 hauling, processing, maintenance, and reclamation equipment,

12 including replacement parts and equipment, and including

13 equipment purchased for lease, but excluding motor vehicles

14 required to be registered under the Illinois Vehicle Code. The

15 changes made to this Section by Public Act 97-767 apply on and

16 after July 1, 2003, but no claim for credit or refund is

17 allowed on or after August 16, 2013 (the effective date of

18 Public Act 98-456) for such taxes paid during the period

19 beginning July 1, 2003 and ending on August 16, 2013 (the

20 effective date of Public Act 98-456).

21 (22) Until June 30, 2013, fuel and petroleum products sold

22 to or used by an air carrier, certified by the carrier to be

23 used for consumption, shipment, or storage in the conduct of

24 its business as an air common carrier, for a flight destined

25 for or returning from a location or locations outside the

26 United States without regard to previous or subsequent domestic

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1 stopovers.

2 Beginning July 1, 2013, fuel and petroleum products sold to

3 or used by an air carrier, certified by the carrier to be used

4 for consumption, shipment, or storage in the conduct of its

5 business as an air common carrier, for a flight that (i) is

6 engaged in foreign trade or is engaged in trade between the

7 United States and any of its possessions and (ii) transports at

8 least one individual or package for hire from the city of

9 origination to the city of final destination on the same

10 aircraft, without regard to a change in the flight number of

11 that aircraft.

12 (23) A transaction in which the purchase order is received

13 by a florist who is located outside Illinois, but who has a

14 florist located in Illinois deliver the property to the

15 purchaser or the purchaser's donee in Illinois.

16 (24) Fuel consumed or used in the operation of ships,

17 barges, or vessels that are used primarily in or for the

18 transportation of property or the conveyance of persons for

19 hire on rivers bordering on this State if the fuel is delivered

20 by the seller to the purchaser's barge, ship, or vessel while

21 it is afloat upon that bordering river.

22 (25) Except as provided in item (25-5) of this Section, a

23 motor vehicle sold in this State to a nonresident even though

24 the motor vehicle is delivered to the nonresident in this

25 State, if the motor vehicle is not to be titled in this State,

26 and if a drive-away permit is issued to the motor vehicle as

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1 provided in Section 3-603 of the Illinois Vehicle Code or if

2 the nonresident purchaser has vehicle registration plates to

3 transfer to the motor vehicle upon returning to his or her home

4 state. The issuance of the drive-away permit or having the

5 out-of-state registration plates to be transferred is prima

6 facie evidence that the motor vehicle will not be titled in

7 this State.

8 (25-5) The exemption under item (25) does not apply if the

9 state in which the motor vehicle will be titled does not allow

10 a reciprocal exemption for a motor vehicle sold and delivered

11 in that state to an Illinois resident but titled in Illinois.

12 The tax collected under this Act on the sale of a motor vehicle

13 in this State to a resident of another state that does not

14 allow a reciprocal exemption shall be imposed at a rate equal

15 to the state's rate of tax on taxable property in the state in

16 which the purchaser is a resident, except that the tax shall

17 not exceed the tax that would otherwise be imposed under this

18 Act. At the time of the sale, the purchaser shall execute a

19 statement, signed under penalty of perjury, of his or her

20 intent to title the vehicle in the state in which the purchaser

21 is a resident within 30 days after the sale and of the fact of

22 the payment to the State of Illinois of tax in an amount

23 equivalent to the state's rate of tax on taxable property in

24 his or her state of residence and shall submit the statement to

25 the appropriate tax collection agency in his or her state of

26 residence. In addition, the retailer must retain a signed copy

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1 of the statement in his or her records. Nothing in this item

2 shall be construed to require the removal of the vehicle from

3 this state following the filing of an intent to title the

4 vehicle in the purchaser's state of residence if the purchaser

5 titles the vehicle in his or her state of residence within 30

6 days after the date of sale. The tax collected under this Act

7 in accordance with this item (25-5) shall be proportionately

8 distributed as if the tax were collected at the 6.25% general

9 rate imposed under this Act.

10 (25-7) Beginning on July 1, 2007, no tax is imposed under

11 this Act on the sale of an aircraft, as defined in Section 3 of

12 the Illinois Aeronautics Act, if all of the following

13 conditions are met:

14 (1) the aircraft leaves this State within 15 days after

15 the later of either the issuance of the final billing for

16 the sale of the aircraft, or the authorized approval for

17 return to service, completion of the maintenance record

18 entry, and completion of the test flight and ground test

19 for inspection, as required by 14 C.F.R. 91.407;

20 (2) the aircraft is not based or registered in this

21 State after the sale of the aircraft; and

22 (3) the seller retains in his or her books and records

23 and provides to the Department a signed and dated

24 certification from the purchaser, on a form prescribed by

25 the Department, certifying that the requirements of this

26 item (25-7) are met. The certificate must also include the

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1 name and address of the purchaser, the address of the

2 location where the aircraft is to be titled or registered,

3 the address of the primary physical location of the

4 aircraft, and other information that the Department may

5 reasonably require.

6 For purposes of this item (25-7):

7 "Based in this State" means hangared, stored, or otherwise

8 used, excluding post-sale customizations as defined in this

9 Section, for 10 or more days in each 12-month period

10 immediately following the date of the sale of the aircraft.

11 "Registered in this State" means an aircraft registered

12 with the Department of Transportation, Aeronautics Division,

13 or titled or registered with the Federal Aviation

14 Administration to an address located in this State.

15 This paragraph (25-7) is exempt from the provisions of

16 Section 2-70.

17 (26) Semen used for artificial insemination of livestock

18 for direct agricultural production.

19 (27) Horses, or interests in horses, registered with and

20 meeting the requirements of any of the Arabian Horse Club

21 Registry of America, Appaloosa Horse Club, American Quarter

22 Horse Association, United States Trotting Association, or

23 Jockey Club, as appropriate, used for purposes of breeding or

24 racing for prizes. This item (27) is exempt from the provisions

25 of Section 2-70, and the exemption provided for under this item

26 (27) applies for all periods beginning May 30, 1995, but no

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1 claim for credit or refund is allowed on or after January 1,

2 2008 (the effective date of Public Act 95-88) for such taxes

3 paid during the period beginning May 30, 2000 and ending on

4 January 1, 2008 (the effective date of Public Act 95-88).

5 (28) Computers and communications equipment utilized for

6 any hospital purpose and equipment used in the diagnosis,

7 analysis, or treatment of hospital patients sold to a lessor

8 who leases the equipment, under a lease of one year or longer

9 executed or in effect at the time of the purchase, to a

10 hospital that has been issued an active tax exemption

11 identification number by the Department under Section 1g of

12 this Act.

13 (29) Personal property sold to a lessor who leases the

14 property, under a lease of one year or longer executed or in

15 effect at the time of the purchase, to a governmental body that

16 has been issued an active tax exemption identification number

17 by the Department under Section 1g of this Act.

18 (30) Beginning with taxable years ending on or after

19 December 31, 1995 and ending with taxable years ending on or

20 before December 31, 2004, personal property that is donated for

21 disaster relief to be used in a State or federally declared

22 disaster area in Illinois or bordering Illinois by a

23 manufacturer or retailer that is registered in this State to a

24 corporation, society, association, foundation, or institution

25 that has been issued a sales tax exemption identification

26 number by the Department that assists victims of the disaster

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1 who reside within the declared disaster area.

2 (31) Beginning with taxable years ending on or after

3 December 31, 1995 and ending with taxable years ending on or

4 before December 31, 2004, personal property that is used in the

5 performance of infrastructure repairs in this State, including

6 but not limited to municipal roads and streets, access roads,

7 bridges, sidewalks, waste disposal systems, water and sewer

8 line extensions, water distribution and purification

9 facilities, storm water drainage and retention facilities, and

10 sewage treatment facilities, resulting from a State or

11 federally declared disaster in Illinois or bordering Illinois

12 when such repairs are initiated on facilities located in the

13 declared disaster area within 6 months after the disaster.

14 (32) Beginning July 1, 1999, game or game birds sold at a

15 "game breeding and hunting preserve area" as that term is used

16 in the Wildlife Code. This paragraph is exempt from the

17 provisions of Section 2-70.

18 (33) A motor vehicle, as that term is defined in Section

19 1-146 of the Illinois Vehicle Code, that is donated to a

20 corporation, limited liability company, society, association,

21 foundation, or institution that is determined by the Department

22 to be organized and operated exclusively for educational

23 purposes. For purposes of this exemption, "a corporation,

24 limited liability company, society, association, foundation,

25 or institution organized and operated exclusively for

26 educational purposes" means all tax-supported public schools,

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1 private schools that offer systematic instruction in useful

2 branches of learning by methods common to public schools and

3 that compare favorably in their scope and intensity with the

4 course of study presented in tax-supported schools, and

5 vocational or technical schools or institutes organized and

6 operated exclusively to provide a course of study of not less

7 than 6 weeks duration and designed to prepare individuals to

8 follow a trade or to pursue a manual, technical, mechanical,

9 industrial, business, or commercial occupation.

10 (34) Beginning January 1, 2000, personal property,

11 including food, purchased through fundraising events for the

12 benefit of a public or private elementary or secondary school,

13 a group of those schools, or one or more school districts if

14 the events are sponsored by an entity recognized by the school

15 district that consists primarily of volunteers and includes

16 parents and teachers of the school children. This paragraph

17 does not apply to fundraising events (i) for the benefit of

18 private home instruction or (ii) for which the fundraising

19 entity purchases the personal property sold at the events from

20 another individual or entity that sold the property for the

21 purpose of resale by the fundraising entity and that profits

22 from the sale to the fundraising entity. This paragraph is

23 exempt from the provisions of Section 2-70.

24 (35) Beginning January 1, 2000 and through December 31,

25 2001, new or used automatic vending machines that prepare and

26 serve hot food and beverages, including coffee, soup, and other

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1 items, and replacement parts for these machines. Beginning

2 January 1, 2002 and through June 30, 2003, machines and parts

3 for machines used in commercial, coin-operated amusement and

4 vending business if a use or occupation tax is paid on the

5 gross receipts derived from the use of the commercial,

6 coin-operated amusement and vending machines. This paragraph

7 is exempt from the provisions of Section 2-70.

8 (35-5) Beginning August 23, 2001 and through June 30, 2016,

9 food for human consumption that is to be consumed off the

10 premises where it is sold (other than alcoholic beverages, soft

11 drinks, and food that has been prepared for immediate

12 consumption) and prescription and nonprescription medicines,

13 drugs, medical appliances, and insulin, urine testing

14 materials, syringes, and needles used by diabetics, for human

15 use, when purchased for use by a person receiving medical

16 assistance under Article V of the Illinois Public Aid Code who

17 resides in a licensed long-term care facility, as defined in

18 the Nursing Home Care Act, or a licensed facility as defined in

19 the ID/DD Community Care Act, the MC/DD Act, or the Specialized

20 Mental Health Rehabilitation Act of 2013.

21 (36) Beginning August 2, 2001, computers and

22 communications equipment utilized for any hospital purpose and

23 equipment used in the diagnosis, analysis, or treatment of

24 hospital patients sold to a lessor who leases the equipment,

25 under a lease of one year or longer executed or in effect at

26 the time of the purchase, to a hospital that has been issued an

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1 active tax exemption identification number by the Department

2 under Section 1g of this Act. This paragraph is exempt from the

3 provisions of Section 2-70.

4 (37) Beginning August 2, 2001, personal property sold to a

5 lessor who leases the property, under a lease of one year or

6 longer executed or in effect at the time of the purchase, to a

7 governmental body that has been issued an active tax exemption

8 identification number by the Department under Section 1g of

9 this Act. This paragraph is exempt from the provisions of

10 Section 2-70.

11 (38) Beginning on January 1, 2002 and through June 30,

12 2016, tangible personal property purchased from an Illinois

13 retailer by a taxpayer engaged in centralized purchasing

14 activities in Illinois who will, upon receipt of the property

15 in Illinois, temporarily store the property in Illinois (i) for

16 the purpose of subsequently transporting it outside this State

17 for use or consumption thereafter solely outside this State or

18 (ii) for the purpose of being processed, fabricated, or

19 manufactured into, attached to, or incorporated into other

20 tangible personal property to be transported outside this State

21 and thereafter used or consumed solely outside this State. The

22 Director of Revenue shall, pursuant to rules adopted in

23 accordance with the Illinois Administrative Procedure Act,

24 issue a permit to any taxpayer in good standing with the

25 Department who is eligible for the exemption under this

26 paragraph (38). The permit issued under this paragraph (38)

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1 shall authorize the holder, to the extent and in the manner

2 specified in the rules adopted under this Act, to purchase

3 tangible personal property from a retailer exempt from the

4 taxes imposed by this Act. Taxpayers shall maintain all

5 necessary books and records to substantiate the use and

6 consumption of all such tangible personal property outside of

7 the State of Illinois.

8 (39) Beginning January 1, 2008, tangible personal property

9 used in the construction or maintenance of a community water

10 supply, as defined under Section 3.145 of the Environmental

11 Protection Act, that is operated by a not-for-profit

12 corporation that holds a valid water supply permit issued under

13 Title IV of the Environmental Protection Act. This paragraph is

14 exempt from the provisions of Section 2-70.

15 (40) Beginning January 1, 2010, materials, parts,

16 equipment, components, and furnishings incorporated into or

17 upon an aircraft as part of the modification, refurbishment,

18 completion, replacement, repair, or maintenance of the

19 aircraft. This exemption includes consumable supplies used in

20 the modification, refurbishment, completion, replacement,

21 repair, and maintenance of aircraft, but excludes any

22 materials, parts, equipment, components, and consumable

23 supplies used in the modification, replacement, repair, and

24 maintenance of aircraft engines or power plants, whether such

25 engines or power plants are installed or uninstalled upon any

26 such aircraft. "Consumable supplies" include, but are not

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1 limited to, adhesive, tape, sandpaper, general purpose

2 lubricants, cleaning solution, latex gloves, and protective

3 films. This exemption applies only to the sale of qualifying

4 tangible personal property to persons who modify, refurbish,

5 complete, replace, or maintain an aircraft and who (i) hold an

6 Air Agency Certificate and are empowered to operate an approved

7 repair station by the Federal Aviation Administration, (ii)

8 have a Class IV Rating, and (iii) conduct operations in

9 accordance with Part 145 of the Federal Aviation Regulations.

10 The exemption does not include aircraft operated by a

11 commercial air carrier providing scheduled passenger air

12 service pursuant to authority issued under Part 121 or Part 129

13 of the Federal Aviation Regulations. The changes made to this

14 paragraph (40) by Public Act 98-534 are declarative of existing

15 law.

16 (41) Tangible personal property sold to a

17 public-facilities corporation, as described in Section

18 11-65-10 of the Illinois Municipal Code, for purposes of

19 constructing or furnishing a municipal convention hall, but

20 only if the legal title to the municipal convention hall is

21 transferred to the municipality without any further

22 consideration by or on behalf of the municipality at the time

23 of the completion of the municipal convention hall or upon the

24 retirement or redemption of any bonds or other debt instruments

25 issued by the public-facilities corporation in connection with

26 the development of the municipal convention hall. This

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1 exemption includes existing public-facilities corporations as

2 provided in Section 11-65-25 of the Illinois Municipal Code.

3 This paragraph is exempt from the provisions of Section 2-70.

4 (42) Beginning January 1, 2017, menstrual pads, tampons,

5 and menstrual cups.

6 (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;

7 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.

8 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.

9 7-29-15; 99-855, eff. 8-19-16.)

10 (35 ILCS 120/2-45) (from Ch. 120, par. 441-45)

11 Sec. 2-45. Manufacturing and assembly exemption. The

12 manufacturing and assembly machinery and equipment exemption

13 includes machinery and equipment that replaces machinery and

14 equipment in an existing manufacturing facility as well as

15 machinery and equipment that are for use in an expanded or new

16 manufacturing facility.

17 The machinery and equipment exemption also includes

18 machinery and equipment used in the general maintenance or

19 repair of exempt machinery and equipment or for in-house

20 manufacture of exempt machinery and equipment.Beginning on

21 July 1, 2017, the manufacturing and assembling machinery and

22 equipment exemption also includes graphic arts machinery and

23 equipment, as defined in paragraph (4) of Section 2-5. The

24 machinery and equipment exemption does not include machinery

25 and equipment used in (i) the generation of electricity for

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1 wholesale or retail sale; (ii) the generation or treatment of

2 natural or artificial gas for wholesale or retail sale that is

3 delivered to customers through pipes, pipelines, or mains; or

4 (iii) the treatment of water for wholesale or retail sale that

5 is delivered to customers through pipes, pipelines, or mains.

6 The provisions of this amendatory Act of the 98th General

7 Assembly are declaratory of existing law as to the meaning and

8 scope of this exemption. For the purposes of this exemption,

9 terms have the following meanings:

10 (1) "Manufacturing process" means the production of an

11 article of tangible personal property, whether the article

12 is a finished product or an article for use in the process

13 of manufacturing or assembling a different article of

14 tangible personal property, by a procedure commonly

15 regarded as manufacturing, processing, fabricating, or

16 refining that changes some existing material or materials

17 into a material with a different form, use, or name. In

18 relation to a recognized integrated business composed of a

19 series of operations that collectively constitute

20 manufacturing, or individually constitute manufacturing

21 operations, the manufacturing process commences with the

22 first operation or stage of production in the series and

23 does not end until the completion of the final product in

24 the last operation or stage of production in the series.

25 For purposes of this exemption, photoprocessing is a

26 manufacturing process of tangible personal property for

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1 wholesale or retail sale.

2 (2) "Assembling process" means the production of an

3 article of tangible personal property, whether the article

4 is a finished product or an article for use in the process

5 of manufacturing or assembling a different article of

6 tangible personal property, by the combination of existing

7 materials in a manner commonly regarded as assembling that

8 results in a material of a different form, use, or name.

9 (3) "Machinery" means major mechanical machines or

10 major components of those machines contributing to a

11 manufacturing or assembling process.

12 (4) "Equipment" includes an independent device or tool

13 separate from machinery but essential to an integrated

14 manufacturing or assembly process; including computers

15 used primarily in a manufacturer's computer assisted

16 design, computer assisted manufacturing (CAD/CAM) system;

17 any subunit or assembly comprising a component of any

18 machinery or auxiliary, adjunct, or attachment parts of

19 machinery, such as tools, dies, jigs, fixtures, patterns,

20 and molds; and any parts that require periodic replacement

21 in the course of normal operation; but does not include

22 hand tools. Equipment includes chemicals or chemicals

23 acting as catalysts but only if the chemicals or chemicals

24 acting as catalysts effect a direct and immediate change

25 upon a product being manufactured or assembled for

26 wholesale or retail sale or lease.

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1 (5) "Production related tangible personal property"

2 means all tangible personal property that is used or

3 consumed by the purchaser in a manufacturing facility in

4 which a manufacturing process takes place and includes,

5 without limitation, tangible personal property that is

6 purchased for incorporation into real estate within a

7 manufacturing facility and tangible personal property that

8 is used or consumed in activities such as research and

9 development, preproduction material handling, receiving,

10 quality control, inventory control, storage, staging, and

11 packaging for shipping and transportation purposes.

12 "Production related tangible personal property" does not

13 include (i) tangible personal property that is used, within

14 or without a manufacturing facility, in sales, purchasing,

15 accounting, fiscal management, marketing, personnel

16 recruitment or selection, or landscaping or (ii) tangible

17 personal property that is required to be titled or

18 registered with a department, agency, or unit of federal,

19 State, or local government.

20 The manufacturing and assembling machinery and equipment

21 exemption includes production related tangible personal

22 property that is purchased on or after July 1, 2007 and on or

23 before June 30, 2008. The exemption for production related

24 tangible personal property is subject to both of the following

25 limitations:

26 (1) The maximum amount of the exemption for any one

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1 taxpayer may not exceed 5% of the purchase price of

2 production related tangible personal property that is

3 purchased on or after July 1, 2007 and on or before June

4 30, 2008. A credit under Section 3-85 of this Act may not

5 be earned by the purchase of production related tangible

6 personal property for which an exemption is received under

7 this Section.

8 (2) The maximum aggregate amount of the exemptions for

9 production related tangible personal property awarded

10 under this Act and the Use Tax Act to all taxpayers may not

11 exceed $10,000,000. If the claims for the exemption exceed

12 $10,000,000, then the Department shall reduce the amount of

13 the exemption to each taxpayer on a pro rata basis.

14 The Department may adopt rules to implement and administer the

15 exemption for production related tangible personal property.

16 The manufacturing and assembling machinery and equipment

17 exemption includes the sale of materials to a purchaser who

18 produces exempted types of machinery, equipment, or tools and

19 who rents or leases that machinery, equipment, or tools to a

20 manufacturer of tangible personal property. This exemption

21 also includes the sale of materials to a purchaser who

22 manufactures those materials into an exempted type of

23 machinery, equipment, or tools that the purchaser uses himself

24 or herself in the manufacturing of tangible personal property.

25 The purchaser of the machinery and equipment who has an active

26 resale registration number shall furnish that number to the

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1 seller at the time of purchase. A purchaser of the machinery,

2 equipment, and tools without an active resale registration

3 number shall furnish to the seller a certificate of exemption

4 for each transaction stating facts establishing the exemption

5 for that transaction, and that certificate shall be available

6 to the Department for inspection or audit. Informal rulings,

7 opinions, or letters issued by the Department in response to an

8 inquiry or request for an opinion from any person regarding the

9 coverage and applicability of this exemption to specific

10 devices shall be published, maintained as a public record, and

11 made available for public inspection and copying. If the

12 informal ruling, opinion, or letter contains trade secrets or

13 other confidential information, where possible, the Department

14 shall delete that information before publication. Whenever

15 informal rulings, opinions, or letters contain a policy of

16 general applicability, the Department shall formulate and

17 adopt that policy as a rule in accordance with the Illinois

18 Administrative Procedure Act.

19 The manufacturing and assembling machinery and equipment

20 exemption is exempt from the provisions of Section 2-70.

21 (Source: P.A. 98-583, eff. 1-1-14.)

22 ARTICLE 99. EFFECTIVE DATE

23 Section 99-999. Effective date. This Act takes effect upon

24 becoming law, except that Articles 1, 15, 17, and 25 take

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1 effect on January 1, 2018.".