100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2224

 

Introduced 7/21/2017, by Sen. Kyle McCarter

 

SYNOPSIS AS INTRODUCED:
 
See Index

    If and only if Senate Bill 9 of the 100th General Assembly becomes law in the form in which it was amended by House Amendment No. 3, repeals the State Tax Lien Registration Act and the Revised Uniform Unclaimed Property Act created by that bill. Repeals provisions of Senate Bill 9 of the 100th General Assembly that would have repealed the Uniform Disposition of Unclaimed Property Act on January 1, 2018. Changes various Acts by restoring language deleted by Senate Bill 9 of the 100th General Assembly and deleting language added by Senate Bill 9 of the 100th General Assembly. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2224LRB100 13364 AXK 27964 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    (10000SB0009ham003, Sections 1-1 through 1-40 rep.)
5    Section 1-1. If and only if Senate Bill 9 of the 100th
6General Assembly becomes law in the form in which it was
7amended by House Amendment No. 3, then the State Tax Lien
8Registration Act (Sections 1-1 through 1-40 of Article 1 of
9Senate Bill 9 of the 100th General Assembly) is repealed.
 
10    (10000SB0009ham003, Sections 15-101 through 15-1504 rep.)
11    Section 1-2. If and only if Senate Bill 9 of the 100th
12General Assembly becomes law in the form in which it was
13amended by House Amendment No. 3, then the Revised Uniform
14Unclaimed Property Act (Sections 15-101 through 15-1504 of
15Article 15 of Senate Bill 9 of the 100th General Assembly) is
16repealed.
 
17    (10000SB0009ham003, Section 17-5 rep.)
18    Section 1-3. If and only if Senate Bill 9 of the 100th
19General Assembly becomes law in the form in which it was
20amended by House Amendment No. 3, then Section 17-5 of Senate
21Bill 9 of the 100th General Assembly is repealed.
 

 

 

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1    (35 ILCS 5/225 rep.)
2    Section 1-4. If and only if Senate Bill 9 of the 100th
3General Assembly becomes law in the form in which it was
4amended by House Amendment No. 3, then the Illinois Income Tax
5Act is amended by repealing Section 225.
 
6    Section 17-10. If and only if Senate Bill 9 of the 100th
7General Assembly becomes law in the form in which it was
8amended by House Amendment No. 3, then the Illinois
9Administrative Procedure Act is amended by changing Section 1-5
10as follows:
 
11    (5 ILCS 100/1-5)  (from Ch. 127, par. 1001-5)
12    Sec. 1-5. Applicability.
13    (a) This Act applies to every agency as defined in this
14Act. Beginning January 1, 1978, in case of conflict between the
15provisions of this Act and the Act creating or conferring power
16on an agency, this Act shall control. If, however, an agency
17(or its predecessor in the case of an agency that has been
18consolidated or reorganized) has existing procedures on July 1,
191977, specifically for contested cases or licensing, those
20existing provisions control, except that this exception
21respecting contested cases and licensing does not apply if the
22Act creating or conferring power on the agency adopts by
23express reference the provisions of this Act. Where the Act
24creating or conferring power on an agency establishes

 

 

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1administrative procedures not covered by this Act, those
2procedures shall remain in effect.
3    (b) The provisions of this Act do not apply to (i)
4preliminary hearings, investigations, or practices where no
5final determinations affecting State funding are made by the
6State Board of Education, (ii) legal opinions issued under
7Section 2-3.7 of the School Code, (iii) as to State colleges
8and universities, their disciplinary and grievance
9proceedings, academic irregularity and capricious grading
10proceedings, and admission standards and procedures, and (iv)
11the class specifications for positions and individual position
12descriptions prepared and maintained under the Personnel Code.
13Those class specifications shall, however, be made reasonably
14available to the public for inspection and copying. The
15provisions of this Act do not apply to hearings under Section
1620 of the Uniform Disposition of Unclaimed Property Act.
17    (c) Section 5-35 of this Act relating to procedures for
18rulemaking does not apply to the following:
19        (1) Rules adopted by the Pollution Control Board that,
20    in accordance with Section 7.2 of the Environmental
21    Protection Act, are identical in substance to federal
22    regulations or amendments to those regulations
23    implementing the following: Sections 3001, 3002, 3003,
24    3004, 3005, and 9003 of the Solid Waste Disposal Act;
25    Section 105 of the Comprehensive Environmental Response,
26    Compensation, and Liability Act of 1980; Sections 307(b),

 

 

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1    307(c), 307(d), 402(b)(8), and 402(b)(9) of the Federal
2    Water Pollution Control Act; Sections 1412(b), 1414(c),
3    1417(a), 1421, and 1445(a) of the Safe Drinking Water Act;
4    and Section 109 of the Clean Air Act.
5        (2) Rules adopted by the Pollution Control Board that
6    establish or amend standards for the emission of
7    hydrocarbons and carbon monoxide from gasoline powered
8    motor vehicles subject to inspection under the Vehicle
9    Emissions Inspection Law of 2005 or its predecessor laws.
10        (3) Procedural rules adopted by the Pollution Control
11    Board governing requests for exceptions under Section 14.2
12    of the Environmental Protection Act.
13        (4) The Pollution Control Board's grant, pursuant to an
14    adjudicatory determination, of an adjusted standard for
15    persons who can justify an adjustment consistent with
16    subsection (a) of Section 27 of the Environmental
17    Protection Act.
18        (4.5) The Pollution Control Board's adoption of
19    time-limited water quality standards under Section 38.5 of
20    the Environmental Protection Act.
21        (5) Rules adopted by the Pollution Control Board that
22    are identical in substance to the regulations adopted by
23    the Office of the State Fire Marshal under clause (ii) of
24    paragraph (b) of subsection (3) of Section 2 of the
25    Gasoline Storage Act.
26    (d) Pay rates established under Section 8a of the Personnel

 

 

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1Code shall be amended or repealed pursuant to the process set
2forth in Section 5-50 within 30 days after it becomes necessary
3to do so due to a conflict between the rates and the terms of a
4collective bargaining agreement covering the compensation of
5an employee subject to that Code.
6    (e) Section 10-45 of this Act shall not apply to any
7hearing, proceeding, or investigation conducted under Section
813-515 of the Public Utilities Act.
9    (f) Article 10 of this Act does not apply to any hearing,
10proceeding, or investigation conducted by the State Council for
11the State of Illinois created under Section 3-3-11.05 of the
12Unified Code of Corrections or by the Interstate Commission for
13Adult Offender Supervision created under the Interstate
14Compact for Adult Offender Supervision or by the Interstate
15Commission for Juveniles created under the Interstate Compact
16for Juveniles.
17    (g) This Act is subject to the provisions of Article XXI of
18the Public Utilities Act. To the extent that any provision of
19this Act conflicts with the provisions of that Article XXI, the
20provisions of that Article XXI control.
21(Source: P.A. 98-463, eff. 8-16-13; 99-937, eff. 2-24-17;
2210000SB0009ham003.)
 
23    Section 17-15. If and only if Senate Bill 9 of the 100th
24General Assembly becomes law in the form in which it was
25amended by House Amendment No. 3, then the Freedom of

 

 

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1Information Act is amended by changing Section 7.5 as follows:
 
2    (5 ILCS 140/7.5)
3    Sec. 7.5. Statutory exemptions. To the extent provided for
4by the statutes referenced below, the following shall be exempt
5from inspection and copying:
6        (a) All information determined to be confidential
7    under Section 4002 of the Technology Advancement and
8    Development Act.
9        (b) Library circulation and order records identifying
10    library users with specific materials under the Library
11    Records Confidentiality Act.
12        (c) Applications, related documents, and medical
13    records received by the Experimental Organ Transplantation
14    Procedures Board and any and all documents or other records
15    prepared by the Experimental Organ Transplantation
16    Procedures Board or its staff relating to applications it
17    has received.
18        (d) Information and records held by the Department of
19    Public Health and its authorized representatives relating
20    to known or suspected cases of sexually transmissible
21    disease or any information the disclosure of which is
22    restricted under the Illinois Sexually Transmissible
23    Disease Control Act.
24        (e) Information the disclosure of which is exempted
25    under Section 30 of the Radon Industry Licensing Act.

 

 

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1        (f) Firm performance evaluations under Section 55 of
2    the Architectural, Engineering, and Land Surveying
3    Qualifications Based Selection Act.
4        (g) Information the disclosure of which is restricted
5    and exempted under Section 50 of the Illinois Prepaid
6    Tuition Act.
7        (h) Information the disclosure of which is exempted
8    under the State Officials and Employees Ethics Act, and
9    records of any lawfully created State or local inspector
10    general's office that would be exempt if created or
11    obtained by an Executive Inspector General's office under
12    that Act.
13        (i) Information contained in a local emergency energy
14    plan submitted to a municipality in accordance with a local
15    emergency energy plan ordinance that is adopted under
16    Section 11-21.5-5 of the Illinois Municipal Code.
17        (j) Information and data concerning the distribution
18    of surcharge moneys collected and remitted by wireless
19    carriers under the Wireless Emergency Telephone Safety
20    Act.
21        (k) Law enforcement officer identification information
22    or driver identification information compiled by a law
23    enforcement agency or the Department of Transportation
24    under Section 11-212 of the Illinois Vehicle Code.
25        (l) Records and information provided to a residential
26    health care facility resident sexual assault and death

 

 

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1    review team or the Executive Council under the Abuse
2    Prevention Review Team Act.
3        (m) Information provided to the predatory lending
4    database created pursuant to Article 3 of the Residential
5    Real Property Disclosure Act, except to the extent
6    authorized under that Article.
7        (n) Defense budgets and petitions for certification of
8    compensation and expenses for court appointed trial
9    counsel as provided under Sections 10 and 15 of the Capital
10    Crimes Litigation Act. This subsection (n) shall apply
11    until the conclusion of the trial of the case, even if the
12    prosecution chooses not to pursue the death penalty prior
13    to trial or sentencing.
14        (o) Information that is prohibited from being
15    disclosed under Section 4 of the Illinois Health and
16    Hazardous Substances Registry Act.
17        (p) Security portions of system safety program plans,
18    investigation reports, surveys, schedules, lists, data, or
19    information compiled, collected, or prepared by or for the
20    Regional Transportation Authority under Section 2.11 of
21    the Regional Transportation Authority Act or the St. Clair
22    County Transit District under the Bi-State Transit Safety
23    Act.
24        (q) Information prohibited from being disclosed by the
25    Personnel Records Review Act.
26        (r) Information prohibited from being disclosed by the

 

 

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1    Illinois School Student Records Act.
2        (s) Information the disclosure of which is restricted
3    under Section 5-108 of the Public Utilities Act.
4        (t) All identified or deidentified health information
5    in the form of health data or medical records contained in,
6    stored in, submitted to, transferred by, or released from
7    the Illinois Health Information Exchange, and identified
8    or deidentified health information in the form of health
9    data and medical records of the Illinois Health Information
10    Exchange in the possession of the Illinois Health
11    Information Exchange Authority due to its administration
12    of the Illinois Health Information Exchange. The terms
13    "identified" and "deidentified" shall be given the same
14    meaning as in the Health Insurance Portability and
15    Accountability Act of 1996, Public Law 104-191, or any
16    subsequent amendments thereto, and any regulations
17    promulgated thereunder.
18        (u) Records and information provided to an independent
19    team of experts under Brian's Law.
20        (v) Names and information of people who have applied
21    for or received Firearm Owner's Identification Cards under
22    the Firearm Owners Identification Card Act or applied for
23    or received a concealed carry license under the Firearm
24    Concealed Carry Act, unless otherwise authorized by the
25    Firearm Concealed Carry Act; and databases under the
26    Firearm Concealed Carry Act, records of the Concealed Carry

 

 

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1    Licensing Review Board under the Firearm Concealed Carry
2    Act, and law enforcement agency objections under the
3    Firearm Concealed Carry Act.
4        (w) Personally identifiable information which is
5    exempted from disclosure under subsection (g) of Section
6    19.1 of the Toll Highway Act.
7        (x) Information which is exempted from disclosure
8    under Section 5-1014.3 of the Counties Code or Section
9    8-11-21 of the Illinois Municipal Code.
10        (y) Confidential information under the Adult
11    Protective Services Act and its predecessor enabling
12    statute, the Elder Abuse and Neglect Act, including
13    information about the identity and administrative finding
14    against any caregiver of a verified and substantiated
15    decision of abuse, neglect, or financial exploitation of an
16    eligible adult maintained in the Registry established
17    under Section 7.5 of the Adult Protective Services Act.
18        (z) Records and information provided to a fatality
19    review team or the Illinois Fatality Review Team Advisory
20    Council under Section 15 of the Adult Protective Services
21    Act.
22        (aa) Information which is exempted from disclosure
23    under Section 2.37 of the Wildlife Code.
24        (bb) Information which is or was prohibited from
25    disclosure by the Juvenile Court Act of 1987.
26        (cc) Recordings made under the Law Enforcement

 

 

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1    Officer-Worn Body Camera Act, except to the extent
2    authorized under that Act.
3        (dd) Information that is prohibited from being
4    disclosed under Section 45 of the Condominium and Common
5    Interest Community Ombudsperson Act.
6        (ee) Information that is exempted from disclosure
7    under Section 30.1 of the Pharmacy Practice Act.
8        (ff) Information that is exempted from disclosure
9    under the Revised Uniform Unclaimed Property Act.
10(Source: P.A. 98-49, eff. 7-1-13; 98-63, eff. 7-9-13; 98-756,
11eff. 7-16-14; 98-1039, eff. 8-25-14; 98-1045, eff. 8-25-14;
1299-78, eff. 7-20-15; 99-298, eff. 8-6-15; 99-352, eff. 1-1-16;
1399-642, eff. 7-28-16; 99-776, eff. 8-12-16; 99-863, eff.
148-19-16; revised 9-1-16; 10000SB0009ham003.)
 
15    Section 17-20. If and only if Senate Bill 9 of the 100th
16General Assembly becomes law in the form in which it was
17amended by House Amendment No. 3, then the State Comptroller
18Act is amended by changing Section 9 as follows:
 
19    (15 ILCS 405/9)  (from Ch. 15, par. 209)
20    Sec. 9. Warrants; vouchers; preaudit.
21    (a) No payment may be made from public funds held by the
22State Treasurer in or outside of the State treasury, except by
23warrant drawn by the Comptroller and presented by him to the
24treasurer to be countersigned except for payments made pursuant

 

 

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1to Section 9.03 or 9.05 of this Act.
2    (b) No warrant for the payment of money by the State
3Treasurer may be drawn by the Comptroller without the
4presentation of itemized vouchers indicating that the
5obligation or expenditure is pursuant to law and authorized,
6and authorizing the Comptroller to order payment.
7    (b-1) An itemized voucher for under $5 that is presented to
8the Comptroller for payment shall not be paid except through
9electronic funds transfer. This subsection (b-1) does not apply
10to (i) vouchers presented by the legislative branch of State
11government, (ii) vouchers presented by the State Treasurer's
12Office for the payment of unclaimed property claims authorized
13under the Revised Uniform Disposition of Unclaimed Property
14Act, or (iii) vouchers presented by the Department of Revenue
15for the payment of refunds of taxes administered by the
16Department.
17    (c) The Comptroller shall examine each voucher required by
18law to be filed with him and determine whether unencumbered
19appropriations or unencumbered obligational or expenditure
20authority other than by appropriation are legally available to
21incur the obligation or to make the expenditure of public
22funds. If he determines that unencumbered appropriations or
23other obligational or expenditure authority are not available
24from which to incur the obligation or make the expenditure, the
25Comptroller shall refuse to draw a warrant.
26    (d) The Comptroller shall examine each voucher and all

 

 

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1other documentation required to accompany the voucher, and
2shall ascertain whether the voucher and documentation meet all
3requirements established by or pursuant to law. If the
4Comptroller determines that the voucher and documentation do
5not meet applicable requirements established by or pursuant to
6law, he shall refuse to draw a warrant. As used in this
7Section, "requirements established by or pursuant to law"
8includes statutory enactments and requirements established by
9rules and regulations adopted pursuant to this Act.
10    (e) Prior to drawing a warrant, the Comptroller may review
11the voucher, any documentation accompanying the voucher, and
12any other documentation related to the transaction on file with
13him, and determine if the transaction is in accordance with the
14law. If based on his review the Comptroller has reason to
15believe that such transaction is not in accordance with the
16law, he shall refuse to draw a warrant.
17    (f) Where the Comptroller refuses to draw a warrant
18pursuant to this Section, he shall maintain separate records of
19such transactions.
20    (g) State agencies shall have the principal responsibility
21for the preaudit of their encumbrances, expenditures, and other
22transactions as otherwise required by law.
23(Source: P.A. 97-969, eff. 8-16-12; 97-1142, eff. 12-28-12;
2498-421, eff. 8-16-13; 10000SB0009ham003.)
 
25    Section 17-25. If and only if Senate Bill 9 of the 100th

 

 

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1General Assembly becomes law in the form in which it was
2amended by House Amendment No. 3, then the State Treasurer Act
3is amended by changing Sections 0.02, 0.03, 0.04, 0.05, and
40.06 as follows:
 
5    (15 ILCS 505/0.02)
6    Sec. 0.02. Transfer of powers. The rights, powers, duties,
7and functions vested in the Department of Financial
8Institutions to administer the Uniform Disposition of
9Unclaimed Property Act (superseded by the Revised Uniform
10Unclaimed Property Act) are transferred to the State Treasurer
11on July 1, 1999; provided, however, that the rights, powers,
12duties, and functions involving the examination of the records
13of any person that the State Treasurer has reason to believe
14has failed to report properly under this Act shall be
15transferred to the Office of Banks and Real Estate if the
16person is regulated by the Office of Banks and Real Estate
17under the Illinois Banking Act, the Corporate Fiduciary Act,
18the Foreign Banking Office Act, the Illinois Savings and Loan
19Act of 1985, or the Savings Bank Act and shall be retained by
20the Department of Financial Institutions if the person is doing
21business in the State under the supervision of the Department
22of Financial Institutions, the National Credit Union
23Administration, the Office of Thrift Supervision, or the
24Comptroller of the Currency.
25(Source: P.A. 91-16, eff. 6-4-99; 10000SB0009ham003.)
 

 

 

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1    (15 ILCS 505/0.03)
2    Sec. 0.03. Transfer of personnel.
3    (a) Except as provided in subsection (b), personnel
4employed by the Department of Financial Institutions on June
530, 1999 to perform duties pertaining to the administration of
6the Uniform Disposition of Unclaimed Property Act (superseded
7by the Revised Uniform Unclaimed Property Act) are transferred
8to the State Treasurer on July 1, 1999.
9    (b) In the case of a person employed by the Department of
10Financial Institutions to perform both duties pertaining to the
11administration of the Uniform Disposition of Unclaimed
12Property Act (superseded by the Revised Uniform Unclaimed
13Property Act) and duties pertaining to a function retained by
14the Department of Financial Institutions, the State Treasurer,
15in consultation with the Director of Financial Institutions,
16shall determine whether to transfer the employee to the Office
17of the State Treasurer; until this determination has been made,
18the transfer shall not take effect.
19    (c) The rights of State employees, the State, and its
20agencies under the Personnel Code and applicable collective
21bargaining agreements and retirement plans are not affected by
22this amendatory Act of 1999, except that all positions
23transferred to the State Treasurer shall be subject to the
24State Treasurer Employment Code effective July 1, 2000.
25    All transferred employees who are members of collective

 

 

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1bargaining units shall retain their seniority, continuous
2service, salary, and accrued benefits. During the pendency of
3the existing collective bargaining agreement, the rights
4provided for under that agreement and memoranda and supplements
5to that agreement, including but not limited to, the rights of
6employees performing duties pertaining to the administration
7of the Uniform Disposition of Unclaimed Property Act
8(superseded by the Revised Uniform Unclaimed Property Act) to
9positions in other State agencies and the right of employees in
10other State agencies covered by the agreement to positions
11performing duties pertaining to the administration of the
12Uniform Disposition of Unclaimed Property Act (superseded by
13the Revised Uniform Unclaimed Property Act), shall not be
14abridged.
15    The State Treasurer shall continue to honor during their
16pendency all bargaining agreements in effect at the time of the
17transfer and to recognize all collective bargaining
18representatives for the employees who perform or will perform
19functions transferred by this amendatory Act of 1999. For all
20purposes with respect to the management of the existing
21agreement and the negotiation and management of any successor
22agreements, the State Treasurer shall be deemed to be the
23employer of employees who perform or will perform functions
24transferred to the Office of the State Treasurer by this
25amendatory Act of 1999; provided that the Illinois Department
26of Central Management Services shall be a party to any

 

 

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1grievance or arbitration proceeding held pursuant to the
2provisions of the collective bargaining agreement which
3involves the movement of employees from the Office of the State
4Treasurer to an agency under the jurisdiction of the Governor
5covered by the agreement.
6(Source: P.A. 91-16, eff. 6-4-99; 10000SB0009ham003.)
 
7    (15 ILCS 505/0.04)
8    Sec. 0.04. Transfer of property.
9    (a) Except as provided in subsection (b), all real and
10personal property, including but not limited to all books,
11records, and documents, and all unexpended appropriations and
12pending business pertaining to the administration of the
13Uniform Disposition of Unclaimed Property Act (superseded by
14the Revised Uniform Unclaimed Property Act) shall be
15transferred and delivered to the State Treasurer effective July
161, 1999.
17    (b) In the case of books, records, or documents that
18pertain both to the administration of the Uniform Disposition
19of Unclaimed Property Act (superseded by the Revised Uniform
20Unclaimed Property Act) and to a function retained by the
21Department of Financial Institutions, the State Treasurer, in
22consultation with the Director of Financial Institutions,
23shall determine whether the books, records, or documents shall
24be transferred, copied, or left with the Department of
25Financial Institutions; until this determination has been

 

 

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1made, the transfer shall not take effect.
2    In the case of property or an unexpended appropriation that
3pertains both to the administration of the Uniform Disposition
4of Unclaimed Property Act (superseded by the Revised Uniform
5Unclaimed Property Act) and to a function retained by the
6Department of Financial Institutions, the State Treasurer, in
7consultation with the Director of Financial Institutions,
8shall determine whether the property or unexpended
9appropriation shall be transferred, divided, or left with the
10Department of Financial Institutions; until this determination
11has been made (and, in the case of an unexpended appropriation,
12notice of the determination has been filed with the State
13Comptroller), the transfer shall not take effect.
14(Source: P.A. 91-16, eff. 6-4-99; 10000SB0009ham003.)
 
15    (15 ILCS 505/0.05)
16    Sec. 0.05. Rules and standards.
17    (a) The rules and standards of the Department of Financial
18Institutions that are in effect on June 30, 1999 and pertain to
19the administration of the Uniform Disposition of Unclaimed
20Property Act (superseded by the Revised Uniform Unclaimed
21Property Act) shall become the rules and standards of the State
22Treasurer on July 1, 1999 and shall continue in effect until
23amended or repealed by the State Treasurer.
24    (b) Any rules pertaining to the administration of the
25Uniform Disposition of Unclaimed Property Act (superseded by

 

 

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1the Revised Uniform Unclaimed Property Act) that have been
2proposed by the Department of Financial Institutions but have
3not taken effect or been finally adopted by June 30, 1999 shall
4become proposed rules of the State Treasurer on July 1, 1999,
5and any rulemaking procedures that have already been completed
6by the Department of Financial Institutions need not be
7repeated.
8    (c) As soon as practical after July 1, 1999, the State
9Treasurer shall revise and clarify the rules transferred to it
10under this amendatory Act of 1999 to reflect the reorganization
11of rights, powers, duties, and functions effected by this
12amendatory Act of 1999 using the procedures for recodification
13of rules available under the Illinois Administrative Procedure
14Act, except that existing title, part, and section numbering
15for the affected rules may be retained.
16    (d) As soon as practical after July 1, 1999, the Office of
17Banks and Real Estate and the Office of the State Treasurer
18shall jointly promulgate rules to reflect the transfer of
19examination functions to the Office of Banks and Real Estate
20under this amendatory Act of 1999 using the procedures
21available under the Illinois Administrative Procedure Act.
22    (e) As soon as practical after July 1, 1999, the Department
23of Financial Institutions and the Office of the State Treasurer
24shall jointly promulgate rules to reflect the retention of
25examination functions by the Department of Financial
26Institutions under this amendatory Act of 1999 using the

 

 

SB2224- 20 -LRB100 13364 AXK 27964 b

1procedures available under the Illinois Administrative
2Procedure Act.
3(Source: P.A. 91-16, eff. 6-4-99; 10000SB0009ham003.)
 
4    (15 ILCS 505/0.06)
5    Sec. 0.06. Savings provisions.
6    (a) The rights, powers, duties, and functions transferred
7to the State Treasurer or the Commissioner of Banks and Real
8Estate by this amendatory Act of 1999 shall be vested in and
9exercised by the State Treasurer or the Commissioner of Banks
10and Real Estate subject to the provisions of this amendatory
11Act of 1999. An act done by the State Treasurer or the
12Commissioner of Banks and Real Estate or an officer, employee,
13or agent of the State Treasurer or the Commissioner of Banks
14and Real Estate in the exercise of the transferred rights,
15powers, duties, or functions shall have the same legal effect
16as if done by the Department of Financial Institutions or an
17officer, employee, or agent of the Department of Financial
18Institutions prior to the effective date of this amendatory Act
19of 1999.
20    (b) The transfer of rights, powers, duties, and functions
21to the State Treasurer or the Commissioner of Banks and Real
22Estate under this amendatory Act of 1999 does not invalidate
23any previous action taken by or in respect to the Department of
24Financial Institutions or its officers, employees, or agents.
25References to the Department of Financial Institutions or its

 

 

SB2224- 21 -LRB100 13364 AXK 27964 b

1officers, employees or agents in any document, contract,
2agreement, or law shall, in appropriate contexts, be deemed to
3refer to the State Treasurer or the Commissioner of Banks and
4Real Estate or the officers, employees, or agents of the State
5Treasurer or the Commissioner of Banks and Real Estate.
6    (c) The transfer of rights, powers, duties, and functions
7from the Department of Financial Institutions to the State
8Treasurer or the Commissioner of Banks and Real Estate under
9this amendatory Act of 1999 does not affect the rights,
10obligations, or duties of any other person or entity, including
11any civil or criminal penalties applicable thereto, arising out
12of those transferred rights, powers, duties, and functions.
13    (d) With respect to matters that pertain to a right, power,
14duty, or function transferred to the State Treasurer under this
15amendatory Act of 1999:
16        (1) Beginning July 1, 1999, any report or notice that
17    was previously required to be made or given by any person
18    to the Department of Financial Institutions or any of its
19    officers, employees, or agents under the Uniform
20    Disposition of Unclaimed Property Act (superseded by the
21    Revised Uniform Unclaimed Property Act) or rules
22    promulgated pursuant to that Act shall be made or given in
23    the same manner to the State Treasurer or his or her
24    appropriate officer, employee, or agent.
25        (2) Beginning July 1, 1999, any document that was
26    previously required to be furnished or served by any person

 

 

SB2224- 22 -LRB100 13364 AXK 27964 b

1    to or upon the Department of Financial Institutions or any
2    of its officers, employees, or agents under the Uniform
3    Disposition of Unclaimed Property Act (superseded by the
4    Revised Uniform Unclaimed Property Act) or rules
5    promulgated pursuant to that Act shall be furnished or
6    served in the same manner to or upon the State Treasurer or
7    his or her appropriate officer, employee, or agent.
8    (e) This amendatory Act of 1999 does not affect any act
9done, ratified, or canceled, any right occurring or
10established, or any action or proceeding had or commenced in an
11administrative, civil, or criminal cause before July 1, 1999.
12Any such action or proceeding that pertains to the Uniform
13Disposition of Unclaimed Property Act (superseded by the
14Revised Uniform Unclaimed Property Act) or rules promulgated
15pursuant to that Act and that is pending on that date may be
16prosecuted, defended, or continued by the State Treasurer.
17(Source: P.A. 91-16, eff. 6-4-99; 10000SB0009ham003.)
 
18    Section 17-30. If and only if Senate Bill 9 of the 100th
19General Assembly becomes law in the form in which it was
20amended by House Amendment No. 3, then the Financial
21Institutions Code is amended by changing Sections 7 and 18.1 as
22follows:
 
23    (20 ILCS 1205/7)  (from Ch. 17, par. 108)
24    Sec. 7. The provisions of "The Illinois Administrative

 

 

SB2224- 23 -LRB100 13364 AXK 27964 b

1Procedure Act", as now or hereafter amended, are hereby
2expressly adopted and incorporated herein as though a part of
3this Act, and shall apply to all administrative rules and
4procedures of the Director and the Department of Financial
5Institutions under this Act, except that the provisions of the
6Administrative Procedure Act regarding contested cases shall
7not apply to actions of the Director under Section 15.1 of "An
8Act in relation to the definition, licensing and regulation of
9community currency exchanges and ambulatory currency
10exchanges, and the operators and employees thereof, and to make
11an appropriation therefor, and to provide penalties and
12remedies for the violation thereof", approved June 30, 1943, as
13amended, or Sections 8 and 61 of "The Illinois Credit Union
14Act", or to hearings under Section 20 of the "Uniform
15Disposition of Unclaimed Property Act".
16(Source: P.A. 81-329; 10000SB0009ham003.)
 
17    (20 ILCS 1205/18.1)
18    Sec. 18.1. Transfer of administration of Uniform
19Disposition of Unclaimed Property Act to State Treasurer. The
20rights, powers, duties, and functions vested in the Department
21of Financial Institutions to administer the Uniform
22Disposition of Unclaimed Property Act (superseded by the
23Revised Uniform Unclaimed Property Act) are transferred to the
24State Treasurer on July 1, 1999 in accordance with Sections
250.02 through 0.06 of the State Treasurer Act; provided,

 

 

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1however, that the rights, powers, duties, and functions
2involving the examination of the records of any person that the
3State Treasurer has reason to believe has failed to report
4properly under this Act shall be transferred to the Office of
5Banks and Real Estate if the person is regulated by the Office
6of Banks and Real Estate under the Illinois Banking Act, the
7Corporate Fiduciary Act, the Foreign Banking Office Act, the
8Illinois Savings and Loan Act of 1985, or the Savings Bank Act
9and shall be retained by the Department of Financial
10Institutions if the person is doing business in the State under
11the supervision of the Department of Financial Institutions,
12the National Credit Union Administration, the Office of Thrift
13Supervision, or the Comptroller of the Currency.
14(Source: P.A. 91-16, eff. 6-4-99; 10000SB0009ham003.)
 
15    Section 17-35. If and only if Senate Bill 9 of the 100th
16General Assembly becomes law in the form in which it was
17amended by House Amendment No. 3, then the State Finance Act is
18amended by changing Sections 6b-1 and 8.12 as follows:
 
19    (30 ILCS 105/6b-1)  (from Ch. 127, par. 142b1)
20    Sec. 6b-1. There shall be paid into the State Pensions Fund
21the funds and proceeds from the sale of abandoned property as
22provided in Section 18 of the Revised Uniform "Uniform
23Disposition of Unclaimed Property Act", enacted by the
24Seventy-second General Assembly.

 

 

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1(Source: Laws 1961, p. 3423; 10000SB0009ham003.)
 
2    (30 ILCS 105/8.12)   (from Ch. 127, par. 144.12)
3    Sec. 8.12. State Pensions Fund.
4    (a) The moneys in the State Pensions Fund shall be used
5exclusively for the administration of the Revised Uniform
6Disposition of Unclaimed Property Act and for the expenses
7incurred by the Auditor General for administering the
8provisions of Section 2-8.1 of the Illinois State Auditing Act
9and for operational expenses of the Office of the State
10Treasurer and for the funding of the unfunded liabilities of
11the designated retirement systems. Beginning in State fiscal
12year 2018, payments to the designated retirement systems under
13this Section shall be in addition to, and not in lieu of, any
14State contributions required under the Illinois Pension Code.
15    "Designated retirement systems" means:
16        (1) the State Employees' Retirement System of
17    Illinois;
18        (2) the Teachers' Retirement System of the State of
19    Illinois;
20        (3) the State Universities Retirement System;
21        (4) the Judges Retirement System of Illinois; and
22        (5) the General Assembly Retirement System.
23    (b) Each year the General Assembly may make appropriations
24from the State Pensions Fund for the administration of the
25Revised Uniform Disposition of Unclaimed Property Act.

 

 

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1    Each month, the Commissioner of the Office of Banks and
2Real Estate shall certify to the State Treasurer the actual
3expenditures that the Office of Banks and Real Estate incurred
4conducting unclaimed property examinations under the Uniform
5Disposition of Unclaimed Property Act during the immediately
6preceding month. Within a reasonable time following the
7acceptance of such certification by the State Treasurer, the
8State Treasurer shall pay from its appropriation from the State
9Pensions Fund to the Bank and Trust Company Fund, the Savings
10Bank Regulatory Fund, and the Residential Finance Regulatory
11Fund an amount equal to the expenditures incurred by each Fund
12for that month.
13    Each month, the Director of Financial Institutions shall
14certify to the State Treasurer the actual expenditures that the
15Department of Financial Institutions incurred conducting
16unclaimed property examinations under the Uniform Disposition
17of Unclaimed Property Act during the immediately preceding
18month. Within a reasonable time following the acceptance of
19such certification by the State Treasurer, the State Treasurer
20shall pay from its appropriation from the State Pensions Fund
21to the Financial Institution Fund and the Credit Union Fund an
22amount equal to the expenditures incurred by each Fund for that
23month.
24    (c) As soon as possible after the effective date of this
25amendatory Act of the 93rd General Assembly, the General
26Assembly shall appropriate from the State Pensions Fund (1) to

 

 

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1the State Universities Retirement System the amount certified
2under Section 15-165 during the prior year, (2) to the Judges
3Retirement System of Illinois the amount certified under
4Section 18-140 during the prior year, and (3) to the General
5Assembly Retirement System the amount certified under Section
62-134 during the prior year as part of the required State
7contributions to each of those designated retirement systems;
8except that amounts appropriated under this subsection (c) in
9State fiscal year 2005 shall not reduce the amount in the State
10Pensions Fund below $5,000,000. If the amount in the State
11Pensions Fund does not exceed the sum of the amounts certified
12in Sections 15-165, 18-140, and 2-134 by at least $5,000,000,
13the amount paid to each designated retirement system under this
14subsection shall be reduced in proportion to the amount
15certified by each of those designated retirement systems.
16    (c-5) For fiscal years 2006 through 2017, the General
17Assembly shall appropriate from the State Pensions Fund to the
18State Universities Retirement System the amount estimated to be
19available during the fiscal year in the State Pensions Fund;
20provided, however, that the amounts appropriated under this
21subsection (c-5) shall not reduce the amount in the State
22Pensions Fund below $5,000,000.
23    (c-6) For fiscal year 2018 and each fiscal year thereafter,
24as soon as may be practical after any money is deposited into
25the State Pensions Fund from the Unclaimed Property Trust Fund,
26the State Treasurer shall apportion the deposited amount among

 

 

SB2224- 28 -LRB100 13364 AXK 27964 b

1the designated retirement systems as defined in subsection (a)
2to reduce their actuarial reserve deficiencies. The State
3Comptroller and State Treasurer shall pay the apportioned
4amounts to the designated retirement systems to fund the
5unfunded liabilities of the designated retirement systems. The
6amount apportioned to each designated retirement system shall
7constitute a portion of the amount estimated to be available
8for appropriation from the State Pensions Fund that is the same
9as that retirement system's portion of the total actual reserve
10deficiency of the systems, as determined annually by the
11Governor's Office of Management and Budget at the request of
12the State Treasurer. The amounts apportioned under this
13subsection shall not reduce the amount in the State Pensions
14Fund below $5,000,000.
15    (d) The Governor's Office of Management and Budget shall
16determine the individual and total reserve deficiencies of the
17designated retirement systems. For this purpose, the
18Governor's Office of Management and Budget shall utilize the
19latest available audit and actuarial reports of each of the
20retirement systems and the relevant reports and statistics of
21the Public Employee Pension Fund Division of the Department of
22Insurance.
23    (d-1) As soon as practicable after the effective date of
24this amendatory Act of the 93rd General Assembly, the
25Comptroller shall direct and the Treasurer shall transfer from
26the State Pensions Fund to the General Revenue Fund, as funds

 

 

SB2224- 29 -LRB100 13364 AXK 27964 b

1become available, a sum equal to the amounts that would have
2been paid from the State Pensions Fund to the Teachers'
3Retirement System of the State of Illinois, the State
4Universities Retirement System, the Judges Retirement System
5of Illinois, the General Assembly Retirement System, and the
6State Employees' Retirement System of Illinois after the
7effective date of this amendatory Act during the remainder of
8fiscal year 2004 to the designated retirement systems from the
9appropriations provided for in this Section if the transfers
10provided in Section 6z-61 had not occurred. The transfers
11described in this subsection (d-1) are to partially repay the
12General Revenue Fund for the costs associated with the bonds
13used to fund the moneys transferred to the designated
14retirement systems under Section 6z-61.
15    (e) The changes to this Section made by this amendatory Act
16of 1994 shall first apply to distributions from the Fund for
17State fiscal year 1996.
18(Source: P.A. 98-24, eff. 6-19-13; 98-463, eff. 8-16-13;
1998-674, eff. 6-30-14; 98-1081, eff. 1-1-15; 99-8, eff. 7-9-15;
2099-78, eff. 7-20-15; 99-523, eff. 6-30-16; 10000SB0009ham003.)
 
21    Section 17-40. If and only if Senate Bill 9 of the 100th
22General Assembly becomes law in the form in which it was
23amended by House Amendment No. 3, then the State Officers and
24Employees Money Disposition Act is amended by changing Section
252 as follows:
 

 

 

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1    (30 ILCS 230/2)  (from Ch. 127, par. 171)
2    Sec. 2. Accounts of money received; payment into State
3treasury.
4    (a) Every officer, board, commission, commissioner,
5department, institution, arm or agency brought within the
6provisions of this Act by Section 1 shall keep in proper books
7a detailed itemized account of all moneys received for or on
8behalf of the State of Illinois, showing the date of receipt,
9the payor, and purpose and amount, and the date and manner of
10disbursement as hereinafter provided, and, unless a different
11time of payment is expressly provided by law or by rules or
12regulations promulgated under subsection (b) of this Section,
13shall pay into the State treasury the gross amount of money so
14received on the day of actual physical receipt with respect to
15any single item of receipt exceeding $10,000, within 24 hours
16of actual physical receipt with respect to an accumulation of
17receipts of $10,000 or more, or within 48 hours of actual
18physical receipt with respect to an accumulation of receipts
19exceeding $500 but less than $10,000, disregarding holidays,
20Saturdays and Sundays, after the receipt of same, without any
21deduction on account of salaries, fees, costs, charges,
22expenses or claims of any description whatever; provided that:
23        (1) the provisions of (i) Section 2505-475 of the
24    Department of Revenue Law (20 ILCS 2505/2505-475), (ii) any
25    specific taxing statute authorizing a claim for credit

 

 

SB2224- 31 -LRB100 13364 AXK 27964 b

1    procedure instead of the actual making of refunds, (iii)
2    Section 505 of the Illinois Controlled Substances Act, (iv)
3    Section 85 of the Methamphetamine Control and Community
4    Protection Act, authorizing the Director of State Police to
5    dispose of forfeited property, which includes the sale and
6    disposition of the proceeds of the sale of forfeited
7    property, and the Department of Central Management
8    Services to be reimbursed for costs incurred with the sales
9    of forfeited vehicles, boats or aircraft and to pay to bona
10    fide or innocent purchasers, conditional sales vendors or
11    mortgagees of such vehicles, boats or aircraft their
12    interest in such vehicles, boats or aircraft, and (v)
13    Section 6b-2 of the State Finance Act, establishing
14    procedures for handling cash receipts from the sale of
15    pari-mutuel wagering tickets, shall not be deemed to be in
16    conflict with the requirements of this Section;
17        (2) any fees received by the State Registrar of Vital
18    Records pursuant to the Vital Records Act which are
19    insufficient in amount may be returned by the Registrar as
20    provided in that Act;
21        (3) any fees received by the Department of Public
22    Health under the Food Handling Regulation Enforcement Act
23    that are submitted for renewal of an expired food service
24    sanitation manager certificate may be returned by the
25    Director as provided in that Act;
26        (3.5) the State Treasurer may permit the deduction of

 

 

SB2224- 32 -LRB100 13364 AXK 27964 b

1    fees by third-party unclaimed property examiners from the
2    property recovered by the examiners for the State of
3    Illinois during examinations of holders located outside
4    the State under which the Office of the Treasurer has
5    agreed to pay for the examinations based upon a percentage,
6    set by rule by the State Treasurer in accordance with the
7    Revised Uniform Unclaimed Property Illinois Administrative
8    Procedure Act, of the property recovered during the
9    examination; and
10        (4) if the amount of money received does not exceed
11    $500, such money may be retained and need not be paid into
12    the State treasury until the total amount of money so
13    received exceeds $500, or until the next succeeding 1st or
14    15th day of each month (or until the next business day if
15    these days fall on Sunday or a holiday), whichever is
16    earlier, at which earlier time such money shall be paid
17    into the State treasury, except that if a local bank or
18    savings and loan association account has been authorized by
19    law, any balances shall be paid into the State treasury on
20    Monday of each week if more than $500 is to be deposited in
21    any fund.
22Single items of receipt exceeding $10,000 received after 2 p.m.
23on a working day may be deemed to have been received on the
24next working day for purposes of fulfilling the requirement
25that the item be deposited on the day of actual physical
26receipt.

 

 

SB2224- 33 -LRB100 13364 AXK 27964 b

1    No money belonging to or left for the use of the State
2shall be expended or applied except in consequence of an
3appropriation made by law and upon the warrant of the State
4Comptroller. However, payments made by the Comptroller to
5persons by direct deposit need not be made upon the warrant of
6the Comptroller, but if not made upon a warrant, shall be made
7in accordance with Section 9.02 of the State Comptroller Act.
8All moneys so paid into the State treasury shall, unless
9required by some statute to be held in the State treasury in a
10separate or special fund, be covered into the General Revenue
11Fund in the State treasury. Moneys received in the form of
12checks, drafts or similar instruments shall be properly
13endorsed, if necessary, and delivered to the State Treasurer
14for collection. The State Treasurer shall remit such collected
15funds to the depositing officer, board, commission,
16commissioner, department, institution, arm or agency by
17Treasurers Draft or through electronic funds transfer. The
18draft or notification of the electronic funds transfer shall be
19provided to the State Comptroller to allow deposit into the
20appropriate fund.
21    (b) Different time periods for the payment of public funds
22into the State treasury or to the State Treasurer, in excess of
23the periods established in subsection (a) of this Section, but
24not in excess of 30 days after receipt of such funds, may be
25established and revised from time to time by rules or
26regulations promulgated jointly by the State Treasurer and the

 

 

SB2224- 34 -LRB100 13364 AXK 27964 b

1State Comptroller in accordance with the Illinois
2Administrative Procedure Act. The different time periods
3established by rule or regulation under this subsection may
4vary according to the nature and amounts of the funds received,
5the locations at which the funds are received, whether
6compliance with the deposit requirements specified in
7subsection (a) of this Section would be cost effective, and
8such other circumstances and conditions as the promulgating
9authorities consider to be appropriate. The Treasurer and the
10Comptroller shall review all such different time periods
11established pursuant to this subsection every 2 years from the
12establishment thereof and upon such review, unless it is
13determined that it is economically unfeasible for the agency to
14comply with the provisions of subsection (a), shall repeal such
15different time period.
16(Source: P.A. 94-556, eff. 9-11-05; 10000SB0009ham003.)
 
17    Section 17-45. If and only if Senate Bill 9 of the 100th
18General Assembly becomes law in the form in which it was
19amended by House Amendment No. 3, then the Counties Code is
20amended by changing Section 3-3034 as follows:
 
21    (55 ILCS 5/3-3034)  (from Ch. 34, par. 3-3034)
22    Sec. 3-3034. Disposition of body. After the inquest the
23coroner may deliver the body or human remains of the deceased
24to the family of the deceased or, if there are no family

 

 

SB2224- 35 -LRB100 13364 AXK 27964 b

1members to accept the body or the remains, then to friends of
2the deceased, if there be any, but if not, the coroner shall
3cause the body or the remains to be decently buried, cremated,
4or donated for medical science purposes, the expenses to be
5paid from the property of the deceased, if there is sufficient,
6if not, by the county. The coroner may not approve the
7cremation or donation of the body if it is necessary to
8preserve the body for law enforcement purposes. If the State
9Treasurer, pursuant to the Revised Uniform Disposition of
10Unclaimed Property Act, delivers human remains to the coroner,
11the coroner shall cause the human remains to be disposed of as
12provided in this Section. If the police department of any
13municipality or county investigates abandoned cremated
14remains, determines that they are human remains, and cannot
15locate the owner of the remains, then the police shall deliver
16the remains to the coroner, and the coroner shall cause the
17remains to be disposed of as provided in this Section.
18(Source: P.A. 96-1339, eff. 7-27-10; 97-679, eff. 2-6-12;
1910000SB0009ham003.)
 
20    Section 17-50. If and only if Senate Bill 9 of the 100th
21General Assembly becomes law in the form in which it was
22amended by House Amendment No. 3, then the Illinois Banking Act
23is amended by changing Sections 48, 48.1, 48.3, and 65 as
24follows:
 

 

 

SB2224- 36 -LRB100 13364 AXK 27964 b

1    (205 ILCS 5/48)
2    Sec. 48. Secretary's powers; duties. The Secretary shall
3have the powers and authority, and is charged with the duties
4and responsibilities designated in this Act, and a State bank
5shall not be subject to any other visitorial power other than
6as authorized by this Act, except those vested in the courts,
7or upon prior consultation with the Secretary, a foreign bank
8regulator with an appropriate supervisory interest in the
9parent or affiliate of a state bank. In the performance of the
10Secretary's duties:
11        (1) The Commissioner shall call for statements from all
12    State banks as provided in Section 47 at least one time
13    during each calendar quarter.
14        (2) (a) The Commissioner, as often as the Commissioner
15    shall deem necessary or proper, and no less frequently than
16    18 months following the preceding examination, shall
17    appoint a suitable person or persons to make an examination
18    of the affairs of every State bank, except that for every
19    eligible State bank, as defined by regulation, the
20    Commissioner in lieu of the examination may accept on an
21    alternating basis the examination made by the eligible
22    State bank's appropriate federal banking agency pursuant
23    to Section 111 of the Federal Deposit Insurance Corporation
24    Improvement Act of 1991, provided the appropriate federal
25    banking agency has made such an examination. A person so
26    appointed shall not be a stockholder or officer or employee

 

 

SB2224- 37 -LRB100 13364 AXK 27964 b

1    of any bank which that person may be directed to examine,
2    and shall have powers to make a thorough examination into
3    all the affairs of the bank and in so doing to examine any
4    of the officers or agents or employees thereof on oath and
5    shall make a full and detailed report of the condition of
6    the bank to the Commissioner. In making the examination the
7    examiners shall include an examination of the affairs of
8    all the affiliates of the bank, as defined in subsection
9    (b) of Section 35.2 of this Act, or subsidiaries of the
10    bank as shall be necessary to disclose fully the conditions
11    of the subsidiaries or affiliates, the relations between
12    the bank and the subsidiaries or affiliates and the effect
13    of those relations upon the affairs of the bank, and in
14    connection therewith shall have power to examine any of the
15    officers, directors, agents, or employees of the
16    subsidiaries or affiliates on oath. After May 31, 1997, the
17    Commissioner may enter into cooperative agreements with
18    state regulatory authorities of other states to provide for
19    examination of State bank branches in those states, and the
20    Commissioner may accept reports of examinations of State
21    bank branches from those state regulatory authorities.
22    These cooperative agreements may set forth the manner in
23    which the other state regulatory authorities may be
24    compensated for examinations prepared for and submitted to
25    the Commissioner.
26        (b) After May 31, 1997, the Commissioner is authorized

 

 

SB2224- 38 -LRB100 13364 AXK 27964 b

1    to examine, as often as the Commissioner shall deem
2    necessary or proper, branches of out-of-state banks. The
3    Commissioner may establish and may assess fees to be paid
4    to the Commissioner for examinations under this subsection
5    (b). The fees shall be borne by the out-of-state bank,
6    unless the fees are borne by the state regulatory authority
7    that chartered the out-of-state bank, as determined by a
8    cooperative agreement between the Commissioner and the
9    state regulatory authority that chartered the out-of-state
10    bank.
11        (2.1) Pursuant to paragraph (a) of subsection (6) of
12    this Section, the Secretary shall adopt rules that ensure
13    consistency and due process in the examination process. The
14    Secretary may also establish guidelines that (i) define the
15    scope of the examination process and (ii) clarify
16    examination items to be resolved. The rules, formal
17    guidance, interpretive letters, or opinions furnished to
18    State banks by the Secretary may be relied upon by the
19    State banks.
20        (2.5) Whenever any State bank, any subsidiary or
21    affiliate of a State bank, or after May 31, 1997, any
22    branch of an out-of-state bank causes to be performed, by
23    contract or otherwise, any bank services for itself,
24    whether on or off its premises:
25            (a) that performance shall be subject to
26        examination by the Commissioner to the same extent as

 

 

SB2224- 39 -LRB100 13364 AXK 27964 b

1        if services were being performed by the bank or, after
2        May 31, 1997, branch of the out-of-state bank itself on
3        its own premises; and
4            (b) the bank or, after May 31, 1997, branch of the
5        out-of-state bank shall notify the Commissioner of the
6        existence of a service relationship. The notification
7        shall be submitted with the first statement of
8        condition (as required by Section 47 of this Act) due
9        after the making of the service contract or the
10        performance of the service, whichever occurs first.
11        The Commissioner shall be notified of each subsequent
12        contract in the same manner.
13        For purposes of this subsection (2.5), the term "bank
14    services" means services such as sorting and posting of
15    checks and deposits, computation and posting of interest
16    and other credits and charges, preparation and mailing of
17    checks, statements, notices, and similar items, or any
18    other clerical, bookkeeping, accounting, statistical, or
19    similar functions performed for a State bank, including but
20    not limited to electronic data processing related to those
21    bank services.
22        (3) The expense of administering this Act, including
23    the expense of the examinations of State banks as provided
24    in this Act, shall to the extent of the amounts resulting
25    from the fees provided for in paragraphs (a), (a-2), and
26    (b) of this subsection (3) be assessed against and borne by

 

 

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1    the State banks:
2            (a) Each bank shall pay to the Secretary a Call
3        Report Fee which shall be paid in quarterly
4        installments equal to one-fourth of the sum of the
5        annual fixed fee of $800, plus a variable fee based on
6        the assets shown on the quarterly statement of
7        condition delivered to the Secretary in accordance
8        with Section 47 for the preceding quarter according to
9        the following schedule: 16¢ per $1,000 of the first
10        $5,000,000 of total assets, 15¢ per $1,000 of the next
11        $20,000,000 of total assets, 13¢ per $1,000 of the next
12        $75,000,000 of total assets, 9¢ per $1,000 of the next
13        $400,000,000 of total assets, 7¢ per $1,000 of the next
14        $500,000,000 of total assets, and 5¢ per $1,000 of all
15        assets in excess of $1,000,000,000, of the State bank.
16        The Call Report Fee shall be calculated by the
17        Secretary and billed to the banks for remittance at the
18        time of the quarterly statements of condition provided
19        for in Section 47. The Secretary may require payment of
20        the fees provided in this Section by an electronic
21        transfer of funds or an automatic debit of an account
22        of each of the State banks. In case more than one
23        examination of any bank is deemed by the Secretary to
24        be necessary in any examination frequency cycle
25        specified in subsection 2(a) of this Section, and is
26        performed at his direction, the Secretary may assess a

 

 

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1        reasonable additional fee to recover the cost of the
2        additional examination; provided, however, that an
3        examination conducted at the request of the State
4        Treasurer pursuant to the Uniform Disposition of
5        Unclaimed Property Act shall not be deemed to be an
6        additional examination under this Section. In lieu of
7        the method and amounts set forth in this paragraph (a)
8        for the calculation of the Call Report Fee, the
9        Secretary may specify by rule that the Call Report Fees
10        provided by this Section may be assessed semiannually
11        or some other period and may provide in the rule the
12        formula to be used for calculating and assessing the
13        periodic Call Report Fees to be paid by State banks.
14            (a-1) If in the opinion of the Commissioner an
15        emergency exists or appears likely, the Commissioner
16        may assign an examiner or examiners to monitor the
17        affairs of a State bank with whatever frequency he
18        deems appropriate, including but not limited to a daily
19        basis. The reasonable and necessary expenses of the
20        Commissioner during the period of the monitoring shall
21        be borne by the subject bank. The Commissioner shall
22        furnish the State bank a statement of time and expenses
23        if requested to do so within 30 days of the conclusion
24        of the monitoring period.
25            (a-2) On and after January 1, 1990, the reasonable
26        and necessary expenses of the Commissioner during

 

 

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1        examination of the performance of electronic data
2        processing services under subsection (2.5) shall be
3        borne by the banks for which the services are provided.
4        An amount, based upon a fee structure prescribed by the
5        Commissioner, shall be paid by the banks or, after May
6        31, 1997, branches of out-of-state banks receiving the
7        electronic data processing services along with the
8        Call Report Fee assessed under paragraph (a) of this
9        subsection (3).
10            (a-3) After May 31, 1997, the reasonable and
11        necessary expenses of the Commissioner during
12        examination of the performance of electronic data
13        processing services under subsection (2.5) at or on
14        behalf of branches of out-of-state banks shall be borne
15        by the out-of-state banks, unless those expenses are
16        borne by the state regulatory authorities that
17        chartered the out-of-state banks, as determined by
18        cooperative agreements between the Commissioner and
19        the state regulatory authorities that chartered the
20        out-of-state banks.
21            (b) "Fiscal year" for purposes of this Section 48
22        is defined as a period beginning July 1 of any year and
23        ending June 30 of the next year. The Commissioner shall
24        receive for each fiscal year, commencing with the
25        fiscal year ending June 30, 1987, a contingent fee
26        equal to the lesser of the aggregate of the fees paid

 

 

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1        by all State banks under paragraph (a) of subsection
2        (3) for that year, or the amount, if any, whereby the
3        aggregate of the administration expenses, as defined
4        in paragraph (c), for that fiscal year exceeds the sum
5        of the aggregate of the fees payable by all State banks
6        for that year under paragraph (a) of subsection (3),
7        plus any amounts transferred into the Bank and Trust
8        Company Fund from the State Pensions Fund for that
9        year, plus all other amounts collected by the
10        Commissioner for that year under any other provision of
11        this Act, plus the aggregate of all fees collected for
12        that year by the Commissioner under the Corporate
13        Fiduciary Act, excluding the receivership fees
14        provided for in Section 5-10 of the Corporate Fiduciary
15        Act, and the Foreign Banking Office Act. The aggregate
16        amount of the contingent fee thus arrived at for any
17        fiscal year shall be apportioned amongst, assessed
18        upon, and paid by the State banks and foreign banking
19        corporations, respectively, in the same proportion
20        that the fee of each under paragraph (a) of subsection
21        (3), respectively, for that year bears to the aggregate
22        for that year of the fees collected under paragraph (a)
23        of subsection (3). The aggregate amount of the
24        contingent fee, and the portion thereof to be assessed
25        upon each State bank and foreign banking corporation,
26        respectively, shall be determined by the Commissioner

 

 

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1        and shall be paid by each, respectively, within 120
2        days of the close of the period for which the
3        contingent fee is computed and is payable, and the
4        Commissioner shall give 20 days' days advance notice of
5        the amount of the contingent fee payable by the State
6        bank and of the date fixed by the Commissioner for
7        payment of the fee.
8            (c) The "administration expenses" for any fiscal
9        year shall mean the ordinary and contingent expenses
10        for that year incident to making the examinations
11        provided for by, and for otherwise administering, this
12        Act, the Corporate Fiduciary Act, excluding the
13        expenses paid from the Corporate Fiduciary
14        Receivership account in the Bank and Trust Company
15        Fund, the Foreign Banking Office Act, the Electronic
16        Fund Transfer Act, and the Illinois Bank Examiners'
17        Education Foundation Act, including all salaries and
18        other compensation paid for personal services rendered
19        for the State by officers or employees of the State,
20        including the Commissioner and the Deputy
21        Commissioners, communication equipment and services,
22        office furnishings, surety bond premiums, and travel
23        expenses of those officers and employees, employees,
24        expenditures or charges for the acquisition,
25        enlargement or improvement of, or for the use of, any
26        office space, building, or structure, or expenditures

 

 

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1        for the maintenance thereof or for furnishing heat,
2        light, or power with respect thereto, all to the extent
3        that those expenditures are directly incidental to
4        such examinations or administration. The Commissioner
5        shall not be required by paragraphs (c) or (d-1) of
6        this subsection (3) to maintain in any fiscal year's
7        budget appropriated reserves for accrued vacation and
8        accrued sick leave that is required to be paid to
9        employees of the Commissioner upon termination of
10        their service with the Commissioner in an amount that
11        is more than is reasonably anticipated to be necessary
12        for any anticipated turnover in employees, whether due
13        to normal attrition or due to layoffs, terminations, or
14        resignations.
15            (d) The aggregate of all fees collected by the
16        Secretary under this Act, the Corporate Fiduciary Act,
17        or the Foreign Banking Office Act on and after July 1,
18        1979, shall be paid promptly after receipt of the same,
19        accompanied by a detailed statement thereof, into the
20        State treasury and shall be set apart in a special fund
21        to be known as the "Bank and Trust Company Fund",
22        except as provided in paragraph (c) of subsection (11)
23        of this Section. All earnings received from
24        investments of funds in the Bank and Trust Company Fund
25        shall be deposited in the Bank and Trust Company Fund
26        and may be used for the same purposes as fees deposited

 

 

SB2224- 46 -LRB100 13364 AXK 27964 b

1        in that Fund. The amount from time to time deposited
2        into the Bank and Trust Company Fund shall be used: (i)
3        to offset the ordinary administrative expenses of the
4        Secretary as defined in this Section or (ii) as a
5        credit against fees under paragraph (d-1) of this
6        subsection (3). Nothing in this amendatory Act of 1979
7        shall prevent continuing the practice of paying
8        expenses involving salaries, retirement, social
9        security, and State-paid insurance premiums of State
10        officers by appropriations from the General Revenue
11        Fund. However, the General Revenue Fund shall be
12        reimbursed for those payments made on and after July 1,
13        1979, by an annual transfer of funds from the Bank and
14        Trust Company Fund. Moneys in the Bank and Trust
15        Company Fund may be transferred to the Professions
16        Indirect Cost Fund, as authorized under Section
17        2105-300 of the Department of Professional Regulation
18        Law of the Civil Administrative Code of Illinois.
19            Notwithstanding provisions in the State Finance
20        Act, as now or hereafter amended, or any other law to
21        the contrary, the sum of $18,788,847 shall be
22        transferred from the Bank and Trust Company Fund to the
23        Financial Institutions Settlement of 2008 Fund on the
24        effective date of this amendatory Act of the 95th
25        General Assembly, or as soon thereafter as practical.
26            Notwithstanding provisions in the State Finance

 

 

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1        Act, as now or hereafter amended, or any other law to
2        the contrary, the Governor may, during any fiscal year
3        through January 10, 2011, from time to time direct the
4        State Treasurer and Comptroller to transfer a
5        specified sum not exceeding 10% of the revenues to be
6        deposited into the Bank and Trust Company Fund during
7        that fiscal year from that Fund to the General Revenue
8        Fund in order to help defray the State's operating
9        costs for the fiscal year. Notwithstanding provisions
10        in the State Finance Act, as now or hereafter amended,
11        or any other law to the contrary, the total sum
12        transferred during any fiscal year through January 10,
13        2011, from the Bank and Trust Company Fund to the
14        General Revenue Fund pursuant to this provision shall
15        not exceed during any fiscal year 10% of the revenues
16        to be deposited into the Bank and Trust Company Fund
17        during that fiscal year. The State Treasurer and
18        Comptroller shall transfer the amounts designated
19        under this Section as soon as may be practicable after
20        receiving the direction to transfer from the Governor.
21            (d-1) Adequate funds shall be available in the Bank
22        and Trust Company Fund to permit the timely payment of
23        administration expenses. In each fiscal year the total
24        administration expenses shall be deducted from the
25        total fees collected by the Commissioner and the
26        remainder transferred into the Cash Flow Reserve

 

 

SB2224- 48 -LRB100 13364 AXK 27964 b

1        Account, unless the balance of the Cash Flow Reserve
2        Account prior to the transfer equals or exceeds
3        one-fourth of the total initial appropriations from
4        the Bank and Trust Company Fund for the subsequent
5        year, in which case the remainder shall be credited to
6        State banks and foreign banking corporations and
7        applied against their fees for the subsequent year. The
8        amount credited to each State bank and foreign banking
9        corporation shall be in the same proportion as the Call
10        Report Fees paid by each for the year bear to the total
11        Call Report Fees collected for the year. If, after a
12        transfer to the Cash Flow Reserve Account is made or if
13        no remainder is available for transfer, the balance of
14        the Cash Flow Reserve Account is less than one-fourth
15        of the total initial appropriations for the subsequent
16        year and the amount transferred is less than 5% of the
17        total Call Report Fees for the year, additional amounts
18        needed to make the transfer equal to 5% of the total
19        Call Report Fees for the year shall be apportioned
20        amongst, assessed upon, and paid by the State banks and
21        foreign banking corporations in the same proportion
22        that the Call Report Fees of each, respectively, for
23        the year bear to the total Call Report Fees collected
24        for the year. The additional amounts assessed shall be
25        transferred into the Cash Flow Reserve Account. For
26        purposes of this paragraph (d-1), the calculation of

 

 

SB2224- 49 -LRB100 13364 AXK 27964 b

1        the fees collected by the Commissioner shall exclude
2        the receivership fees provided for in Section 5-10 of
3        the Corporate Fiduciary Act.
4            (e) The Commissioner may upon request certify to
5        any public record in his keeping and shall have
6        authority to levy a reasonable charge for issuing
7        certifications of any public record in his keeping.
8            (f) In addition to fees authorized elsewhere in
9        this Act, the Commissioner may, in connection with a
10        review, approval, or provision of a service, levy a
11        reasonable charge to recover the cost of the review,
12        approval, or service.
13        (4) Nothing contained in this Act shall be construed to
14    limit the obligation relative to examinations and reports
15    of any State bank, deposits in which are to any extent
16    insured by the United States or any agency thereof, nor to
17    limit in any way the powers of the Commissioner with
18    reference to examinations and reports of that bank.
19        (5) The nature and condition of the assets in or
20    investment of any bonus, pension, or profit sharing plan
21    for officers or employees of every State bank or, after May
22    31, 1997, branch of an out-of-state bank shall be deemed to
23    be included in the affairs of that State bank or branch of
24    an out-of-state bank subject to examination by the
25    Commissioner under the provisions of subsection (2) of this
26    Section, and if the Commissioner shall find from an

 

 

SB2224- 50 -LRB100 13364 AXK 27964 b

1    examination that the condition of or operation of the
2    investments or assets of the plan is unlawful, fraudulent,
3    or unsafe, or that any trustee has abused his trust, the
4    Commissioner shall, if the situation so found by the
5    Commissioner shall not be corrected to his satisfaction
6    within 60 days after the Commissioner has given notice to
7    the board of directors of the State bank or out-of-state
8    bank of his findings, report the facts to the Attorney
9    General who shall thereupon institute proceedings against
10    the State bank or out-of-state bank, the board of directors
11    thereof, or the trustees under such plan as the nature of
12    the case may require.
13        (6) The Commissioner shall have the power:
14            (a) To promulgate reasonable rules for the purpose
15        of administering the provisions of this Act.
16            (a-5) To impose conditions on any approval issued
17        by the Commissioner if he determines that the
18        conditions are necessary or appropriate. These
19        conditions shall be imposed in writing and shall
20        continue in effect for the period prescribed by the
21        Commissioner.
22            (b) To issue orders against any person, if the
23        Commissioner has reasonable cause to believe that an
24        unsafe or unsound banking practice has occurred, is
25        occurring, or is about to occur, if any person has
26        violated, is violating, or is about to violate any law,

 

 

SB2224- 51 -LRB100 13364 AXK 27964 b

1        rule, or written agreement with the Commissioner, or
2        for the purpose of administering the provisions of this
3        Act and any rule promulgated in accordance with this
4        Act.
5            (b-1) To enter into agreements with a bank
6        establishing a program to correct the condition of the
7        bank or its practices.
8            (c) To appoint hearing officers to execute any of
9        the powers granted to the Commissioner under this
10        Section for the purpose of administering this Act and
11        any rule promulgated in accordance with this Act and
12        otherwise to authorize, in writing, an officer or
13        employee of the Office of Banks and Real Estate to
14        exercise his powers under this Act.
15            (d) To subpoena witnesses, to compel their
16        attendance, to administer an oath, to examine any
17        person under oath, and to require the production of any
18        relevant books, papers, accounts, and documents in the
19        course of and pursuant to any investigation being
20        conducted, or any action being taken, by the
21        Commissioner in respect of any matter relating to the
22        duties imposed upon, or the powers vested in, the
23        Commissioner under the provisions of this Act or any
24        rule promulgated in accordance with this Act.
25            (e) To conduct hearings.
26        (7) Whenever, in the opinion of the Secretary, any

 

 

SB2224- 52 -LRB100 13364 AXK 27964 b

1    director, officer, employee, or agent of a State bank or
2    any subsidiary or bank holding company of the bank or,
3    after May 31, 1997, of any branch of an out-of-state bank
4    or any subsidiary or bank holding company of the bank shall
5    have violated any law, rule, or order relating to that bank
6    or any subsidiary or bank holding company of the bank,
7    shall have obstructed or impeded any examination or
8    investigation by the Secretary, shall have engaged in an
9    unsafe or unsound practice in conducting the business of
10    that bank or any subsidiary or bank holding company of the
11    bank, or shall have violated any law or engaged or
12    participated in any unsafe or unsound practice in
13    connection with any financial institution or other
14    business entity such that the character and fitness of the
15    director, officer, employee, or agent does not assure
16    reasonable promise of safe and sound operation of the State
17    bank, the Secretary may issue an order of removal. If, in
18    the opinion of the Secretary, any former director, officer,
19    employee, or agent of a State bank or any subsidiary or
20    bank holding company of the bank, prior to the termination
21    of his or her service with that bank or any subsidiary or
22    bank holding company of the bank, violated any law, rule,
23    or order relating to that State bank or any subsidiary or
24    bank holding company of the bank, obstructed or impeded any
25    examination or investigation by the Secretary, engaged in
26    an unsafe or unsound practice in conducting the business of

 

 

SB2224- 53 -LRB100 13364 AXK 27964 b

1    that bank or any subsidiary or bank holding company of the
2    bank, or violated any law or engaged or participated in any
3    unsafe or unsound practice in connection with any financial
4    institution or other business entity such that the
5    character and fitness of the director, officer, employee,
6    or agent would not have assured reasonable promise of safe
7    and sound operation of the State bank, the Secretary may
8    issue an order prohibiting that person from further service
9    with a bank or any subsidiary or bank holding company of
10    the bank as a director, officer, employee, or agent. An
11    order issued pursuant to this subsection shall be served
12    upon the director, officer, employee, or agent. A copy of
13    the order shall be sent to each director of the bank
14    affected by registered mail. A copy of the order shall also
15    be served upon the bank of which he is a director, officer,
16    employee, or agent, whereupon he shall cease to be a
17    director, officer, employee, or agent of that bank. The
18    Secretary may institute a civil action against the
19    director, officer, or agent of the State bank or, after May
20    31, 1997, of the branch of the out-of-state bank against
21    whom any order provided for by this subsection (7) of this
22    Section 48 has been issued, and against the State bank or,
23    after May 31, 1997, out-of-state bank, to enforce
24    compliance with or to enjoin any violation of the terms of
25    the order. Any person who has been the subject of an order
26    of removal or an order of prohibition issued by the

 

 

SB2224- 54 -LRB100 13364 AXK 27964 b

1    Secretary under this subsection or Section 5-6 of the
2    Corporate Fiduciary Act may not thereafter serve as
3    director, officer, employee, or agent of any State bank or
4    of any branch of any out-of-state bank, or of any corporate
5    fiduciary, as defined in Section 1-5.05 of the Corporate
6    Fiduciary Act, or of any other entity that is subject to
7    licensure or regulation by the Division of Banking unless
8    the Secretary has granted prior approval in writing.
9        For purposes of this paragraph (7), "bank holding
10    company" has the meaning prescribed in Section 2 of the
11    Illinois Bank Holding Company Act of 1957.
12        (8) The Commissioner may impose civil penalties of up
13    to $100,000 against any person for each violation of any
14    provision of this Act, any rule promulgated in accordance
15    with this Act, any order of the Commissioner, or any other
16    action which in the Commissioner's discretion is an unsafe
17    or unsound banking practice.
18        (9) The Commissioner may impose civil penalties of up
19    to $100 against any person for the first failure to comply
20    with reporting requirements set forth in the report of
21    examination of the bank and up to $200 for the second and
22    subsequent failures to comply with those reporting
23    requirements.
24        (10) All final administrative decisions of the
25    Commissioner hereunder shall be subject to judicial review
26    pursuant to the provisions of the Administrative Review

 

 

SB2224- 55 -LRB100 13364 AXK 27964 b

1    Law. For matters involving administrative review, venue
2    shall be in either Sangamon County or Cook County.
3        (11) The endowment fund for the Illinois Bank
4    Examiners' Education Foundation shall be administered as
5    follows:
6            (a) (Blank).
7            (b) The Foundation is empowered to receive
8        voluntary contributions, gifts, grants, bequests, and
9        donations on behalf of the Illinois Bank Examiners'
10        Education Foundation from national banks and other
11        persons for the purpose of funding the endowment of the
12        Illinois Bank Examiners' Education Foundation.
13            (c) The aggregate of all special educational fees
14        collected by the Secretary and property received by the
15        Secretary on behalf of the Illinois Bank Examiners'
16        Education Foundation under this subsection (11) on or
17        after June 30, 1986, shall be either (i) promptly paid
18        after receipt of the same, accompanied by a detailed
19        statement thereof, into the State Treasury and shall be
20        set apart in a special fund to be known as "The
21        Illinois Bank Examiners' Education Fund" to be
22        invested by either the Treasurer of the State of
23        Illinois in the Public Treasurers' Investment Pool or
24        in any other investment he is authorized to make or by
25        the Illinois State Board of Investment as the State
26        Banking Board of Illinois may direct or (ii) deposited

 

 

SB2224- 56 -LRB100 13364 AXK 27964 b

1        into an account maintained in a commercial bank or
2        corporate fiduciary in the name of the Illinois Bank
3        Examiners' Education Foundation pursuant to the order
4        and direction of the Board of Trustees of the Illinois
5        Bank Examiners' Education Foundation.
6        (12) (Blank).
7        (13) The Secretary may borrow funds from the General
8    Revenue Fund on behalf of the Bank and Trust Company Fund
9    if the Director of Banking certifies to the Governor that
10    there is an economic emergency affecting banking that
11    requires a borrowing to provide additional funds to the
12    Bank and Trust Company Fund. The borrowed funds shall be
13    paid back within 3 years and shall not exceed the total
14    funding appropriated to the Agency in the previous year.
15        (14) In addition to the fees authorized in this Act,
16    the Secretary may assess reasonable receivership fees
17    against any State bank that does not maintain insurance
18    with the Federal Deposit Insurance Corporation. All fees
19    collected under this subsection (14) shall be paid into the
20    Non-insured Institutions Receivership account in the Bank
21    and Trust Company Fund, as established by the Secretary.
22    The fees assessed under this subsection (14) shall provide
23    for the expenses that arise from the administration of the
24    receivership of any such institution required to pay into
25    the Non-insured Institutions Receivership account, whether
26    pursuant to this Act, the Corporate Fiduciary Act, the

 

 

SB2224- 57 -LRB100 13364 AXK 27964 b

1    Foreign Banking Office Act, or any other Act that requires
2    payments into the Non-insured Institutions Receivership
3    account. The Secretary may establish by rule a reasonable
4    manner of assessing fees under this subsection (14).
5(Source: P.A. 98-784, eff. 7-24-14; 99-39, eff. 1-1-16;
610000SB0009ham003.)
 
7    (205 ILCS 5/48.1)  (from Ch. 17, par. 360)
8    Sec. 48.1. Customer financial records; confidentiality.
9    (a) For the purpose of this Section, the term "financial
10records" means any original, any copy, or any summary of:
11        (1) a document granting signature authority over a
12    deposit or account;
13        (2) a statement, ledger card or other record on any
14    deposit or account, which shows each transaction in or with
15    respect to that account;
16        (3) a check, draft or money order drawn on a bank or
17    issued and payable by a bank; or
18        (4) any other item containing information pertaining
19    to any relationship established in the ordinary course of a
20    bank's business between a bank and its customer, including
21    financial statements or other financial information
22    provided by the customer.
23    (b) This Section does not prohibit:
24        (1) The preparation, examination, handling or
25    maintenance of any financial records by any officer,

 

 

SB2224- 58 -LRB100 13364 AXK 27964 b

1    employee or agent of a bank having custody of the records,
2    or the examination of the records by a certified public
3    accountant engaged by the bank to perform an independent
4    audit.
5        (2) The examination of any financial records by, or the
6    furnishing of financial records by a bank to, any officer,
7    employee or agent of (i) the Commissioner of Banks and Real
8    Estate, (ii) after May 31, 1997, a state regulatory
9    authority authorized to examine a branch of a State bank
10    located in another state, (iii) the Comptroller of the
11    Currency, (iv) the Federal Reserve Board, or (v) the
12    Federal Deposit Insurance Corporation for use solely in the
13    exercise of his duties as an officer, employee, or agent.
14        (3) The publication of data furnished from financial
15    records relating to customers where the data cannot be
16    identified to any particular customer or account.
17        (4) The making of reports or returns required under
18    Chapter 61 of the Internal Revenue Code of 1986.
19        (5) Furnishing information concerning the dishonor of
20    any negotiable instrument permitted to be disclosed under
21    the Uniform Commercial Code.
22        (6) The exchange in the regular course of business of
23    (i) credit information between a bank and other banks or
24    financial institutions or commercial enterprises, directly
25    or through a consumer reporting agency or (ii) financial
26    records or information derived from financial records

 

 

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1    between a bank and other banks or financial institutions or
2    commercial enterprises for the purpose of conducting due
3    diligence pursuant to a purchase or sale involving the bank
4    or assets or liabilities of the bank.
5        (7) The furnishing of information to the appropriate
6    law enforcement authorities where the bank reasonably
7    believes it has been the victim of a crime.
8        (8) The furnishing of information under the Revised
9    Uniform Disposition of Unclaimed Property Act.
10        (9) The furnishing of information under the Illinois
11    Income Tax Act and the Illinois Estate and
12    Generation-Skipping Transfer Tax Act.
13        (10) The furnishing of information under the federal
14    Currency and Foreign Transactions Reporting Act Title 31,
15    United States Code, Section 1051 et seq.
16        (11) The furnishing of information under any other
17    statute that by its terms or by regulations promulgated
18    thereunder requires the disclosure of financial records
19    other than by subpoena, summons, warrant, or court order.
20        (12) The furnishing of information about the existence
21    of an account of a person to a judgment creditor of that
22    person who has made a written request for that information.
23        (13) The exchange in the regular course of business of
24    information between commonly owned banks in connection
25    with a transaction authorized under paragraph (23) of
26    Section 5 and conducted at an affiliate facility.

 

 

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1        (14) The furnishing of information in accordance with
2    the federal Personal Responsibility and Work Opportunity
3    Reconciliation Act of 1996. Any bank governed by this Act
4    shall enter into an agreement for data exchanges with a
5    State agency provided the State agency pays to the bank a
6    reasonable fee not to exceed its actual cost incurred. A
7    bank providing information in accordance with this item
8    shall not be liable to any account holder or other person
9    for any disclosure of information to a State agency, for
10    encumbering or surrendering any assets held by the bank in
11    response to a lien or order to withhold and deliver issued
12    by a State agency, or for any other action taken pursuant
13    to this item, including individual or mechanical errors,
14    provided the action does not constitute gross negligence or
15    willful misconduct. A bank shall have no obligation to
16    hold, encumber, or surrender assets until it has been
17    served with a subpoena, summons, warrant, court or
18    administrative order, lien, or levy.
19        (15) The exchange in the regular course of business of
20    information between a bank and any commonly owned affiliate
21    of the bank, subject to the provisions of the Financial
22    Institutions Insurance Sales Law.
23        (16) 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 bank that a customer who is an elderly person or person
4    with a disability has been or may become the victim of
5    financial exploitation. For the purposes of this item (16),
6    the term: (i) "elderly person" means a person who is 60 or
7    more years of age, (ii) "disabled person" means a person
8    who has or reasonably appears to the bank to have a
9    physical or mental disability that impairs his or her
10    ability to seek or obtain protection from or prevent
11    financial exploitation, and (iii) "financial exploitation"
12    means tortious or illegal use of the assets or resources of
13    an elderly or disabled person, and includes, without
14    limitation, misappropriation of the elderly or disabled
15    person's assets or resources by undue influence, breach of
16    fiduciary relationship, intimidation, fraud, deception,
17    extortion, or the use of assets or resources in any manner
18    contrary to law. A bank or person furnishing information
19    pursuant to this item (16) shall be entitled to the same
20    rights and protections as a person furnishing information
21    under the Adult Protective Services Act and the Illinois
22    Domestic Violence Act of 1986.
23        (17) The disclosure of financial records or
24    information as necessary to effect, administer, or enforce
25    a transaction requested or authorized by the customer, or
26    in connection with:

 

 

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1            (A) servicing or processing a financial product or
2        service requested or authorized by the customer;
3            (B) maintaining or servicing a customer's account
4        with the bank; or
5            (C) a proposed or actual securitization or
6        secondary market sale (including sales of servicing
7        rights) related to a transaction of a customer.
8        Nothing in this item (17), however, authorizes the sale
9    of the financial records or information of a customer
10    without the consent of the customer.
11        (18) The disclosure of financial records or
12    information as necessary to protect against actual or
13    potential fraud, unauthorized transactions, claims, or
14    other liability.
15        (19)(a) The disclosure of financial records or
16    information related to a private label credit program
17    between a financial institution and a private label party
18    in connection with that private label credit program. Such
19    information is limited to outstanding balance, available
20    credit, payment and performance and account history,
21    product references, purchase information, and information
22    related to the identity of the customer.
23        (b)(1) For purposes of this paragraph (19) of
24    subsection (b) of Section 48.1, a "private label credit
25    program" means a credit program involving a financial
26    institution and a private label party that is used by a

 

 

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1    customer of the financial institution and the private label
2    party primarily for payment for goods or services sold,
3    manufactured, or distributed by a private label party.
4        (2) For purposes of this paragraph (19) of subsection
5    (b) of Section 48.1, a "private label party" means, with
6    respect to a private label credit program, any of the
7    following: a retailer, a merchant, a manufacturer, a trade
8    group, or any such person's affiliate, subsidiary, member,
9    agent, or service provider.
10    (c) Except as otherwise provided by this Act, a bank may
11not disclose to any person, except to the customer or his duly
12authorized agent, any financial records or financial
13information obtained from financial records relating to that
14customer of that bank unless:
15        (1) the customer has authorized disclosure to the
16    person;
17        (2) the financial records are disclosed in response to
18    a lawful subpoena, summons, warrant, citation to discover
19    assets, or court order which meets the requirements of
20    subsection (d) of this Section; or
21        (3) the bank is attempting to collect an obligation
22    owed to the bank and the bank complies with the provisions
23    of Section 2I of the Consumer Fraud and Deceptive Business
24    Practices Act.
25    (d) A bank shall disclose financial records under paragraph
26(2) of subsection (c) of this Section under a lawful subpoena,

 

 

SB2224- 64 -LRB100 13364 AXK 27964 b

1summons, warrant, citation to discover assets, or court order
2only after the bank mails a copy of the subpoena, summons,
3warrant, citation to discover assets, or court order to the
4person establishing the relationship with the bank, if living,
5and, otherwise his personal representative, if known, at his
6last known address by first class mail, postage prepaid, unless
7the bank is specifically prohibited from notifying the person
8by order of court or by applicable State or federal law. A bank
9shall not mail a copy of a subpoena to any person pursuant to
10this subsection if the subpoena was issued by a grand jury
11under the Statewide Grand Jury Act.
12    (e) Any officer or employee of a bank who knowingly and
13willfully furnishes financial records in violation of this
14Section is guilty of a business offense and, upon conviction,
15shall be fined not more than $1,000.
16    (f) Any person who knowingly and willfully induces or
17attempts to induce any officer or employee of a bank to
18disclose financial records in violation of this Section is
19guilty of a business offense and, upon conviction, shall be
20fined not more than $1,000.
21    (g) A bank shall be reimbursed for costs that are
22reasonably necessary and that have been directly incurred in
23searching for, reproducing, or transporting books, papers,
24records, or other data of a customer required or requested to
25be produced pursuant to a lawful subpoena, summons, warrant,
26citation to discover assets, or court order. The Commissioner

 

 

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1shall determine the rates and conditions under which payment
2may be made.
3(Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15;
410000SB0009ham003.)
 
5    (205 ILCS 5/48.3)  (from Ch. 17, par. 360.2)
6    Sec. 48.3. Disclosure of reports of examinations and
7confidential supervisory information; limitations.
8    (a) Any report of examination, visitation, or
9investigation prepared by the Commissioner under this Act, the
10Electronic Fund Transfer Act, the Corporate Fiduciary Act, the
11Illinois Bank Holding Company Act of 1957, and the Foreign
12Banking Office Act, any report of examination, visitation, or
13investigation prepared by the state regulatory authority of
14another state that examines a branch of an Illinois State bank
15in that state, any document or record prepared or obtained in
16connection with or relating to any examination, visitation, or
17investigation, and any record prepared or obtained by the
18Commissioner to the extent that the record summarizes or
19contains information derived from any report, document, or
20record described in this subsection shall be deemed
21"confidential supervisory information". Confidential
22supervisory information shall not include any information or
23record routinely prepared by a bank or other financial
24institution and maintained in the ordinary course of business
25or any information or record that is required to be made

 

 

SB2224- 66 -LRB100 13364 AXK 27964 b

1publicly available pursuant to State or federal law or rule.
2Confidential supervisory information shall be the property of
3the Commissioner and shall only be disclosed under the
4circumstances and for the purposes set forth in this Section.
5     The Commissioner may disclose confidential supervisory
6information only under the following circumstances:
7        (1) The Commissioner may furnish confidential
8    supervisory information to the Board of Governors of the
9    Federal Reserve System, the federal reserve bank of the
10    federal reserve district in which the State bank is located
11    or in which the parent or other affiliate of the State bank
12    is located, any official or examiner thereof duly
13    accredited for the purpose, or any other state regulator,
14    federal regulator, or in the case of a foreign bank
15    possessing a certificate of authority pursuant to the
16    Foreign Banking Office Act or a license pursuant to the
17    Foreign Bank Representative Office Act, the bank regulator
18    in the country where the foreign bank is chartered, that
19    the Commissioner determines to have an appropriate
20    regulatory interest. Nothing contained in this Act shall be
21    construed to limit the obligation of any member State bank
22    to comply with the requirements relative to examinations
23    and reports of the Federal Reserve Act and of the Board of
24    Governors of the Federal Reserve System or the federal
25    reserve bank of the federal reserve district in which the
26    bank is located, nor to limit in any way the powers of the

 

 

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1    Commissioner with reference to examinations and reports.
2        (2) The Commissioner may furnish confidential
3    supervisory information to the United States, any agency
4    thereof that has insured a bank's deposits in whole or in
5    part, or any official or examiner thereof duly accredited
6    for the purpose. Nothing contained in this Act shall be
7    construed to limit the obligation relative to examinations
8    and reports of any State bank, deposits in which are to any
9    extent insured by the United States, any agency thereof,
10    nor to limit in any way the powers of the Commissioner with
11    reference to examination and reports of such bank.
12        (3) The Commissioner may furnish confidential
13    supervisory information to the appropriate law enforcement
14    authorities when the Commissioner reasonably believes a
15    bank, which the Commissioner has caused to be examined, has
16    been a victim of a crime.
17        (4) The Commissioner may furnish confidential
18    supervisory information relating to a bank or other
19    financial institution, which the Commissioner has caused
20    to be examined, to be sent to the administrator of the
21    Revised Uniform Disposition of Unclaimed Property Act.
22        (5) The Commissioner may furnish confidential
23    supervisory information relating to a bank or other
24    financial institution, which the Commissioner has caused
25    to be examined, relating to its performance of obligations
26    under the Illinois Income Tax Act and the Illinois Estate

 

 

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1    and Generation-Skipping Transfer Tax Act to the Illinois
2    Department of Revenue.
3        (6) The Commissioner may furnish confidential
4    supervisory information relating to a bank or other
5    financial institution, which the Commissioner has caused
6    to be examined, under the federal Currency and Foreign
7    Transactions Reporting Act, Title 31, United States Code,
8    Section 1051 et seq.
9        (6.5) The Commissioner may furnish confidential
10    supervisory information to any other agency or entity that
11    the Commissioner determines to have a legitimate
12    regulatory interest.
13        (7) The Commissioner may furnish confidential
14    supervisory information under any other statute that by its
15    terms or by regulations promulgated thereunder requires
16    the disclosure of financial records other than by subpoena,
17    summons, warrant, or court order.
18        (8) At the request of the affected bank or other
19    financial institution, the Commissioner may furnish
20    confidential supervisory information relating to a bank or
21    other financial institution, which the Commissioner has
22    caused to be examined, in connection with the obtaining of
23    insurance coverage or the pursuit of an insurance claim for
24    or on behalf of the bank or other financial institution;
25    provided that, when possible, the Commissioner shall
26    disclose only relevant information while maintaining the

 

 

SB2224- 69 -LRB100 13364 AXK 27964 b

1    confidentiality of financial records not relevant to such
2    insurance coverage or claim and, when appropriate, may
3    delete identifying data relating to any person or
4    individual.
5        (9) The Commissioner may furnish a copy of a report of
6    any examination performed by the Commissioner of the
7    condition and affairs of any electronic data processing
8    entity to the banks serviced by the electronic data
9    processing entity.
10        (10) In addition to the foregoing circumstances, the
11    Commissioner may, but is not required to, furnish
12    confidential supervisory information under the same
13    circumstances authorized for the bank or financial
14    institution pursuant to subsection (b) of this Section,
15    except that the Commissioner shall provide confidential
16    supervisory information under circumstances described in
17    paragraph (3) of subsection (b) of this Section only upon
18    the request of the bank or other financial institution.
19    (b) A bank or other financial institution or its officers,
20agents, and employees may disclose confidential supervisory
21information only under the following circumstances:
22        (1) to the board of directors of the bank or other
23    financial institution, as well as the president,
24    vice-president, cashier, and other officers of the bank or
25    other financial institution to whom the board of directors
26    may delegate duties with respect to compliance with

 

 

SB2224- 70 -LRB100 13364 AXK 27964 b

1    recommendations for action, and to the board of directors
2    of a bank holding company that owns at least 80% of the
3    outstanding stock of the bank or other financial
4    institution;
5        (2) to attorneys for the bank or other financial
6    institution and to a certified public accountant engaged by
7    the State bank or financial institution to perform an
8    independent audit provided that the attorney or certified
9    public accountant shall not permit the confidential
10    supervisory information to be further disseminated;
11        (3) to any person who seeks to acquire a controlling
12    interest in, or who seeks to merge with, the bank or
13    financial institution, provided that all attorneys,
14    certified public accountants, officers, agents, or
15    employees of that person shall agree to be bound to respect
16    the confidentiality of the confidential supervisory
17    information and to not further disseminate the information
18    therein contained;
19        (4) (blank); or
20        (5) to the bank's insurance company in relation to an
21    insurance claim or the effort by the bank to procure
22    insurance coverage, provided that, when possible, the bank
23    shall disclose only information that is relevant to the
24    insurance claim or that is necessary to procure the
25    insurance coverage, while maintaining the confidentiality
26    of financial information pertaining to customers. When

 

 

SB2224- 71 -LRB100 13364 AXK 27964 b

1    appropriate, the bank may delete identifying data relating
2    to any person.
3    The disclosure of confidential supervisory information by
4a bank or other financial institution pursuant to this
5subsection (b) and the disclosure of information to the
6Commissioner or other regulatory agency in connection with any
7examination, visitation, or investigation shall not constitute
8a waiver of any legal privilege otherwise available to the bank
9or other financial institution with respect to the information.
10    (c) (1) Notwithstanding any other provision of this Act or
11any other law, confidential supervisory information shall be
12the property of the Commissioner and shall be privileged from
13disclosure to any person except as provided in this Section. No
14person in possession of confidential supervisory information
15may disclose that information for any reason or under any
16circumstances not specified in this Section without the prior
17authorization of the Commissioner. Any person upon whom a
18demand for production of confidential supervisory information
19is made, whether by subpoena, order, or other judicial or
20administrative process, must withhold production of the
21confidential supervisory information and must notify the
22Commissioner of the demand, at which time the Commissioner is
23authorized to intervene for the purpose of enforcing the
24limitations of this Section or seeking the withdrawal or
25termination of the attempt to compel production of the
26confidential supervisory information.

 

 

SB2224- 72 -LRB100 13364 AXK 27964 b

1    (2) Any request for discovery or disclosure of confidential
2supervisory information, whether by subpoena, order, or other
3judicial or administrative process, shall be made to the
4Commissioner, and the Commissioner shall determine within 15
5days whether to disclose the information pursuant to procedures
6and standards that the Commissioner shall establish by rule. If
7the Commissioner determines that such information will not be
8disclosed, the Commissioner's decision shall be subject to
9judicial review under the provisions of the Administrative
10Review Law, and venue shall be in either Sangamon County or
11Cook County.
12    (3) Any court order that compels disclosure of confidential
13supervisory information may be immediately appealed by the
14Commissioner, and the order shall be automatically stayed
15pending the outcome of the appeal.
16    (d) If any officer, agent, attorney, or employee of a bank
17or financial institution knowingly and willfully furnishes
18confidential supervisory information in violation of this
19Section, the Commissioner may impose a civil monetary penalty
20up to $1,000 for the violation against the officer, agent,
21attorney, or employee.
22(Source: P.A. 90-301, eff. 8-1-97; 91-201, eff. 1-1-00;
2310000SB0009ham003.)
 
24    (205 ILCS 5/65)  (from Ch. 17, par. 377)
25    Sec. 65. Dividends; dissolution. From time to time during a

 

 

SB2224- 73 -LRB100 13364 AXK 27964 b

1receivership other than a receivership conducted by the Federal
2Deposit Insurance Corporation, the Commissioner shall make and
3pay from monies of the bank a ratable dividend on all claims as
4may be proved to his or her satisfaction or adjudicated by the
5court. Claims so proven or adjudicated shall bear interest at
6the rate of 3% per annum from the date of the appointment of
7the receiver to the date of payment, but all dividends on a
8claim shall be applied first to principal. In computing the
9amount of any dividend to be paid, if the Commissioner deems it
10desirable in the interests of economy of administration and to
11the interest of the bank and its creditors, he or she may pay
12up to the amount of $10 of each claim or unpaid portion thereof
13in full. As the proceeds of the assets of the bank are
14collected in the course of liquidation, the Commissioner shall
15make and pay further dividends on all claims previously proven
16or adjudicated. After one year from the entry of a judgment of
17dissolution, all unclaimed dividends shall be remitted to the
18State Treasurer in accordance with the Revised Uniform
19Unclaimed Property Act "Uniform Disposition of Unclaimed
20Property Act", as now or hereafter amended, together with a
21list of all unpaid claimants, their last known addresses and
22the amounts unpaid.
23(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
 
24    Section 17-55. If and only if Senate Bill 9 of the 100th
25General Assembly becomes law in the form in which it was

 

 

SB2224- 74 -LRB100 13364 AXK 27964 b

1amended by House Amendment No. 3, then the Savings Bank Act is
2amended by changing Sections 4013, 9012, and 10090 as follows:
 
3    (205 ILCS 205/4013)  (from Ch. 17, par. 7304-13)
4    Sec. 4013. Access to books and records; communication with
5members and shareholders.
6    (a) Every member or shareholder shall have the right to
7inspect books and records of the savings bank that pertain to
8his accounts. Otherwise, the right of inspection and
9examination of the books and records shall be limited as
10provided in this Act, and no other person shall have access to
11the books and records nor shall be entitled to a list of the
12members or shareholders.
13    (b) For the purpose of this Section, the term "financial
14records" means any original, any copy, or any summary of (1) a
15document granting signature authority over a deposit or
16account; (2) a statement, ledger card, or other record on any
17deposit or account that shows each transaction in or with
18respect to that account; (3) a check, draft, or money order
19drawn on a savings bank or issued and payable by a savings
20bank; or (4) any other item containing information pertaining
21to any relationship established in the ordinary course of a
22savings bank's business between a savings bank and its
23customer, including financial statements or other financial
24information provided by the member or shareholder.
25    (c) This Section does not prohibit:

 

 

SB2224- 75 -LRB100 13364 AXK 27964 b

1        (1) The preparation, examination, handling, or
2    maintenance of any financial records by any officer,
3    employee, or agent of a savings bank having custody of
4    records or examination of records by a certified public
5    accountant engaged by the savings bank to perform an
6    independent audit.
7        (2) The examination of any financial records by, or the
8    furnishing of financial records by a savings bank to, any
9    officer, employee, or agent of the Commissioner of Banks
10    and Real Estate or the federal depository institution
11    regulator for use solely in the exercise of his duties as
12    an officer, employee, or agent.
13        (3) The publication of data furnished from financial
14    records relating to members or holders of capital where the
15    data cannot be identified to any particular member,
16    shareholder, or account.
17        (4) The making of reports or returns required under
18    Chapter 61 of the Internal Revenue Code of 1986.
19        (5) Furnishing information concerning the dishonor of
20    any negotiable instrument permitted to be disclosed under
21    the Uniform Commercial Code.
22        (6) The exchange in the regular course of business of
23    (i) credit information between a savings bank and other
24    savings banks or financial institutions or commercial
25    enterprises, directly or through a consumer reporting
26    agency or (ii) financial records or information derived

 

 

SB2224- 76 -LRB100 13364 AXK 27964 b

1    from financial records between a savings bank and other
2    savings banks or financial institutions or commercial
3    enterprises for the purpose of conducting due diligence
4    pursuant to a purchase or sale involving the savings bank
5    or assets or liabilities of the savings bank.
6        (7) The furnishing of information to the appropriate
7    law enforcement authorities where the savings bank
8    reasonably believes it has been the victim of a crime.
9        (8) The furnishing of information pursuant to the
10    Revised Uniform Disposition of Unclaimed Property Act.
11        (9) The furnishing of information pursuant to the
12    Illinois Income Tax Act and the Illinois Estate and
13    Generation-Skipping Transfer Tax Act.
14        (10) The furnishing of information pursuant to the
15    federal "Currency and Foreign Transactions Reporting Act",
16    (Title 31, United States Code, Section 1051 et seq.).
17        (11) The furnishing of information pursuant to any
18    other statute which by its terms or by regulations
19    promulgated thereunder requires the disclosure of
20    financial records other than by subpoena, summons,
21    warrant, or court order.
22        (12) The furnishing of information in accordance with
23    the federal Personal Responsibility and Work Opportunity
24    Reconciliation Act of 1996. Any savings bank governed by
25    this Act shall enter into an agreement for data exchanges
26    with a State agency provided the State agency pays to the

 

 

SB2224- 77 -LRB100 13364 AXK 27964 b

1    savings bank a reasonable fee not to exceed its actual cost
2    incurred. A savings bank providing information in
3    accordance with this item shall not be liable to any
4    account holder or other person for any disclosure of
5    information to a State agency, for encumbering or
6    surrendering any assets held by the savings bank in
7    response to a lien or order to withhold and deliver issued
8    by a State agency, or for any other action taken pursuant
9    to this item, including individual or mechanical errors,
10    provided the action does not constitute gross negligence or
11    willful misconduct. A savings bank shall have no obligation
12    to hold, encumber, or surrender assets until it has been
13    served with a subpoena, summons, warrant, court or
14    administrative order, lien, or levy.
15        (13) The furnishing of information to law enforcement
16    authorities, the Illinois Department on Aging and its
17    regional administrative and provider agencies, the
18    Department of Human Services Office of Inspector General,
19    or public guardians: (i) upon subpoena by the investigatory
20    entity or the guardian, or (ii) if there is suspicion by
21    the savings bank that a customer who is an elderly person
22    or person with a disability has been or may become the
23    victim of financial exploitation. For the purposes of this
24    item (13), the term: (i) "elderly person" means a person
25    who is 60 or more years of age, (ii) "person with a
26    disability" means a person who has or reasonably appears to

 

 

SB2224- 78 -LRB100 13364 AXK 27964 b

1    the savings bank to have a physical or mental disability
2    that impairs his or her ability to seek or obtain
3    protection from or prevent financial exploitation, and
4    (iii) "financial exploitation" means tortious or illegal
5    use of the assets or resources of an elderly person or
6    person with a disability, and includes, without
7    limitation, misappropriation of the assets or resources of
8    the elderly person or person with a disability by undue
9    influence, breach of fiduciary relationship, intimidation,
10    fraud, deception, extortion, or the use of assets or
11    resources in any manner contrary to law. A savings bank or
12    person furnishing information pursuant to this item (13)
13    shall be entitled to the same rights and protections as a
14    person furnishing information under the Adult Protective
15    Services Act and the Illinois Domestic Violence Act of
16    1986.
17        (14) The disclosure of financial records or
18    information as necessary to effect, administer, or enforce
19    a transaction requested or authorized by the member or
20    holder of capital, or in connection with:
21            (A) servicing or processing a financial product or
22        service requested or authorized by the member or holder
23        of capital;
24            (B) maintaining or servicing an account of a member
25        or holder of capital with the savings bank; or
26            (C) a proposed or actual securitization or

 

 

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1        secondary market sale (including sales of servicing
2        rights) related to a transaction of a member or holder
3        of capital.
4        Nothing in this item (14), however, authorizes the sale
5    of the financial records or information of a member or
6    holder of capital without the consent of the member or
7    holder of capital.
8        (15) The exchange in the regular course of business of
9    information between a savings bank and any commonly owned
10    affiliate of the savings bank, subject to the provisions of
11    the Financial Institutions Insurance Sales Law.
12        (16) The disclosure of financial records or
13    information as necessary to protect against or prevent
14    actual or potential fraud, unauthorized transactions,
15    claims, or other liability.
16        (17)(a) The disclosure of financial records or
17    information related to a private label credit program
18    between a financial institution and a private label party
19    in connection with that private label credit program. Such
20    information is limited to outstanding balance, available
21    credit, payment and performance and account history,
22    product references, purchase information, and information
23    related to the identity of the customer.
24        (b)(1) For purposes of this paragraph (17) of
25    subsection (c) of Section 4013, a "private label credit
26    program" means a credit program involving a financial

 

 

SB2224- 80 -LRB100 13364 AXK 27964 b

1    institution and a private label party that is used by a
2    customer of the financial institution and the private label
3    party primarily for payment for goods or services sold,
4    manufactured, or distributed by a private label party.
5        (2) For purposes of this paragraph (17) of subsection
6    (c) of Section 4013, a "private label party" means, with
7    respect to a private label credit program, any of the
8    following: a retailer, a merchant, a manufacturer, a trade
9    group, or any such person's affiliate, subsidiary, member,
10    agent, or service provider.
11    (d) A savings bank may not disclose to any person, except
12to the member or holder of capital or his duly authorized
13agent, any financial records relating to that member or
14shareholder of the savings bank unless:
15        (1) the member or shareholder has authorized
16    disclosure to the person; or
17        (2) the financial records are disclosed in response to
18    a lawful subpoena, summons, warrant, citation to discover
19    assets, or court order that meets the requirements of
20    subsection (e) of this Section.
21    (e) A savings bank shall disclose financial records under
22subsection (d) of this Section pursuant to a lawful subpoena,
23summons, warrant, citation to discover assets, or court order
24only after the savings bank mails a copy of the subpoena,
25summons, warrant, citation to discover assets, or court order
26to the person establishing the relationship with the savings

 

 

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1bank, if living, and otherwise, his personal representative, if
2known, at his last known address by first class mail, postage
3prepaid, unless the savings bank is specifically prohibited
4from notifying the person by order of court.
5    (f) Any officer or employee of a savings bank who knowingly
6and willfully furnishes financial records in violation of this
7Section is guilty of a business offense and, upon conviction,
8shall be fined not more than $1,000.
9    (g) Any person who knowingly and willfully induces or
10attempts to induce any officer or employee of a savings bank to
11disclose financial records in violation of this Section is
12guilty of a business offense and, upon conviction, shall be
13fined not more than $1,000.
14    (h) If any member or shareholder desires to communicate
15with the other members or shareholders of the savings bank with
16reference to any question pending or to be presented at an
17annual or special meeting, the savings bank shall give that
18person, upon request, a statement of the approximate number of
19members or shareholders entitled to vote at the meeting and an
20estimate of the cost of preparing and mailing the
21communication. The requesting member shall submit the
22communication to the Commissioner who, upon finding it to be
23appropriate and truthful, shall direct that it be prepared and
24mailed to the members upon the requesting member's or
25shareholder's payment or adequate provision for payment of the
26expenses of preparation and mailing.

 

 

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1    (i) A savings bank shall be reimbursed for costs that are
2necessary and that have been directly incurred in searching
3for, reproducing, or transporting books, papers, records, or
4other data of a customer required to be reproduced pursuant to
5a lawful subpoena, warrant, citation to discover assets, or
6court order.
7    (j) Notwithstanding the provisions of this Section, a
8savings bank may sell or otherwise make use of lists of
9customers' names and addresses. All other information
10regarding a customer's account is are subject to the disclosure
11provisions of this Section. At the request of any customer,
12that customer's name and address shall be deleted from any list
13that is to be sold or used in any other manner beyond
14identification of the customer's accounts.
15(Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15; revised
169-14-16; 10000SB0009ham003.)
 
17    (205 ILCS 205/9012)  (from Ch. 17, par. 7309-12)
18    Sec. 9012. Disclosure of reports of examinations and
19confidential supervisory information; limitations.
20    (a) Any report of examination, visitation, or
21investigation prepared by the Commissioner under this Act, any
22report of examination, visitation, or investigation prepared
23by the state regulatory authority of another state that
24examines a branch of an Illinois State savings bank in that
25state, any document or record prepared or obtained in

 

 

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1connection with or relating to any examination, visitation, or
2investigation, and any record prepared or obtained by the
3Commissioner to the extent that the record summarizes or
4contains information derived from any report, document, or
5record described in this subsection shall be deemed
6confidential supervisory information. "Confidential
7supervisory information" shall not include any information or
8record routinely prepared by a savings bank and maintained in
9the ordinary course of business or any information or record
10that is required to be made publicly available pursuant to
11State or federal law or rule. Confidential supervisory
12information shall be the property of the Commissioner and shall
13only be disclosed under the circumstances and for the purposes
14set forth in this Section.
15    The Commissioner may disclose confidential supervisory
16information only under the following circumstances:
17        (1) The Commissioner may furnish confidential
18    supervisory information to federal and state depository
19    institution regulators, or any official or examiner
20    thereof duly accredited for the purpose. Nothing contained
21    in this Act shall be construed to limit the obligation of
22    any savings bank to comply with the requirements relative
23    to examinations and reports nor to limit in any way the
24    powers of the Commissioner relative to examinations and
25    reports.
26        (2) The Commissioner may furnish confidential

 

 

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1    supervisory information to the United States or any agency
2    thereof that to any extent has insured a savings bank's
3    deposits, or any official or examiner thereof duly
4    accredited for the purpose. Nothing contained in this Act
5    shall be construed to limit the obligation relative to
6    examinations and reports of any savings bank in which
7    deposits are to any extent insured by the United States or
8    any agency thereof nor to limit in any way the powers of
9    the Commissioner with reference to examination and reports
10    of the savings bank.
11        (3) The Commissioner may furnish confidential
12    supervisory information to the appropriate law enforcement
13    authorities when the Commissioner reasonably believes a
14    savings bank, which the Commissioner has caused to be
15    examined, has been a victim of a crime.
16        (4) The Commissioner may furnish confidential
17    supervisory information related to a savings bank, which
18    the Commissioner has caused to be examined, to the
19    administrator of the Revised Uniform Disposition of
20    Unclaimed Property Act.
21        (5) The Commissioner may furnish confidential
22    supervisory information relating to a savings bank, which
23    the Commissioner has caused to be examined, relating to its
24    performance of obligations under the Illinois Income Tax
25    Act and the Illinois Estate and Generation-Skipping
26    Transfer Tax Act to the Illinois Department of Revenue.

 

 

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1        (6) The Commissioner may furnish confidential
2    supervisory information relating to a savings bank, which
3    the Commissioner has caused to be examined, under the
4    federal Currency and Foreign Transactions Reporting Act,
5    31 United States Code, Section 1051 et seq.
6        (7) The Commissioner may furnish confidential
7    supervisory information to any other agency or entity that
8    the Commissioner determines to have a legitimate
9    regulatory interest.
10        (8) The Commissioner may furnish confidential
11    supervisory information as otherwise permitted or required
12    by this Act and may furnish confidential supervisory
13    information under any other statute that by its terms or by
14    regulations promulgated thereunder requires the disclosure
15    of financial records other than by subpoena, summons,
16    warrant, or court order.
17        (9) At the request of the affected savings bank, the
18    Commissioner may furnish confidential supervisory
19    information relating to the savings bank, which the
20    Commissioner has caused to be examined, in connection with
21    the obtaining of insurance coverage or the pursuit of an
22    insurance claim for or on behalf of the savings bank;
23    provided that, when possible, the Commissioner shall
24    disclose only relevant information while maintaining the
25    confidentiality of financial records not relevant to such
26    insurance coverage or claim and, when appropriate, may

 

 

SB2224- 86 -LRB100 13364 AXK 27964 b

1    delete identifying data relating to any person.
2        (10) The Commissioner may furnish a copy of a report of
3    any examination performed by the Commissioner of the
4    condition and affairs of any electronic data processing
5    entity to the savings banks serviced by the electronic data
6    processing entity.
7        (11) In addition to the foregoing circumstances, the
8    Commissioner may, but is not required to, furnish
9    confidential supervisory information under the same
10    circumstances authorized for the savings bank pursuant to
11    subsection (b) of this Section, except that the
12    Commissioner shall provide confidential supervisory
13    information under circumstances described in paragraph (3)
14    of subsection (b) of this Section only upon the request of
15    the savings bank.
16    (b) A savings bank or its officers, agents, and employees
17may disclose confidential supervisory information only under
18the following circumstances:
19        (1) to the board of directors of the savings bank, as
20    well as the president, vice-president, cashier, and other
21    officers of the savings bank to whom the board of directors
22    may delegate duties with respect to compliance with
23    recommendations for action, and to the board of directors
24    of a savings bank holding company that owns at least 80% of
25    the outstanding stock of the savings bank or other
26    financial institution.

 

 

SB2224- 87 -LRB100 13364 AXK 27964 b

1        (2) to attorneys for the savings bank and to a
2    certified public accountant engaged by the savings bank to
3    perform an independent audit; provided that the attorney or
4    certified public accountant shall not permit the
5    confidential supervisory information to be further
6    disseminated.
7        (3) to any person who seeks to acquire a controlling
8    interest in, or who seeks to merge with, the savings bank;
9    provided that the person shall agree to be bound to respect
10    the confidentiality of the confidential supervisory
11    information and to not further disseminate the information
12    other than to attorneys, certified public accountants,
13    officers, agents, or employees of that person who likewise
14    shall agree to be bound to respect the confidentiality of
15    the confidential supervisory information and to not
16    further disseminate the information.
17        (4) to the savings bank's insurance company, if the
18    supervisory information contains information that is
19    otherwise unavailable and is strictly necessary to
20    obtaining insurance coverage or pursuing an insurance
21    claim for or on behalf of the savings bank; provided that,
22    when possible, the savings bank shall disclose only
23    information that is relevant to obtaining insurance
24    coverage or pursuing an insurance claim, while maintaining
25    the confidentiality of financial information pertaining to
26    customers; and provided further that, when appropriate,

 

 

SB2224- 88 -LRB100 13364 AXK 27964 b

1    the savings bank may delete identifying data relating to
2    any person.
3    The disclosure of confidential supervisory information by
4a savings bank pursuant to this subsection (b) and the
5disclosure of information to the Commissioner or other
6regulatory agency in connection with any examination,
7visitation, or investigation shall not constitute a waiver of
8any legal privilege otherwise available to the savings bank
9with respect to the information.
10    (c) (1) Notwithstanding any other provision of this Act or
11any other law, confidential supervisory information shall be
12the property of the Commissioner and shall be privileged from
13disclosure to any person except as provided in this Section. No
14person in possession of confidential supervisory information
15may disclose that information for any reason or under any
16circumstances not specified in this Section without the prior
17authorization of the Commissioner. Any person upon whom a
18demand for production of confidential supervisory information
19is made, whether by subpoena, order, or other judicial or
20administrative process, must withhold production of the
21confidential supervisory information and must notify the
22Commissioner of the demand, at which time the Commissioner is
23authorized to intervene for the purpose of enforcing the
24limitations of this Section or seeking the withdrawal or
25termination of the attempt to compel production of the
26confidential supervisory information.

 

 

SB2224- 89 -LRB100 13364 AXK 27964 b

1    (2) Any request for discovery or disclosure of confidential
2supervisory information, whether by subpoena, order, or other
3judicial or administrative process, shall be made to the
4Commissioner, and the Commissioner shall determine within 15
5days whether to disclose the information pursuant to procedures
6and standards that the Commissioner shall establish by rule. If
7the Commissioner determines that such information will not be
8disclosed, the Commissioner's decision shall be subject to
9judicial review under the provisions of the Administrative
10Review Law, and venue shall be in either Sangamon County or
11Cook County.
12    (3) Any court order that compels disclosure of confidential
13supervisory information may be immediately appealed by the
14Commissioner, and the order shall be automatically stayed
15pending the outcome of the appeal.
16    (d) If any officer, agent, attorney, or employee of a
17savings bank knowingly and willfully furnishes confidential
18supervisory information in violation of this Section, the
19Commissioner may impose a civil monetary penalty up to $1,000
20for the violation against the officer, agent, attorney, or
21employee.
22    (e)   Subject to the limits of this Section, the
23Commissioner also may promulgate regulations to set procedures
24and standards for disclosure of the following items:
25        (1) All fixed orders and opinions made in cases of
26    appeals of the Commissioner's actions.

 

 

SB2224- 90 -LRB100 13364 AXK 27964 b

1        (2) Statements of policy and interpretations adopted
2    by the Commissioner's office, but not otherwise made
3    public.
4        (3) Nonconfidential portions of application files,
5    including applications for new charters. The Commissioner
6    shall specify by rule as to what part of the files are
7    confidential.
8        (4) Quarterly reports of income, deposits, and
9    financial condition.
10(Source: P.A. 93-271, eff. 7-22-03; 10000SB0009ham003.)
 
11    (205 ILCS 205/10090)
12    Sec. 10090. Dividends; dissolution. From time to time
13during a receivership other than a receivership conducted by
14the Federal Deposit Insurance Corporation, the Secretary shall
15make and pay from moneys of the savings bank a ratable dividend
16on all claims as may be proved to his or her satisfaction or
17adjudicated by the court. Claims so proven or adjudicated shall
18bear interest at the rate of 3% per annum from the date of the
19appointment of the receiver to the date of payment, but all
20dividends on a claim shall be applied first to principal. In
21computing the amount of any dividend to be paid, if the
22Secretary deems it desirable in the interests of economy of
23administration and to the interest of the savings bank and its
24creditors, he or she may pay up to the amount of $10 of each
25claim or unpaid portion thereof in full. As the proceeds of the

 

 

SB2224- 91 -LRB100 13364 AXK 27964 b

1assets of the savings bank are collected in the course of
2liquidation, the Secretary shall make and pay further dividends
3on all claims previously proven or adjudicated. After one year
4from the entry of a judgment of dissolution, all unclaimed
5dividends shall be remitted to the State Treasurer in
6accordance with the Revised Uniform Disposition of Unclaimed
7Property Act, as now or hereafter amended, together with a list
8of all unpaid claimants, their last known addresses and the
9amounts unpaid.
10(Source: P.A. 96-1365, eff. 7-28-10; 10000SB0009ham003.)
 
11    Section 17-60. If and only if Senate Bill 9 of the 100th
12General Assembly becomes law in the form in which it was
13amended by House Amendment No. 3, then the Illinois Credit
14Union Act is amended by changing Sections 10 and 62 as follows:
 
15    (205 ILCS 305/10)  (from Ch. 17, par. 4411)
16    Sec. 10. Credit union records; member financial records.
17    (1) A credit union shall establish and maintain books,
18records, accounting systems and procedures which accurately
19reflect its operations and which enable the Department to
20readily ascertain the true financial condition of the credit
21union and whether it is complying with this Act.
22    (2) A photostatic or photographic reproduction of any
23credit union records shall be admissible as evidence of
24transactions with the credit union.

 

 

SB2224- 92 -LRB100 13364 AXK 27964 b

1    (3)(a) For the purpose of this Section, the term "financial
2records" means any original, any copy, or any summary of (1) a
3document granting signature authority over an account, (2) a
4statement, ledger card or other record on any account which
5shows each transaction in or with respect to that account, (3)
6a check, draft or money order drawn on a financial institution
7or other entity or issued and payable by or through a financial
8institution or other entity, or (4) any other item containing
9information pertaining to any relationship established in the
10ordinary course of business between a credit union and its
11member, including financial statements or other financial
12information provided by the member.
13    (b) This Section does not prohibit:
14        (1) The preparation, examination, handling or
15    maintenance of any financial records by any officer,
16    employee or agent of a credit union having custody of such
17    records, or the examination of such records by a certified
18    public accountant engaged by the credit union to perform an
19    independent audit.
20        (2) The examination of any financial records by or the
21    furnishing of financial records by a credit union to any
22    officer, employee or agent of the Department, the National
23    Credit Union Administration, Federal Reserve board or any
24    insurer of share accounts for use solely in the exercise of
25    his duties as an officer, employee or agent.
26        (3) The publication of data furnished from financial

 

 

SB2224- 93 -LRB100 13364 AXK 27964 b

1    records relating to members where the data cannot be
2    identified to any particular customer of account.
3        (4) The making of reports or returns required under
4    Chapter 61 of the Internal Revenue Code of 1954.
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 credit union and other
10    credit unions or financial institutions or commercial
11    enterprises, directly or through a consumer reporting
12    agency or (ii) financial records or information derived
13    from financial records between a credit union and other
14    credit unions or financial institutions or commercial
15    enterprises for the purpose of conducting due diligence
16    pursuant to a merger or a purchase or sale of assets or
17    liabilities of the credit union.
18        (7) The furnishing of information to the appropriate
19    law enforcement authorities where the credit union
20    reasonably believes it has been the victim of a crime.
21        (8) The furnishing of information pursuant to the
22    Revised Uniform Disposition of Unclaimed Property Act.
23        (9) The furnishing of information pursuant to the
24    Illinois Income Tax Act and the Illinois Estate and
25    Generation-Skipping Transfer Tax Act.
26        (10) The furnishing of information pursuant to the

 

 

SB2224- 94 -LRB100 13364 AXK 27964 b

1    federal "Currency and Foreign Transactions Reporting Act",
2    Title 31, United States Code, Section 1051 et sequentia.
3        (11) The furnishing of information pursuant to any
4    other statute which by its terms or by regulations
5    promulgated thereunder requires the disclosure of
6    financial records other than by subpoena, summons, warrant
7    or court order.
8        (12) The furnishing of information in accordance with
9    the federal Personal Responsibility and Work Opportunity
10    Reconciliation Act of 1996. Any credit union governed by
11    this Act shall enter into an agreement for data exchanges
12    with a State agency provided the State agency pays to the
13    credit union a reasonable fee not to exceed its actual cost
14    incurred. A credit union providing information in
15    accordance with this item shall not be liable to any
16    account holder or other person for any disclosure of
17    information to a State agency, for encumbering or
18    surrendering any assets held by the credit union in
19    response to a lien or order to withhold and deliver issued
20    by a State agency, or for any other action taken pursuant
21    to this item, including individual or mechanical errors,
22    provided the action does not constitute gross negligence or
23    willful misconduct. A credit union shall have no obligation
24    to hold, encumber, or surrender assets until it has been
25    served with a subpoena, summons, warrant, court or
26    administrative order, lien, or levy.

 

 

SB2224- 95 -LRB100 13364 AXK 27964 b

1        (13) The furnishing of information to law enforcement
2    authorities, the Illinois Department on Aging and its
3    regional administrative and provider agencies, the
4    Department of Human Services Office of Inspector General,
5    or public guardians: (i) upon subpoena by the investigatory
6    entity or the guardian, or (ii) if there is suspicion by
7    the credit union that a member who is an elderly person or
8    person with a disability has been or may become the victim
9    of financial exploitation. For the purposes of this item
10    (13), the term: (i) "elderly person" means a person who is
11    60 or more years of age, (ii) "person with a disability"
12    means a person who has or reasonably appears to the credit
13    union to have a physical or mental disability that impairs
14    his or her ability to seek or obtain protection from or
15    prevent financial exploitation, and (iii) "financial
16    exploitation" means tortious or illegal use of the assets
17    or resources of an elderly person or person with a
18    disability, and includes, without limitation,
19    misappropriation of the elderly or disabled person's
20    assets or resources by undue influence, breach of fiduciary
21    relationship, intimidation, fraud, deception, extortion,
22    or the use of assets or resources in any manner contrary to
23    law. A credit union or person furnishing information
24    pursuant to this item (13) shall be entitled to the same
25    rights and protections as a person furnishing information
26    under the Adult Protective Services Act and the Illinois

 

 

SB2224- 96 -LRB100 13364 AXK 27964 b

1    Domestic Violence Act of 1986.
2        (14) The disclosure of financial records or
3    information as necessary to effect, administer, or enforce
4    a transaction requested or authorized by the member, or in
5    connection with:
6            (A) servicing or processing a financial product or
7        service requested or authorized by the member;
8            (B) maintaining or servicing a member's account
9        with the credit union; or
10            (C) a proposed or actual securitization or
11        secondary market sale (including sales of servicing
12        rights) related to a transaction of a member.
13        Nothing in this item (14), however, authorizes the sale
14    of the financial records or information of a member without
15    the consent of the member.
16        (15) The disclosure of financial records or
17    information as necessary to protect against or prevent
18    actual or potential fraud, unauthorized transactions,
19    claims, or other liability.
20        (16)(a) The disclosure of financial records or
21    information related to a private label credit program
22    between a financial institution and a private label party
23    in connection with that private label credit program. Such
24    information is limited to outstanding balance, available
25    credit, payment and performance and account history,
26    product references, purchase information, and information

 

 

SB2224- 97 -LRB100 13364 AXK 27964 b

1    related to the identity of the customer.
2        (b)(1) For purposes of this paragraph (16) of
3    subsection (b) of Section 10, a "private label credit
4    program" means a credit program involving a financial
5    institution and a private label party that is used by a
6    customer of the financial institution and the private label
7    party primarily for payment for goods or services sold,
8    manufactured, or distributed by a private label party.
9        (2) For purposes of this paragraph (16) of subsection
10    (b) of Section 10, a "private label party" means, with
11    respect to a private label credit program, any of the
12    following: a retailer, a merchant, a manufacturer, a trade
13    group, or any such person's affiliate, subsidiary, member,
14    agent, or service provider.
15    (c) Except as otherwise provided by this Act, a credit
16union may not disclose to any person, except to the member or
17his duly authorized agent, any financial records relating to
18that member of the credit union unless:
19        (1) the member has authorized disclosure to the person;
20        (2) the financial records are disclosed in response to
21    a lawful subpoena, summons, warrant, citation to discover
22    assets, or court order that meets the requirements of
23    subparagraph (d) of this Section; or
24        (3) the credit union is attempting to collect an
25    obligation owed to the credit union and the credit union
26    complies with the provisions of Section 2I of the Consumer

 

 

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1    Fraud and Deceptive Business Practices Act.
2    (d) A credit union shall disclose financial records under
3subparagraph (c)(2) of this Section pursuant to a lawful
4subpoena, summons, warrant, citation to discover assets, or
5court order only after the credit union mails a copy of the
6subpoena, summons, warrant, citation to discover assets, or
7court order to the person establishing the relationship with
8the credit union, if living, and otherwise his personal
9representative, if known, at his last known address by first
10class mail, postage prepaid unless the credit union is
11specifically prohibited from notifying the person by order of
12court or by applicable State or federal law. In the case of a
13grand jury subpoena, a credit union shall not mail a copy of a
14subpoena to any person pursuant to this subsection if the
15subpoena was issued by a grand jury under the Statewide Grand
16Jury Act or notifying the person would constitute a violation
17of the federal Right to Financial Privacy Act of 1978.
18    (e)(1) Any officer or employee of a credit union who
19knowingly and wilfully furnishes financial records in
20violation of this Section is guilty of a business offense and
21upon conviction thereof shall be fined not more than $1,000.
22    (2) Any person who knowingly and wilfully induces or
23attempts to induce any officer or employee of a credit union to
24disclose financial records in violation of this Section is
25guilty of a business offense and upon conviction thereof shall
26be fined not more than $1,000.

 

 

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1    (f) A credit union shall be reimbursed for costs which are
2reasonably necessary and which have been directly incurred in
3searching for, reproducing or transporting books, papers,
4records or other data of a member required or requested to be
5produced pursuant to a lawful subpoena, summons, warrant,
6citation to discover assets, or court order. The Secretary and
7the Director may determine, by rule, the rates and conditions
8under which payment shall be made. Delivery of requested
9documents may be delayed until final reimbursement of all costs
10is received.
11(Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15;
1210000SB0009ham003.)
 
13    (205 ILCS 305/62)  (from Ch. 17, par. 4463)
14    Sec. 62. Liquidation.
15    (1) A credit union may elect to dissolve voluntarily and
16liquidate its affairs in the manner prescribed in this Section.
17    (2) The board of directors shall adopt a resolution
18recommending the credit union be dissolved voluntarily, and
19directing that the question of liquidating be submitted to the
20members.
21    (3) Within 10 days after the board of directors decides to
22submit the question of liquidation to the members, the chairman
23or president shall notify the Secretary thereof, in writing,
24setting forth the reasons for the proposed action. Within 10
25days after the members act on the question of liquidation, the

 

 

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1chairman or president shall notify the Secretary, in writing,
2as to whether or not the members approved the proposed
3liquidation. The Secretary then must determine whether this
4Section has been complied with and if his decision is
5favorable, he shall prepare a certificate to the effect that
6this Section has been complied with, a copy of which will be
7retained by the Department and the other copy forwarded to the
8credit union. The certificate must be filed with the recorder
9or if there is no recorder, in the office of the county clerk
10of the county or counties in which the credit union is
11operating, whereupon the credit union must cease operations
12except for the purpose of its liquidation.
13    (4) As soon as the board of directors passes a resolution
14to submit the question of liquidation to the members, payment
15on shares, withdrawal of shares, making any transfer of shares
16to loans and interest, making investments of any kind and
17granting loans shall be suspended pending action by members. On
18approval by the members of such proposal, all such operations
19shall be permanently discontinued. The necessary expenses of
20operating shall, however, continue to be paid on authorization
21of the board of directors or the liquidating agent during the
22period of liquidation.
23    (5) For a credit union to enter voluntary liquidation, it
24must be approved by affirmative vote of the members owning a
25majority of the shares entitled to vote, in person or by proxy,
26at a regular or special meeting of the members. Notice, in

 

 

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1writing, shall be given to each member, by first class mail, at
2least 10 days prior to such meeting. If liquidation is
3approved, the board of directors shall appoint a liquidating
4agent for the purpose of conserving and collecting the assets,
5closing the affairs of the credit union and distributing the
6assets as required by this Act.
7    (6) A liquidating credit union shall continue in existence
8for the purpose of discharging its debts, collecting and
9distributing its assets, and doing all acts required in order
10to terminate its operations and may sue and be sued for the
11purpose of enforcing such debts and obligations until its
12affairs are fully adjusted.
13    (7) Subject to such rules and regulations as the Secretary
14may promulgate, the liquidating agent shall use the assets of
15the credit union to pay; first, expenses incidental to
16liquidating including any surety bond that may be required;
17then, liabilities of the credit union; then special classes of
18shares. The remaining assets shall then be distributed to the
19members proportionately to the dollar value of the shares held
20by each member in relation to the total dollar value of all
21shares outstanding as of the date the dissolution was voted.
22    (8) As soon as the liquidating agent determines that all
23assets as to which there is a reasonable expectancy of sale or
24transfer have been liquidated and distributed as set forth in
25this Section, he shall execute a certificate of dissolution on
26a form prescribed by the Department and file the same, together

 

 

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1with all pertinent books and records of the liquidating credit
2union with the Department, whereupon such credit union shall be
3dissolved. The liquidating agent must, within 3 years after
4issuance of a certificate by the Secretary referred to in
5Subsection (3) of this Section, discharge the debts of the
6credit union, collect and distribute its assets and do all
7other acts required to wind up its business.
8    (9) If the Secretary determines that the liquidating agent
9has failed to make reasonable progress in the liquidating of
10the credit union's affairs and distribution of its assets or
11has violated this Act, the Secretary may take possession and
12control of the credit union and remove the liquidating agent
13and appoint a liquidating agent to complete the liquidation
14under his direction and control. The Secretary shall fill any
15vacancy caused by the resignation, death, illness, removal,
16desertion or incapacity to function of the liquidating agent.
17    (10) Any funds representing unclaimed dividends and shares
18in liquidation and remaining in the hands of the board of
19directors or the liquidating agent at the end of the
20liquidation must be deposited by them, together with all books
21and papers of the credit union, with the State Treasurer in
22compliance with the Revised Uniform Disposition of Unclaimed
23Property Act, approved August 17, 1961, as amended.
24(Source: P.A. 97-133, eff. 1-1-12; 10000SB0009ham003.)
 
25    Section 17-65. If and only if Senate Bill 9 of the 100th

 

 

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1General Assembly becomes law in the form in which it was
2amended by House Amendment No. 3, then the Currency Exchange
3Act is amended by changing Sections 15.1b and 19.3 as follows:
 
4    (205 ILCS 405/15.1b)  (from Ch. 17, par. 4827)
5    Sec. 15.1b. Liquidation; distribution; priority. The
6General Assembly finds and declares that community currency
7exchanges provide important and vital services to Illinois
8citizens. The General Assembly also finds that in providing
9such services, community currency exchanges transact extensive
10business involving check cashing and the writing of money
11orders in communities in which banking services are generally
12unavailable. It is therefore declared to be the policy of this
13State that customers who receive these services must be
14protected from insolvencies of currency exchanges and
15interruptions of services. To carry out this policy and to
16insure that customers of community currency exchanges are
17protected in the event it is determined that a community
18currency exchange in receivership should be liquidated in
19accordance with Section 15.1a of this Act, the Secretary shall
20make a distribution of moneys collected by the receiver in the
21following order of priority: First, allowed claims for the
22actual necessary expenses of the receivership of the community
23currency exchange being liquidated, including (a) reasonable
24receiver fees and receiver's attorney's fees approved by the
25Secretary, (b) all expenses of any preliminary or other

 

 

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1examinations into the condition of the community currency
2exchange or receivership, (c) all expenses incurred by the
3Secretary which are incident to possession and control of any
4property or records of the community currency exchange, and (d)
5reasonable expenses incurred by the Secretary as the result of
6business agreements or contractual arrangements necessary to
7insure that the services of the community currency exchanges
8are delivered to the community without interruption. Said
9business agreements or contractual arrangements may include,
10but are not limited to, agreements made by the Secretary, or by
11the Receiver with the approval of the Secretary, with banks,
12money order companies, bonding companies and other types of
13financial institutions; Second, allowed claims by a purchaser
14of money orders issued on demand of the community currency
15exchange being liquidated; Third, allowed claims arising by
16virtue of and to the extent of the amount a utility customer
17deposits with the community currency exchange being liquidated
18which are not remitted to the utility company; Fourth, allowed
19claims arising by virtue of and to the extent of the amount
20paid by a purchaser of Illinois license plates, vehicle
21stickers sold for State and municipal governments in Illinois,
22and temporary Illinois registration permits purchased at the
23currency exchange being liquidated; Fifth, allowed unsecured
24claims for wages or salaries, excluding vacation, severance and
25sick leave pay earned by employee earned within 90 days prior
26to the appointment of a Receiver; Sixth, secured claims;

 

 

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1Seventh, allowed unsecured claims of any tax, and interest and
2penalty on the tax; Eighth, allowed unsecured claims other than
3a kind specified in paragraph one, two and three of this
4Section, filed with the Secretary within the time the Secretary
5fixes for filing claims; Ninth, allowed unsecured claims, other
6than a kind specified in paragraphs one, two and three of this
7Section filed with the Secretary after the time fixed for
8filing claims by the Secretary; Tenth, allowed creditor claims
9asserted by an owner, member, or stockholder of the community
10currency exchange in liquidation; Eleventh, after one year from
11the final dissolution of the currency exchange, all assets not
12used to satisfy allowed claims shall be distributed pro rata to
13the owner, owners, members, or stockholders of the currency
14exchange.
15    The Secretary shall pay all claims of equal priority
16according to the schedule set out above, and shall not pay
17claims of lower priority until all higher priority claims are
18satisfied. If insufficient assets are available to meet all
19claims of equal priority, those assets shall be distributed pro
20rata among those claims. All unclaimed assets of a currency
21exchange shall be deposited with the Secretary to be paid out
22by him when proper claims therefor are presented to the
23Secretary. If there are funds remaining after the conclusion of
24a receivership of an abandoned currency exchange, the remaining
25funds shall be considered unclaimed property and remitted to
26the State Treasurer under the Revised Uniform Disposition of

 

 

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1Unclaimed Property Act.
2(Source: P.A. 97-315, eff. 1-1-12; 10000SB0009ham003.)
 
3    (205 ILCS 405/19.3)  (from Ch. 17, par. 4838)
4    Sec. 19.3. (A) The General Assembly hereby finds and
5declares: community currency exchanges and ambulatory currency
6exchanges provide important and vital services to Illinois
7citizens. In so doing, they transact extensive business
8involving check cashing and the writing of money orders in
9communities in which banking services are generally
10unavailable. Customers of currency exchanges who receive these
11services must be protected from being charged unreasonable and
12unconscionable rates for cashing checks and purchasing money
13orders. The Illinois Department of Financial and Professional
14Regulation has the responsibility for regulating the
15operations of currency exchanges and has the expertise to
16determine reasonable maximum rates to be charged for check
17cashing and money order purchases. Therefore, it is in the
18public interest, convenience, welfare and good to have the
19Department establish reasonable maximum rate schedules for
20check cashing and the issuance of money orders and to require
21community and ambulatory currency exchanges to prominently
22display to the public the fees charged for all services. The
23Secretary shall review, each year, the cost of operation of the
24Currency Exchange Section and the revenue generated from
25currency exchange examinations and report to the General

 

 

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1Assembly if the need exists for an increase in the fees
2mandated by this Act to maintain the Currency Exchange Section
3at a fiscally self-sufficient level. The Secretary shall
4include in such report the total amount of funds remitted to
5the State and delivered to the State Treasurer by currency
6exchanges pursuant to the Revised Uniform Disposition of
7Unclaimed Property Act.
8    (B) The Secretary shall, by rules adopted in accordance
9with the Illinois Administrative Procedure Act, expeditiously
10formulate and issue schedules of reasonable maximum rates which
11can be charged for check cashing and writing of money orders by
12community currency exchanges and ambulatory currency
13exchanges.
14        (1) In determining the maximum rate schedules for the
15    purposes of this Section the Secretary shall take into
16    account:
17            (a) Rates charged in the past for the cashing of
18        checks and the issuance of money orders by community
19        and ambulatory currency exchanges.
20            (b) Rates charged by banks or other business
21        entities for rendering the same or similar services and
22        the factors upon which those rates are based.
23            (c) The income, cost and expense of the operation
24        of currency exchanges.
25            (d) Rates charged by currency exchanges or other
26        similar entities located in other states for the same

 

 

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1        or similar services and the factors upon which those
2        rates are based.
3            (e) Rates charged by the United States Postal
4        Service for the issuing of money orders and the factors
5        upon which those rates are based.
6            (f) A reasonable profit for a currency exchange
7        operation.
8        (2)(a) The schedule of reasonable maximum rates
9    established pursuant to this Section may be modified by the
10    Secretary from time to time pursuant to rules adopted in
11    accordance with the Illinois Administrative Procedure Act.
12        (b) Upon the filing of a verified petition setting
13    forth allegations demonstrating reasonable cause to
14    believe that the schedule of maximum rates previously
15    issued and promulgated should be adjusted, the Secretary
16    shall expeditiously:
17            (i) reject the petition if it fails to demonstrate
18        reasonable cause to believe that an adjustment is
19        necessary; or
20            (ii) conduct such hearings, in accordance with
21        this Section, as may be necessary to determine whether
22        the petition should be granted in whole or in part.
23        (c) No petition may be filed pursuant to subparagraph
24    (a) of paragraph (2) of subsection (B) unless:
25            (i) at least nine months have expired since the
26        last promulgation of schedules of maximum rates; and

 

 

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1            (ii) at least one-fourth of all community currency
2        exchange licensees join in a petition or, in the case
3        of ambulatory currency exchanges, a licensee or
4        licensees authorized to serve at least 100 locations
5        join in a petition.
6        (3) Any currency exchange may charge lower fees than
7    those of the applicable maximum fee schedule after filing
8    with the Secretary a schedule of fees it proposes to use.
9(Source: P.A. 97-315, eff. 1-1-12; 10000SB0009ham003.)
 
10    Section 17-70. If and only if Senate Bill 9 of the 100th
11General Assembly becomes law in the form in which it was
12amended by House Amendment No. 3, then the Corporate Fiduciary
13Act is amended by changing Section 6-14 as follows:
 
14    (205 ILCS 620/6-14)  (from Ch. 17, par. 1556-14)
15    Sec. 6-14. From time to time during receivership the
16Commissioner shall make and pay from monies of the corporate
17fiduciary a ratable dividend on all claims as may be proved to
18his or her satisfaction or adjudicated by the court. After one
19year from the entry of a judgment of dissolution, all unclaimed
20dividends shall be remitted to the State Treasurer in
21accordance with the Revised Uniform Disposition of Unclaimed
22Property Act, as now or hereafter amended, together with a list
23of all unpaid claimants, their last known addresses and the
24amounts unpaid.

 

 

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1(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
 
2    Section 17-75. If and only if Senate Bill 9 of the 100th
3General Assembly becomes law in the form in which it was
4amended by House Amendment No. 3, then the Transmitters of
5Money Act is amended by changing Section 30 as follows:
 
6    (205 ILCS 657/30)
7    Sec. 30. Surety bond.
8    (a) An applicant for a license shall post and a licensee
9must maintain with the Director a bond or bonds issued by
10corporations qualified to do business as surety companies in
11this State.
12    (b) The applicant or licensee shall post a bond in the
13amount of the greater of $100,000 or an amount equal to the
14daily average of outstanding payment instruments for the
15preceding 12 months or operational history, whichever is
16shorter, up to a maximum amount of $2,000,000. When the amount
17of the required bond exceeds $1,000,000, the applicant or
18licensee may, in the alternative, post a bond in the amount of
19$1,000,000 plus a dollar for dollar increase in the net worth
20of the applicant or licensee over and above the amount required
21in Section 20, up to a total amount of $2,000,000.
22    (c) The bond must be in a form satisfactory to the Director
23and shall run to the State of Illinois for the benefit of any
24claimant against the applicant or licensee with respect to the

 

 

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1receipt, handling, transmission, and payment of money by the
2licensee or authorized seller in connection with the licensed
3operations. A claimant damaged by a breach of the conditions of
4a bond shall have a right to action upon the bond for damages
5suffered thereby and may bring suit directly on the bond, or
6the Director may bring suit on behalf of the claimant.
7    (d) (Blank).
8    (e) (Blank).
9    (f) After receiving a license, the licensee must maintain
10the required bond plus net worth (if applicable) until 5 years
11after it ceases to do business in this State unless all
12outstanding payment instruments are eliminated or the
13provisions under the Revised Uniform Disposition of Unclaimed
14Property Act have become operative and are adhered to by the
15licensee. Notwithstanding this provision, however, the amount
16required to be maintained may be reduced to the extent that the
17amount of the licensee's payment instruments outstanding in
18this State are reduced.
19    (g) If the Director at any time reasonably determines that
20the required bond is insecure, deficient in amount, or
21exhausted in whole or in part, he may in writing require the
22filing of a new or supplemental bond in order to secure
23compliance with this Act and may demand compliance with the
24requirement within 30 days following service on the licensee.
25(Source: P.A. 92-400, eff. 1-1-02; 10000SB0009ham003.)
 

 

 

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1    Section 17-80. If and only if Senate Bill 9 of the 100th
2General Assembly becomes law in the form in which it was
3amended by House Amendment No. 3, then the Adverse Claims to
4Deposit Accounts Act is amended by changing Section 10 as
5follows:
 
6    (205 ILCS 700/10)
7    Sec. 10. Application of Act. This Act shall not preempt:
8    (1) the Revised Uniform Disposition of Unclaimed Property
9Act, nor shall any provision of this Act be construed to
10relieve any holder, including a financial institution, from
11reporting and remitting all unclaimed property, including
12deposit accounts, under the Revised Uniform Disposition of
13Unclaimed Property Act;
14    (2) the Uniform Commercial Code, nor shall any provision of
15this Act be construed as affecting the rights of a person with
16respect to a deposit account under the Uniform Commercial Code;
17    (3) the provisions of Section 2-1402 of the Code of Civil
18Procedure, nor shall any provision of this Act be construed as
19affecting the rights of a person with respect to a deposit
20account under Section 2-1402 of the Code of Civil Procedure;
21    (4) the provisions of Part 7 of Article II of the Code of
22Civil Procedure, nor shall any provision of this Act be
23construed as affecting the rights of a person with respect to a
24deposit account under the provisions of Part 7 of Article II of
25the Code of Civil Procedure;

 

 

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1    (5) the provisions of Article XXV of the Probate Act of
21975, nor shall any provision of this Act be construed as
3affecting the rights of a person with respect to a deposit
4account under the provisions of Article XXV of the Probate Act
5of 1975; or
6    (6) the Safety Deposit Box Opening Act, nor shall any
7provision of this Act be construed as affecting the rights of a
8person with respect to a deposit account under the Safety
9Deposit Box Opening Act.
10(Source: P.A. 89-601, eff. 8-2-96; 10000SB0009ham003.)
 
11    Section 17-85. If and only if Senate Bill 9 of the 100th
12General Assembly becomes law in the form in which it was
13amended by House Amendment No. 3, then the Illinois Insurance
14Code is amended by changing Section 210 as follows:
 
15    (215 ILCS 5/210)  (from Ch. 73, par. 822)
16    Sec. 210. Distribution of assets; priorities; unpaid
17dividends.
18    (1) Any time after the last day fixed for the filing of
19proofs of claims in the liquidation of a company, the court
20may, upon the application of the Director authorize him to
21declare out of the funds remaining in his hands, one or more
22dividends upon all claims allowed in accordance with the
23priorities established in Section 205.
24    (2) Where there has been no adjudication of insolvency, the

 

 

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1Director shall pay all allowed claims in full in accordance
2with the priorities set forth in Section 205. The director
3shall not be chargeable for any assets so distributed to any
4claimant who has failed to file a proper proof of claim before
5such distribution has been made.
6    (3) When subsequent to an adjudication of insolvency,
7pursuant to Section 208, a surplus is found to exist after the
8payment in full of all allowed claims falling within the
9priorities set forth in paragraphs (a), (b), (c), (d), (e), (f)
10and (g) of subsection (1) of Section 205 and which have been
11duly filed prior to the last date fixed for the filing thereof,
12and after the setting aside of a reserve for all additional
13costs and expenses of the proceeding, the court shall set a new
14date for the filing of claims. After the expiration of the new
15date, all allowed claims filed on or before said new date
16together with all previously allowed claims falling within the
17priorities set forth in paragraphs (h) and (i) of subsection
18(1) of Section 205 shall be paid in accordance with the
19priorities set forth in Section 205.
20    (4) Dividends remaining unclaimed or unpaid in the hands of
21the Director for 6 months after the final order of distribution
22may be by him deposited in one or more savings and loan
23associations, State or national banks, trust companies or
24savings banks to the credit of the Director, whomsoever he may
25be, in trust for the person entitled thereto, but no such
26person shall be entitled to any interest upon such deposit. All

 

 

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1such deposits shall be entitled to priority of payment in case
2of the insolvency or voluntary or involuntary liquidation of
3the depositary on an equality with any other priority given by
4the banking law. Any such funds together with interest, if any,
5paid or credited thereon, remaining and unclaimed in the hands
6of the Director in Trust after 2 years shall be presumed
7abandoned and reported and delivered to the State Treasurer and
8become subject to the provisions of the Revised Uniform
9Disposition of Unclaimed Property Act.
10(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
 
11    Section 17-90. If and only if Senate Bill 9 of the 100th
12General Assembly becomes law in the form in which it was
13amended by House Amendment No. 3, then the Unclaimed Life
14Insurance Benefits Act is amended by changing Sections 5, 15,
15and 20 as follows:
 
16    (215 ILCS 185/5)
17    Sec. 5. Purpose. This Act shall require recognition of the
18Revised Uniform Disposition of Unclaimed Property Act and
19require the complete and proper disclosure, transparency, and
20accountability relating to any method of payment for life
21insurance, annuity, or retained asset agreement death
22benefits.
23(Source: P.A. 99-893, eff. 1-1-17; 10000SB0009ham003.)
 

 

 

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1    (215 ILCS 185/15)
2    Sec. 15. Insurer conduct.
3    (a) An insurer shall initially perform a comparison of its
4insureds', annuitants', and retained asset account holders'
5in-force policies, annuity contracts, and retained asset
6accounts by using the full Death Master File. The initial
7comparison shall be completed on or before December 31, 2017,
8unless extended by the Department pursuant to administrative
9rule. Thereafter, an insurer shall perform a comparison on at
10least a semi-annual basis using the Death Master File update
11files for comparisons to identify potential matches of its
12insureds, annuitants, and retained asset account holders. In
13the event that one of the insurer's lines of business conducts
14a search for matches of its insureds, annuitants, and retained
15asset account holders against the Death Master File at
16intervals more frequently than semi-annually, then all lines of
17the insurer's business shall conduct searches for matches
18against the Death Master File with the same frequency.
19    An insured, an annuitant, or a retained asset account
20holder is presumed dead if the date of his or her death is
21indicated by the comparison required in this subsection (a),
22unless the insurer has competent and substantial evidence that
23the person is living, including, but not limited to, a contact
24made by the insurer with the person or his or her legal
25representative.
26    For those potential matches identified as a result of a

 

 

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1Death Master File match, the insurer shall within 120 days
2after the date of death notice, if the insurer has not been
3contacted by a beneficiary, determine whether benefits are due
4in accordance with the applicable policy or contract and, if
5benefits are due in accordance with the applicable policy or
6contract:
7        (1) use good faith efforts, which shall be documented
8    by the insurer, to locate the beneficiary or beneficiaries;
9    the Department shall establish by administrative rule
10    minimum standards for what constitutes good faith efforts
11    to locate a beneficiary, which shall include: (A) searching
12    insurer records; (B) the appropriate use of First Class
13    United States mail, e-mail addresses, and telephone calls;
14    and (C) reasonable efforts by insurers to obtain updated
15    contact information for the beneficiary or beneficiaries;
16    good faith efforts shall not include additional attempts to
17    contact the beneficiary at an address already confirmed not
18    to be current; and
19        (2) provide the appropriate claims forms or
20    instructions to the beneficiary or beneficiaries to make a
21    claim, including the need to provide an official death
22    certificate if applicable under the policy or annuity
23    contract.
24    (b) Insurers shall implement procedures to account for the
25following when conducting searches of the Death Master File:
26        (1) common nicknames, initials used in lieu of a first

 

 

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1    or middle name, use of a middle name, compound first and
2    middle names, and interchanged first and middle names;
3        (2) compound last names, maiden or married names, and
4    hyphens, blank spaces, or apostrophes in last names;
5        (3) transposition of the "month" and "date" portions of
6    the date of birth; and
7        (4) incomplete social security numbers.
8    (c) To the extent permitted by law, an insurer may disclose
9the minimum necessary personal information about the insured,
10annuity owner, retained asset account holder, or beneficiary to
11a person whom the insurer reasonably believes may be able to
12assist the insurer with locating the beneficiary or a person
13otherwise entitled to payment of the claims proceeds.
14    (d) An insurer or its service provider shall not charge any
15beneficiary or other authorized representative for any fees or
16costs associated with a Death Master File search or
17verification of a Death Master File match conducted pursuant to
18this Act.
19    (e) The benefits from a policy, annuity contract, or a
20retained asset account, plus any applicable accrued interest,
21shall first be payable to the designated beneficiaries or
22owners and, in the event the beneficiaries or owners cannot be
23found, shall be reported and delivered to the State Treasurer
24pursuant to the Revised Uniform Disposition of Unclaimed
25Property Act. Nothing in this subsection (e) is intended to
26alter the amounts reportable under the existing provisions of

 

 

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1the Revised Uniform Disposition of Unclaimed Property Act or to
2allow the imposition of additional statutory interest under
3Article XIV of the Illinois Insurance Code.
4    (f) Failure to meet any requirement of this Section with
5such frequency as to constitute a general business practice is
6a violation of Section 424 of the Illinois Insurance Code.
7Nothing in this Section shall be construed to create or imply a
8private cause of action for a violation of this Section.
9(Source: P.A. 99-893, eff. 1-1-17; 10000SB0009ham003.)
 
10    (215 ILCS 185/20)
11    Sec. 20. Revised Uniform Disposition of Unclaimed Property
12Act. Nothing in this Act shall be construed to amend, modify,
13or supersede the Revised Uniform Disposition of Unclaimed
14Property Act, including the authority of the State Treasurer to
15examine the records of any person if the State Treasurer has
16reason to believe that such person has failed to report
17property that should have been reported pursuant to the Revised
18Uniform Disposition of Unclaimed Property Act.
19(Source: P.A. 99-893, eff. 1-1-17; 10000SB0009ham003.)
 
20    Section 17-95. If and only if Senate Bill 9 of the 100th
21General Assembly becomes law in the form in which it was
22amended by House Amendment No. 3, then the Real Estate License
23Act of 2000 is amended by changing Section 20-20 as follows:
 

 

 

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1    (225 ILCS 454/20-20)
2    (Section scheduled to be repealed on January 1, 2020)
3    Sec. 20-20. Grounds for discipline.
4    (a) The Department may refuse to issue or renew a license,
5may place on probation, suspend, or revoke any license,
6reprimand, or take any other disciplinary or non-disciplinary
7action as the Department may deem proper and impose a fine not
8to exceed $25,000 upon any licensee or applicant under this Act
9or any person who holds himself or herself out as an applicant
10or licensee or against a licensee in handling his or her own
11property, whether held by deed, option, or otherwise, for any
12one or any combination of the following causes:
13        (1) Fraud or misrepresentation in applying for, or
14    procuring, a license under this Act or in connection with
15    applying for renewal of a license under this Act.
16        (2) The conviction of or plea of guilty or plea of nolo
17    contendere to a felony or misdemeanor in this State or any
18    other jurisdiction; or the entry of an administrative
19    sanction by a government agency in this State or any other
20    jurisdiction. Action taken under this paragraph (2) for a
21    misdemeanor or an administrative sanction is limited to a
22    misdemeanor or administrative sanction that has as an
23    essential element dishonesty or fraud or involves larceny,
24    embezzlement, or obtaining money, property, or credit by
25    false pretenses or by means of a confidence game.
26        (3) Inability to practice the profession with

 

 

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1    reasonable judgment, skill, or safety as a result of a
2    physical illness, including, but not limited to,
3    deterioration through the aging process or loss of motor
4    skill, or a mental illness or disability.
5        (4) Practice under this Act as a licensee in a retail
6    sales establishment from an office, desk, or space that is
7    not separated from the main retail business by a separate
8    and distinct area within the establishment.
9        (5) Having been disciplined by another state, the
10    District of Columbia, a territory, a foreign nation, or a
11    governmental agency authorized to impose discipline if at
12    least one of the grounds for that discipline is the same as
13    or the equivalent of one of the grounds for which a
14    licensee may be disciplined under this Act. A certified
15    copy of the record of the action by the other state or
16    jurisdiction shall be prima facie evidence thereof.
17        (6) Engaging in the practice of real estate brokerage
18    without a license or after the licensee's license was
19    expired or while the license was inoperative.
20        (7) Cheating on or attempting to subvert the Real
21    Estate License Exam or continuing education exam.
22        (8) Aiding or abetting an applicant to subvert or cheat
23    on the Real Estate License Exam or continuing education
24    exam administered pursuant to this Act.
25        (9) Advertising that is inaccurate, misleading, or
26    contrary to the provisions of the Act.

 

 

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1        (10) Making any substantial misrepresentation or
2    untruthful advertising.
3        (11) Making any false promises of a character likely to
4    influence, persuade, or induce.
5        (12) Pursuing a continued and flagrant course of
6    misrepresentation or the making of false promises through
7    licensees, employees, agents, advertising, or otherwise.
8        (13) Any misleading or untruthful advertising, or
9    using any trade name or insignia of membership in any real
10    estate organization of which the licensee is not a member.
11        (14) Acting for more than one party in a transaction
12    without providing written notice to all parties for whom
13    the licensee acts.
14        (15) Representing or attempting to represent a broker
15    other than the sponsoring broker.
16        (16) Failure to account for or to remit any moneys or
17    documents coming into his or her possession that belong to
18    others.
19        (17) Failure to maintain and deposit in a special
20    account, separate and apart from personal and other
21    business accounts, all escrow moneys belonging to others
22    entrusted to a licensee while acting as a broker, escrow
23    agent, or temporary custodian of the funds of others or
24    failure to maintain all escrow moneys on deposit in the
25    account until the transactions are consummated or
26    terminated, except to the extent that the moneys, or any

 

 

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1    part thereof, shall be:
2            (A) disbursed prior to the consummation or
3        termination (i) in accordance with the written
4        direction of the principals to the transaction or their
5        duly authorized agents, (ii) in accordance with
6        directions providing for the release, payment, or
7        distribution of escrow moneys contained in any written
8        contract signed by the principals to the transaction or
9        their duly authorized agents, or (iii) pursuant to an
10        order of a court of competent jurisdiction; or
11            (B) deemed abandoned and transferred to the Office
12        of the State Treasurer to be handled as unclaimed
13        property pursuant to the Revised Uniform Disposition
14        of Unclaimed Property Act. Escrow moneys may be deemed
15        abandoned under this subparagraph (B) only: (i) in the
16        absence of disbursement under subparagraph (A); (ii)
17        in the absence of notice of the filing of any claim in
18        a court of competent jurisdiction; and (iii) if 6
19        months have elapsed after the receipt of a written
20        demand for the escrow moneys from one of the principals
21        to the transaction or the principal's duly authorized
22        agent.
23    The account shall be noninterest bearing, unless the
24    character of the deposit is such that payment of interest
25    thereon is otherwise required by law or unless the
26    principals to the transaction specifically require, in

 

 

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1    writing, that the deposit be placed in an interest bearing
2    account.
3        (18) Failure to make available to the Department all
4    escrow records and related documents maintained in
5    connection with the practice of real estate within 24 hours
6    of a request for those documents by Department personnel.
7        (19) Failing to furnish copies upon request of
8    documents relating to a real estate transaction to a party
9    who has executed that document.
10        (20) Failure of a sponsoring broker to timely provide
11    information, sponsor cards, or termination of licenses to
12    the Department.
13        (21) Engaging in dishonorable, unethical, or
14    unprofessional conduct of a character likely to deceive,
15    defraud, or harm the public.
16        (22) Commingling the money or property of others with
17    his or her own money or property.
18        (23) Employing any person on a purely temporary or
19    single deal basis as a means of evading the law regarding
20    payment of commission to nonlicensees on some contemplated
21    transactions.
22        (24) Permitting the use of his or her license as a
23    broker to enable a leasing agent or unlicensed person to
24    operate a real estate business without actual
25    participation therein and control thereof by the broker.
26        (25) Any other conduct, whether of the same or a

 

 

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1    different character from that specified in this Section,
2    that constitutes dishonest dealing.
3        (26) Displaying a "for rent" or "for sale" sign on any
4    property without the written consent of an owner or his or
5    her duly authorized agent or advertising by any means that
6    any property is for sale or for rent without the written
7    consent of the owner or his or her authorized agent.
8        (27) Failing to provide information requested by the
9    Department, or otherwise respond to that request, within 30
10    days of the request.
11        (28) Advertising by means of a blind advertisement,
12    except as otherwise permitted in Section 10-30 of this Act.
13        (29) Offering guaranteed sales plans, as defined in
14    clause (A) of this subdivision (29), except to the extent
15    hereinafter set forth:
16            (A) A "guaranteed sales plan" is any real estate
17        purchase or sales plan whereby a licensee enters into a
18        conditional or unconditional written contract with a
19        seller, prior to entering into a brokerage agreement
20        with the seller, by the terms of which a licensee
21        agrees to purchase a property of the seller within a
22        specified period of time at a specific price in the
23        event the property is not sold in accordance with the
24        terms of a brokerage agreement to be entered into
25        between the sponsoring broker and the seller.
26            (B) A licensee offering a guaranteed sales plan

 

 

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1        shall provide the details and conditions of the plan in
2        writing to the party to whom the plan is offered.
3            (C) A licensee offering a guaranteed sales plan
4        shall provide to the party to whom the plan is offered
5        evidence of sufficient financial resources to satisfy
6        the commitment to purchase undertaken by the broker in
7        the plan.
8            (D) Any licensee offering a guaranteed sales plan
9        shall undertake to market the property of the seller
10        subject to the plan in the same manner in which the
11        broker would market any other property, unless the
12        agreement with the seller provides otherwise.
13            (E) The licensee cannot purchase seller's property
14        until the brokerage agreement has ended according to
15        its terms or is otherwise terminated.
16            (F) Any licensee who fails to perform on a
17        guaranteed sales plan in strict accordance with its
18        terms shall be subject to all the penalties provided in
19        this Act for violations thereof and, in addition, shall
20        be subject to a civil fine payable to the party injured
21        by the default in an amount of up to $25,000.
22        (30) Influencing or attempting to influence, by any
23    words or acts, a prospective seller, purchaser, occupant,
24    landlord, or tenant of real estate, in connection with
25    viewing, buying, or leasing real estate, so as to promote
26    or tend to promote the continuance or maintenance of

 

 

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1    racially and religiously segregated housing or so as to
2    retard, obstruct, or discourage racially integrated
3    housing on or in any street, block, neighborhood, or
4    community.
5        (31) Engaging in any act that constitutes a violation
6    of any provision of Article 3 of the Illinois Human Rights
7    Act, whether or not a complaint has been filed with or
8    adjudicated by the Human Rights Commission.
9        (32) Inducing any party to a contract of sale or lease
10    or brokerage agreement to break the contract of sale or
11    lease or brokerage agreement for the purpose of
12    substituting, in lieu thereof, a new contract for sale or
13    lease or brokerage agreement with a third party.
14        (33) Negotiating a sale, exchange, or lease of real
15    estate directly with any person if the licensee knows that
16    the person has an exclusive brokerage agreement with
17    another broker, unless specifically authorized by that
18    broker.
19        (34) When a licensee is also an attorney, acting as the
20    attorney for either the buyer or the seller in the same
21    transaction in which the licensee is acting or has acted as
22    a managing broker or broker.
23        (35) Advertising or offering merchandise or services
24    as free if any conditions or obligations necessary for
25    receiving the merchandise or services are not disclosed in
26    the same advertisement or offer. These conditions or

 

 

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1    obligations include without limitation the requirement
2    that the recipient attend a promotional activity or visit a
3    real estate site. As used in this subdivision (35), "free"
4    includes terms such as "award", "prize", "no charge", "free
5    of charge", "without charge", and similar words or phrases
6    that reasonably lead a person to believe that he or she may
7    receive or has been selected to receive something of value,
8    without any conditions or obligations on the part of the
9    recipient.
10        (36) Disregarding or violating any provision of the
11    Land Sales Registration Act of 1989, the Illinois Real
12    Estate Time-Share Act, or the published rules promulgated
13    by the Department to enforce those Acts.
14        (37) Violating the terms of a disciplinary order issued
15    by the Department.
16        (38) Paying or failing to disclose compensation in
17    violation of Article 10 of this Act.
18        (39) Requiring a party to a transaction who is not a
19    client of the licensee to allow the licensee to retain a
20    portion of the escrow moneys for payment of the licensee's
21    commission or expenses as a condition for release of the
22    escrow moneys to that party.
23        (40) Disregarding or violating any provision of this
24    Act or the published rules promulgated by the Department to
25    enforce this Act or aiding or abetting any individual,
26    partnership, registered limited liability partnership,

 

 

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1    limited liability company, or corporation in disregarding
2    any provision of this Act or the published rules
3    promulgated by the Department to enforce this Act.
4        (41) Failing to provide the minimum services required
5    by Section 15-75 of this Act when acting under an exclusive
6    brokerage agreement.
7        (42) Habitual or excessive use or addiction to alcohol,
8    narcotics, stimulants, or any other chemical agent or drug
9    that results in a managing broker, broker, or leasing
10    agent's inability to practice with reasonable skill or
11    safety.
12        (43) Enabling, aiding, or abetting an auctioneer, as
13    defined in the Auction License Act, to conduct a real
14    estate auction in a manner that is in violation of this
15    Act.
16    (b) The Department may refuse to issue or renew or may
17suspend the license of any person who fails to file a return,
18pay the tax, penalty or interest shown in a filed return, or
19pay any final assessment of tax, penalty, or interest, as
20required by any tax Act administered by the Department of
21Revenue, until such time as the requirements of that tax Act
22are satisfied in accordance with subsection (g) of Section
232105-15 of the Civil Administrative Code of Illinois.
24    (c) The Department shall deny a license or renewal
25authorized by this Act to a person who has defaulted on an
26educational loan or scholarship provided or guaranteed by the

 

 

SB2224- 130 -LRB100 13364 AXK 27964 b

1Illinois Student Assistance Commission or any governmental
2agency of this State in accordance with item (5) of subsection
3(a) of Section 2105-15 of the Civil Administrative Code of
4Illinois.
5    (d) In cases where the Department of Healthcare and Family
6Services (formerly Department of Public Aid) has previously
7determined that a licensee or a potential licensee is more than
830 days delinquent in the payment of child support and has
9subsequently certified the delinquency to the Department may
10refuse to issue or renew or may revoke or suspend that person's
11license or may take other disciplinary action against that
12person based solely upon the certification of delinquency made
13by the Department of Healthcare and Family Services in
14accordance with item (5) of subsection (a) of Section 2105-15
15of the Civil Administrative Code of Illinois.
16    (e) In enforcing this Section, the Department or Board upon
17a showing of a possible violation may compel an individual
18licensed to practice under this Act, or who has applied for
19licensure under this Act, to submit to a mental or physical
20examination, or both, as required by and at the expense of the
21Department. The Department or Board may order the examining
22physician to present testimony concerning the mental or
23physical examination of the licensee or applicant. No
24information shall be excluded by reason of any common law or
25statutory privilege relating to communications between the
26licensee or applicant and the examining physician. The

 

 

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1examining physicians shall be specifically designated by the
2Board or Department. The individual to be examined may have, at
3his or her own expense, another physician of his or her choice
4present during all aspects of this examination. Failure of an
5individual to submit to a mental or physical examination, when
6directed, shall be grounds for suspension of his or her license
7until the individual submits to the examination if the
8Department finds, after notice and hearing, that the refusal to
9submit to the examination was without reasonable cause.
10    If the Department or Board finds an individual unable to
11practice because of the reasons set forth in this Section, the
12Department or Board may require that individual to submit to
13care, counseling, or treatment by physicians approved or
14designated by the Department or Board, as a condition, term, or
15restriction for continued, reinstated, or renewed licensure to
16practice; or, in lieu of care, counseling, or treatment, the
17Department may file, or the Board may recommend to the
18Department to file, a complaint to immediately suspend, revoke,
19or otherwise discipline the license of the individual. An
20individual whose license was granted, continued, reinstated,
21renewed, disciplined or supervised subject to such terms,
22conditions, or restrictions, and who fails to comply with such
23terms, conditions, or restrictions, shall be referred to the
24Secretary for a determination as to whether the individual
25shall have his or her license suspended immediately, pending a
26hearing by the Department.

 

 

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1    In instances in which the Secretary immediately suspends a
2person's license under this Section, a hearing on that person's
3license must be convened by the Department within 30 days after
4the suspension and completed without appreciable delay. The
5Department and Board shall have the authority to review the
6subject individual's record of treatment and counseling
7regarding the impairment to the extent permitted by applicable
8federal statutes and regulations safeguarding the
9confidentiality of medical records.
10    An individual licensed under this Act and affected under
11this Section shall be afforded an opportunity to demonstrate to
12the Department or Board that he or she can resume practice in
13compliance with acceptable and prevailing standards under the
14provisions of his or her license.
15(Source: P.A. 98-553, eff. 1-1-14; 98-756, eff. 7-16-14;
1699-227, eff. 8-3-15; 10000SB0009ham003.)
 
17    Section 17-100. If and only if Senate Bill 9 of the 100th
18General Assembly becomes law in the form in which it was
19amended by House Amendment No. 3, then the Code of Criminal
20Procedure of 1963 is amended by changing Section 110-17 as
21follows:
 
22    (725 ILCS 5/110-17)  (from Ch. 38, par. 110-17)
23    Sec. 110-17. Unclaimed Bail Deposits. Notwithstanding the
24provisions of the Revised Uniform Disposition of Unclaimed

 

 

SB2224- 133 -LRB100 13364 AXK 27964 b

1Property Act, any sum of money deposited by any person to
2secure his release from custody which remains unclaimed by the
3person entitled to its return for 3 years after the conditions
4of the bail bond have been performed and the accused has been
5discharged from all obligations in the cause shall be presumed
6to be abandoned.
7    (a) The clerk of the circuit court, as soon thereafter as
8practicable, shall cause notice to be published once, in
9English, in a newspaper or newspapers of general circulation in
10the county wherein the deposit of bond was received.
11    (b) The published notice shall be entitled "Notice of
12Persons Appearing to be Owners of Abandoned Property" and shall
13contain:
14        (1) The names, in alphabetical order, of persons to
15    whom the notice is directed.
16        (2) A statement that information concerning the amount
17    of the property may be obtained by any persons possessing
18    an interest in the property by making an inquiry at the
19    office of the clerk of the circuit court at a location
20    designated by him.
21        (3) A statement that if proof of claim is not presented
22    by the owner to the clerk of the circuit court and if the
23    owner's right to receive the property is not established to
24    the satisfaction of the clerk of the court within 65 days
25    from the date of the published notice, the abandoned
26    property will be placed in the custody of the treasurer of

 

 

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1    the county, not later than 85 days after such publication,
2    to whom all further claims must thereafter be directed. If
3    the claim is established as aforesaid and after deducting
4    an amount not to exceed $20 to cover the cost of notice
5    publication and related clerical expenses, the clerk of the
6    court shall make payment to the person entitled thereto.
7        (4) The clerk of the circuit court is not required to
8    publish in such notice any items of less than $100 unless
9    he deems such publication in the public interest.
10    (c) Any clerk of the circuit court who has caused notice to
11be published as provided by this Section shall, within 20 days
12after the time specified in this Section for claiming the
13property from the clerk of the court, pay or deliver to the
14treasurer of the county having jurisdiction of the offense,
15whether the bond was taken there or any other county, all sums
16deposited as specified in this section less such amounts as may
17have been returned to the persons whose rights to receive the
18sums deposited have been established to the satisfaction of the
19clerk of the circuit court. Any clerk of the circuit court who
20transfers such sums to the county treasury including sums
21deposited by persons whose names are not required to be set
22forth in the published notice aforesaid, is relieved of all
23liability for such sums as have been transferred as unclaimed
24bail deposits or any claim which then exists or which
25thereafter may arise or be made in respect to such sums.
26    (d) The treasurer of the county shall keep just and true

 

 

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1accounts of all moneys paid into the treasury, and if any
2person appears within 5 years after the deposit of moneys by
3the clerk of the circuit court and claims any money paid into
4the treasury, he shall file a claim therefor on the form
5prescribed by the treasurer of the county who shall consider
6any claim filed under this Act and who may, in his discretion,
7hold a hearing and receive evidence concerning it. The
8treasurer of the county shall prepare a finding and the
9decision in writing on each hearing, stating the substance of
10any evidence heard by him, his findings of fact in respect
11thereto, and the reasons for his decision. The decision shall
12be a public record.
13    (e) All claims which are not filed within the 5 year period
14shall be forever barred.
15(Source: P.A. 85-768; 10000SB0009ham003.)
 
16    Section 17-105. If and only if Senate Bill 9 of the 100th
17General Assembly becomes law in the form in which it was
18amended by House Amendment No. 3, then the Probate Act of 1975
19is amended by changing Sections 2-1 and 2-2 as follows:
 
20    (755 ILCS 5/2-1)  (from Ch. 110 1/2, par. 2-1)
21    Sec. 2-1. Rules of descent and distribution. The intestate
22real and personal estate of a resident decedent and the
23intestate real estate in this State of a nonresident decedent,
24after all just claims against his estate are fully paid,

 

 

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1descends and shall be distributed as follows:
2    (a) If there is a surviving spouse and also a descendant of
3the decedent: 1/2 of the entire estate to the surviving spouse
4and 1/2 to the decedent's descendants per stirpes.
5    (b) If there is no surviving spouse but a descendant of the
6decedent: the entire estate to the decedent's descendants per
7stirpes.
8    (c) If there is a surviving spouse but no descendant of the
9decedent: the entire estate to the surviving spouse.
10    (d) If there is no surviving spouse or descendant but a
11parent, brother, sister or descendant of a brother or sister of
12the decedent: the entire estate to the parents, brothers and
13sisters of the decedent in equal parts, allowing to the
14surviving parent if one is dead a double portion and to the
15descendants of a deceased brother or sister per stirpes the
16portion which the deceased brother or sister would have taken
17if living.
18    (e) If there is no surviving spouse, descendant, parent,
19brother, sister or descendant of a brother or sister of the
20decedent but a grandparent or descendant of a grandparent of
21the decedent: (1) 1/2 of the entire estate to the decedent's
22maternal grandparents in equal parts or to the survivor of
23them, or if there is none surviving, to their descendants per
24stirpes, and (2) 1/2 of the entire estate to the decedent's
25paternal grandparents in equal parts or to the survivor of
26them, or if there is none surviving, to their descendants per

 

 

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1stirpes. If there is no surviving paternal grandparent or
2descendant of a paternal grandparent, but a maternal
3grandparent or descendant of a maternal grandparent of the
4decedent: the entire estate to the decedent's maternal
5grandparents in equal parts or to the survivor of them, or if
6there is none surviving, to their descendants per stirpes. If
7there is no surviving maternal grandparent or descendant of a
8maternal grandparent, but a paternal grandparent or descendant
9of a paternal grandparent of the decedent: the entire estate to
10the decedent's paternal grandparents in equal parts or to the
11survivor of them, or if there is none surviving, to their
12descendants per stirpes.
13    (f) If there is no surviving spouse, descendant, parent,
14brother, sister, descendant of a brother or sister or
15grandparent or descendant of a grandparent of the decedent: (1)
161/2 of the entire estate to the decedent's maternal
17great-grandparents in equal parts or to the survivor of them,
18or if there is none surviving, to their descendants per
19stirpes, and (2) 1/2 of the entire estate to the decedent's
20paternal great-grandparents in equal parts or to the survivor
21of them, or if there is none surviving, to their descendants
22per stirpes. If there is no surviving paternal
23great-grandparent or descendant of a paternal
24great-grandparent, but a maternal great-grandparent or
25descendant of a maternal great-grandparent of the decedent: the
26entire estate to the decedent's maternal great-grandparents in

 

 

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1equal parts or to the survivor of them, or if there is none
2surviving, to their descendants per stirpes. If there is no
3surviving maternal great-grandparent or descendant of a
4maternal great-grandparent, but a paternal great-grandparent
5or descendant of a paternal great-grandparent of the decedent:
6the entire estate to the decedent's paternal
7great-grandparents in equal parts or to the survivor of them,
8or if there is none surviving, to their descendants per
9stirpes.
10    (g) If there is no surviving spouse, descendant, parent,
11brother, sister, descendant of a brother or sister,
12grandparent, descendant of a grandparent, great-grandparent or
13descendant of a great-grandparent of the decedent: the entire
14estate in equal parts to the nearest kindred of the decedent in
15equal degree (computing by the rules of the civil law) and
16without representation.
17    (h) If there is no surviving spouse and no known kindred of
18the decedent: the real estate escheats to the county in which
19it is located; the personal estate physically located within
20this State and the personal estate physically located or held
21outside this State which is the subject of ancillary
22administration of an estate being administered within this
23State escheats to the county of which the decedent was a
24resident, or, if the decedent was not a resident of this State,
25to the county in which it is located; all other personal
26property of the decedent of every class and character, wherever

 

 

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1situate, or the proceeds thereof, shall escheat to this State
2and be delivered to the State Treasurer pursuant to the Revised
3Uniform Disposition of Unclaimed Property Act.
4    In no case is there any distinction between the kindred of
5the whole and the half blood.
6(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
 
7    (755 ILCS 5/2-2)  (from Ch. 110 1/2, par. 2-2)
8    Sec. 2-2. Children born out of wedlock. The intestate real
9and personal estate of a resident decedent who was a child born
10out of wedlock at the time of death and the intestate real
11estate in this State of a nonresident decedent who was a child
12born out of wedlock at the time of death, after all just claims
13against his estate are fully paid, descends and shall be
14distributed as provided in Section 2-1, subject to Section
152-6.5 of this Act, if both parents are eligible parents. As
16used in this Section, "eligible parent" means a parent of the
17decedent who, during the decedent's lifetime, acknowledged the
18decedent as the parent's child, established a parental
19relationship with the decedent, and supported the decedent as
20the parent's child. "Eligible parents" who are in arrears of in
21excess of one year's child support obligations shall not
22receive any property benefit or other interest of the decedent
23unless and until a court of competent jurisdiction makes a
24determination as to the effect on the deceased of the arrearage
25and allows a reduced benefit. In no event shall the reduction

 

 

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1of the benefit or other interest be less than the amount of
2child support owed for the support of the decedent at the time
3of death. The court's considerations shall include but are not
4limited to the considerations in subsections (1) through (3) of
5Section 2-6.5 of this Act.
6    If neither parent is an eligible parent, the intestate real
7and personal estate of a resident decedent who was a child born
8out of wedlock at the time of death and the intestate real
9estate in this State of a nonresident decedent who was a child
10born out of wedlock at the time of death, after all just claims
11against his or her estate are fully paid, descends and shall be
12distributed as provided in Section 2-1, but the parents of the
13decedent shall be treated as having predeceased the decedent.
14    If only one parent is an eligible parent, the intestate
15real and personal estate of a resident decedent who was a child
16born out of wedlock at the time of death and the intestate real
17estate in this State of a nonresident decedent who was a child
18born out of wedlock at the time of death, after all just claims
19against his or her estate are fully paid, subject to Section
202-6.5 of this Act, descends and shall be distributed as
21follows:
22    (a) If there is a surviving spouse and also a descendant of
23the decedent: 1/2 of the entire estate to the surviving spouse
24and 1/2 to the decedent's descendants per stirpes.
25    (b) If there is no surviving spouse but a descendant of the
26decedent: the entire estate to the decedent's descendants per

 

 

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1stirpes.
2    (c) If there is a surviving spouse but no descendant of the
3decedent: the entire estate to the surviving spouse.
4    (d) If there is no surviving spouse or descendant but the
5eligible parent or a descendant of the eligible parent of the
6decedent: the entire estate to the eligible parent and the
7eligible parent's descendants, allowing 1/2 to the eligible
8parent and 1/2 to the eligible parent's descendants per
9stirpes.
10    (e) If there is no surviving spouse, descendant, eligible
11parent, or descendant of the eligible parent of the decedent,
12but a grandparent on the eligible parent's side of the family
13or descendant of such grandparent of the decedent: the entire
14estate to the decedent's grandparents on the eligible parent's
15side of the family in equal parts, or to the survivor of them,
16or if there is none surviving, to their descendants per
17stirpes.
18    (f) If there is no surviving spouse, descendant, eligible
19parent, descendant of the eligible parent, grandparent on the
20eligible parent's side of the family, or descendant of such
21grandparent of the decedent: the entire estate to the
22decedent's great-grandparents on the eligible parent's side of
23the family in equal parts or to the survivor of them, or if
24there is none surviving, to their descendants per stirpes.
25    (g) If there is no surviving spouse, descendant, eligible
26parent, descendant of the eligible parent, grandparent on the

 

 

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1eligible parent's side of the family, descendant of such
2grandparent, great-grandparent on the eligible parent's side
3of the family, or descendant of such great-grandparent of the
4decedent: the entire estate in equal parts to the nearest
5kindred of the eligible parent of the decedent in equal degree
6(computing by the rules of the civil law) and without
7representation.
8    (h) If there is no surviving spouse, descendant, or
9eligible parent of the decedent and no known kindred of the
10eligible parent of the decedent: the real estate escheats to
11the county in which it is located; the personal estate
12physically located within this State and the personal estate
13physically located or held outside this State which is the
14subject of ancillary administration within this State escheats
15to the county of which the decedent was a resident or, if the
16decedent was not a resident of this State, to the county in
17which it is located; all other personal property of the
18decedent of every class and character, wherever situate, or the
19proceeds thereof, shall escheat to this State and be delivered
20to the State Treasurer of this State pursuant to the Revised
21Uniform Disposition of Unclaimed Property Act.
22    For purposes of inheritance, the changes made by this
23amendatory Act of 1998 apply to all decedents who die on or
24after the effective date of this amendatory Act of 1998. For
25the purpose of determining the property rights of any person
26under any instrument, the changes made by this amendatory Act

 

 

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1of 1998 apply to all instruments executed on or after the
2effective date of this amendatory Act of 1998.
3    A child born out of wedlock is heir of his mother and of
4any maternal ancestor and of any person from whom his mother
5might have inherited, if living; and the descendants of a
6person who was a child born out of wedlock shall represent such
7person and take by descent any estate which the parent would
8have taken, if living. If a decedent has acknowledged paternity
9of a child born out of wedlock or if during his lifetime or
10after his death a decedent has been adjudged to be the father
11of a child born out of wedlock, that person is heir of his
12father and of any paternal ancestor and of any person from whom
13his father might have inherited, if living; and the descendants
14of a person who was a child born out of wedlock shall represent
15that person and take by descent any estate which the parent
16would have taken, if living. If during his lifetime the
17decedent was adjudged to be the father of a child born out of
18wedlock by a court of competent jurisdiction, an authenticated
19copy of the judgment is sufficient proof of the paternity; but
20in all other cases paternity must be proved by clear and
21convincing evidence. A person who was a child born out of
22wedlock whose parents intermarry and who is acknowledged by the
23father as the father's child is a lawful child of the father.
24After a child born out of wedlock is adopted, that person's
25relationship to his or her adopting and natural parents shall
26be governed by Section 2-4 of this Act. For purposes of

 

 

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1inheritance, the changes made by this amendatory Act of 1997
2apply to all decedents who die on or after January 1, 1998. For
3the purpose of determining the property rights of any person
4under any instrument, the changes made by this amendatory Act
5of 1997 apply to all instruments executed on or after January
61, 1998.
7(Source: P.A. 94-229, eff. 1-1-06; 10000SB0009ham003.)
 
8    Section 17-110. If and only if Senate Bill 9 of the 100th
9General Assembly becomes law in the form in which it was
10amended by House Amendment No. 3, then the Sale of Unclaimed
11Property Act is amended by changing Section 3 as follows:
 
12    (770 ILCS 90/3)  (from Ch. 141, par. 3)
13    Sec. 3. All persons other than common carriers having a
14lien on personal property, by virtue of the Innkeepers Lien Act
15or for more than $2,000 by virtue of the Labor and Storage Lien
16Act may enforce the lien by a sale of the property, on giving
17to the owner thereof, if he and his residence be known to the
18person having such lien, 30 days' notice by certified mail, in
19writing of the time and place of such sale, and if the owner or
20his place of residence be unknown to the person having such
21lien, then upon his filing his affidavit to that effect with
22the clerk of the circuit court in the county where such
23property is situated; notice of the sale may be given by
24publishing the same once in each week for 3 successive weeks in

 

 

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1some newspaper of general circulation published in the county,
2and out of the proceeds of the sale all costs and charges for
3advertising and making the same, and the amount of the lien
4shall be paid, and the surplus, if any, shall be paid to the
5owner of the property or, if not claimed by said owner, such
6surplus, if any, shall be disposed under the Revised Uniform
7Disposition of Unclaimed Property Act. All sales pursuant to
8this Section must be public and conducted in a commercially
9reasonable manner so as to maximize the net proceeds of the
10sale. Conformity to the requirements of this Act shall be a
11perpetual bar to any action against such lienor by any person
12for the recovery of such chattels or the value thereof or any
13damages growing out of the failure of such person to receive
14such chattels.
15(Source: P.A. 87-206; 10000SB0009ham003.)
 
16    Section 17-115. If and only if Senate Bill 9 of the 100th
17General Assembly becomes law in the form in which it was
18amended by House Amendment No. 3, then the Business Corporation
19Act of 1983 is amended by changing Section 12.70 as follows:
 
20    (805 ILCS 5/12.70)  (from Ch. 32, par. 12.70)
21    Sec. 12.70. Deposit of amount due certain shareholders.
22Upon the distribution of the assets of a corporation among its
23shareholders, the distributive portion to which a shareholder
24would be entitled who is unknown or cannot can not be found, or

 

 

SB2224- 146 -LRB100 13364 AXK 27964 b

1who is under disability and there is no person legally
2competent to receive such distributive portion, shall be
3presumed abandoned and reported and delivered to the State
4Treasurer and become subject to the provision of the Revised
5Uniform Disposition of Unclaimed Property Act. In the event
6such distribution is be made other than in cash, such
7distributive portion of the assets shall be reduced to cash
8before being so reported and delivered.
9(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
 
10    Section 17-120. If and only if Senate Bill 9 of the 100th
11General Assembly becomes law in the form in which it was
12amended by House Amendment No. 3, then the General Not For
13Profit Corporation Act of 1986 is amended by changing Section
14112.70 as follows:
 
15    (805 ILCS 105/112.70)  (from Ch. 32, par. 112.70)
16    Sec. 112.70. Deposit of amount due. Upon the distribution
17of the assets of a corporation, the distributive portion to
18which a person would be entitled who is unknown or cannot be
19found, or who is under disability and there is no person
20legally competent to receive such distributive portion, shall
21be presumed abandoned and reported and delivered to the State
22Treasurer and become subject to the Revised provision of the
23Uniform Disposition of Unclaimed Property Act. In the event
24such distribution is be made other than in cash, such

 

 

SB2224- 147 -LRB100 13364 AXK 27964 b

1distributive portion of the assets shall be reduced to cash
2before being so reported and delivered.
3(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
 
4    Section 20-5. If and only if Senate Bill 9 of the 100th
5General Assembly becomes law in the form in which it was
6amended by House Amendment No. 3, then the Illinois Income Tax
7Act is amended by changing Sections 201, 202.5, 203, 204, 208,
8212, 901, and 1501 as follows:
 
9    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
10    Sec. 201. Tax Imposed.
11    (a) In general. A tax measured by net income is hereby
12imposed on every individual, corporation, trust and estate for
13each taxable year ending after July 31, 1969 on the privilege
14of earning or receiving income in or as a resident of this
15State. Such tax shall be in addition to all other occupation or
16privilege taxes imposed by this State or by any municipal
17corporation or political subdivision thereof.
18    (b) Rates. The tax imposed by subsection (a) of this
19Section shall be determined as follows, except as adjusted by
20subsection (d-1):
21        (1) In the case of an individual, trust or estate, for
22    taxable years ending prior to July 1, 1989, an amount equal
23    to 2 1/2% of the taxpayer's net income for the taxable
24    year.

 

 

SB2224- 148 -LRB100 13364 AXK 27964 b

1        (2) In the case of an individual, trust or estate, for
2    taxable years beginning prior to July 1, 1989 and ending
3    after June 30, 1989, an amount equal to the sum of (i) 2
4    1/2% of the taxpayer's net income for the period prior to
5    July 1, 1989, as calculated under Section 202.3, and (ii)
6    3% of the taxpayer's net income for the period after June
7    30, 1989, as calculated under Section 202.3.
8        (3) In the case of an individual, trust or estate, for
9    taxable years beginning after June 30, 1989, and ending
10    prior to January 1, 2011, an amount equal to 3% of the
11    taxpayer's net income for the taxable year.
12        (4) In the case of an individual, trust, or estate, for
13    taxable years beginning prior to January 1, 2011, and
14    ending after December 31, 2010, an amount equal to the sum
15    of (i) 3% of the taxpayer's net income for the period prior
16    to January 1, 2011, as calculated under Section 202.5, and
17    (ii) 5% of the taxpayer's net income for the period after
18    December 31, 2010, as calculated under Section 202.5.
19        (5) In the case of an individual, trust, or estate, for
20    taxable years beginning on or after January 1, 2011, and
21    ending prior to January 1, 2015, an amount equal to 5% of
22    the taxpayer's net income for the taxable year.
23        (5.1) In the case of an individual, trust, or estate,
24    for taxable years beginning prior to January 1, 2015, and
25    ending after December 31, 2014, an amount equal to the sum
26    of (i) 5% of the taxpayer's net income for the period prior

 

 

SB2224- 149 -LRB100 13364 AXK 27964 b

1    to January 1, 2015, as calculated under Section 202.5, and
2    (ii) 3.75% of the taxpayer's net income for the period
3    after December 31, 2014, as calculated under Section 202.5.
4        (5.2) In the case of an individual, trust, or estate,
5    for taxable years beginning on or after January 1, 2015,
6    and ending prior to July 1, 2017 January 1, 2025, an amount
7    equal to 3.75% of the taxpayer's net income for the taxable
8    year.
9        (5.3) In the case of an individual, trust, or estate,
10    for taxable years beginning prior to July 1, 2017 January
11    1, 2025, and ending after June 30, 2017 December 31, 2024,
12    an amount equal to the sum of (i) 3.75% of the taxpayer's
13    net income for the period prior to July 1, 2017 January 1,
14    2025, as calculated under Section 202.5, and (ii) 4.95%
15    3.25% of the taxpayer's net income for the period after
16    June 30, 2017 December 31, 2024, as calculated under
17    Section 202.5.
18        (5.4) In the case of an individual, trust, or estate,
19    for taxable years beginning on or after July 1, 2017
20    January 1, 2025, an amount equal to 4.95% 3.25% of the
21    taxpayer's net income for the taxable year.
22        (6) In the case of a corporation, for taxable years
23    ending prior to July 1, 1989, an amount equal to 4% of the
24    taxpayer's net income for the taxable year.
25        (7) In the case of a corporation, for taxable years
26    beginning prior to July 1, 1989 and ending after June 30,

 

 

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1    1989, an amount equal to the sum of (i) 4% of the
2    taxpayer's net income for the period prior to July 1, 1989,
3    as calculated under Section 202.3, and (ii) 4.8% of the
4    taxpayer's net income for the period after June 30, 1989,
5    as calculated under Section 202.3.
6        (8) In the case of a corporation, for taxable years
7    beginning after June 30, 1989, and ending prior to January
8    1, 2011, an amount equal to 4.8% of the taxpayer's net
9    income for the taxable year.
10        (9) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2011, and ending after
12    December 31, 2010, an amount equal to the sum of (i) 4.8%
13    of the taxpayer's net income for the period prior to
14    January 1, 2011, as calculated under Section 202.5, and
15    (ii) 7% of the taxpayer's net income for the period after
16    December 31, 2010, as calculated under Section 202.5.
17        (10) In the case of a corporation, for taxable years
18    beginning on or after January 1, 2011, and ending prior to
19    January 1, 2015, an amount equal to 7% of the taxpayer's
20    net income for the taxable year.
21        (11) In the case of a corporation, for taxable years
22    beginning prior to January 1, 2015, and ending after
23    December 31, 2014, an amount equal to the sum of (i) 7% of
24    the taxpayer's net income for the period prior to January
25    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
26    of the taxpayer's net income for the period after December

 

 

SB2224- 151 -LRB100 13364 AXK 27964 b

1    31, 2014, as calculated under Section 202.5.
2        (12) In the case of a corporation, for taxable years
3    beginning on or after January 1, 2015, and ending prior to
4    July 1, 2017 January 1, 2025, an amount equal to 5.25% of
5    the taxpayer's net income for the taxable year.
6        (13) In the case of a corporation, for taxable years
7    beginning prior to July 1, 2017 January 1, 2025, and ending
8    after June 30, 2017 December 31, 2024, an amount equal to
9    the sum of (i) 5.25% of the taxpayer's net income for the
10    period prior to July 1, 2017 January 1, 2025, as calculated
11    under Section 202.5, and (ii) 7% 4.8% of the taxpayer's net
12    income for the period after June 30, 2017 December 31,
13    2024, as calculated under Section 202.5.
14        (14) In the case of a corporation, for taxable years
15    beginning on or after July 1, 2017 January 1, 2025, an
16    amount equal to 7% 4.8% of the taxpayer's net income for
17    the taxable year.
18    The rates under this subsection (b) are subject to the
19provisions of Section 201.5.
20    (c) Personal Property Tax Replacement Income Tax.
21Beginning on July 1, 1979 and thereafter, in addition to such
22income tax, there is also hereby imposed the Personal Property
23Tax Replacement Income Tax measured by net income on every
24corporation (including Subchapter S corporations), partnership
25and trust, for each taxable year ending after June 30, 1979.
26Such taxes are imposed on the privilege of earning or receiving

 

 

SB2224- 152 -LRB100 13364 AXK 27964 b

1income in or as a resident of this State. The Personal Property
2Tax Replacement Income Tax shall be in addition to the income
3tax imposed by subsections (a) and (b) of this Section and in
4addition to all other occupation or privilege taxes imposed by
5this State or by any municipal corporation or political
6subdivision thereof.
7    (d) Additional Personal Property Tax Replacement Income
8Tax Rates. The personal property tax replacement income tax
9imposed by this subsection and subsection (c) of this Section
10in the case of a corporation, other than a Subchapter S
11corporation and except as adjusted by subsection (d-1), shall
12be an additional amount equal to 2.85% of such taxpayer's net
13income for the taxable year, except that beginning on January
141, 1981, and thereafter, the rate of 2.85% specified in this
15subsection shall be reduced to 2.5%, and in the case of a
16partnership, trust or a Subchapter S corporation shall be an
17additional amount equal to 1.5% of such taxpayer's net income
18for the taxable year.
19    (d-1) Rate reduction for certain foreign insurers. In the
20case of a foreign insurer, as defined by Section 35A-5 of the
21Illinois Insurance Code, whose state or country of domicile
22imposes on insurers domiciled in Illinois a retaliatory tax
23(excluding any insurer whose premiums from reinsurance assumed
24are 50% or more of its total insurance premiums as determined
25under paragraph (2) of subsection (b) of Section 304, except
26that for purposes of this determination premiums from

 

 

SB2224- 153 -LRB100 13364 AXK 27964 b

1reinsurance do not include premiums from inter-affiliate
2reinsurance arrangements), beginning with taxable years ending
3on or after December 31, 1999, the sum of the rates of tax
4imposed by subsections (b) and (d) shall be reduced (but not
5increased) to the rate at which the total amount of tax imposed
6under this Act, net of all credits allowed under this Act,
7shall equal (i) the total amount of tax that would be imposed
8on the foreign insurer's net income allocable to Illinois for
9the taxable year by such foreign insurer's state or country of
10domicile if that net income were subject to all income taxes
11and taxes measured by net income imposed by such foreign
12insurer's state or country of domicile, net of all credits
13allowed or (ii) a rate of zero if no such tax is imposed on such
14income by the foreign insurer's state of domicile. For the
15purposes of this subsection (d-1), an inter-affiliate includes
16a mutual insurer under common management.
17        (1) For the purposes of subsection (d-1), in no event
18    shall the sum of the rates of tax imposed by subsections
19    (b) and (d) be reduced below the rate at which the sum of:
20            (A) the total amount of tax imposed on such foreign
21        insurer under this Act for a taxable year, net of all
22        credits allowed under this Act, plus
23            (B) the privilege tax imposed by Section 409 of the
24        Illinois Insurance Code, the fire insurance company
25        tax imposed by Section 12 of the Fire Investigation
26        Act, and the fire department taxes imposed under

 

 

SB2224- 154 -LRB100 13364 AXK 27964 b

1        Section 11-10-1 of the Illinois Municipal Code,
2    equals 1.25% for taxable years ending prior to December 31,
3    2003, or 1.75% for taxable years ending on or after
4    December 31, 2003, of the net taxable premiums written for
5    the taxable year, as described by subsection (1) of Section
6    409 of the Illinois Insurance Code. This paragraph will in
7    no event increase the rates imposed under subsections (b)
8    and (d).
9        (2) Any reduction in the rates of tax imposed by this
10    subsection shall be applied first against the rates imposed
11    by subsection (b) and only after the tax imposed by
12    subsection (a) net of all credits allowed under this
13    Section other than the credit allowed under subsection (i)
14    has been reduced to zero, against the rates imposed by
15    subsection (d).
16    This subsection (d-1) is exempt from the provisions of
17Section 250.
18    (e) Investment credit. A taxpayer shall be allowed a credit
19against the Personal Property Tax Replacement Income Tax for
20investment in qualified property.
21        (1) A taxpayer shall be allowed a credit equal to .5%
22    of the basis of qualified property placed in service during
23    the taxable year, provided such property is placed in
24    service on or after July 1, 1984. There shall be allowed an
25    additional credit equal to .5% of the basis of qualified
26    property placed in service during the taxable year,

 

 

SB2224- 155 -LRB100 13364 AXK 27964 b

1    provided such property is placed in service on or after
2    July 1, 1986, and the taxpayer's base employment within
3    Illinois has increased by 1% or more over the preceding
4    year as determined by the taxpayer's employment records
5    filed with the Illinois Department of Employment Security.
6    Taxpayers who are new to Illinois shall be deemed to have
7    met the 1% growth in base employment for the first year in
8    which they file employment records with the Illinois
9    Department of Employment Security. The provisions added to
10    this Section by Public Act 85-1200 (and restored by Public
11    Act 87-895) shall be construed as declaratory of existing
12    law and not as a new enactment. If, in any year, the
13    increase in base employment within Illinois over the
14    preceding year is less than 1%, the additional credit shall
15    be limited to that percentage times a fraction, the
16    numerator of which is .5% and the denominator of which is
17    1%, but shall not exceed .5%. The investment credit shall
18    not be allowed to the extent that it would reduce a
19    taxpayer's liability in any tax year below zero, nor may
20    any credit for qualified property be allowed for any year
21    other than the year in which the property was placed in
22    service in Illinois. For tax years ending on or after
23    December 31, 1987, and on or before December 31, 1988, the
24    credit shall be allowed for the tax year in which the
25    property is placed in service, or, if the amount of the
26    credit exceeds the tax liability for that year, whether it

 

 

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1    exceeds the original liability or the liability as later
2    amended, such excess may be carried forward and applied to
3    the tax liability of the 5 taxable years following the
4    excess credit years if the taxpayer (i) makes investments
5    which cause the creation of a minimum of 2,000 full-time
6    equivalent jobs in Illinois, (ii) is located in an
7    enterprise zone established pursuant to the Illinois
8    Enterprise Zone Act and (iii) is certified by the
9    Department of Commerce and Community Affairs (now
10    Department of Commerce and Economic Opportunity) as
11    complying with the requirements specified in clause (i) and
12    (ii) by July 1, 1986. The Department of Commerce and
13    Community Affairs (now Department of Commerce and Economic
14    Opportunity) shall notify the Department of Revenue of all
15    such certifications immediately. For tax years ending
16    after December 31, 1988, the credit shall be allowed for
17    the tax year in which the property is placed in service,
18    or, if the amount of the credit exceeds the tax liability
19    for that year, whether it exceeds the original liability or
20    the liability as later amended, such excess may be carried
21    forward and applied to the tax liability of the 5 taxable
22    years following the excess credit years. The credit shall
23    be applied to the earliest year for which there is a
24    liability. If there is credit from more than one tax year
25    that is available to offset a liability, earlier credit
26    shall be applied first.

 

 

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1        (2) The term "qualified property" means property
2    which:
3            (A) is tangible, whether new or used, including
4        buildings and structural components of buildings and
5        signs that are real property, but not including land or
6        improvements to real property that are not a structural
7        component of a building such as landscaping, sewer
8        lines, local access roads, fencing, parking lots, and
9        other appurtenances;
10            (B) is depreciable pursuant to Section 167 of the
11        Internal Revenue Code, except that "3-year property"
12        as defined in Section 168(c)(2)(A) of that Code is not
13        eligible for the credit provided by this subsection
14        (e);
15            (C) is acquired by purchase as defined in Section
16        179(d) of the Internal Revenue Code;
17            (D) is used in Illinois by a taxpayer who is
18        primarily engaged in manufacturing, or in mining coal
19        or fluorite, or in retailing, or was placed in service
20        on or after July 1, 2006 in a River Edge Redevelopment
21        Zone established pursuant to the River Edge
22        Redevelopment Zone Act; and
23            (E) has not previously been used in Illinois in
24        such a manner and by such a person as would qualify for
25        the credit provided by this subsection (e) or
26        subsection (f).

 

 

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1        (3) For purposes of this subsection (e),
2    "manufacturing" means the material staging and production
3    of tangible personal property by procedures commonly
4    regarded as manufacturing, processing, fabrication, or
5    assembling which changes some existing material into new
6    shapes, new qualities, or new combinations. For purposes of
7    this subsection (e) the term "mining" shall have the same
8    meaning as the term "mining" in Section 613(c) of the
9    Internal Revenue Code. For purposes of this subsection (e),
10    the term "retailing" means the sale of tangible personal
11    property for use or consumption and not for resale, or
12    services rendered in conjunction with the sale of tangible
13    personal property for use or consumption and not for
14    resale. For purposes of this subsection (e), "tangible
15    personal property" has the same meaning as when that term
16    is used in the Retailers' Occupation Tax Act, and, for
17    taxable years ending after December 31, 2008, does not
18    include the generation, transmission, or distribution of
19    electricity.
20        (4) The basis of qualified property shall be the basis
21    used to compute the depreciation deduction for federal
22    income tax purposes.
23        (5) If the basis of the property for federal income tax
24    depreciation purposes is increased after it has been placed
25    in service in Illinois by the taxpayer, the amount of such
26    increase shall be deemed property placed in service on the

 

 

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1    date of such increase in basis.
2        (6) The term "placed in service" shall have the same
3    meaning as under Section 46 of the Internal Revenue Code.
4        (7) If during any taxable year, any property ceases to
5    be qualified property in the hands of the taxpayer within
6    48 months after being placed in service, or the situs of
7    any qualified property is moved outside Illinois within 48
8    months after being placed in service, the Personal Property
9    Tax Replacement Income Tax for such taxable year shall be
10    increased. Such increase shall be determined by (i)
11    recomputing the investment credit which would have been
12    allowed for the year in which credit for such property was
13    originally allowed by eliminating such property from such
14    computation and, (ii) subtracting such recomputed credit
15    from the amount of credit previously allowed. For the
16    purposes of this paragraph (7), a reduction of the basis of
17    qualified property resulting from a redetermination of the
18    purchase price shall be deemed a disposition of qualified
19    property to the extent of such reduction.
20        (8) Unless the investment credit is extended by law,
21    the basis of qualified property shall not include costs
22    incurred after December 31, 2018, except for costs incurred
23    pursuant to a binding contract entered into on or before
24    December 31, 2018.
25        (9) Each taxable year ending before December 31, 2000,
26    a partnership may elect to pass through to its partners the

 

 

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1    credits to which the partnership is entitled under this
2    subsection (e) for the taxable year. A partner may use the
3    credit allocated to him or her under this paragraph only
4    against the tax imposed in subsections (c) and (d) of this
5    Section. If the partnership makes that election, those
6    credits shall be allocated among the partners in the
7    partnership in accordance with the rules set forth in
8    Section 704(b) of the Internal Revenue Code, and the rules
9    promulgated under that Section, and the allocated amount of
10    the credits shall be allowed to the partners for that
11    taxable year. The partnership shall make this election on
12    its Personal Property Tax Replacement Income Tax return for
13    that taxable year. The election to pass through the credits
14    shall be irrevocable.
15        For taxable years ending on or after December 31, 2000,
16    a partner that qualifies its partnership for a subtraction
17    under subparagraph (I) of paragraph (2) of subsection (d)
18    of Section 203 or a shareholder that qualifies a Subchapter
19    S corporation for a subtraction under subparagraph (S) of
20    paragraph (2) of subsection (b) of Section 203 shall be
21    allowed a credit under this subsection (e) equal to its
22    share of the credit earned under this subsection (e) during
23    the taxable year by the partnership or Subchapter S
24    corporation, determined in accordance with the
25    determination of income and distributive share of income
26    under Sections 702 and 704 and Subchapter S of the Internal

 

 

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1    Revenue Code. This paragraph is exempt from the provisions
2    of Section 250.
3    (f) Investment credit; Enterprise Zone; River Edge
4Redevelopment Zone.
5        (1) A taxpayer shall be allowed a credit against the
6    tax imposed by subsections (a) and (b) of this Section for
7    investment in qualified property which is placed in service
8    in an Enterprise Zone created pursuant to the Illinois
9    Enterprise Zone Act or, for property placed in service on
10    or after July 1, 2006, a River Edge Redevelopment Zone
11    established pursuant to the River Edge Redevelopment Zone
12    Act. For partners, shareholders of Subchapter S
13    corporations, and owners of limited liability companies,
14    if the liability company is treated as a partnership for
15    purposes of federal and State income taxation, there shall
16    be allowed a credit under this subsection (f) to be
17    determined in accordance with the determination of income
18    and distributive share of income under Sections 702 and 704
19    and Subchapter S of the Internal Revenue Code. The credit
20    shall be .5% of the basis for such property. The credit
21    shall be available only in the taxable year in which the
22    property is placed in service in the Enterprise Zone or
23    River Edge Redevelopment Zone and shall not be allowed to
24    the extent that it would reduce a taxpayer's liability for
25    the tax imposed by subsections (a) and (b) of this Section
26    to below zero. For tax years ending on or after December

 

 

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1    31, 1985, the credit shall be allowed for the tax year in
2    which the property is placed in service, or, if the amount
3    of the credit exceeds the tax liability for that year,
4    whether it exceeds the original liability or the liability
5    as later amended, such excess may be carried forward and
6    applied to the tax liability of the 5 taxable years
7    following the excess credit year. The credit shall be
8    applied to the earliest year for which there is a
9    liability. If there is credit from more than one tax year
10    that is available to offset a liability, the credit
11    accruing first in time shall be applied first.
12        (2) The term qualified property means property which:
13            (A) is tangible, whether new or used, including
14        buildings and structural components of buildings;
15            (B) is depreciable pursuant to Section 167 of the
16        Internal Revenue Code, except that "3-year property"
17        as defined in Section 168(c)(2)(A) of that Code is not
18        eligible for the credit provided by this subsection
19        (f);
20            (C) is acquired by purchase as defined in Section
21        179(d) of the Internal Revenue Code;
22            (D) is used in the Enterprise Zone or River Edge
23        Redevelopment Zone by the taxpayer; and
24            (E) has not been previously used in Illinois in
25        such a manner and by such a person as would qualify for
26        the credit provided by this subsection (f) or

 

 

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1        subsection (e).
2        (3) The basis of qualified property shall be the basis
3    used to compute the depreciation deduction for federal
4    income tax purposes.
5        (4) If the basis of the property for federal income tax
6    depreciation purposes is increased after it has been placed
7    in service in the Enterprise Zone or River Edge
8    Redevelopment Zone by the taxpayer, the amount of such
9    increase shall be deemed property placed in service on the
10    date of such increase in basis.
11        (5) The term "placed in service" shall have the same
12    meaning as under Section 46 of the Internal Revenue Code.
13        (6) If during any taxable year, any property ceases to
14    be qualified property in the hands of the taxpayer within
15    48 months after being placed in service, or the situs of
16    any qualified property is moved outside the Enterprise Zone
17    or River Edge Redevelopment Zone within 48 months after
18    being placed in service, the tax imposed under subsections
19    (a) and (b) of this Section for such taxable year shall be
20    increased. Such increase shall be determined by (i)
21    recomputing the investment credit which would have been
22    allowed for the year in which credit for such property was
23    originally allowed by eliminating such property from such
24    computation, and (ii) subtracting such recomputed credit
25    from the amount of credit previously allowed. For the
26    purposes of this paragraph (6), a reduction of the basis of

 

 

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1    qualified property resulting from a redetermination of the
2    purchase price shall be deemed a disposition of qualified
3    property to the extent of such reduction.
4        (7) There shall be allowed an additional credit equal
5    to 0.5% of the basis of qualified property placed in
6    service during the taxable year in a River Edge
7    Redevelopment Zone, provided such property is placed in
8    service on or after July 1, 2006, and the taxpayer's base
9    employment within Illinois has increased by 1% or more over
10    the preceding year as determined by the taxpayer's
11    employment records filed with the Illinois Department of
12    Employment Security. Taxpayers who are new to Illinois
13    shall be deemed to have met the 1% growth in base
14    employment for the first year in which they file employment
15    records with the Illinois Department of Employment
16    Security. If, in any year, the increase in base employment
17    within Illinois over the preceding year is less than 1%,
18    the additional credit shall be limited to that percentage
19    times a fraction, the numerator of which is 0.5% and the
20    denominator of which is 1%, but shall not exceed 0.5%.
21    (g) (Blank).
22    (h) Investment credit; High Impact Business.
23        (1) Subject to subsections (b) and (b-5) of Section 5.5
24    of the Illinois Enterprise Zone Act, a taxpayer shall be
25    allowed a credit against the tax imposed by subsections (a)
26    and (b) of this Section for investment in qualified

 

 

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1    property which is placed in service by a Department of
2    Commerce and Economic Opportunity designated High Impact
3    Business. The credit shall be .5% of the basis for such
4    property. The credit shall not be available (i) until the
5    minimum investments in qualified property set forth in
6    subdivision (a)(3)(A) of Section 5.5 of the Illinois
7    Enterprise Zone Act have been satisfied or (ii) until the
8    time authorized in subsection (b-5) of the Illinois
9    Enterprise Zone Act for entities designated as High Impact
10    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
11    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
12    Act, and shall not be allowed to the extent that it would
13    reduce a taxpayer's liability for the tax imposed by
14    subsections (a) and (b) of this Section to below zero. The
15    credit applicable to such investments shall be taken in the
16    taxable year in which such investments have been completed.
17    The credit for additional investments beyond the minimum
18    investment by a designated high impact business authorized
19    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
20    Enterprise Zone Act shall be available only in the taxable
21    year in which the property is placed in service and shall
22    not be allowed to the extent that it would reduce a
23    taxpayer's liability for the tax imposed by subsections (a)
24    and (b) of this Section to below zero. For tax years ending
25    on or after December 31, 1987, the credit shall be allowed
26    for the tax year in which the property is placed in

 

 

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1    service, or, if the amount of the credit exceeds the tax
2    liability for that year, whether it exceeds the original
3    liability or the liability as later amended, such excess
4    may be carried forward and applied to the tax liability of
5    the 5 taxable years following the excess credit year. The
6    credit shall be applied to the earliest year for which
7    there is a liability. If there is credit from more than one
8    tax year that is available to offset a liability, the
9    credit accruing first in time shall be applied first.
10        Changes made in this subdivision (h)(1) by Public Act
11    88-670 restore changes made by Public Act 85-1182 and
12    reflect existing law.
13        (2) The term qualified property means property which:
14            (A) is tangible, whether new or used, including
15        buildings and structural components of buildings;
16            (B) is depreciable pursuant to Section 167 of the
17        Internal Revenue Code, except that "3-year property"
18        as defined in Section 168(c)(2)(A) of that Code is not
19        eligible for the credit provided by this subsection
20        (h);
21            (C) is acquired by purchase as defined in Section
22        179(d) of the Internal Revenue Code; and
23            (D) is not eligible for the Enterprise Zone
24        Investment Credit provided by subsection (f) of this
25        Section.
26        (3) The basis of qualified property shall be the basis

 

 

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1    used to compute the depreciation deduction for federal
2    income tax purposes.
3        (4) If the basis of the property for federal income tax
4    depreciation purposes is increased after it has been placed
5    in service in a federally designated Foreign Trade Zone or
6    Sub-Zone located in Illinois by the taxpayer, the amount of
7    such increase shall be deemed property placed in service on
8    the date of such increase in basis.
9        (5) The term "placed in service" shall have the same
10    meaning as under Section 46 of the Internal Revenue Code.
11        (6) If during any taxable year ending on or before
12    December 31, 1996, any property ceases to be qualified
13    property in the hands of the taxpayer within 48 months
14    after being placed in service, or the situs of any
15    qualified property is moved outside Illinois within 48
16    months after being placed in service, the tax imposed under
17    subsections (a) and (b) of this Section for such taxable
18    year shall be increased. Such increase shall be determined
19    by (i) recomputing the investment credit which would have
20    been allowed for the year in which credit for such property
21    was originally allowed by eliminating such property from
22    such computation, and (ii) subtracting such recomputed
23    credit from the amount of credit previously allowed. For
24    the purposes of this paragraph (6), a reduction of the
25    basis of qualified property resulting from a
26    redetermination of the purchase price shall be deemed a

 

 

SB2224- 168 -LRB100 13364 AXK 27964 b

1    disposition of qualified property to the extent of such
2    reduction.
3        (7) Beginning with tax years ending after December 31,
4    1996, if a taxpayer qualifies for the credit under this
5    subsection (h) and thereby is granted a tax abatement and
6    the taxpayer relocates its entire facility in violation of
7    the explicit terms and length of the contract under Section
8    18-183 of the Property Tax Code, the tax imposed under
9    subsections (a) and (b) of this Section shall be increased
10    for the taxable year in which the taxpayer relocated its
11    facility by an amount equal to the amount of credit
12    received by the taxpayer under this subsection (h).
13    (i) Credit for Personal Property Tax Replacement Income
14Tax. For tax years ending prior to December 31, 2003, a credit
15shall be allowed against the tax imposed by subsections (a) and
16(b) of this Section for the tax imposed by subsections (c) and
17(d) of this Section. This credit shall be computed by
18multiplying the tax imposed by subsections (c) and (d) of this
19Section by a fraction, the numerator of which is base income
20allocable to Illinois and the denominator of which is Illinois
21base income, and further multiplying the product by the tax
22rate imposed by subsections (a) and (b) of this Section.
23    Any credit earned on or after December 31, 1986 under this
24subsection which is unused in the year the credit is computed
25because it exceeds the tax liability imposed by subsections (a)
26and (b) for that year (whether it exceeds the original

 

 

SB2224- 169 -LRB100 13364 AXK 27964 b

1liability or the liability as later amended) may be carried
2forward and applied to the tax liability imposed by subsections
3(a) and (b) of the 5 taxable years following the excess credit
4year, provided that no credit may be carried forward to any
5year ending on or after December 31, 2003. This credit shall be
6applied first to the earliest year for which there is a
7liability. If there is a credit under this subsection from more
8than one tax year that is available to offset a liability the
9earliest credit arising under this subsection shall be applied
10first.
11    If, during any taxable year ending on or after December 31,
121986, the tax imposed by subsections (c) and (d) of this
13Section for which a taxpayer has claimed a credit under this
14subsection (i) is reduced, the amount of credit for such tax
15shall also be reduced. Such reduction shall be determined by
16recomputing the credit to take into account the reduced tax
17imposed by subsections (c) and (d). If any portion of the
18reduced amount of credit has been carried to a different
19taxable year, an amended return shall be filed for such taxable
20year to reduce the amount of credit claimed.
21    (j) Training expense credit. Beginning with tax years
22ending on or after December 31, 1986 and prior to December 31,
232003, a taxpayer shall be allowed a credit against the tax
24imposed by subsections (a) and (b) under this Section for all
25amounts paid or accrued, on behalf of all persons employed by
26the taxpayer in Illinois or Illinois residents employed outside

 

 

SB2224- 170 -LRB100 13364 AXK 27964 b

1of Illinois by a taxpayer, for educational or vocational
2training in semi-technical or technical fields or semi-skilled
3or skilled fields, which were deducted from gross income in the
4computation of taxable income. The credit against the tax
5imposed by subsections (a) and (b) shall be 1.6% of such
6training expenses. For partners, shareholders of subchapter S
7corporations, and owners of limited liability companies, if the
8liability company is treated as a partnership for purposes of
9federal and State income taxation, there shall be allowed a
10credit under this subsection (j) to be determined in accordance
11with the determination of income and distributive share of
12income under Sections 702 and 704 and subchapter S of the
13Internal Revenue Code.
14    Any credit allowed under this subsection which is unused in
15the year the credit is earned may be carried forward to each of
16the 5 taxable years following the year for which the credit is
17first computed until it is used. This credit shall be applied
18first to the earliest year for which there is a liability. If
19there is a credit under this subsection from more than one tax
20year that is available to offset a liability the earliest
21credit arising under this subsection shall be applied first. No
22carryforward credit may be claimed in any tax year ending on or
23after December 31, 2003.
24    (k) Research and development credit. For tax years ending
25after July 1, 1990 and prior to December 31, 2003, and
26beginning again for tax years ending on or after December 31,

 

 

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12004, and ending prior to January 1, 2022 January 1, 2016, a
2taxpayer shall be allowed a credit against the tax imposed by
3subsections (a) and (b) of this Section for increasing research
4activities in this State. The credit allowed against the tax
5imposed by subsections (a) and (b) shall be equal to 6 1/2% of
6the qualifying expenditures for increasing research activities
7in this State. For partners, shareholders of subchapter S
8corporations, and owners of limited liability companies, if the
9liability company is treated as a partnership for purposes of
10federal and State income taxation, there shall be allowed a
11credit under this subsection to be determined in accordance
12with the determination of income and distributive share of
13income under Sections 702 and 704 and subchapter S of the
14Internal Revenue Code.
15    For purposes of this subsection, "qualifying expenditures"
16means the qualifying expenditures as defined for the federal
17credit for increasing research activities which would be
18allowable under Section 41 of the Internal Revenue Code and
19which are conducted in this State, "qualifying expenditures for
20increasing research activities in this State" means the excess
21of qualifying expenditures for the taxable year in which
22incurred over qualifying expenditures for the base period,
23"qualifying expenditures for the base period" means the average
24of the qualifying expenditures for each year in the base
25period, and "base period" means the 3 taxable years immediately
26preceding the taxable year for which the determination is being

 

 

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1made.
2    Any credit in excess of the tax liability for the taxable
3year may be carried forward. A taxpayer may elect to have the
4unused credit shown on its final completed return carried over
5as a credit against the tax liability for the following 5
6taxable years or until it has been fully used, whichever occurs
7first; provided that no credit earned in a tax year ending
8prior to December 31, 2003 may be carried forward to any year
9ending on or after December 31, 2003.
10    If an unused credit is carried forward to a given year from
112 or more earlier years, that credit arising in the earliest
12year will be applied first against the tax liability for the
13given year. If a tax liability for the given year still
14remains, the credit from the next earliest year will then be
15applied, and so on, until all credits have been used or no tax
16liability for the given year remains. Any remaining unused
17credit or credits then will be carried forward to the next
18following year in which a tax liability is incurred, except
19that no credit can be carried forward to a year which is more
20than 5 years after the year in which the expense for which the
21credit is given was incurred.
22    No inference shall be drawn from this amendatory Act of the
2391st General Assembly in construing this Section for taxable
24years beginning before January 1, 1999.
25    It is the intent of the General Assembly that the research
26and development credit under this subsection (k) shall apply

 

 

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1continuously for all tax years ending on or after December 31,
22004 and ending prior to January 1, 2022, including, but not
3limited to, the period beginning on January 1, 2016 and ending
4on the effective date of this amendatory Act of the 100th
5General Assembly. All actions taken in reliance on the
6continuation of the credit under this subsection (k) by any
7taxpayer are hereby validated.
8    (l) Environmental Remediation Tax Credit.
9        (i) For tax years ending after December 31, 1997 and on
10    or before December 31, 2001, a taxpayer shall be allowed a
11    credit against the tax imposed by subsections (a) and (b)
12    of this Section for certain amounts paid for unreimbursed
13    eligible remediation costs, as specified in this
14    subsection. For purposes of this Section, "unreimbursed
15    eligible remediation costs" means costs approved by the
16    Illinois Environmental Protection Agency ("Agency") under
17    Section 58.14 of the Environmental Protection Act that were
18    paid in performing environmental remediation at a site for
19    which a No Further Remediation Letter was issued by the
20    Agency and recorded under Section 58.10 of the
21    Environmental Protection Act. The credit must be claimed
22    for the taxable year in which Agency approval of the
23    eligible remediation costs is granted. The credit is not
24    available to any taxpayer if the taxpayer or any related
25    party caused or contributed to, in any material respect, a
26    release of regulated substances on, in, or under the site

 

 

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1    that was identified and addressed by the remedial action
2    pursuant to the Site Remediation Program of the
3    Environmental Protection Act. After the Pollution Control
4    Board rules are adopted pursuant to the Illinois
5    Administrative Procedure Act for the administration and
6    enforcement of Section 58.9 of the Environmental
7    Protection Act, determinations as to credit availability
8    for purposes of this Section shall be made consistent with
9    those rules. For purposes of this Section, "taxpayer"
10    includes a person whose tax attributes the taxpayer has
11    succeeded to under Section 381 of the Internal Revenue Code
12    and "related party" includes the persons disallowed a
13    deduction for losses by paragraphs (b), (c), and (f)(1) of
14    Section 267 of the Internal Revenue Code by virtue of being
15    a related taxpayer, as well as any of its partners. The
16    credit allowed against the tax imposed by subsections (a)
17    and (b) shall be equal to 25% of the unreimbursed eligible
18    remediation costs in excess of $100,000 per site, except
19    that the $100,000 threshold shall not apply to any site
20    contained in an enterprise zone as determined by the
21    Department of Commerce and Community Affairs (now
22    Department of Commerce and Economic Opportunity). The
23    total credit allowed shall not exceed $40,000 per year with
24    a maximum total of $150,000 per site. For partners and
25    shareholders of subchapter S corporations, there shall be
26    allowed a credit under this subsection to be determined in

 

 

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1    accordance with the determination of income and
2    distributive share of income under Sections 702 and 704 and
3    subchapter S of the Internal Revenue Code.
4        (ii) A credit allowed under this subsection that is
5    unused in the year the credit is earned may be carried
6    forward to each of the 5 taxable years following the year
7    for which the credit is first earned until it is used. The
8    term "unused credit" does not include any amounts of
9    unreimbursed eligible remediation costs in excess of the
10    maximum credit per site authorized under paragraph (i).
11    This credit shall be applied first to the earliest year for
12    which there is a liability. If there is a credit under this
13    subsection from more than one tax year that is available to
14    offset a liability, the earliest credit arising under this
15    subsection shall be applied first. A credit allowed under
16    this subsection may be sold to a buyer as part of a sale of
17    all or part of the remediation site for which the credit
18    was granted. The purchaser of a remediation site and the
19    tax credit shall succeed to the unused credit and remaining
20    carry-forward period of the seller. To perfect the
21    transfer, the assignor shall record the transfer in the
22    chain of title for the site and provide written notice to
23    the Director of the Illinois Department of Revenue of the
24    assignor's intent to sell the remediation site and the
25    amount of the tax credit to be transferred as a portion of
26    the sale. In no event may a credit be transferred to any

 

 

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1    taxpayer if the taxpayer or a related party would not be
2    eligible under the provisions of subsection (i).
3        (iii) For purposes of this Section, the term "site"
4    shall have the same meaning as under Section 58.2 of the
5    Environmental Protection Act.
6    (m) Education expense credit. Beginning with tax years
7ending after December 31, 1999, a taxpayer who is the custodian
8of one or more qualifying pupils shall be allowed a credit
9against the tax imposed by subsections (a) and (b) of this
10Section for qualified education expenses incurred on behalf of
11the qualifying pupils. The credit shall be equal to 25% of
12qualified education expenses, but in no event may the total
13credit under this subsection claimed by a family that is the
14custodian of qualifying pupils exceed (i) $500 for tax years
15ending prior to December 31, 2017, and (ii) $750 for tax years
16ending on or after December 31, 2017. In no event shall a
17credit under this subsection reduce the taxpayer's liability
18under this Act to less than zero. Notwithstanding any other
19provision of law, for taxable years beginning on or after
20January 1, 2017, no taxpayer may claim a credit under this
21subsection (m) if the taxpayer's adjusted gross income for the
22taxable year exceeds (i) $500,000, in the case of spouses
23filing a joint federal tax return or (ii) $250,000, in the case
24of all other taxpayers. This subsection is exempt from the
25provisions of Section 250 of this Act.
26    For purposes of this subsection:

 

 

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1    "Qualifying pupils" means individuals who (i) are
2residents of the State of Illinois, (ii) are under the age of
321 at the close of the school year for which a credit is
4sought, and (iii) during the school year for which a credit is
5sought were full-time pupils enrolled in a kindergarten through
6twelfth grade education program at any school, as defined in
7this subsection.
8    "Qualified education expense" means the amount incurred on
9behalf of a qualifying pupil in excess of $250 for tuition,
10book fees, and lab fees at the school in which the pupil is
11enrolled during the regular school year.
12    "School" means any public or nonpublic elementary or
13secondary school in Illinois that is in compliance with Title
14VI of the Civil Rights Act of 1964 and attendance at which
15satisfies the requirements of Section 26-1 of the School Code,
16except that nothing shall be construed to require a child to
17attend any particular public or nonpublic school to qualify for
18the credit under this Section.
19    "Custodian" means, with respect to qualifying pupils, an
20Illinois resident who is a parent, the parents, a legal
21guardian, or the legal guardians of the qualifying pupils.
22    (n) River Edge Redevelopment Zone site remediation tax
23credit.
24        (i) For tax years ending on or after December 31, 2006,
25    a taxpayer shall be allowed a credit against the tax
26    imposed by subsections (a) and (b) of this Section for

 

 

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1    certain amounts paid for unreimbursed eligible remediation
2    costs, as specified in this subsection. For purposes of
3    this Section, "unreimbursed eligible remediation costs"
4    means costs approved by the Illinois Environmental
5    Protection Agency ("Agency") under Section 58.14a of the
6    Environmental Protection Act that were paid in performing
7    environmental remediation at a site within a River Edge
8    Redevelopment Zone for which a No Further Remediation
9    Letter was issued by the Agency and recorded under Section
10    58.10 of the Environmental Protection Act. The credit must
11    be claimed for the taxable year in which Agency approval of
12    the eligible remediation costs is granted. The credit is
13    not available to any taxpayer if the taxpayer or any
14    related party caused or contributed to, in any material
15    respect, a release of regulated substances on, in, or under
16    the site that was identified and addressed by the remedial
17    action pursuant to the Site Remediation Program of the
18    Environmental Protection Act. Determinations as to credit
19    availability for purposes of this Section shall be made
20    consistent with rules adopted by the Pollution Control
21    Board pursuant to the Illinois Administrative Procedure
22    Act for the administration and enforcement of Section 58.9
23    of the Environmental Protection Act. For purposes of this
24    Section, "taxpayer" includes a person whose tax attributes
25    the taxpayer has succeeded to under Section 381 of the
26    Internal Revenue Code and "related party" includes the

 

 

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1    persons disallowed a deduction for losses by paragraphs
2    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
3    Code by virtue of being a related taxpayer, as well as any
4    of its partners. The credit allowed against the tax imposed
5    by subsections (a) and (b) shall be equal to 25% of the
6    unreimbursed eligible remediation costs in excess of
7    $100,000 per site.
8        (ii) A credit allowed under this subsection that is
9    unused in the year the credit is earned may be carried
10    forward to each of the 5 taxable years following the year
11    for which the credit is first earned until it is used. This
12    credit shall be applied first to the earliest year for
13    which there is a liability. If there is a credit under this
14    subsection from more than one tax year that is available to
15    offset a liability, the earliest credit arising under this
16    subsection shall be applied first. A credit allowed under
17    this subsection may be sold to a buyer as part of a sale of
18    all or part of the remediation site for which the credit
19    was granted. The purchaser of a remediation site and the
20    tax credit shall succeed to the unused credit and remaining
21    carry-forward period of the seller. To perfect the
22    transfer, the assignor shall record the transfer in the
23    chain of title for the site and provide written notice to
24    the Director of the Illinois Department of Revenue of the
25    assignor's intent to sell the remediation site and the
26    amount of the tax credit to be transferred as a portion of

 

 

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1    the sale. In no event may a credit be transferred to any
2    taxpayer if the taxpayer or a related party would not be
3    eligible under the provisions of subsection (i).
4        (iii) For purposes of this Section, the term "site"
5    shall have the same meaning as under Section 58.2 of the
6    Environmental Protection Act.
7    (o) For each of taxable years during the Compassionate Use
8of Medical Cannabis Pilot Program, a surcharge is imposed on
9all taxpayers on income arising from the sale or exchange of
10capital assets, depreciable business property, real property
11used in the trade or business, and Section 197 intangibles of
12an organization registrant under the Compassionate Use of
13Medical Cannabis Pilot Program Act. The amount of the surcharge
14is equal to the amount of federal income tax liability for the
15taxable year attributable to those sales and exchanges. The
16surcharge imposed does not apply if:
17        (1) the medical cannabis cultivation center
18    registration, medical cannabis dispensary registration, or
19    the property of a registration is transferred as a result
20    of any of the following:
21            (A) bankruptcy, a receivership, or a debt
22        adjustment initiated by or against the initial
23        registration or the substantial owners of the initial
24        registration;
25            (B) cancellation, revocation, or termination of
26        any registration by the Illinois Department of Public

 

 

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1        Health;
2            (C) a determination by the Illinois Department of
3        Public Health that transfer of the registration is in
4        the best interests of Illinois qualifying patients as
5        defined by the Compassionate Use of Medical Cannabis
6        Pilot Program Act;
7            (D) the death of an owner of the equity interest in
8        a registrant;
9            (E) the acquisition of a controlling interest in
10        the stock or substantially all of the assets of a
11        publicly traded company;
12            (F) a transfer by a parent company to a wholly
13        owned subsidiary; or
14            (G) the transfer or sale to or by one person to
15        another person where both persons were initial owners
16        of the registration when the registration was issued;
17        or
18        (2) the cannabis cultivation center registration,
19    medical cannabis dispensary registration, or the
20    controlling interest in a registrant's property is
21    transferred in a transaction to lineal descendants in which
22    no gain or loss is recognized or as a result of a
23    transaction in accordance with Section 351 of the Internal
24    Revenue Code in which no gain or loss is recognized.
25(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
26eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,

 

 

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1eff. 7-16-14; 10000SB0009ham003.)
 
2    (35 ILCS 5/202.5)
3    Sec. 202.5. Net income attributable to the period beginning
4prior to the first day of a month and ending after the last day
5of the preceding month January 1 of any year and ending after
6December 31 of the preceding year.
7    (a) In general. With respect to the taxable year of a
8taxpayer beginning prior to the first day of a month and ending
9after the last day of the preceding month January 1 of any year
10and ending after December 31 of the preceding year, net income
11for the period after the last day of the preceding month
12December 31 of the preceding year, is that amount that bears
13the same ratio to the taxpayer's net income for the entire
14taxable year as the number of days in that taxable year after
15the last day of the preceding month December 31 bears to the
16total number of days in that taxable year, and the net income
17for the period prior to the first day of the month January 1 is
18that amount that bears the same ratio to the taxpayer's net
19income for the entire taxable year as the number of days in
20that taxable year prior to the first day of the month January 1
21bears to the total number of days in that taxable year.
22    (b) Election to attribute income and deduction items
23specifically to the respective portions of a taxable year prior
24to the first day of a month and ending after the last day of the
25preceding month January 1 of any year and after December 31 of

 

 

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1the preceding year. In the case of a taxpayer with a taxable
2year beginning prior to the first day of a month and ending
3after the last day of the preceding month January 1 of any year
4and ending after December 31 of the preceding year, the
5taxpayer may elect, instead of the procedure established in
6subsection (a) of this Section, to determine net income on a
7specific accounting basis for the 2 portions of the taxable
8year:
9        (1) from the beginning of the taxable year through the
10    last day of that apportionment period December 31; and
11        (2) from the first day of the next apportionment period
12    January 1 through the end of the taxable year.
13    The election provided by this subsection must be made in
14the form and manner that the Department requires by rule, and
15must be made no later than the due date (including any
16extensions thereof) for the filing of the return for the
17taxable year, and is irrevocable.
18    (c) If the taxpayer elects specific accounting under
19subsection (b):
20        (1) there shall be taken into account in computing base
21    income for each of the 2 portions of the taxable year only
22    those items earned, received, paid, incurred or accrued in
23    each such period;
24        (2) for purposes of apportioning business income of the
25    taxpayer, the provisions in Article 3 shall be applied on
26    the basis of the taxpayer's full taxable year, without

 

 

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1    regard to this Section;
2        (3) the exemption provided by Section 204 shall be
3    divided between the respective periods in amounts which
4    bear the same ratio to the total exemption allowable under
5    Section 204 (determined without regard to this Section) as
6    the total number of days in each period bears to the total
7    number of days in the taxable year;
8        (4) for purposes of this subsection, net income may not
9    be negative for either of the two portions of the taxable
10    year and positive for the other; if net income for one
11    portion of the taxable year would be positive and net
12    income for the other portion would otherwise be negative,
13    the net income for the entire taxable year shall be
14    attributed to the portion of the taxable year with positive
15    net income and the net income for the other portion of the
16    taxable year shall be zero; and
17        (5) the net loss carryforward deduction for the taxable
18    year under Section 207 may not exceed combined net income
19    of both portions of the taxable year, and shall be used
20    against the net income of the portion of the taxable year
21    from the beginning of the taxable year through the last day
22    of the preceding month December 31 before any remaining
23    amount is used against the net income of the latter portion
24    of the taxable year.
25(Source: P.A. 96-1496, eff. 1-13-11; 10000SB0009ham003.)
 

 

 

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1    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
2    Sec. 203. Base income defined.
3    (a) Individuals.
4        (1) In general. In the case of an individual, base
5    income means an amount equal to the taxpayer's adjusted
6    gross income for the taxable year as modified by paragraph
7    (2).
8        (2) Modifications. The adjusted gross income referred
9    to in paragraph (1) shall be modified by adding thereto the
10    sum of the following amounts:
11            (A) An amount equal to all amounts paid or accrued
12        to the taxpayer as interest or dividends during the
13        taxable year to the extent excluded from gross income
14        in the computation of adjusted gross income, except
15        stock dividends of qualified public utilities
16        described in Section 305(e) of the Internal Revenue
17        Code;
18            (B) An amount equal to the amount of tax imposed by
19        this Act to the extent deducted from gross income in
20        the computation of adjusted gross income for the
21        taxable year;
22            (C) An amount equal to the amount received during
23        the taxable year as a recovery or refund of real
24        property taxes paid with respect to the taxpayer's
25        principal residence under the Revenue Act of 1939 and
26        for which a deduction was previously taken under

 

 

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1        subparagraph (L) of this paragraph (2) prior to July 1,
2        1991, the retrospective application date of Article 4
3        of Public Act 87-17. In the case of multi-unit or
4        multi-use structures and farm dwellings, the taxes on
5        the taxpayer's principal residence shall be that
6        portion of the total taxes for the entire property
7        which is attributable to such principal residence;
8            (D) An amount equal to the amount of the capital
9        gain deduction allowable under the Internal Revenue
10        Code, to the extent deducted from gross income in the
11        computation of adjusted gross income;
12            (D-5) An amount, to the extent not included in
13        adjusted gross income, equal to the amount of money
14        withdrawn by the taxpayer in the taxable year from a
15        medical care savings account and the interest earned on
16        the account in the taxable year of a withdrawal
17        pursuant to subsection (b) of Section 20 of the Medical
18        Care Savings Account Act or subsection (b) of Section
19        20 of the Medical Care Savings Account Act of 2000;
20            (D-10) For taxable years ending after December 31,
21        1997, an amount equal to any eligible remediation costs
22        that the individual deducted in computing adjusted
23        gross income and for which the individual claims a
24        credit under subsection (l) of Section 201;
25            (D-15) 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;
4            (D-16) 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 (D-15), then
8        an amount equal to the aggregate amount of the
9        deductions taken in all taxable years under
10        subparagraph (Z) 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 (Z), 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            (D-17) 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 foreign person's business activity outside
2        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 under Sections 951 through 964
17        of the Internal Revenue Code and amounts included in
18        gross income under Section 78 of the Internal Revenue
19        Code) with respect to the stock of the same person to
20        whom the interest was paid, accrued, or incurred.
21            This paragraph shall not apply to the following:
22                (i) an item of interest paid, accrued, or
23            incurred, directly or indirectly, to a person who
24            is subject in a foreign country or state, other
25            than a state which requires mandatory unitary
26            reporting, to a tax on or measured by net income

 

 

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1            with respect to such interest; or
2                (ii) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person if
4            the taxpayer can establish, based on a
5            preponderance of the evidence, both of the
6            following:
7                    (a) the person, during the same taxable
8                year, paid, accrued, or incurred, the interest
9                to a person that is not a related member, and
10                    (b) the transaction giving rise to the
11                interest expense between the taxpayer and the
12                person did not have as a principal purpose the
13                avoidance of Illinois income tax, and is paid
14                pursuant to a contract or agreement that
15                reflects an arm's-length interest rate and
16                terms; or
17                (iii) the taxpayer can establish, based on
18            clear and convincing evidence, that the interest
19            paid, accrued, or incurred relates to a contract or
20            agreement entered into at arm's-length rates and
21            terms and the principal purpose for the payment is
22            not federal or Illinois tax avoidance; or
23                (iv) an item of interest paid, accrued, or
24            incurred, directly or indirectly, to a person if
25            the taxpayer establishes by clear and convincing
26            evidence that the adjustments are unreasonable; or

 

 

SB2224- 190 -LRB100 13364 AXK 27964 b

1            if the taxpayer and the Director agree in writing
2            to the application or use of an alternative method
3            of apportionment under Section 304(f).
4                Nothing in this subsection shall preclude the
5            Director from making any other adjustment
6            otherwise allowed under Section 404 of this Act for
7            any tax year beginning after the effective date of
8            this amendment provided such adjustment is made
9            pursuant to regulation adopted by the Department
10            and such regulations provide methods and standards
11            by which the Department will utilize its authority
12            under Section 404 of this Act;
13            (D-18) An amount equal to the amount of intangible
14        expenses and costs otherwise allowed as a deduction in
15        computing base income, and that were paid, accrued, or
16        incurred, directly or indirectly, (i) for taxable
17        years ending on or after December 31, 2004, to a
18        foreign person who would be a member of the same
19        unitary business group but for the fact that the
20        foreign person's business activity outside the United
21        States is 80% or more of that person's total business
22        activity and (ii) for taxable years ending on or after
23        December 31, 2008, to a person who would be a member of
24        the same unitary business group but for the fact that
25        the person is prohibited under Section 1501(a)(27)
26        from being included in the unitary business group

 

 

SB2224- 191 -LRB100 13364 AXK 27964 b

1        because he or she is ordinarily required to apportion
2        business income under different subsections of Section
3        304. The addition modification required by this
4        subparagraph shall be reduced to the extent that
5        dividends were included in base income of the unitary
6        group for the same taxable year and received by the
7        taxpayer or by a member of the taxpayer's unitary
8        business group (including amounts included in gross
9        income under Sections 951 through 964 of the Internal
10        Revenue Code and amounts included in gross income under
11        Section 78 of the Internal Revenue Code) with respect
12        to the stock of the same person to whom the intangible
13        expenses and costs were directly or indirectly paid,
14        incurred, or accrued. The preceding sentence does not
15        apply to the extent that the same dividends caused a
16        reduction to the addition modification required under
17        Section 203(a)(2)(D-17) of this Act. As used in this
18        subparagraph, the term "intangible expenses and costs"
19        includes (1) expenses, losses, and costs for, or
20        related to, the direct or indirect acquisition, use,
21        maintenance or management, ownership, sale, exchange,
22        or any other disposition of intangible property; (2)
23        losses incurred, directly or indirectly, from
24        factoring transactions or discounting transactions;
25        (3) royalty, patent, technical, and copyright fees;
26        (4) licensing fees; and (5) other similar expenses and

 

 

SB2224- 192 -LRB100 13364 AXK 27964 b

1        costs. For purposes of this subparagraph, "intangible
2        property" includes patents, patent applications, trade
3        names, trademarks, service marks, copyrights, mask
4        works, trade secrets, and similar types of intangible
5        assets.
6            This paragraph shall not apply to the following:
7                (i) any item of intangible expenses or costs
8            paid, accrued, or incurred, directly or
9            indirectly, from a transaction with a person who is
10            subject in a foreign country or state, other than a
11            state which requires mandatory unitary reporting,
12            to a tax on or measured by net income with respect
13            to such item; or
14                (ii) any item of intangible expense or cost
15            paid, accrued, or incurred, directly or
16            indirectly, if the taxpayer can establish, based
17            on a preponderance of the evidence, both of the
18            following:
19                    (a) the person during the same taxable
20                year paid, accrued, or incurred, the
21                intangible expense or cost to a person that is
22                not a related member, and
23                    (b) the transaction giving rise to the
24                intangible expense or cost between the
25                taxpayer and the person did not have as a
26                principal purpose the avoidance of Illinois

 

 

SB2224- 193 -LRB100 13364 AXK 27964 b

1                income tax, and is paid pursuant to a contract
2                or agreement that reflects arm's-length terms;
3                or
4                (iii) any item of intangible expense or cost
5            paid, accrued, or incurred, directly or
6            indirectly, from a transaction with a person if the
7            taxpayer establishes by clear and convincing
8            evidence, that the adjustments are unreasonable;
9            or if the taxpayer and the Director agree in
10            writing to the application or use of an alternative
11            method of apportionment under Section 304(f);
12                Nothing in this subsection shall preclude the
13            Director from making any other adjustment
14            otherwise allowed under Section 404 of this Act for
15            any tax year beginning after the effective date of
16            this amendment provided such adjustment is made
17            pursuant to regulation adopted by the Department
18            and such regulations provide methods and standards
19            by which the Department will utilize its authority
20            under Section 404 of this Act;
21            (D-19) For taxable years ending on or after
22        December 31, 2008, an amount equal to the amount of
23        insurance premium expenses and costs otherwise allowed
24        as a deduction in computing base income, and that were
25        paid, accrued, or incurred, directly or indirectly, to
26        a person who would be a member of the same unitary

 

 

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1        business group but for the fact that the person is
2        prohibited under Section 1501(a)(27) from being
3        included in the unitary business group because he or
4        she is ordinarily required to apportion business
5        income under different subsections of Section 304. The
6        addition modification required by this subparagraph
7        shall be reduced to the extent that dividends were
8        included in base income of the unitary group for the
9        same taxable year and received by the taxpayer or by a
10        member of the taxpayer's unitary business group
11        (including amounts included in gross income under
12        Sections 951 through 964 of the Internal Revenue Code
13        and amounts included in gross income under Section 78
14        of the Internal Revenue Code) with respect to the stock
15        of the same person to whom the premiums and costs were
16        directly or indirectly paid, incurred, or accrued. The
17        preceding sentence does not apply to the extent that
18        the same dividends caused a reduction to the addition
19        modification required under Section 203(a)(2)(D-17) or
20        Section 203(a)(2)(D-18) of this Act.
21            (D-20) For taxable years beginning on or after
22        January 1, 2002 and ending on or before December 31,
23        2006, in the case of a distribution from a qualified
24        tuition program under Section 529 of the Internal
25        Revenue Code, other than (i) a distribution from a
26        College Savings Pool created under Section 16.5 of the

 

 

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1        State Treasurer Act or (ii) a distribution from the
2        Illinois Prepaid Tuition Trust Fund, an amount equal to
3        the amount excluded from gross income under Section
4        529(c)(3)(B). For taxable years beginning on or after
5        January 1, 2007, in the case of a distribution from a
6        qualified tuition program under Section 529 of the
7        Internal Revenue Code, other than (i) a distribution
8        from a College Savings Pool created under Section 16.5
9        of the State Treasurer Act, (ii) a distribution from
10        the Illinois Prepaid Tuition Trust Fund, or (iii) a
11        distribution from a qualified tuition program under
12        Section 529 of the Internal Revenue Code that (I)
13        adopts and determines that its offering materials
14        comply with the College Savings Plans Network's
15        disclosure principles and (II) has made reasonable
16        efforts to inform in-state residents of the existence
17        of in-state qualified tuition programs by informing
18        Illinois residents directly and, where applicable, to
19        inform financial intermediaries distributing the
20        program to inform in-state residents of the existence
21        of in-state qualified tuition programs at least
22        annually, an amount equal to the amount excluded from
23        gross income under Section 529(c)(3)(B).
24            For the purposes of this subparagraph (D-20), a
25        qualified tuition program has made reasonable efforts
26        if it makes disclosures (which may use the term

 

 

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1        "in-state program" or "in-state plan" and need not
2        specifically refer to Illinois or its qualified
3        programs by name) (i) directly to prospective
4        participants in its offering materials or makes a
5        public disclosure, such as a website posting; and (ii)
6        where applicable, to intermediaries selling the
7        out-of-state program in the same manner that the
8        out-of-state program distributes its offering
9        materials;
10            (D-21) For taxable years beginning on or after
11        January 1, 2007, in the case of transfer of moneys from
12        a qualified tuition program under Section 529 of the
13        Internal Revenue Code that is administered by the State
14        to an out-of-state program, an amount equal to the
15        amount of moneys previously deducted from base income
16        under subsection (a)(2)(Y) of this Section;
17            (D-22) For taxable years beginning on or after
18        January 1, 2009, in the case of a nonqualified
19        withdrawal or refund of moneys from a qualified tuition
20        program under Section 529 of the Internal Revenue Code
21        administered by the State that is not used for
22        qualified expenses at an eligible education
23        institution, an amount equal to the contribution
24        component of the nonqualified withdrawal or refund
25        that was previously deducted from base income under
26        subsection (a)(2)(y) of this Section, provided that

 

 

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1        the withdrawal or refund did not result from the
2        beneficiary's death or disability;
3            (D-23) An amount equal to the credit allowable to
4        the taxpayer under Section 218(a) of this Act,
5        determined without regard to Section 218(c) of this
6        Act;
7            (D-24) For taxable years ending on or after
8        December 31, 2017, an amount equal to the deduction
9        allowed under Section 199 of the Internal Revenue Code
10        for the taxable year;
11    and by deducting from the total so obtained the sum of the
12    following amounts:
13            (E) For taxable years ending before December 31,
14        2001, any amount included in such total in respect of
15        any compensation (including but not limited to any
16        compensation paid or accrued to a serviceman while a
17        prisoner of war or missing in action) paid to a
18        resident by reason of being on active duty in the Armed
19        Forces of the United States and in respect of any
20        compensation paid or accrued to a resident who as a
21        governmental employee was a prisoner of war or missing
22        in action, and in respect of any compensation paid to a
23        resident in 1971 or thereafter for annual training
24        performed pursuant to Sections 502 and 503, Title 32,
25        United States Code as a member of the Illinois National
26        Guard or, beginning with taxable years ending on or

 

 

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1        after December 31, 2007, the National Guard of any
2        other state. For taxable years ending on or after
3        December 31, 2001, any amount included in such total in
4        respect of any compensation (including but not limited
5        to any compensation paid or accrued to a serviceman
6        while a prisoner of war or missing in action) paid to a
7        resident by reason of being a member of any component
8        of the Armed Forces of the United States and in respect
9        of any compensation paid or accrued to a resident who
10        as a governmental employee was a prisoner of war or
11        missing in action, and in respect of any compensation
12        paid to a resident in 2001 or thereafter by reason of
13        being a member of the Illinois National Guard or,
14        beginning with taxable years ending on or after
15        December 31, 2007, the National Guard of any other
16        state. The provisions of this subparagraph (E) are
17        exempt from the provisions of Section 250;
18            (F) An amount equal to all amounts included in such
19        total pursuant to the provisions of Sections 402(a),
20        402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
21        Internal Revenue Code, or included in such total as
22        distributions under the provisions of any retirement
23        or disability plan for employees of any governmental
24        agency or unit, or retirement payments to retired
25        partners, which payments are excluded in computing net
26        earnings from self employment by Section 1402 of the

 

 

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1        Internal Revenue Code and regulations adopted pursuant
2        thereto;
3            (G) The valuation limitation amount;
4            (H) An amount equal to the amount of any tax
5        imposed by this Act which was refunded to the taxpayer
6        and included in such total for the taxable year;
7            (I) An amount equal to all amounts included in such
8        total pursuant to the provisions of Section 111 of the
9        Internal Revenue Code as a recovery of items previously
10        deducted from adjusted gross income in the computation
11        of taxable income;
12            (J) An amount equal to those dividends included in
13        such total which were paid by a corporation which
14        conducts business operations in a River Edge
15        Redevelopment Zone or zones created under the River
16        Edge Redevelopment Zone Act, and conducts
17        substantially all of its operations in a River Edge
18        Redevelopment Zone or zones. This subparagraph (J) is
19        exempt from the provisions of Section 250;
20            (K) An amount equal to those dividends included in
21        such total that were paid by a corporation that
22        conducts business operations in a federally designated
23        Foreign Trade Zone or Sub-Zone and that is designated a
24        High Impact Business located in Illinois; provided
25        that dividends eligible for the deduction provided in
26        subparagraph (J) of paragraph (2) of this subsection

 

 

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1        shall not be eligible for the deduction provided under
2        this subparagraph (K);
3            (L) For taxable years ending after December 31,
4        1983, an amount equal to all social security benefits
5        and railroad retirement benefits included in such
6        total pursuant to Sections 72(r) and 86 of the Internal
7        Revenue Code;
8            (M) With the exception of any amounts subtracted
9        under subparagraph (N), an amount equal to the sum of
10        all amounts disallowed as deductions by (i) Sections
11        171(a) (2), and 265(2) of the Internal Revenue Code,
12        and all amounts of expenses allocable to interest and
13        disallowed as deductions by Section 265(1) of the
14        Internal Revenue Code; and (ii) for taxable years
15        ending on or after August 13, 1999, Sections 171(a)(2),
16        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
17        Code, plus, for taxable years ending on or after
18        December 31, 2011, Section 45G(e)(3) of the Internal
19        Revenue Code and, for taxable years ending on or after
20        December 31, 2008, any amount included in gross income
21        under Section 87 of the Internal Revenue Code; the
22        provisions of this subparagraph are exempt from the
23        provisions of Section 250;
24            (N) An amount equal to all amounts included in such
25        total which are exempt from taxation by this State
26        either by reason of its statutes or Constitution or by

 

 

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1        reason of the Constitution, treaties or statutes of the
2        United States; provided that, in the case of any
3        statute of this State that exempts income derived from
4        bonds or other obligations from the tax imposed under
5        this Act, the amount exempted shall be the interest net
6        of bond premium amortization;
7            (O) An amount equal to any contribution made to a
8        job training project established pursuant to the Tax
9        Increment Allocation Redevelopment Act;
10            (P) 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 or of any itemized deduction
15        taken from adjusted gross income in the computation of
16        taxable income for restoration of substantial amounts
17        held under claim of right for the taxable year;
18            (Q) An amount equal to any amounts included in such
19        total, received by the taxpayer as an acceleration in
20        the payment of life, endowment or annuity benefits in
21        advance of the time they would otherwise be payable as
22        an indemnity for a terminal illness;
23            (R) An amount equal to the amount of any federal or
24        State bonus paid to veterans of the Persian Gulf War;
25            (S) An amount, to the extent included in adjusted
26        gross income, equal to the amount of a contribution

 

 

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1        made in the taxable year on behalf of the taxpayer to a
2        medical care savings account established under the
3        Medical Care Savings Account Act or the Medical Care
4        Savings Account Act of 2000 to the extent the
5        contribution is accepted by the account administrator
6        as provided in that Act;
7            (T) An amount, to the extent included in adjusted
8        gross income, equal to the amount of interest earned in
9        the taxable year on a medical care savings account
10        established under the Medical Care Savings Account Act
11        or the Medical Care Savings Account Act of 2000 on
12        behalf of the taxpayer, other than interest added
13        pursuant to item (D-5) of this paragraph (2);
14            (U) For one taxable year beginning on or after
15        January 1, 1994, an amount equal to the total amount of
16        tax imposed and paid under subsections (a) and (b) of
17        Section 201 of this Act on grant amounts received by
18        the taxpayer under the Nursing Home Grant Assistance
19        Act during the taxpayer's taxable years 1992 and 1993;
20            (V) Beginning with tax years ending on or after
21        December 31, 1995 and ending with tax years ending on
22        or before December 31, 2004, an amount equal to the
23        amount paid by a taxpayer who is a self-employed
24        taxpayer, a partner of a partnership, or a shareholder
25        in a Subchapter S corporation for health insurance or
26        long-term care insurance for that taxpayer or that

 

 

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1        taxpayer's spouse or dependents, to the extent that the
2        amount paid for that health insurance or long-term care
3        insurance may be deducted under Section 213 of the
4        Internal Revenue Code, has not been deducted on the
5        federal income tax return of the taxpayer, and does not
6        exceed the taxable income attributable to that
7        taxpayer's income, self-employment income, or
8        Subchapter S corporation income; except that no
9        deduction shall be allowed under this item (V) if the
10        taxpayer is eligible to participate in any health
11        insurance or long-term care insurance plan of an
12        employer of the taxpayer or the taxpayer's spouse. The
13        amount of the health insurance and long-term care
14        insurance subtracted under this item (V) shall be
15        determined by multiplying total health insurance and
16        long-term care insurance premiums paid by the taxpayer
17        times a number that represents the fractional
18        percentage of eligible medical expenses under Section
19        213 of the Internal Revenue Code of 1986 not actually
20        deducted on the taxpayer's federal income tax return;
21            (W) For taxable years beginning on or after January
22        1, 1998, all amounts included in the taxpayer's federal
23        gross income in the taxable year from amounts converted
24        from a regular IRA to a Roth IRA. This paragraph is
25        exempt from the provisions of Section 250;
26            (X) For taxable year 1999 and thereafter, an amount

 

 

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1        equal to the amount of any (i) distributions, to the
2        extent includible in gross income for federal income
3        tax purposes, made to the taxpayer because of his or
4        her status as a victim of persecution for racial or
5        religious reasons by Nazi Germany or any other Axis
6        regime or as an heir of the victim and (ii) items of
7        income, to the extent includible in gross income for
8        federal income tax purposes, attributable to, derived
9        from or in any way related to assets stolen from,
10        hidden from, or otherwise lost to a victim of
11        persecution for racial or religious reasons by Nazi
12        Germany or any other Axis regime immediately prior to,
13        during, and immediately after World War II, including,
14        but not limited to, interest on the proceeds receivable
15        as insurance under policies issued to a victim of
16        persecution for racial or religious reasons by Nazi
17        Germany or any other Axis regime by European insurance
18        companies immediately prior to and during World War II;
19        provided, however, this subtraction from federal
20        adjusted gross income does not apply to assets acquired
21        with such assets or with the proceeds from the sale of
22        such assets; provided, further, this paragraph shall
23        only apply to a taxpayer who was the first recipient of
24        such assets after their recovery and who is a victim of
25        persecution for racial or religious reasons by Nazi
26        Germany or any other Axis regime or as an heir of the

 

 

SB2224- 205 -LRB100 13364 AXK 27964 b

1        victim. The amount of and the eligibility for any
2        public assistance, benefit, or similar entitlement is
3        not affected by the inclusion of items (i) and (ii) of
4        this paragraph in gross income for federal income tax
5        purposes. This paragraph is exempt from the provisions
6        of Section 250;
7            (Y) For taxable years beginning on or after January
8        1, 2002 and ending on or before December 31, 2004,
9        moneys contributed in the taxable year to a College
10        Savings Pool account under Section 16.5 of the State
11        Treasurer Act, except that amounts excluded from gross
12        income under Section 529(c)(3)(C)(i) of the Internal
13        Revenue Code shall not be considered moneys
14        contributed under this subparagraph (Y). For taxable
15        years beginning on or after January 1, 2005, a maximum
16        of $10,000 contributed in the taxable year to (i) a
17        College Savings Pool account under Section 16.5 of the
18        State Treasurer Act or (ii) the Illinois Prepaid
19        Tuition Trust Fund, except that amounts excluded from
20        gross income under Section 529(c)(3)(C)(i) of the
21        Internal Revenue Code shall not be considered moneys
22        contributed under this subparagraph (Y). For purposes
23        of this subparagraph, contributions made by an
24        employer on behalf of an employee, or matching
25        contributions made by an employee, shall be treated as
26        made by the employee. This subparagraph (Y) is exempt

 

 

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1        from the provisions of Section 250;
2            (Z) 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 (Z) is exempt from the provisions of
11        Section 250;
12            (AA) If the taxpayer sells, transfers, abandons,
13        or otherwise disposes of property for which the
14        taxpayer was required in any taxable year to make an
15        addition modification under subparagraph (D-15), then
16        an amount 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 (D-15), 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 (AA) is exempt from the
2        provisions of Section 250;
3            (BB) Any amount included in adjusted gross income,
4        other than salary, received by a driver in a
5        ridesharing arrangement using a motor vehicle;
6            (CC) The amount of (i) any interest income (net of
7        the deductions allocable thereto) taken into account
8        for the taxable year with respect to a transaction with
9        a taxpayer that is required to make an addition
10        modification with respect to such transaction under
11        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
12        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
13        the amount of that addition modification, and (ii) any
14        income from intangible property (net of the deductions
15        allocable thereto) taken into account for the taxable
16        year with respect to a transaction with a taxpayer that
17        is required to make an addition modification with
18        respect to such transaction under Section
19        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
20        203(d)(2)(D-8), but not to exceed the amount of that
21        addition modification. This subparagraph (CC) is
22        exempt from the provisions of Section 250;
23            (DD) An amount equal to the interest income taken
24        into account for the taxable year (net of the
25        deductions allocable thereto) with respect to
26        transactions with (i) a foreign person who would be a

 

 

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1        member of the taxpayer's unitary business group but for
2        the fact that the foreign person's business activity
3        outside the United States is 80% or more of that
4        person's total business activity and (ii) for taxable
5        years ending on or after December 31, 2008, to a person
6        who would be a member of the same unitary business
7        group but for the fact that the person is prohibited
8        under Section 1501(a)(27) from being included in the
9        unitary business group because he or she is ordinarily
10        required to apportion business income under different
11        subsections of Section 304, but not to exceed the
12        addition modification required to be made for the same
13        taxable year under Section 203(a)(2)(D-17) for
14        interest paid, accrued, or incurred, directly or
15        indirectly, to the same person. This subparagraph (DD)
16        is exempt from the provisions of Section 250;
17            (EE) An amount equal to the income from intangible
18        property taken into account for the taxable year (net
19        of the deductions allocable thereto) with respect to
20        transactions with (i) a foreign person who would be a
21        member of the taxpayer's unitary business group but for
22        the fact that the foreign person's business activity
23        outside the United States is 80% or more of that
24        person's total business activity and (ii) for taxable
25        years ending on or after December 31, 2008, to a person
26        who would be a member of the same unitary business

 

 

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1        group but for the fact that the person is prohibited
2        under Section 1501(a)(27) from being included in the
3        unitary business group because he or she is ordinarily
4        required to apportion business income under different
5        subsections of Section 304, but not to exceed the
6        addition modification required to be made for the same
7        taxable year under Section 203(a)(2)(D-18) for
8        intangible expenses and costs paid, accrued, or
9        incurred, directly or indirectly, to the same foreign
10        person. This subparagraph (EE) is exempt from the
11        provisions of Section 250;
12            (FF) An amount equal to any amount awarded to the
13        taxpayer during the taxable year by the Court of Claims
14        under subsection (c) of Section 8 of the Court of
15        Claims Act for time unjustly served in a State prison.
16        This subparagraph (FF) is exempt from the provisions of
17        Section 250; and
18            (GG) For taxable years ending on or after December
19        31, 2011, in the case of a taxpayer who was required to
20        add back any insurance premiums under Section
21        203(a)(2)(D-19), such taxpayer may elect to subtract
22        that part of a reimbursement received from the
23        insurance company equal to the amount of the expense or
24        loss (including expenses incurred by the insurance
25        company) that would have been taken into account as a
26        deduction for federal income tax purposes if the

 

 

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1        expense or loss had been uninsured. If a taxpayer makes
2        the election provided for by this subparagraph (GG),
3        the insurer to which the premiums were paid must add
4        back to income the amount subtracted by the taxpayer
5        pursuant to this subparagraph (GG). This subparagraph
6        (GG) is exempt from the provisions of Section 250.
 
7    (b) Corporations.
8        (1) In general. In the case of a corporation, base
9    income means an amount equal to the taxpayer's taxable
10    income for the taxable year as modified by paragraph (2).
11        (2) Modifications. The taxable income referred to in
12    paragraph (1) shall be modified by adding thereto the sum
13    of the following amounts:
14            (A) An amount equal to all amounts paid or accrued
15        to the taxpayer as interest and all distributions
16        received from regulated investment companies during
17        the taxable year to the extent excluded from gross
18        income in the computation of taxable income;
19            (B) An amount equal to the amount of tax imposed by
20        this Act to the extent deducted from gross income in
21        the computation of taxable income for the taxable year;
22            (C) In the case of a regulated investment company,
23        an amount equal to the excess of (i) the net long-term
24        capital gain for the taxable year, over (ii) the amount
25        of the capital gain dividends designated as such in

 

 

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1        accordance with Section 852(b)(3)(C) of the Internal
2        Revenue Code and any amount designated under Section
3        852(b)(3)(D) of the Internal Revenue Code,
4        attributable to the taxable year (this amendatory Act
5        of 1995 (Public Act 89-89) is declarative of existing
6        law and is not a new enactment);
7            (D) The amount of any net operating loss deduction
8        taken in arriving at taxable income, other than a net
9        operating loss carried forward from a taxable year
10        ending prior to December 31, 1986;
11            (E) For taxable years in which a net operating loss
12        carryback or carryforward from a taxable year ending
13        prior to December 31, 1986 is an element of taxable
14        income under paragraph (1) of subsection (e) or
15        subparagraph (E) of paragraph (2) of subsection (e),
16        the amount by which addition modifications other than
17        those provided by this subparagraph (E) exceeded
18        subtraction modifications in such earlier taxable
19        year, with the following limitations applied in the
20        order that they are listed:
21                (i) the addition modification relating to the
22            net operating loss carried back or forward to the
23            taxable year from any taxable year ending prior to
24            December 31, 1986 shall be reduced by the amount of
25            addition modification under this subparagraph (E)
26            which related to that net operating loss and which

 

 

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1            was taken into account in calculating the base
2            income of an earlier taxable year, and
3                (ii) the addition modification relating to the
4            net operating loss carried back or forward to the
5            taxable year from any taxable year ending prior to
6            December 31, 1986 shall not exceed the amount of
7            such carryback or carryforward;
8            For taxable years in which there is a net operating
9        loss carryback or carryforward from more than one other
10        taxable year ending prior to December 31, 1986, the
11        addition modification provided in this subparagraph
12        (E) shall be the sum of the amounts computed
13        independently under the preceding provisions of this
14        subparagraph (E) for each such taxable year;
15            (E-5) For taxable years ending after December 31,
16        1997, an amount equal to any eligible remediation costs
17        that the corporation deducted in computing adjusted
18        gross income and for which the corporation claims a
19        credit under subsection (l) of Section 201;
20            (E-10) For taxable years 2001 and thereafter, an
21        amount equal to the bonus depreciation deduction taken
22        on the taxpayer's federal income tax return for the
23        taxable year under subsection (k) of Section 168 of the
24        Internal Revenue Code;
25            (E-11) If the taxpayer sells, transfers, abandons,
26        or otherwise disposes of property for which the

 

 

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1        taxpayer was required in any taxable year to make an
2        addition modification under subparagraph (E-10), then
3        an amount equal to the aggregate amount of the
4        deductions taken in all taxable years under
5        subparagraph (T) with respect to that property.
6            If the taxpayer continues to own property through
7        the last day of the last tax year for which the
8        taxpayer may claim a depreciation deduction for
9        federal income tax purposes and for which the taxpayer
10        was allowed in any taxable year to make a subtraction
11        modification under subparagraph (T), then an amount
12        equal to that subtraction modification.
13            The taxpayer is required to make the addition
14        modification under this subparagraph only once with
15        respect to any one piece of property;
16            (E-12) An amount equal to the amount otherwise
17        allowed as a deduction in computing base income for
18        interest paid, accrued, or incurred, directly or
19        indirectly, (i) for taxable years ending on or after
20        December 31, 2004, to a foreign person who would be a
21        member of the same unitary business group but for the
22        fact the foreign person's business activity outside
23        the United States is 80% or more of the foreign
24        person's total business activity and (ii) for taxable
25        years ending on or after December 31, 2008, to a person
26        who would be a member of the same unitary business

 

 

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1        group but for the fact that the person is prohibited
2        under Section 1501(a)(27) from being included in the
3        unitary business group because he or she is ordinarily
4        required to apportion business income under different
5        subsections of Section 304. The addition modification
6        required by this subparagraph shall be reduced to the
7        extent that dividends were included in base income of
8        the unitary group for the same taxable year and
9        received by the taxpayer or by a member of the
10        taxpayer's unitary business group (including amounts
11        included in gross income pursuant to Sections 951
12        through 964 of the Internal Revenue Code and amounts
13        included in gross income under Section 78 of the
14        Internal Revenue Code) with respect to the stock of the
15        same person to whom the interest was paid, accrued, or
16        incurred.
17            This paragraph shall not apply to the following:
18                (i) an item of interest paid, accrued, or
19            incurred, directly or indirectly, to a person who
20            is subject in a foreign country or state, other
21            than a state which requires mandatory unitary
22            reporting, to a tax on or measured by net income
23            with respect to such interest; or
24                (ii) an item of interest paid, accrued, or
25            incurred, directly or indirectly, to a person if
26            the taxpayer can establish, based on a

 

 

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1            preponderance of the evidence, both of the
2            following:
3                    (a) the person, during the same taxable
4                year, paid, accrued, or incurred, the interest
5                to a person that is not a related member, and
6                    (b) the transaction giving rise to the
7                interest expense between the taxpayer and the
8                person did not have as a principal purpose the
9                avoidance of Illinois income tax, and is paid
10                pursuant to a contract or agreement that
11                reflects an arm's-length interest rate and
12                terms; or
13                (iii) the taxpayer can establish, based on
14            clear and convincing evidence, that the interest
15            paid, accrued, or incurred relates to a contract or
16            agreement entered into at arm's-length rates and
17            terms and the principal purpose for the payment is
18            not federal or Illinois tax avoidance; or
19                (iv) an item of interest paid, accrued, or
20            incurred, directly or indirectly, to a person if
21            the taxpayer establishes by clear and convincing
22            evidence that the adjustments are unreasonable; or
23            if the taxpayer and the Director agree in writing
24            to the application or use of an alternative method
25            of apportionment under Section 304(f).
26                Nothing in this subsection shall preclude the

 

 

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1            Director from making any other adjustment
2            otherwise allowed under Section 404 of this Act for
3            any tax year beginning after the effective date of
4            this amendment provided such adjustment is made
5            pursuant to regulation adopted by the Department
6            and such regulations provide methods and standards
7            by which the Department will utilize its authority
8            under Section 404 of this Act;
9            (E-13) An amount equal to the amount of intangible
10        expenses and costs otherwise allowed as a deduction in
11        computing base income, and that were paid, accrued, or
12        incurred, directly or indirectly, (i) for taxable
13        years ending on or after December 31, 2004, to a
14        foreign person who would be a member of the same
15        unitary business group but for the fact that the
16        foreign person's business activity outside the United
17        States is 80% or more of that person's total business
18        activity and (ii) for taxable years ending on or after
19        December 31, 2008, to a person who would be a member of
20        the same unitary business group but for the fact that
21        the person is prohibited under Section 1501(a)(27)
22        from being included in the unitary business group
23        because he or she is ordinarily required to apportion
24        business income under different subsections of Section
25        304. The addition modification required by this
26        subparagraph shall be reduced to the extent that

 

 

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1        dividends were included in base income of the unitary
2        group for the same taxable year and received by the
3        taxpayer or by a member of the taxpayer's unitary
4        business group (including amounts included in gross
5        income pursuant to Sections 951 through 964 of the
6        Internal Revenue Code and amounts included in gross
7        income under Section 78 of the Internal Revenue Code)
8        with respect to the stock of the same person to whom
9        the intangible expenses and costs were directly or
10        indirectly paid, incurred, or accrued. The preceding
11        sentence shall not apply to the extent that the same
12        dividends caused a reduction to the addition
13        modification required under Section 203(b)(2)(E-12) of
14        this Act. As used in this subparagraph, the term
15        "intangible expenses and costs" includes (1) expenses,
16        losses, and costs for, or related to, the direct or
17        indirect acquisition, use, maintenance or management,
18        ownership, sale, exchange, or any other disposition of
19        intangible property; (2) losses incurred, directly or
20        indirectly, from factoring transactions or discounting
21        transactions; (3) royalty, patent, technical, and
22        copyright fees; (4) licensing fees; and (5) other
23        similar expenses and costs. For purposes of this
24        subparagraph, "intangible property" includes patents,
25        patent applications, trade names, trademarks, service
26        marks, copyrights, mask works, trade secrets, and

 

 

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1        similar types of intangible assets.
2            This paragraph shall not apply to the following:
3                (i) any item of intangible expenses or costs
4            paid, accrued, or incurred, directly or
5            indirectly, from a transaction with a person who is
6            subject in a foreign country or state, other than a
7            state which requires mandatory unitary reporting,
8            to a tax on or measured by net income with respect
9            to such item; or
10                (ii) any item of intangible expense or cost
11            paid, accrued, or incurred, directly or
12            indirectly, if the taxpayer can establish, based
13            on a preponderance of the evidence, both of the
14            following:
15                    (a) the person during the same taxable
16                year paid, accrued, or incurred, the
17                intangible expense or cost to a person that is
18                not a related member, and
19                    (b) the transaction giving rise to the
20                intangible expense or cost between the
21                taxpayer and the person did not have as a
22                principal purpose the avoidance of Illinois
23                income tax, and is paid pursuant to a contract
24                or agreement that reflects arm's-length terms;
25                or
26                (iii) any item of intangible expense or cost

 

 

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1            paid, accrued, or incurred, directly or
2            indirectly, from a transaction with a person if the
3            taxpayer establishes by clear and convincing
4            evidence, that the adjustments are unreasonable;
5            or if the taxpayer and the Director agree in
6            writing to the application or use of an alternative
7            method of apportionment under Section 304(f);
8                Nothing in this subsection shall preclude the
9            Director from making any other adjustment
10            otherwise allowed under Section 404 of this Act for
11            any tax year beginning after the effective date of
12            this amendment provided such adjustment is made
13            pursuant to regulation adopted by the Department
14            and such regulations provide methods and standards
15            by which the Department will utilize its authority
16            under Section 404 of this Act;
17            (E-14) For taxable years ending on or after
18        December 31, 2008, an amount equal to the amount of
19        insurance premium expenses and costs otherwise allowed
20        as a deduction in computing base income, and that were
21        paid, accrued, or incurred, directly or indirectly, to
22        a person who would be a member of the same unitary
23        business group but for the fact that the person is
24        prohibited under Section 1501(a)(27) from being
25        included in the unitary business group because he or
26        she is ordinarily required to apportion business

 

 

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1        income under different subsections of Section 304. The
2        addition modification required by this subparagraph
3        shall be reduced to the extent that dividends were
4        included in base income of the unitary group for the
5        same taxable year and received by the taxpayer or by a
6        member of the taxpayer's unitary business group
7        (including amounts included in gross income under
8        Sections 951 through 964 of the Internal Revenue Code
9        and amounts included in gross income under Section 78
10        of the Internal Revenue Code) with respect to the stock
11        of the same person to whom the premiums and costs were
12        directly or indirectly paid, incurred, or accrued. The
13        preceding sentence does not apply to the extent that
14        the same dividends caused a reduction to the addition
15        modification required under Section 203(b)(2)(E-12) or
16        Section 203(b)(2)(E-13) of this Act;
17            (E-15) For taxable years beginning after December
18        31, 2008, any deduction for dividends paid by a captive
19        real estate investment trust that is allowed to a real
20        estate investment trust under Section 857(b)(2)(B) of
21        the Internal Revenue Code for dividends paid;
22            (E-16) 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            (E-17) 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            (F) An amount equal to the amount of any tax
7        imposed by this Act which was refunded to the taxpayer
8        and included in such total for the taxable year;
9            (G) An amount equal to any amount included in such
10        total under Section 78 of the Internal Revenue Code;
11            (H) In the case of a regulated investment company,
12        an amount equal to the amount of exempt interest
13        dividends as defined in subsection (b) (5) of Section
14        852 of the Internal Revenue Code, paid to shareholders
15        for the taxable year;
16            (I) With the exception of any amounts subtracted
17        under subparagraph (J), an amount equal to the sum of
18        all amounts disallowed as deductions by (i) Sections
19        171(a) (2), and 265(a)(2) and amounts disallowed as
20        interest expense by Section 291(a)(3) of the Internal
21        Revenue Code, and all amounts of expenses allocable to
22        interest and disallowed as deductions by Section
23        265(a)(1) of the Internal Revenue Code; and (ii) for
24        taxable years ending on or after August 13, 1999,
25        Sections 171(a)(2), 265, 280C, 291(a)(3), and
26        832(b)(5)(B)(i) of the Internal Revenue Code, plus,

 

 

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1        for tax years ending on or after December 31, 2011,
2        amounts disallowed as deductions by Section 45G(e)(3)
3        of the Internal Revenue Code and, for taxable years
4        ending on or after December 31, 2008, any amount
5        included in gross income under Section 87 of the
6        Internal Revenue Code and the policyholders' share of
7        tax-exempt interest of a life insurance company under
8        Section 807(a)(2)(B) of the Internal Revenue Code (in
9        the case of a life insurance company with gross income
10        from a decrease in reserves for the tax year) or
11        Section 807(b)(1)(B) of the Internal Revenue Code (in
12        the case of a life insurance company allowed a
13        deduction for an increase in reserves for the tax
14        year); the provisions of this subparagraph are exempt
15        from the provisions of Section 250;
16            (J) An amount equal to all amounts included in such
17        total which are exempt from taxation by this State
18        either by reason of its statutes or Constitution or by
19        reason of the Constitution, treaties or statutes of the
20        United States; provided that, in the case of any
21        statute of this State that exempts income derived from
22        bonds or other obligations from the tax imposed under
23        this Act, the amount exempted shall be the interest net
24        of bond premium amortization;
25            (K) An amount equal to those dividends included in
26        such total which were paid by a corporation which

 

 

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1        conducts business operations in a River Edge
2        Redevelopment Zone or zones created under the River
3        Edge Redevelopment Zone Act and conducts substantially
4        all of its operations in a River Edge Redevelopment
5        Zone or zones. This subparagraph (K) is exempt from the
6        provisions of Section 250;
7            (L) 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 (K) of paragraph 2 of this subsection
14        shall not be eligible for the deduction provided under
15        this subparagraph (L);
16            (M) For any taxpayer that is a financial
17        organization within the meaning of Section 304(c) of
18        this Act, an amount included in such total as interest
19        income from a loan or loans made by such taxpayer to a
20        borrower, to the extent that such a loan is secured by
21        property which is eligible for the River Edge
22        Redevelopment Zone Investment Credit. To determine the
23        portion of a loan or loans that is secured by property
24        eligible for a Section 201(f) investment credit to the
25        borrower, the entire principal amount of the loan or
26        loans between the taxpayer and the borrower should be

 

 

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1        divided into the basis of the Section 201(f) investment
2        credit property which secures the loan or loans, using
3        for this purpose the original basis of such property on
4        the date that it was placed in service in the River
5        Edge Redevelopment Zone. The subtraction modification
6        available to taxpayer in any year under this subsection
7        shall be that portion of the total interest paid by the
8        borrower with respect to such loan attributable to the
9        eligible property as calculated under the previous
10        sentence. This subparagraph (M) is exempt from the
11        provisions of Section 250;
12            (M-1) For any taxpayer that is a financial
13        organization within the meaning of Section 304(c) of
14        this Act, an amount included in such total as interest
15        income from a loan or loans made by such taxpayer to a
16        borrower, to the extent that such a loan is secured by
17        property which is eligible for the High Impact Business
18        Investment Credit. To determine the portion of a loan
19        or loans that is secured by property eligible for a
20        Section 201(h) investment credit to the borrower, the
21        entire principal amount of the loan or loans between
22        the taxpayer and the borrower should be divided into
23        the basis of the Section 201(h) investment credit
24        property which secures the loan or loans, using for
25        this purpose the original basis of such property on the
26        date that it was placed in service in a federally

 

 

SB2224- 226 -LRB100 13364 AXK 27964 b

1        designated Foreign Trade Zone or Sub-Zone located in
2        Illinois. No taxpayer that is eligible for the
3        deduction provided in subparagraph (M) of paragraph
4        (2) of this subsection shall be eligible for the
5        deduction provided under this subparagraph (M-1). The
6        subtraction modification available to taxpayers in any
7        year under this subsection shall be that portion of the
8        total interest paid by the borrower with respect to
9        such loan attributable to the eligible property as
10        calculated under the previous sentence;
11            (N) Two times any contribution made during the
12        taxable year to a designated zone organization to the
13        extent that the contribution (i) qualifies as a
14        charitable contribution under subsection (c) of
15        Section 170 of the Internal Revenue Code and (ii) must,
16        by its terms, be used for a project approved by the
17        Department of Commerce and Economic Opportunity under
18        Section 11 of the Illinois Enterprise Zone Act or under
19        Section 10-10 of the River Edge Redevelopment Zone Act.
20        This subparagraph (N) is exempt from the provisions of
21        Section 250;
22            (O) An amount equal to: (i) 85% for taxable years
23        ending on or before December 31, 1992, or, a percentage
24        equal to the percentage allowable under Section
25        243(a)(1) of the Internal Revenue Code of 1986 for
26        taxable years ending after December 31, 1992, of the

 

 

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1        amount by which dividends included in taxable income
2        and received from a corporation that is not created or
3        organized under the laws of the United States or any
4        state or political subdivision thereof, including, for
5        taxable years ending on or after December 31, 1988,
6        dividends received or deemed received or paid or deemed
7        paid under Sections 951 through 965 of the Internal
8        Revenue Code, exceed the amount of the modification
9        provided under subparagraph (G) of paragraph (2) of
10        this subsection (b) which is related to such dividends,
11        and including, for taxable years ending on or after
12        December 31, 2008, dividends received from a captive
13        real estate investment trust; plus (ii) 100% of the
14        amount by which dividends, included in taxable income
15        and received, including, for taxable years ending on or
16        after December 31, 1988, dividends received or deemed
17        received or paid or deemed paid under Sections 951
18        through 964 of the Internal Revenue Code and including,
19        for taxable years ending on or after December 31, 2008,
20        dividends received from a captive real estate
21        investment trust, from any such corporation specified
22        in clause (i) that would but for the provisions of
23        Section 1504 (b) (3) of the Internal Revenue Code be
24        treated as a member of the affiliated group which
25        includes the dividend recipient, exceed the amount of
26        the modification provided under subparagraph (G) of

 

 

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1        paragraph (2) of this subsection (b) which is related
2        to such dividends. This subparagraph (O) is exempt from
3        the provisions of Section 250 of this Act;
4            (P) An amount equal to any contribution made to a
5        job training project established pursuant to the Tax
6        Increment Allocation Redevelopment Act;
7            (Q) An amount equal to the amount of the deduction
8        used to compute the federal income tax credit for
9        restoration of substantial amounts held under claim of
10        right for the taxable year pursuant to Section 1341 of
11        the Internal Revenue Code;
12            (R) On and after July 20, 1999, in the case of an
13        attorney-in-fact with respect to whom an interinsurer
14        or a reciprocal insurer has made the election under
15        Section 835 of the Internal Revenue Code, 26 U.S.C.
16        835, an amount equal to the excess, if any, of the
17        amounts paid or incurred by that interinsurer or
18        reciprocal insurer in the taxable year to the
19        attorney-in-fact over the deduction allowed to that
20        interinsurer or reciprocal insurer with respect to the
21        attorney-in-fact under Section 835(b) of the Internal
22        Revenue Code for the taxable year; the provisions of
23        this subparagraph are exempt from the provisions of
24        Section 250;
25            (S) For taxable years ending on or after December
26        31, 1997, in the case of a Subchapter S corporation, an

 

 

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1        amount equal to all amounts of income allocable to a
2        shareholder subject to the Personal Property Tax
3        Replacement Income Tax imposed by subsections (c) and
4        (d) of Section 201 of this Act, including amounts
5        allocable to organizations exempt from federal income
6        tax by reason of Section 501(a) of the Internal Revenue
7        Code. This subparagraph (S) is exempt from the
8        provisions of Section 250;
9            (T) For taxable years 2001 and thereafter, for the
10        taxable year in which the bonus depreciation deduction
11        is taken on the taxpayer's federal income tax return
12        under subsection (k) of Section 168 of the Internal
13        Revenue Code and for each applicable taxable year
14        thereafter, an amount equal to "x", where:
15                (1) "y" equals the amount of the depreciation
16            deduction taken for the taxable year on the
17            taxpayer's federal income tax return on property
18            for which the bonus depreciation deduction was
19            taken in any year under subsection (k) of Section
20            168 of the Internal Revenue Code, but not including
21            the bonus depreciation deduction;
22                (2) for taxable years ending on or before
23            December 31, 2005, "x" equals "y" multiplied by 30
24            and then divided by 70 (or "y" multiplied by
25            0.429); and
26                (3) for taxable years ending after December

 

 

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1            31, 2005:
2                    (i) for property on which a bonus
3                depreciation deduction of 30% of the adjusted
4                basis was taken, "x" equals "y" multiplied by
5                30 and then divided by 70 (or "y" multiplied by
6                0.429); and
7                    (ii) for property on which a bonus
8                depreciation deduction of 50% of the adjusted
9                basis was taken, "x" equals "y" multiplied by
10                1.0.
11            The aggregate amount deducted under this
12        subparagraph in all taxable years for any one piece of
13        property may not exceed the amount of the bonus
14        depreciation deduction taken on that property on the
15        taxpayer's federal income tax return under subsection
16        (k) of Section 168 of the Internal Revenue Code. This
17        subparagraph (T) is exempt from the provisions of
18        Section 250;
19            (U) If the taxpayer sells, transfers, abandons, or
20        otherwise disposes of property for which the taxpayer
21        was required in any taxable year to make an addition
22        modification under subparagraph (E-10), then an amount
23        equal to that addition modification.
24            If the taxpayer continues to own property through
25        the last day of the last tax year for which the
26        taxpayer may claim a depreciation deduction for

 

 

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1        federal income tax purposes and for which the taxpayer
2        was required in any taxable year to make an addition
3        modification under subparagraph (E-10), then an amount
4        equal to that addition modification.
5            The taxpayer is allowed to take the deduction under
6        this subparagraph only once with respect to any one
7        piece of property.
8            This subparagraph (U) is exempt from the
9        provisions of Section 250;
10            (V) The amount of: (i) any interest income (net of
11        the deductions allocable thereto) taken into account
12        for the taxable year with respect to a transaction with
13        a taxpayer that is required to make an addition
14        modification with respect to such transaction under
15        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
16        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
17        the amount of such addition modification, (ii) any
18        income from intangible property (net of the deductions
19        allocable thereto) taken into account for the taxable
20        year with respect to a transaction with a taxpayer that
21        is required to make an addition modification with
22        respect to such transaction under Section
23        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
24        203(d)(2)(D-8), but not to exceed the amount of such
25        addition modification, and (iii) any insurance premium
26        income (net of deductions allocable thereto) taken

 

 

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1        into account for the taxable year with respect to a
2        transaction with a taxpayer that is required to make an
3        addition modification with respect to such transaction
4        under Section 203(a)(2)(D-19), Section
5        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
6        203(d)(2)(D-9), but not to exceed the amount of that
7        addition modification. This subparagraph (V) is exempt
8        from the provisions of Section 250;
9            (W) An amount equal to the interest income taken
10        into account for the taxable year (net of the
11        deductions allocable thereto) with respect to
12        transactions with (i) a foreign person who would be a
13        member of the taxpayer's unitary business group but for
14        the fact that the foreign person's business activity
15        outside the United States is 80% or more of that
16        person's total business activity and (ii) for taxable
17        years ending on or after December 31, 2008, to a person
18        who would be a member of the same unitary business
19        group but for the fact that the person is prohibited
20        under Section 1501(a)(27) from being included in the
21        unitary business group because he or she is ordinarily
22        required to apportion business income under different
23        subsections of Section 304, but not to exceed the
24        addition modification required to be made for the same
25        taxable year under Section 203(b)(2)(E-12) for
26        interest paid, accrued, or incurred, directly or

 

 

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1        indirectly, to the same person. This subparagraph (W)
2        is exempt from the provisions of Section 250;
3            (X) An amount equal to the income from intangible
4        property taken into account for the taxable year (net
5        of the deductions allocable thereto) with respect to
6        transactions with (i) a foreign person who would be a
7        member of the taxpayer's unitary business group but for
8        the fact that the foreign person's business activity
9        outside the United States is 80% or more of that
10        person's total business activity and (ii) for taxable
11        years ending on or after December 31, 2008, to a person
12        who would be a member of the same unitary business
13        group but for the fact that the person is prohibited
14        under Section 1501(a)(27) from being included in the
15        unitary business group because he or she is ordinarily
16        required to apportion business income under different
17        subsections of Section 304, but not to exceed the
18        addition modification required to be made for the same
19        taxable year under Section 203(b)(2)(E-13) for
20        intangible expenses and costs paid, accrued, or
21        incurred, directly or indirectly, to the same foreign
22        person. This subparagraph (X) is exempt from the
23        provisions of Section 250;
24            (Y) For taxable years ending on or after December
25        31, 2011, in the case of a taxpayer who was required to
26        add back any insurance premiums under Section

 

 

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1        203(b)(2)(E-14), such taxpayer may elect to subtract
2        that part of a reimbursement received from the
3        insurance company equal to the amount of the expense or
4        loss (including expenses incurred by the insurance
5        company) that would have been taken into account as a
6        deduction for federal income tax purposes if the
7        expense or loss had been uninsured. If a taxpayer makes
8        the election provided for by this subparagraph (Y), the
9        insurer to which the premiums were paid must add back
10        to income the amount subtracted by the taxpayer
11        pursuant to this subparagraph (Y). This subparagraph
12        (Y) is exempt from the provisions of Section 250; and
13            (Z) The difference between the nondeductible
14        controlled foreign corporation dividends under Section
15        965(e)(3) of the Internal Revenue Code over the taxable
16        income of the taxpayer, computed without regard to
17        Section 965(e)(2)(A) of the Internal Revenue Code, and
18        without regard to any net operating loss deduction.
19        This subparagraph (Z) is exempt from the provisions of
20        Section 250.
21        (3) Special rule. For purposes of paragraph (2) (A),
22    "gross income" in the case of a life insurance company, for
23    tax years ending on and after December 31, 1994, and prior
24    to December 31, 2011, shall mean the gross investment
25    income for the taxable year and, for tax years ending on or
26    after December 31, 2011, shall mean all amounts included in

 

 

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1    life insurance gross income under Section 803(a)(3) of the
2    Internal Revenue Code.
 
3    (c) Trusts and estates.
4        (1) In general. In the case of a trust or estate, base
5    income means an amount equal to the taxpayer's taxable
6    income for the taxable year as modified by paragraph (2).
7        (2) Modifications. Subject to the provisions of
8    paragraph (3), the taxable income referred to in paragraph
9    (1) shall be modified by adding thereto the sum of the
10    following amounts:
11            (A) An amount equal to all amounts paid or accrued
12        to the taxpayer as interest or dividends during the
13        taxable year to the extent excluded from gross income
14        in the computation of taxable income;
15            (B) In the case of (i) an estate, $600; (ii) a
16        trust which, under its governing instrument, is
17        required to distribute all of its income currently,
18        $300; and (iii) any other trust, $100, but in each such
19        case, only to the extent such amount was deducted in
20        the computation of taxable income;
21            (C) An amount equal to the amount of tax imposed by
22        this Act to the extent deducted from gross income in
23        the computation of taxable income for the taxable year;
24            (D) The amount of any net operating loss deduction
25        taken in arriving at taxable income, other than a net

 

 

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1        operating loss carried forward from a taxable year
2        ending prior to December 31, 1986;
3            (E) For taxable years in which a net operating loss
4        carryback or carryforward from a taxable year ending
5        prior to December 31, 1986 is an element of taxable
6        income under paragraph (1) of subsection (e) or
7        subparagraph (E) of paragraph (2) of subsection (e),
8        the amount by which addition modifications other than
9        those provided by this subparagraph (E) exceeded
10        subtraction modifications in such taxable year, with
11        the following limitations applied in the order that
12        they are listed:
13                (i) the addition modification relating to the
14            net operating loss carried back or forward to the
15            taxable year from any taxable year ending prior to
16            December 31, 1986 shall be reduced by the amount of
17            addition modification under this subparagraph (E)
18            which related to that net operating loss and which
19            was taken into account in calculating the base
20            income of an earlier taxable year, and
21                (ii) the addition modification relating to the
22            net operating loss carried back or forward to the
23            taxable year from any taxable year ending prior to
24            December 31, 1986 shall not exceed the amount of
25            such carryback or carryforward;
26            For taxable years in which there is a net operating

 

 

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1        loss carryback or carryforward from more than one other
2        taxable year ending prior to December 31, 1986, the
3        addition modification provided in this subparagraph
4        (E) shall be the sum of the amounts computed
5        independently under the preceding provisions of this
6        subparagraph (E) for each such taxable year;
7            (F) For taxable years ending on or after January 1,
8        1989, an amount equal to the tax deducted pursuant to
9        Section 164 of the Internal Revenue Code if the trust
10        or estate is claiming the same tax for purposes of the
11        Illinois foreign tax credit under Section 601 of this
12        Act;
13            (G) An amount equal to the amount of the capital
14        gain deduction allowable under the Internal Revenue
15        Code, to the extent deducted from gross income in the
16        computation of taxable income;
17            (G-5) For taxable years ending after December 31,
18        1997, an amount equal to any eligible remediation costs
19        that the trust or estate deducted in computing adjusted
20        gross income and for which the trust or estate claims a
21        credit under subsection (l) of Section 201;
22            (G-10) For taxable years 2001 and thereafter, an
23        amount equal to the bonus depreciation deduction taken
24        on the taxpayer's federal income tax return for the
25        taxable year under subsection (k) of Section 168 of the
26        Internal Revenue Code; and

 

 

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1            (G-11) If the taxpayer sells, transfers, abandons,
2        or otherwise disposes of property for which the
3        taxpayer was required in any taxable year to make an
4        addition modification under subparagraph (G-10), then
5        an amount equal to the aggregate amount of the
6        deductions taken in all taxable years under
7        subparagraph (R) with respect to that property.
8            If the taxpayer continues to own property through
9        the last day of the last tax year for which the
10        taxpayer may claim a depreciation deduction for
11        federal income tax purposes and for which the taxpayer
12        was allowed in any taxable year to make a subtraction
13        modification under subparagraph (R), then an amount
14        equal to that subtraction modification.
15            The taxpayer is required to make the addition
16        modification under this subparagraph only once with
17        respect to any one piece of property;
18            (G-12) An amount equal to the amount otherwise
19        allowed as a deduction in computing base income for
20        interest paid, accrued, or incurred, directly or
21        indirectly, (i) for taxable years ending on or after
22        December 31, 2004, to a foreign person who would be a
23        member of the same unitary business group but for the
24        fact that the foreign person's business activity
25        outside the United States is 80% or more of the foreign
26        person's total business activity and (ii) for taxable

 

 

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1        years ending on or after December 31, 2008, to a person
2        who would be a member of the same unitary business
3        group but for the fact that the person is prohibited
4        under Section 1501(a)(27) from being included in the
5        unitary business group because he or she is ordinarily
6        required to apportion business income under different
7        subsections of Section 304. The addition modification
8        required by this subparagraph shall be reduced to the
9        extent that dividends were included in base income of
10        the unitary group for the same taxable year and
11        received by the taxpayer or by a member of the
12        taxpayer's unitary business group (including amounts
13        included in gross income pursuant to Sections 951
14        through 964 of the Internal Revenue Code and amounts
15        included in gross income under Section 78 of the
16        Internal Revenue Code) with respect to the stock of the
17        same person to whom the interest was paid, accrued, or
18        incurred.
19            This paragraph shall not apply to the following:
20                (i) an item of interest paid, accrued, or
21            incurred, directly or indirectly, to a person who
22            is subject in a foreign country or state, other
23            than a state which requires mandatory unitary
24            reporting, to a tax on or measured by net income
25            with respect to such interest; or
26                (ii) an item of interest paid, accrued, or

 

 

SB2224- 240 -LRB100 13364 AXK 27964 b

1            incurred, directly or indirectly, to a person if
2            the taxpayer can establish, based on a
3            preponderance of the evidence, both of the
4            following:
5                    (a) the person, during the same taxable
6                year, paid, accrued, or incurred, the interest
7                to a person that is not a related member, and
8                    (b) the transaction giving rise to the
9                interest expense between the taxpayer and the
10                person did not have as a principal purpose the
11                avoidance of Illinois income tax, and is paid
12                pursuant to a contract or agreement that
13                reflects an arm's-length interest rate and
14                terms; or
15                (iii) the taxpayer can establish, based on
16            clear and convincing evidence, that the interest
17            paid, accrued, or incurred relates to a contract or
18            agreement entered into at arm's-length rates and
19            terms and the principal purpose for the payment is
20            not federal or Illinois tax avoidance; or
21                (iv) an item of interest paid, accrued, or
22            incurred, directly or indirectly, to a person if
23            the taxpayer establishes by clear and convincing
24            evidence that the adjustments are unreasonable; or
25            if the taxpayer and the Director agree in writing
26            to the application or use of an alternative method

 

 

SB2224- 241 -LRB100 13364 AXK 27964 b

1            of apportionment under Section 304(f).
2                Nothing in this subsection shall preclude the
3            Director from making any other adjustment
4            otherwise allowed under Section 404 of this Act for
5            any tax year beginning after the effective date of
6            this amendment provided such adjustment is made
7            pursuant to regulation adopted by the Department
8            and such regulations provide methods and standards
9            by which the Department will utilize its authority
10            under Section 404 of this Act;
11            (G-13) An amount equal to the amount of intangible
12        expenses and costs otherwise allowed as a deduction in
13        computing base income, and that were paid, accrued, or
14        incurred, directly or indirectly, (i) for taxable
15        years ending on or after December 31, 2004, to a
16        foreign person who would be a member of the same
17        unitary business group but for the fact that the
18        foreign person's business activity outside the United
19        States is 80% or more of that person's total business
20        activity and (ii) for taxable years ending on or after
21        December 31, 2008, to a person who would be a member of
22        the same unitary business group but for the fact that
23        the person is prohibited under Section 1501(a)(27)
24        from being included in the unitary business group
25        because he or she is ordinarily required to apportion
26        business income under different subsections of Section

 

 

SB2224- 242 -LRB100 13364 AXK 27964 b

1        304. The addition modification required by this
2        subparagraph shall be reduced to the extent that
3        dividends were included in base income of the unitary
4        group for the same taxable year and received by the
5        taxpayer or by a member of the taxpayer's unitary
6        business group (including amounts included in gross
7        income pursuant to Sections 951 through 964 of the
8        Internal Revenue Code and amounts included in gross
9        income under Section 78 of the Internal Revenue Code)
10        with respect to the stock of the same person to whom
11        the intangible expenses and costs were directly or
12        indirectly paid, incurred, or accrued. The preceding
13        sentence shall not apply to the extent that the same
14        dividends caused a reduction to the addition
15        modification required under Section 203(c)(2)(G-12) of
16        this Act. As used in this subparagraph, the term
17        "intangible expenses and costs" includes: (1)
18        expenses, losses, and costs for or related to the
19        direct or indirect acquisition, use, maintenance or
20        management, ownership, sale, exchange, or any other
21        disposition of intangible property; (2) losses
22        incurred, directly or indirectly, from factoring
23        transactions or discounting transactions; (3) royalty,
24        patent, technical, and copyright fees; (4) licensing
25        fees; and (5) other similar expenses and costs. For
26        purposes of this subparagraph, "intangible property"

 

 

SB2224- 243 -LRB100 13364 AXK 27964 b

1        includes patents, patent applications, trade names,
2        trademarks, service marks, copyrights, mask works,
3        trade secrets, and similar types of intangible assets.
4            This paragraph shall not apply to the following:
5                (i) any item of intangible expenses or costs
6            paid, accrued, or incurred, directly or
7            indirectly, from a transaction with a person who is
8            subject in a foreign country or state, other than a
9            state which requires mandatory unitary reporting,
10            to a tax on or measured by net income with respect
11            to such item; or
12                (ii) any item of intangible expense or cost
13            paid, accrued, or incurred, directly or
14            indirectly, if the taxpayer can establish, based
15            on a preponderance of the evidence, both of the
16            following:
17                    (a) the person during the same taxable
18                year paid, accrued, or incurred, the
19                intangible expense or cost to a person that is
20                not a related member, and
21                    (b) the transaction giving rise to the
22                intangible expense or cost between the
23                taxpayer and the person did not have as a
24                principal purpose the avoidance of Illinois
25                income tax, and is paid pursuant to a contract
26                or agreement that reflects arm's-length terms;

 

 

SB2224- 244 -LRB100 13364 AXK 27964 b

1                or
2                (iii) any item of intangible expense or cost
3            paid, accrued, or incurred, directly or
4            indirectly, from a transaction with a person if the
5            taxpayer establishes by clear and convincing
6            evidence, that the adjustments are unreasonable;
7            or if the taxpayer and the Director agree in
8            writing to the application or use of an alternative
9            method of apportionment under Section 304(f);
10                Nothing in this subsection shall preclude the
11            Director from making any other adjustment
12            otherwise allowed under Section 404 of this Act for
13            any tax year beginning after the effective date of
14            this amendment provided such adjustment is made
15            pursuant to regulation adopted by the Department
16            and such regulations provide methods and standards
17            by which the Department will utilize its authority
18            under Section 404 of this Act;
19            (G-14) For taxable years ending on or after
20        December 31, 2008, an amount equal to the amount of
21        insurance premium expenses and costs otherwise allowed
22        as a deduction in computing base income, and that were
23        paid, accrued, or incurred, directly or indirectly, to
24        a person who would be a member of the same unitary
25        business group but for the fact that the person is
26        prohibited under Section 1501(a)(27) from being

 

 

SB2224- 245 -LRB100 13364 AXK 27964 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304. The
4        addition modification required by this subparagraph
5        shall be reduced to the extent that dividends were
6        included in base income of the unitary group for the
7        same taxable year and received by the taxpayer or by a
8        member of the taxpayer's unitary business group
9        (including amounts included in gross income under
10        Sections 951 through 964 of the Internal Revenue Code
11        and amounts included in gross income under Section 78
12        of the Internal Revenue Code) with respect to the stock
13        of the same person to whom the premiums and costs were
14        directly or indirectly paid, incurred, or accrued. The
15        preceding sentence does not apply to the extent that
16        the same dividends caused a reduction to the addition
17        modification required under Section 203(c)(2)(G-12) or
18        Section 203(c)(2)(G-13) of this Act;
19            (G-15) An amount equal to the credit allowable to
20        the taxpayer under Section 218(a) of this Act,
21        determined without regard to Section 218(c) of this
22        Act;
23            (G-16) For taxable years ending on or after
24        December 31, 2017, an amount equal to the deduction
25        allowed under Section 199 of the Internal Revenue Code
26        for the taxable year;

 

 

SB2224- 246 -LRB100 13364 AXK 27964 b

1    and by deducting from the total so obtained the sum of the
2    following amounts:
3            (H) An amount equal to all amounts included in such
4        total pursuant to the provisions of Sections 402(a),
5        402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
6        Internal Revenue Code or included in such total as
7        distributions under the provisions of any retirement
8        or disability plan for employees of any governmental
9        agency or unit, or retirement payments to retired
10        partners, which payments are excluded in computing net
11        earnings from self employment by Section 1402 of the
12        Internal Revenue Code and regulations adopted pursuant
13        thereto;
14            (I) The valuation limitation amount;
15            (J) An amount equal to the amount of any tax
16        imposed by this Act which was refunded to the taxpayer
17        and included in such total for the taxable year;
18            (K) An amount equal to all amounts included in
19        taxable income as modified by subparagraphs (A), (B),
20        (C), (D), (E), (F) and (G) which are exempt from
21        taxation by this State either by reason of its statutes
22        or Constitution or by reason of the Constitution,
23        treaties or statutes of the United States; provided
24        that, in the case of any statute of this State that
25        exempts income derived from bonds or other obligations
26        from the tax imposed under this Act, the amount

 

 

SB2224- 247 -LRB100 13364 AXK 27964 b

1        exempted shall be the interest net of bond premium
2        amortization;
3            (L) With the exception of any amounts subtracted
4        under subparagraph (K), an amount equal to the sum of
5        all amounts disallowed as deductions by (i) Sections
6        171(a) (2) and 265(a)(2) of the Internal Revenue Code,
7        and all amounts of expenses allocable to interest and
8        disallowed as deductions by Section 265(1) of the
9        Internal Revenue Code; and (ii) for taxable years
10        ending on or after August 13, 1999, Sections 171(a)(2),
11        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
12        Code, plus, (iii) for taxable years ending on or after
13        December 31, 2011, Section 45G(e)(3) of the Internal
14        Revenue Code and, for taxable years ending on or after
15        December 31, 2008, any amount included in gross income
16        under Section 87 of the Internal Revenue Code; the
17        provisions of this subparagraph are exempt from the
18        provisions of Section 250;
19            (M) An amount equal to those dividends included in
20        such total which were paid by a corporation which
21        conducts business operations in a River Edge
22        Redevelopment Zone or zones created under the River
23        Edge Redevelopment Zone Act and conducts substantially
24        all of its operations in a River Edge Redevelopment
25        Zone or zones. This subparagraph (M) is exempt from the
26        provisions of Section 250;

 

 

SB2224- 248 -LRB100 13364 AXK 27964 b

1            (N) An amount equal to any contribution made to a
2        job training project established pursuant to the Tax
3        Increment Allocation Redevelopment Act;
4            (O) An amount equal to those dividends included in
5        such total that were paid by a corporation that
6        conducts business operations in a federally designated
7        Foreign Trade Zone or Sub-Zone and that is designated a
8        High Impact Business located in Illinois; provided
9        that dividends eligible for the deduction provided in
10        subparagraph (M) of paragraph (2) of this subsection
11        shall not be eligible for the deduction provided under
12        this subparagraph (O);
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;
18            (Q) For taxable year 1999 and thereafter, an amount
19        equal to the amount of any (i) distributions, to the
20        extent includible in gross income for federal income
21        tax purposes, made to the taxpayer because of his or
22        her status as a victim of persecution for racial or
23        religious reasons by Nazi Germany or any other Axis
24        regime or as an heir of the victim and (ii) items of
25        income, to the extent includible in gross income for
26        federal income tax purposes, attributable to, derived

 

 

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1        from or in any way related to assets stolen from,
2        hidden from, or otherwise lost to a victim of
3        persecution for racial or religious reasons by Nazi
4        Germany or any other Axis regime immediately prior to,
5        during, and immediately after World War II, including,
6        but not limited to, interest on the proceeds receivable
7        as insurance under policies issued to a victim of
8        persecution for racial or religious reasons by Nazi
9        Germany or any other Axis regime by European insurance
10        companies immediately prior to and during World War II;
11        provided, however, this subtraction from federal
12        adjusted gross income does not apply to assets acquired
13        with such assets or with the proceeds from the sale of
14        such assets; provided, further, this paragraph shall
15        only apply to a taxpayer who was the first recipient of
16        such assets after their recovery and who is a victim of
17        persecution for racial or religious reasons by Nazi
18        Germany or any other Axis regime or as an heir of the
19        victim. The amount of and the eligibility for any
20        public assistance, benefit, or similar entitlement is
21        not affected by the inclusion of items (i) and (ii) of
22        this paragraph in gross income for federal income tax
23        purposes. This paragraph is exempt from the provisions
24        of Section 250;
25            (R) For taxable years 2001 and thereafter, for the
26        taxable year in which the bonus depreciation deduction

 

 

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1        is taken on the taxpayer's federal income tax return
2        under subsection (k) of Section 168 of the Internal
3        Revenue Code and for each applicable taxable year
4        thereafter, an amount equal to "x", where:
5                (1) "y" equals the amount of the depreciation
6            deduction taken for the taxable year on the
7            taxpayer's federal income tax return on property
8            for which the bonus depreciation deduction was
9            taken in any year under subsection (k) of Section
10            168 of the Internal Revenue Code, but not including
11            the bonus depreciation deduction;
12                (2) for taxable years ending on or before
13            December 31, 2005, "x" equals "y" multiplied by 30
14            and then divided by 70 (or "y" multiplied by
15            0.429); and
16                (3) for taxable years ending after December
17            31, 2005:
18                    (i) for property on which a bonus
19                depreciation deduction of 30% of the adjusted
20                basis was taken, "x" equals "y" multiplied by
21                30 and then divided by 70 (or "y" multiplied by
22                0.429); and
23                    (ii) for property on which a bonus
24                depreciation deduction of 50% of the adjusted
25                basis was taken, "x" equals "y" multiplied by
26                1.0.

 

 

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1            The aggregate amount deducted under this
2        subparagraph in all taxable years for any one piece of
3        property may not exceed the amount of the bonus
4        depreciation deduction taken on that property on the
5        taxpayer's federal income tax return under subsection
6        (k) of Section 168 of the Internal Revenue Code. This
7        subparagraph (R) is exempt from the provisions of
8        Section 250;
9            (S) If the taxpayer sells, transfers, abandons, or
10        otherwise disposes of property for which the taxpayer
11        was required in any taxable year to make an addition
12        modification under subparagraph (G-10), then an amount
13        equal to that addition modification.
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 required in any taxable year to make an addition
19        modification under subparagraph (G-10), then an amount
20        equal to that addition modification.
21            The taxpayer is allowed to take the deduction under
22        this subparagraph only once with respect to any one
23        piece of property.
24            This subparagraph (S) is exempt from the
25        provisions of Section 250;
26            (T) The amount of (i) any interest income (net of

 

 

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1        the deductions allocable thereto) taken into account
2        for the taxable year with respect to a transaction with
3        a taxpayer that is required to make an addition
4        modification with respect to such transaction under
5        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
6        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
7        the amount of such addition modification and (ii) any
8        income from intangible property (net of the deductions
9        allocable thereto) taken into account for the taxable
10        year with respect to a transaction with a taxpayer that
11        is required to make an addition modification with
12        respect to such transaction under Section
13        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
14        203(d)(2)(D-8), but not to exceed the amount of such
15        addition modification. This subparagraph (T) is exempt
16        from the provisions of Section 250;
17            (U) An amount equal to the interest income taken
18        into account for the taxable year (net of the
19        deductions allocable thereto) with respect to
20        transactions with (i) a foreign person who would be a
21        member of the taxpayer's unitary business group but for
22        the fact the foreign person's business activity
23        outside the United States is 80% or more of that
24        person's total business activity and (ii) for taxable
25        years ending on or after December 31, 2008, to a person
26        who would be a member of the same unitary business

 

 

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1        group but for the fact that the person is prohibited
2        under Section 1501(a)(27) from being included in the
3        unitary business group because he or she is ordinarily
4        required to apportion business income under different
5        subsections of Section 304, but not to exceed the
6        addition modification required to be made for the same
7        taxable year under Section 203(c)(2)(G-12) for
8        interest paid, accrued, or incurred, directly or
9        indirectly, to the same person. This subparagraph (U)
10        is exempt from the provisions of Section 250;
11            (V) An amount equal to the income from intangible
12        property taken into account for the taxable year (net
13        of the deductions allocable thereto) with respect to
14        transactions with (i) a foreign person who would be a
15        member of the taxpayer's unitary business group but for
16        the fact that the foreign person's business activity
17        outside the United States is 80% or more of that
18        person's total business activity and (ii) for taxable
19        years ending on or after December 31, 2008, to a person
20        who would be a member of the same unitary business
21        group but for the fact that the person is prohibited
22        under Section 1501(a)(27) from being included in the
23        unitary business group because he or she is ordinarily
24        required to apportion business income under different
25        subsections of Section 304, but not to exceed the
26        addition modification required to be made for the same

 

 

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1        taxable year under Section 203(c)(2)(G-13) for
2        intangible expenses and costs paid, accrued, or
3        incurred, directly or indirectly, to the same foreign
4        person. This subparagraph (V) is exempt from the
5        provisions of Section 250;
6            (W) in the case of an estate, an amount equal to
7        all amounts included in such total pursuant to the
8        provisions of Section 111 of the Internal Revenue Code
9        as a recovery of items previously deducted by the
10        decedent from adjusted gross income in the computation
11        of taxable income. This subparagraph (W) is exempt from
12        Section 250;
13            (X) an amount equal to the refund included in such
14        total of any tax deducted for federal income tax
15        purposes, to the extent that deduction was added back
16        under subparagraph (F). This subparagraph (X) is
17        exempt from the provisions of Section 250; and
18            (Y) For taxable years ending on or after December
19        31, 2011, in the case of a taxpayer who was required to
20        add back any insurance premiums under Section
21        203(c)(2)(G-14), such taxpayer may elect to subtract
22        that part of a reimbursement received from the
23        insurance company equal to the amount of the expense or
24        loss (including expenses incurred by the insurance
25        company) that would have been taken into account as a
26        deduction for federal income tax purposes if the

 

 

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1        expense or loss had been uninsured. If a taxpayer makes
2        the election provided for by this subparagraph (Y), the
3        insurer to which the premiums were paid must add back
4        to income the amount subtracted by the taxpayer
5        pursuant to this subparagraph (Y). This subparagraph
6        (Y) is exempt from the provisions of Section 250.
7        (3) Limitation. The amount of any modification
8    otherwise required under this subsection shall, under
9    regulations prescribed by the Department, be adjusted by
10    any amounts included therein which were properly paid,
11    credited, or required to be distributed, or permanently set
12    aside for charitable purposes pursuant to Internal Revenue
13    Code Section 642(c) during the taxable year.
 
14    (d) Partnerships.
15        (1) In general. In the case of a partnership, base
16    income means an amount equal to the taxpayer's taxable
17    income for the taxable year as modified by paragraph (2).
18        (2) Modifications. The taxable income referred to in
19    paragraph (1) shall be modified by adding thereto the sum
20    of the following amounts:
21            (A) An amount equal to all amounts paid or accrued
22        to the taxpayer as interest or dividends during the
23        taxable year to the extent excluded from gross income
24        in the computation of taxable income;
25            (B) An amount equal to the amount of tax imposed by

 

 

SB2224- 256 -LRB100 13364 AXK 27964 b

1        this Act to the extent deducted from gross income for
2        the taxable year;
3            (C) The amount of deductions allowed to the
4        partnership pursuant to Section 707 (c) of the Internal
5        Revenue Code in calculating its taxable income;
6            (D) An amount equal to the amount of the capital
7        gain deduction allowable under the Internal Revenue
8        Code, to the extent deducted from gross income in the
9        computation of taxable income;
10            (D-5) For taxable years 2001 and thereafter, an
11        amount equal to the bonus depreciation deduction taken
12        on the taxpayer's federal income tax return for the
13        taxable year under subsection (k) of Section 168 of the
14        Internal Revenue Code;
15            (D-6) 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-5), then
19        an amount equal to the aggregate amount of the
20        deductions taken in all taxable years under
21        subparagraph (O) with respect to that property.
22            If the taxpayer continues to own property through
23        the last day of the last tax year for which the
24        taxpayer may claim a depreciation deduction for
25        federal income tax purposes and for which the taxpayer
26        was allowed in any taxable year to make a subtraction

 

 

SB2224- 257 -LRB100 13364 AXK 27964 b

1        modification under subparagraph (O), then an amount
2        equal to that subtraction modification.
3            The taxpayer is required to make the addition
4        modification under this subparagraph only once with
5        respect to any one piece of property;
6            (D-7) An amount equal to the amount otherwise
7        allowed as a deduction in computing base income for
8        interest paid, accrued, or incurred, directly or
9        indirectly, (i) for taxable years ending on or after
10        December 31, 2004, to a foreign person who would be a
11        member of the same unitary business group but for the
12        fact the foreign person's business activity outside
13        the United States is 80% or more of the foreign
14        person's total business activity and (ii) for taxable
15        years ending on or after December 31, 2008, to a person
16        who would be a member of the same unitary business
17        group but for the fact that the person is prohibited
18        under Section 1501(a)(27) from being included in the
19        unitary business group because he or she is ordinarily
20        required to apportion business income under different
21        subsections of Section 304. The addition modification
22        required by this subparagraph shall be reduced to the
23        extent that dividends were included in base income of
24        the unitary group for the same taxable year and
25        received by the taxpayer or by a member of the
26        taxpayer's unitary business group (including amounts

 

 

SB2224- 258 -LRB100 13364 AXK 27964 b

1        included in gross income pursuant to Sections 951
2        through 964 of the Internal Revenue Code and amounts
3        included in gross income under Section 78 of the
4        Internal Revenue Code) with respect to the stock of the
5        same person to whom the interest was paid, accrued, or
6        incurred.
7            This paragraph shall not apply to the following:
8                (i) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person who
10            is subject in a foreign country or state, other
11            than a state which requires mandatory unitary
12            reporting, to a tax on or measured by net income
13            with respect to such interest; or
14                (ii) an item of interest paid, accrued, or
15            incurred, directly or indirectly, to a person if
16            the taxpayer can establish, based on a
17            preponderance of the evidence, both of the
18            following:
19                    (a) the person, during the same taxable
20                year, paid, accrued, or incurred, the interest
21                to a person that is not a related member, and
22                    (b) the transaction giving rise to the
23                interest expense between the taxpayer and the
24                person did not have as a principal purpose the
25                avoidance of Illinois income tax, and is paid
26                pursuant to a contract or agreement that

 

 

SB2224- 259 -LRB100 13364 AXK 27964 b

1                reflects an arm's-length interest rate and
2                terms; or
3                (iii) the taxpayer can establish, based on
4            clear and convincing evidence, that the interest
5            paid, accrued, or incurred relates to a contract or
6            agreement entered into at arm's-length rates and
7            terms and the principal purpose for the payment is
8            not federal or Illinois tax avoidance; or
9                (iv) an item of interest paid, accrued, or
10            incurred, directly or indirectly, to a person if
11            the taxpayer establishes by clear and convincing
12            evidence that the adjustments are unreasonable; or
13            if the taxpayer and the Director agree in writing
14            to the application or use of an alternative method
15            of apportionment under Section 304(f).
16                Nothing in this subsection shall preclude the
17            Director from making any other adjustment
18            otherwise allowed under Section 404 of this Act for
19            any tax year beginning after the effective date of
20            this amendment provided such adjustment is made
21            pursuant to regulation adopted by the Department
22            and such regulations provide methods and standards
23            by which the Department will utilize its authority
24            under Section 404 of this Act; and
25            (D-8) An amount equal to the amount of intangible
26        expenses and costs otherwise allowed as a deduction in

 

 

SB2224- 260 -LRB100 13364 AXK 27964 b

1        computing base income, and that were paid, accrued, or
2        incurred, directly or indirectly, (i) for taxable
3        years ending on or after December 31, 2004, to a
4        foreign person who would be a member of the same
5        unitary business group but for the fact that the
6        foreign person's business activity outside the United
7        States is 80% or more of that person's total business
8        activity and (ii) for taxable years ending on or after
9        December 31, 2008, to a person who would be a member of
10        the same unitary business group but for the fact that
11        the person is prohibited under Section 1501(a)(27)
12        from being included in the unitary business group
13        because he or she is ordinarily required to apportion
14        business income under different subsections of Section
15        304. The addition modification required by this
16        subparagraph shall be reduced to the extent that
17        dividends were included in base income of the unitary
18        group for the same taxable year and received by the
19        taxpayer or by a member of the taxpayer's unitary
20        business group (including amounts included in gross
21        income pursuant to Sections 951 through 964 of the
22        Internal Revenue Code and amounts included in gross
23        income under Section 78 of the Internal Revenue Code)
24        with respect to the stock of the same person to whom
25        the intangible expenses and costs were directly or
26        indirectly paid, incurred or accrued. The preceding

 

 

SB2224- 261 -LRB100 13364 AXK 27964 b

1        sentence shall not apply to the extent that the same
2        dividends caused a reduction to the addition
3        modification required under Section 203(d)(2)(D-7) of
4        this Act. As used in this subparagraph, the term
5        "intangible expenses and costs" includes (1) expenses,
6        losses, and costs for, or related to, the direct or
7        indirect acquisition, use, maintenance or management,
8        ownership, sale, exchange, or any other disposition of
9        intangible property; (2) losses incurred, directly or
10        indirectly, from factoring transactions or discounting
11        transactions; (3) royalty, patent, technical, and
12        copyright fees; (4) licensing fees; and (5) other
13        similar expenses and costs. For purposes of this
14        subparagraph, "intangible property" includes patents,
15        patent applications, trade names, trademarks, service
16        marks, copyrights, mask works, trade secrets, and
17        similar types of intangible assets;
18            This paragraph shall not apply to the following:
19                (i) any item of intangible expenses or costs
20            paid, accrued, or incurred, directly or
21            indirectly, from a transaction with a person who is
22            subject in a foreign country or state, other than a
23            state which requires mandatory unitary reporting,
24            to a tax on or measured by net income with respect
25            to such item; or
26                (ii) any item of intangible expense or cost

 

 

SB2224- 262 -LRB100 13364 AXK 27964 b

1            paid, accrued, or incurred, directly or
2            indirectly, if the taxpayer can establish, based
3            on a preponderance of the evidence, both of the
4            following:
5                    (a) the person during the same taxable
6                year paid, accrued, or incurred, the
7                intangible expense or cost to a person that is
8                not a related member, and
9                    (b) the transaction giving rise to the
10                intangible expense or cost between the
11                taxpayer and the person did not have as a
12                principal purpose the avoidance of Illinois
13                income tax, and is paid pursuant to a contract
14                or agreement that reflects arm's-length terms;
15                or
16                (iii) any item of intangible expense or cost
17            paid, accrued, or incurred, directly or
18            indirectly, from a transaction with a person if the
19            taxpayer establishes by clear and convincing
20            evidence, that the adjustments are unreasonable;
21            or if the taxpayer and the Director agree in
22            writing to the application or use of an alternative
23            method of apportionment under Section 304(f);
24                Nothing in this subsection shall preclude the
25            Director from making any other adjustment
26            otherwise allowed under Section 404 of this Act for

 

 

SB2224- 263 -LRB100 13364 AXK 27964 b

1            any tax year beginning after the effective date of
2            this amendment provided such adjustment is made
3            pursuant to regulation adopted by the Department
4            and such regulations provide methods and standards
5            by which the Department will utilize its authority
6            under Section 404 of this Act;
7            (D-9) For taxable years ending on or after December
8        31, 2008, an amount equal to the amount of insurance
9        premium expenses and costs otherwise allowed as a
10        deduction in computing base income, and that were paid,
11        accrued, or incurred, directly or indirectly, to a
12        person who would be a member of the same unitary
13        business group but for the fact that the person is
14        prohibited under Section 1501(a)(27) from being
15        included in the unitary business group because he or
16        she is ordinarily required to apportion business
17        income under different subsections of Section 304. The
18        addition modification required by this subparagraph
19        shall be reduced to the extent that dividends were
20        included in base income of the unitary group for the
21        same taxable year and received by the taxpayer or by a
22        member of the taxpayer's unitary business group
23        (including amounts included in gross income under
24        Sections 951 through 964 of the Internal Revenue Code
25        and amounts included in gross income under Section 78
26        of the Internal Revenue Code) with respect to the stock

 

 

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1        of the same person to whom the premiums and costs were
2        directly or indirectly paid, incurred, or accrued. The
3        preceding sentence does not apply to the extent that
4        the same dividends caused a reduction to the addition
5        modification required under Section 203(d)(2)(D-7) or
6        Section 203(d)(2)(D-8) of this Act;
7            (D-10) An amount equal to the credit allowable to
8        the taxpayer under Section 218(a) of this Act,
9        determined without regard to Section 218(c) of this
10        Act;
11            (D-11) For taxable years ending on or after
12        December 31, 2017, an amount equal to the deduction
13        allowed under Section 199 of the Internal Revenue Code
14        for the taxable year;
15    and by deducting from the total so obtained the following
16    amounts:
17            (E) The valuation limitation amount;
18            (F) 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            (G) An amount equal to all amounts included in
22        taxable income as modified by subparagraphs (A), (B),
23        (C) and (D) which are exempt from taxation by this
24        State either by reason of its statutes or Constitution
25        or by reason of the Constitution, treaties or statutes
26        of the United States; provided that, in the case of any

 

 

SB2224- 265 -LRB100 13364 AXK 27964 b

1        statute of this State that exempts income derived from
2        bonds or other obligations from the tax imposed under
3        this Act, the amount exempted shall be the interest net
4        of bond premium amortization;
5            (H) Any income of the partnership which
6        constitutes personal service income as defined in
7        Section 1348 (b) (1) of the Internal Revenue Code (as
8        in effect December 31, 1981) or a reasonable allowance
9        for compensation paid or accrued for services rendered
10        by partners to the partnership, whichever is greater;
11        this subparagraph (H) is exempt from the provisions of
12        Section 250;
13            (I) An amount equal to all amounts of income
14        distributable to an entity subject to the Personal
15        Property Tax Replacement Income Tax imposed by
16        subsections (c) and (d) of Section 201 of this Act
17        including amounts distributable to organizations
18        exempt from federal income tax by reason of Section
19        501(a) of the Internal Revenue Code; this subparagraph
20        (I) is exempt from the provisions of Section 250;
21            (J) With the exception of any amounts subtracted
22        under subparagraph (G), an amount equal to the sum of
23        all amounts disallowed as deductions by (i) Sections
24        171(a) (2), and 265(2) of the Internal Revenue Code,
25        and all amounts of expenses allocable to interest and
26        disallowed as deductions by Section 265(1) of the

 

 

SB2224- 266 -LRB100 13364 AXK 27964 b

1        Internal Revenue Code; and (ii) for taxable years
2        ending on or after August 13, 1999, Sections 171(a)(2),
3        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
4        Code, plus, (iii) for taxable years ending on or after
5        December 31, 2011, Section 45G(e)(3) of the Internal
6        Revenue Code and, for taxable years ending on or after
7        December 31, 2008, any amount included in gross income
8        under Section 87 of the Internal Revenue Code; the
9        provisions of this subparagraph are exempt from the
10        provisions of Section 250;
11            (K) An amount equal to those dividends included in
12        such total which were paid by a corporation which
13        conducts business operations in a River Edge
14        Redevelopment Zone or zones created under the River
15        Edge Redevelopment Zone Act and conducts substantially
16        all of its operations from a River Edge Redevelopment
17        Zone or zones. This subparagraph (K) is exempt from the
18        provisions of Section 250;
19            (L) An amount equal to any contribution made to a
20        job training project established pursuant to the Real
21        Property Tax Increment Allocation Redevelopment Act;
22            (M) An amount equal to those dividends included in
23        such total that were paid by a corporation that
24        conducts business operations in a federally designated
25        Foreign Trade Zone or Sub-Zone and that is designated a
26        High Impact Business located in Illinois; provided

 

 

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1        that dividends eligible for the deduction provided in
2        subparagraph (K) of paragraph (2) of this subsection
3        shall not be eligible for the deduction provided under
4        this subparagraph (M);
5            (N) An amount equal to the amount of the deduction
6        used to compute the federal income tax credit for
7        restoration of substantial amounts held under claim of
8        right for the taxable year pursuant to Section 1341 of
9        the Internal Revenue Code;
10            (O) For taxable years 2001 and thereafter, for the
11        taxable year in which the bonus depreciation deduction
12        is taken on the taxpayer's federal income tax return
13        under subsection (k) of Section 168 of the Internal
14        Revenue Code and for each applicable taxable year
15        thereafter, an amount equal to "x", where:
16                (1) "y" equals the amount of the depreciation
17            deduction taken for the taxable year on the
18            taxpayer's federal income tax return on property
19            for which the bonus depreciation deduction was
20            taken in any year under subsection (k) of Section
21            168 of the Internal Revenue Code, but not including
22            the bonus depreciation deduction;
23                (2) for taxable years ending on or before
24            December 31, 2005, "x" equals "y" multiplied by 30
25            and then divided by 70 (or "y" multiplied by
26            0.429); and

 

 

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1                (3) for taxable years ending after December
2            31, 2005:
3                    (i) for property on which a bonus
4                depreciation deduction of 30% of the adjusted
5                basis was taken, "x" equals "y" multiplied by
6                30 and then divided by 70 (or "y" multiplied by
7                0.429); and
8                    (ii) for property on which a bonus
9                depreciation deduction of 50% of the adjusted
10                basis was taken, "x" equals "y" multiplied by
11                1.0.
12            The aggregate amount deducted under this
13        subparagraph in all taxable years for any one piece of
14        property may not exceed the amount of the bonus
15        depreciation deduction taken on that property on the
16        taxpayer's federal income tax return under subsection
17        (k) of Section 168 of the Internal Revenue Code. This
18        subparagraph (O) is exempt from the provisions of
19        Section 250;
20            (P) If the taxpayer sells, transfers, abandons, or
21        otherwise disposes of property for which the taxpayer
22        was required in any taxable year to make an addition
23        modification under subparagraph (D-5), then an amount
24        equal to that addition modification.
25            If the taxpayer continues to own property through
26        the last day of the last tax year for which the

 

 

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1        taxpayer may claim a depreciation deduction for
2        federal income tax purposes and for which the taxpayer
3        was required in any taxable year to make an addition
4        modification under subparagraph (D-5), then an amount
5        equal to that addition modification.
6            The taxpayer is allowed to take the deduction under
7        this subparagraph only once with respect to any one
8        piece of property.
9            This subparagraph (P) is exempt from the
10        provisions of Section 250;
11            (Q) The amount of (i) any interest income (net of
12        the deductions allocable thereto) taken into account
13        for the taxable year with respect to a transaction with
14        a taxpayer that is required to make an addition
15        modification with respect to such transaction under
16        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
17        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
18        the amount of such addition modification and (ii) any
19        income from intangible property (net of the deductions
20        allocable thereto) taken into account for the taxable
21        year with respect to a transaction with a taxpayer that
22        is required to make an addition modification with
23        respect to such transaction under Section
24        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
25        203(d)(2)(D-8), but not to exceed the amount of such
26        addition modification. This subparagraph (Q) is exempt

 

 

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1        from Section 250;
2            (R) An amount equal to the interest income taken
3        into account for the taxable year (net of the
4        deductions allocable thereto) with respect to
5        transactions with (i) a foreign person who would be a
6        member of the taxpayer's unitary business group but for
7        the fact that the foreign person's business activity
8        outside the United States is 80% or more of that
9        person's total business activity and (ii) for taxable
10        years ending on or after December 31, 2008, to a person
11        who would be a member of the same unitary business
12        group but for the fact that the person is prohibited
13        under Section 1501(a)(27) from being included in the
14        unitary business group because he or she is ordinarily
15        required to apportion business income under different
16        subsections of Section 304, but not to exceed the
17        addition modification required to be made for the same
18        taxable year under Section 203(d)(2)(D-7) for interest
19        paid, accrued, or incurred, directly or indirectly, to
20        the same person. This subparagraph (R) is exempt from
21        Section 250;
22            (S) An amount equal to the income from intangible
23        property taken into account for the taxable year (net
24        of the deductions allocable thereto) with respect to
25        transactions with (i) a foreign person who would be a
26        member of the taxpayer's unitary business group but for

 

 

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1        the fact that the foreign person's business activity
2        outside the United States is 80% or more of that
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, but not to exceed the
11        addition modification required to be made for the same
12        taxable year under Section 203(d)(2)(D-8) for
13        intangible expenses and costs paid, accrued, or
14        incurred, directly or indirectly, to the same person.
15        This subparagraph (S) is exempt from Section 250; and
16            (T) For taxable years ending on or after December
17        31, 2011, in the case of a taxpayer who was required to
18        add back any insurance premiums under Section
19        203(d)(2)(D-9), such taxpayer may elect to subtract
20        that part of a reimbursement received from the
21        insurance company equal to the amount of the expense or
22        loss (including expenses incurred by the insurance
23        company) that would have been taken into account as a
24        deduction for federal income tax purposes if the
25        expense or loss had been uninsured. If a taxpayer makes
26        the election provided for by this subparagraph (T), the

 

 

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1        insurer to which the premiums were paid must add back
2        to income the amount subtracted by the taxpayer
3        pursuant to this subparagraph (T). This subparagraph
4        (T) is exempt from the provisions of Section 250.
 
5    (e) Gross income; adjusted gross income; taxable income.
6        (1) In general. Subject to the provisions of paragraph
7    (2) and subsection (b) (3), for purposes of this Section
8    and Section 803(e), a taxpayer's gross income, adjusted
9    gross income, or taxable income for the taxable year shall
10    mean the amount of gross income, adjusted gross income or
11    taxable income properly reportable for federal income tax
12    purposes for the taxable year under the provisions of the
13    Internal Revenue Code. Taxable income may be less than
14    zero. However, for taxable years ending on or after
15    December 31, 1986, net operating loss carryforwards from
16    taxable years ending prior to December 31, 1986, may not
17    exceed the sum of federal taxable income for the taxable
18    year before net operating loss deduction, plus the excess
19    of addition modifications over subtraction modifications
20    for the taxable year. For taxable years ending prior to
21    December 31, 1986, taxable income may never be an amount in
22    excess of the net operating loss for the taxable year as
23    defined in subsections (c) and (d) of Section 172 of the
24    Internal Revenue Code, provided that when taxable income of
25    a corporation (other than a Subchapter S corporation),

 

 

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1    trust, or estate is less than zero and addition
2    modifications, other than those provided by subparagraph
3    (E) of paragraph (2) of subsection (b) for corporations or
4    subparagraph (E) of paragraph (2) of subsection (c) for
5    trusts and estates, exceed subtraction modifications, an
6    addition modification must be made under those
7    subparagraphs for any other taxable year to which the
8    taxable income less than zero (net operating loss) is
9    applied under Section 172 of the Internal Revenue Code or
10    under subparagraph (E) of paragraph (2) of this subsection
11    (e) applied in conjunction with Section 172 of the Internal
12    Revenue Code.
13        (2) Special rule. For purposes of paragraph (1) of this
14    subsection, the taxable income properly reportable for
15    federal income tax purposes shall mean:
16            (A) Certain life insurance companies. In the case
17        of a life insurance company subject to the tax imposed
18        by Section 801 of the Internal Revenue Code, life
19        insurance company taxable income, plus the amount of
20        distribution from pre-1984 policyholder surplus
21        accounts as calculated under Section 815a of the
22        Internal Revenue Code;
23            (B) Certain other insurance companies. In the case
24        of mutual insurance companies subject to the tax
25        imposed by Section 831 of the Internal Revenue Code,
26        insurance company taxable income;

 

 

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1            (C) Regulated investment companies. In the case of
2        a regulated investment company subject to the tax
3        imposed by Section 852 of the Internal Revenue Code,
4        investment company taxable income;
5            (D) Real estate investment trusts. In the case of a
6        real estate investment trust subject to the tax imposed
7        by Section 857 of the Internal Revenue Code, real
8        estate investment trust taxable income;
9            (E) Consolidated corporations. In the case of a
10        corporation which is a member of an affiliated group of
11        corporations filing a consolidated income tax return
12        for the taxable year for federal income tax purposes,
13        taxable income determined as if such corporation had
14        filed a separate return for federal income tax purposes
15        for the taxable year and each preceding taxable year
16        for which it was a member of an affiliated group. For
17        purposes of this subparagraph, the taxpayer's separate
18        taxable income shall be determined as if the election
19        provided by Section 243(b) (2) of the Internal Revenue
20        Code had been in effect for all such years;
21            (F) Cooperatives. In the case of a cooperative
22        corporation or association, the taxable income of such
23        organization determined in accordance with the
24        provisions of Section 1381 through 1388 of the Internal
25        Revenue Code, but without regard to the prohibition
26        against offsetting losses from patronage activities

 

 

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1        against income from nonpatronage activities; except
2        that a cooperative corporation or association may make
3        an election to follow its federal income tax treatment
4        of patronage losses and nonpatronage losses. In the
5        event such election is made, such losses shall be
6        computed and carried over in a manner consistent with
7        subsection (a) of Section 207 of this Act and
8        apportioned by the apportionment factor reported by
9        the cooperative on its Illinois income tax return filed
10        for the taxable year in which the losses are incurred.
11        The election shall be effective for all taxable years
12        with original returns due on or after the date of the
13        election. In addition, the cooperative may file an
14        amended return or returns, as allowed under this Act,
15        to provide that the election shall be effective for
16        losses incurred or carried forward for taxable years
17        occurring prior to the date of the election. Once made,
18        the election may only be revoked upon approval of the
19        Director. The Department shall adopt rules setting
20        forth requirements for documenting the elections and
21        any resulting Illinois net loss and the standards to be
22        used by the Director in evaluating requests to revoke
23        elections. Public Act 96-932 is declaratory of
24        existing law;
25            (G) Subchapter S corporations. In the case of: (i)
26        a Subchapter S corporation for which there is in effect

 

 

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1        an election for the taxable year under Section 1362 of
2        the Internal Revenue Code, the taxable income of such
3        corporation determined in accordance with Section
4        1363(b) of the Internal Revenue Code, except that
5        taxable income shall take into account those items
6        which are required by Section 1363(b)(1) of the
7        Internal Revenue Code to be separately stated; and (ii)
8        a Subchapter S corporation for which there is in effect
9        a federal election to opt out of the provisions of the
10        Subchapter S Revision Act of 1982 and have applied
11        instead the prior federal Subchapter S rules as in
12        effect on July 1, 1982, the taxable income of such
13        corporation determined in accordance with the federal
14        Subchapter S rules as in effect on July 1, 1982; and
15            (H) Partnerships. In the case of a partnership,
16        taxable income determined in accordance with Section
17        703 of the Internal Revenue Code, except that taxable
18        income shall take into account those items which are
19        required by Section 703(a)(1) to be separately stated
20        but which would be taken into account by an individual
21        in calculating his taxable income.
22        (3) Recapture of business expenses on disposition of
23    asset or business. Notwithstanding any other law to the
24    contrary, if in prior years income from an asset or
25    business has been classified as business income and in a
26    later year is demonstrated to be non-business income, then

 

 

SB2224- 277 -LRB100 13364 AXK 27964 b

1    all expenses, without limitation, deducted in such later
2    year and in the 2 immediately preceding taxable years
3    related to that asset or business that generated the
4    non-business income shall be added back and recaptured as
5    business income in the year of the disposition of the asset
6    or business. Such amount shall be apportioned to Illinois
7    using the greater of the apportionment fraction computed
8    for the business under Section 304 of this Act for the
9    taxable year or the average of the apportionment fractions
10    computed for the business under Section 304 of this Act for
11    the taxable year and for the 2 immediately preceding
12    taxable years.
 
13    (f) Valuation limitation amount.
14        (1) In general. The valuation limitation amount
15    referred to in subsections (a) (2) (G), (c) (2) (I) and
16    (d)(2) (E) is an amount equal to:
17            (A) The sum of the pre-August 1, 1969 appreciation
18        amounts (to the extent consisting of gain reportable
19        under the provisions of Section 1245 or 1250 of the
20        Internal Revenue Code) for all property in respect of
21        which such gain was reported for the taxable year; plus
22            (B) The lesser of (i) the sum of the pre-August 1,
23        1969 appreciation amounts (to the extent consisting of
24        capital gain) for all property in respect of which such
25        gain was reported for federal income tax purposes for

 

 

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1        the taxable year, or (ii) the net capital gain for the
2        taxable year, reduced in either case by any amount of
3        such gain included in the amount determined under
4        subsection (a) (2) (F) or (c) (2) (H).
5        (2) Pre-August 1, 1969 appreciation amount.
6            (A) If the fair market value of property referred
7        to in paragraph (1) was readily ascertainable on August
8        1, 1969, the pre-August 1, 1969 appreciation amount for
9        such property is the lesser of (i) the excess of such
10        fair market value over the taxpayer's basis (for
11        determining gain) for such property on that date
12        (determined under the Internal Revenue Code as in
13        effect on that date), or (ii) the total gain realized
14        and reportable for federal income tax purposes in
15        respect of the sale, exchange or other disposition of
16        such property.
17            (B) If the fair market value of property referred
18        to in paragraph (1) was not readily ascertainable on
19        August 1, 1969, the pre-August 1, 1969 appreciation
20        amount for such property is that amount which bears the
21        same ratio to the total gain reported in respect of the
22        property for federal income tax purposes for the
23        taxable year, as the number of full calendar months in
24        that part of the taxpayer's holding period for the
25        property ending July 31, 1969 bears to the number of
26        full calendar months in the taxpayer's entire holding

 

 

SB2224- 279 -LRB100 13364 AXK 27964 b

1        period for the property.
2            (C) The Department shall prescribe such
3        regulations as may be necessary to carry out the
4        purposes of this paragraph.
 
5    (g) Double deductions. Unless specifically provided
6otherwise, nothing in this Section shall permit the same item
7to be deducted more than once.
 
8    (h) Legislative intention. Except as expressly provided by
9this Section there shall be no modifications or limitations on
10the amounts of income, gain, loss or deduction taken into
11account in determining gross income, adjusted gross income or
12taxable income for federal income tax purposes for the taxable
13year, or in the amount of such items entering into the
14computation of base income and net income under this Act for
15such taxable year, whether in respect of property values as of
16August 1, 1969 or otherwise.
17(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
18eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
1996-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
206-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
21eff. 8-23-11; 97-905, eff. 8-7-12; 10000SB0009ham003.)
 
22    (35 ILCS 5/204)  (from Ch. 120, par. 2-204)
23    Sec. 204. Standard Exemption.

 

 

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1    (a) Allowance of exemption. In computing net income under
2this Act, there shall be allowed as an exemption the sum of the
3amounts determined under subsections (b), (c) and (d),
4multiplied by a fraction the numerator of which is the amount
5of the taxpayer's base income allocable to this State for the
6taxable year and the denominator of which is the taxpayer's
7total base income for the taxable year.
8    (b) Basic amount. For the purpose of subsection (a) of this
9Section, except as provided by subsection (a) of Section 205
10and in this subsection, each taxpayer shall be allowed a basic
11amount of $1000, except that for corporations the basic amount
12shall be zero for tax years ending on or after December 31,
132003, and for individuals the basic amount shall be:
14        (1) for taxable years ending on or after December 31,
15    1998 and prior to December 31, 1999, $1,300;
16        (2) for taxable years ending on or after December 31,
17    1999 and prior to December 31, 2000, $1,650;
18        (3) for taxable years ending on or after December 31,
19    2000 and prior to December 31, 2012, $2,000;
20        (4) for taxable years ending on or after December 31,
21    2012 and prior to December 31, 2013, $2,050;
22        (5) for taxable years ending on or after December 31,
23    2013, $2,050 plus the cost-of-living adjustment under
24    subsection (d-5).
25For taxable years ending on or after December 31, 1992, a
26taxpayer whose Illinois base income exceeds the basic amount

 

 

SB2224- 281 -LRB100 13364 AXK 27964 b

1and who is claimed as a dependent on another person's tax
2return under the Internal Revenue Code shall not be allowed any
3basic amount under this subsection.
4    (c) Additional amount for individuals. In the case of an
5individual taxpayer, there shall be allowed for the purpose of
6subsection (a), in addition to the basic amount provided by
7subsection (b), an additional exemption equal to the basic
8amount for each exemption in excess of one allowable to such
9individual taxpayer for the taxable year under Section 151 of
10the Internal Revenue Code.
11    (d) Additional exemptions for an individual taxpayer and
12his or her spouse. In the case of an individual taxpayer and
13his or her spouse, he or she shall each be allowed additional
14exemptions as follows:
15        (1) Additional exemption for taxpayer or spouse 65
16    years of age or older.
17            (A) For taxpayer. An additional exemption of
18        $1,000 for the taxpayer if he or she has attained the
19        age of 65 before the end of the taxable year.
20            (B) For spouse when a joint return is not filed. An
21        additional exemption of $1,000 for the spouse of the
22        taxpayer if a joint return is not made by the taxpayer
23        and his spouse, and if the spouse has attained the age
24        of 65 before the end of such taxable year, and, for the
25        calendar year in which the taxable year of the taxpayer
26        begins, has no gross income and is not the dependent of

 

 

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1        another taxpayer.
2        (2) Additional exemption for blindness of taxpayer or
3    spouse.
4            (A) For taxpayer. An additional exemption of
5        $1,000 for the taxpayer if he or she is blind at the
6        end of the taxable year.
7            (B) For spouse when a joint return is not filed. An
8        additional exemption of $1,000 for the spouse of the
9        taxpayer if a separate return is made by the taxpayer,
10        and if the spouse is blind and, for the calendar year
11        in which the taxable year of the taxpayer begins, has
12        no gross income and is not the dependent of another
13        taxpayer. For purposes of this paragraph, the
14        determination of whether the spouse is blind shall be
15        made as of the end of the taxable year of the taxpayer;
16        except that if the spouse dies during such taxable year
17        such determination shall be made as of the time of such
18        death.
19            (C) Blindness defined. For purposes of this
20        subsection, an individual is blind only if his or her
21        central visual acuity does not exceed 20/200 in the
22        better eye with correcting lenses, or if his or her
23        visual acuity is greater than 20/200 but is accompanied
24        by a limitation in the fields of vision such that the
25        widest diameter of the visual fields subtends an angle
26        no greater than 20 degrees.

 

 

SB2224- 283 -LRB100 13364 AXK 27964 b

1    (d-5) Cost-of-living adjustment. For purposes of item (5)
2of subsection (b), the cost-of-living adjustment for any
3calendar year and for taxable years ending prior to the end of
4the subsequent calendar year is equal to $2,050 times the
5percentage (if any) by which:
6        (1) the Consumer Price Index for the preceding calendar
7    year, exceeds
8        (2) the Consumer Price Index for the calendar year
9    2011.
10    The Consumer Price Index for any calendar year is the
11average of the Consumer Price Index as of the close of the
1212-month period ending on August 31 of that calendar year.
13    The term "Consumer Price Index" means the last Consumer
14Price Index for All Urban Consumers published by the United
15States Department of Labor or any successor agency.
16    If any cost-of-living adjustment is not a multiple of $25,
17that adjustment shall be rounded to the next lowest multiple of
18$25.
19    (e) Cross reference. See Article 3 for the manner of
20determining base income allocable to this State.
21    (f) Application of Section 250. Section 250 does not apply
22to the amendments to this Section made by Public Act 90-613.
23    (g) Notwithstanding any other provision of law, for taxable
24years beginning on or after January 1, 2017, no taxpayer may
25claim an exemption under this Section if the taxpayer's
26adjusted gross income for the taxable year exceeds (i)

 

 

SB2224- 284 -LRB100 13364 AXK 27964 b

1$500,000, in the case of spouses filing a joint federal tax
2return or (ii) $250,000, in the case of all other taxpayers.
3(Source: P.A. 97-507, eff. 8-23-11; 97-652, eff. 6-1-12;
410000SB0009ham003.)
 
5    (35 ILCS 5/208)  (from Ch. 120, par. 2-208)
6    Sec. 208. Tax credit for residential real property taxes.
7Beginning with tax years ending on or after December 31, 1991,
8every individual taxpayer shall be entitled to a tax credit
9equal to 5% of real property taxes paid by such taxpayer during
10the taxable year on the principal residence of the taxpayer. In
11the case of multi-unit or multi-use structures and farm
12dwellings, the taxes on the taxpayer's principal residence
13shall be that portion of the total taxes which is attributable
14to such principal residence. Notwithstanding any other
15provision of law, for taxable years beginning on or after
16January 1, 2017, no taxpayer may claim a credit under this
17Section if the taxpayer's adjusted gross income for the taxable
18year exceeds (i) $500,000, in the case of spouses filing a
19joint federal tax return, or (ii) $250,000, in the case of all
20other taxpayers.
21(Source: P.A. 87-17; 10000SB0009ham003.)
 
22    (35 ILCS 5/212)
23    Sec. 212. Earned income tax credit.
24    (a) With respect to the federal earned income tax credit

 

 

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1allowed for the taxable year under Section 32 of the federal
2Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
3is entitled to a credit against the tax imposed by subsections
4(a) and (b) of Section 201 in an amount equal to (i) 5% of the
5federal tax credit for each taxable year beginning on or after
6January 1, 2000 and ending prior to December 31, 2012, (ii)
77.5% of the federal tax credit for each taxable year beginning
8on or after January 1, 2012 and ending prior to December 31,
92013, and (iii) 10% of the federal tax credit for each taxable
10year beginning on or after January 1, 2013 and beginning prior
11to January 1, 2017, (iv) 14% of the federal tax credit for each
12taxable year beginning on or after January 1, 2017 and
13beginning prior to January 1, 2018, and (v) 18% of the federal
14tax credit for each taxable year beginning on or after January
151, 2018.
16    For a non-resident or part-year resident, the amount of the
17credit under this Section shall be in proportion to the amount
18of income attributable to this State.
19    (b) For taxable years beginning before January 1, 2003, in
20no event shall a credit under this Section reduce the
21taxpayer's liability to less than zero. For each taxable year
22beginning on or after January 1, 2003, if the amount of the
23credit exceeds the income tax liability for the applicable tax
24year, then the excess credit shall be refunded to the taxpayer.
25The amount of a refund shall not be included in the taxpayer's
26income or resources for the purposes of determining eligibility

 

 

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1or benefit level in any means-tested benefit program
2administered by a governmental entity unless required by
3federal law.
4    (c) This Section is exempt from the provisions of Section
5250.
6(Source: P.A. 97-652, eff. 6-1-12; 10000SB0009ham003.)
 
7    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
8    Sec. 901. Collection authority.
9    (a) In general.
10    The Department shall collect the taxes imposed by this Act.
11The Department shall collect certified past due child support
12amounts under Section 2505-650 of the Department of Revenue Law
13(20 ILCS 2505/2505-650). Except as provided in subsections (c),
14(e), (f), (g), and (h) of this Section, money collected
15pursuant to subsections (a) and (b) of Section 201 of this Act
16shall be paid into the General Revenue Fund in the State
17treasury; money collected pursuant to subsections (c) and (d)
18of Section 201 of this Act shall be paid into the Personal
19Property Tax Replacement Fund, a special fund in the State
20Treasury; and money collected under Section 2505-650 of the
21Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
22into the Child Support Enforcement Trust Fund, a special fund
23outside the State Treasury, or to the State Disbursement Unit
24established under Section 10-26 of the Illinois Public Aid
25Code, as directed by the Department of Healthcare and Family

 

 

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1Services.
2    (b) Local Government Distributive Fund.
3    Beginning August 1, 1969, and continuing through June 30,
41994, the Treasurer shall transfer each month from the General
5Revenue Fund to a special fund in the State treasury, to be
6known as the "Local Government Distributive Fund", an amount
7equal to 1/12 of the net revenue realized from the tax imposed
8by subsections (a) and (b) of Section 201 of this Act during
9the preceding month. Beginning July 1, 1994, and continuing
10through June 30, 1995, the Treasurer shall transfer each month
11from the General Revenue Fund to the Local Government
12Distributive Fund an amount equal to 1/11 of the net revenue
13realized from the tax imposed by subsections (a) and (b) of
14Section 201 of this Act during the preceding month. Beginning
15July 1, 1995 and continuing through January 31, 2011, the
16Treasurer shall transfer each month from the General Revenue
17Fund to the Local Government Distributive Fund an amount equal
18to the net of (i) 1/10 of the net revenue realized from the tax
19imposed by subsections (a) and (b) of Section 201 of the
20Illinois Income Tax Act during the preceding month (ii) minus,
21beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
22and beginning July 1, 2004, zero. Beginning February 1, 2011,
23and continuing through January 31, 2015, the Treasurer shall
24transfer each month from the General Revenue Fund to the Local
25Government Distributive Fund an amount equal to the sum of (i)
266% (10% of the ratio of the 3% individual income tax rate prior

 

 

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1to 2011 to the 5% individual income tax rate after 2010) of the
2net revenue realized from the tax imposed by subsections (a)
3and (b) of Section 201 of this Act upon individuals, trusts,
4and estates during the preceding month and (ii) 6.86% (10% of
5the ratio of the 4.8% corporate income tax rate prior to 2011
6to the 7% corporate income tax rate after 2010) of the net
7revenue realized from the tax imposed by subsections (a) and
8(b) of Section 201 of this Act upon corporations during the
9preceding month. Beginning February 1, 2015 and continuing
10through July 31, 2017 January 31, 2025, the Treasurer shall
11transfer each month from the General Revenue Fund to the Local
12Government Distributive Fund an amount equal to the sum of (i)
138% (10% of the ratio of the 3% individual income tax rate prior
14to 2011 to the 3.75% individual income tax rate after 2014) of
15the net revenue realized from the tax imposed by subsections
16(a) and (b) of Section 201 of this Act upon individuals,
17trusts, and estates during the preceding month and (ii) 9.14%
18(10% of the ratio of the 4.8% corporate income tax rate prior
19to 2011 to the 5.25% corporate income tax rate after 2014) of
20the net revenue realized from the tax imposed by subsections
21(a) and (b) of Section 201 of this Act upon corporations during
22the preceding month. Beginning August 1, 2017 February 1, 2025,
23the Treasurer shall transfer each month from the General
24Revenue Fund to the Local Government Distributive Fund an
25amount equal to the sum of (i) 6.06% 9.23% (10% of the ratio of
26the 3% individual income tax rate prior to 2011 to the 4.95%

 

 

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13.25% individual income tax rate after July 1, 2017 2024) of
2the net revenue realized from the tax imposed by subsections
3(a) and (b) of Section 201 of this Act upon individuals,
4trusts, and estates during the preceding month and (ii) 6.85%
5(10% of the ratio of the 4.8% corporate income tax rate prior
6to 2011 to the 7% corporate income tax rate after July 1, 2017)
710% of the net revenue realized from the tax imposed by
8subsections (a) and (b) of Section 201 of this Act upon
9corporations during the preceding month. Net revenue realized
10for a month shall be defined as the revenue from the tax
11imposed by subsections (a) and (b) of Section 201 of this Act
12which is deposited in the General Revenue Fund, the Education
13Assistance Fund, the Income Tax Surcharge Local Government
14Distributive Fund, the Fund for the Advancement of Education,
15and the Commitment to Human Services Fund during the month
16minus the amount paid out of the General Revenue Fund in State
17warrants during that same month as refunds to taxpayers for
18overpayment of liability under the tax imposed by subsections
19(a) and (b) of Section 201 of this Act.
20    Beginning on August 26, 2014 (the effective date of Public
21Act 98-1052), the Comptroller shall perform the transfers
22required by this subsection (b) no later than 60 days after he
23or she receives the certification from the Treasurer as
24provided in Section 1 of the State Revenue Sharing Act.
25    (c) Deposits Into Income Tax Refund Fund.
26        (1) Beginning on January 1, 1989 and thereafter, the

 

 

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1    Department shall deposit a percentage of the amounts
2    collected pursuant to subsections (a) and (b)(1), (2), and
3    (3), of Section 201 of this Act into a fund in the State
4    treasury known as the Income Tax Refund Fund. The
5    Department shall deposit 6% of such amounts during the
6    period beginning January 1, 1989 and ending on June 30,
7    1989. Beginning with State fiscal year 1990 and for each
8    fiscal year thereafter, the percentage deposited into the
9    Income Tax Refund Fund during a fiscal year shall be the
10    Annual Percentage. For fiscal years 1999 through 2001, the
11    Annual Percentage shall be 7.1%. For fiscal year 2003, the
12    Annual Percentage shall be 8%. For fiscal year 2004, the
13    Annual Percentage shall be 11.7%. Upon the effective date
14    of this amendatory Act of the 93rd General Assembly, the
15    Annual Percentage shall be 10% for fiscal year 2005. For
16    fiscal year 2006, the Annual Percentage shall be 9.75%. For
17    fiscal year 2007, the Annual Percentage shall be 9.75%. For
18    fiscal year 2008, the Annual Percentage shall be 7.75%. For
19    fiscal year 2009, the Annual Percentage shall be 9.75%. For
20    fiscal year 2010, the Annual Percentage shall be 9.75%. For
21    fiscal year 2011, the Annual Percentage shall be 8.75%. For
22    fiscal year 2012, the Annual Percentage shall be 8.75%. For
23    fiscal year 2013, the Annual Percentage shall be 9.75%. For
24    fiscal year 2014, the Annual Percentage shall be 9.5%. For
25    fiscal year 2015, the Annual Percentage shall be 10%. For
26    all other fiscal years, the Annual Percentage shall be

 

 

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1    calculated as a fraction, the numerator of which shall be
2    the amount of refunds approved for payment by the
3    Department during the preceding fiscal year as a result of
4    overpayment of tax liability under subsections (a) and
5    (b)(1), (2), and (3) of Section 201 of this Act plus the
6    amount of such refunds remaining approved but unpaid at the
7    end of the preceding fiscal year, minus the amounts
8    transferred into the Income Tax Refund Fund from the
9    Tobacco Settlement Recovery Fund, and the denominator of
10    which shall be the amounts which will be collected pursuant
11    to subsections (a) and (b)(1), (2), and (3) of Section 201
12    of this Act during the preceding fiscal year; except that
13    in State fiscal year 2002, the Annual Percentage shall in
14    no event exceed 7.6%. The Director of Revenue shall certify
15    the Annual Percentage to the Comptroller on the last
16    business day of the fiscal year immediately preceding the
17    fiscal year for which it is to be effective.
18        (2) Beginning on January 1, 1989 and thereafter, the
19    Department shall deposit a percentage of the amounts
20    collected pursuant to subsections (a) and (b)(6), (7), and
21    (8), (c) and (d) of Section 201 of this Act into a fund in
22    the State treasury known as the Income Tax Refund Fund. The
23    Department shall deposit 18% of such amounts during the
24    period beginning January 1, 1989 and ending on June 30,
25    1989. Beginning with State fiscal year 1990 and for each
26    fiscal year thereafter, the percentage deposited into the

 

 

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1    Income Tax Refund Fund during a fiscal year shall be the
2    Annual Percentage. For fiscal years 1999, 2000, and 2001,
3    the Annual Percentage shall be 19%. For fiscal year 2003,
4    the Annual Percentage shall be 27%. For fiscal year 2004,
5    the Annual Percentage shall be 32%. Upon the effective date
6    of this amendatory Act of the 93rd General Assembly, the
7    Annual Percentage shall be 24% for fiscal year 2005. For
8    fiscal year 2006, the Annual Percentage shall be 20%. For
9    fiscal year 2007, the Annual Percentage shall be 17.5%. For
10    fiscal year 2008, the Annual Percentage shall be 15.5%. For
11    fiscal year 2009, the Annual Percentage shall be 17.5%. For
12    fiscal year 2010, the Annual Percentage shall be 17.5%. For
13    fiscal year 2011, the Annual Percentage shall be 17.5%. For
14    fiscal year 2012, the Annual Percentage shall be 17.5%. For
15    fiscal year 2013, the Annual Percentage shall be 14%. For
16    fiscal year 2014, the Annual Percentage shall be 13.4%. For
17    fiscal year 2015, the Annual Percentage shall be 14%. For
18    all other fiscal years, the Annual Percentage shall be
19    calculated as a fraction, the numerator of which shall be
20    the amount of refunds approved for payment by the
21    Department during the preceding fiscal year as a result of
22    overpayment of tax liability under subsections (a) and
23    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
24    Act plus the amount of such refunds remaining approved but
25    unpaid at the end of the preceding fiscal year, and the
26    denominator of which shall be the amounts which will be

 

 

SB2224- 293 -LRB100 13364 AXK 27964 b

1    collected pursuant to subsections (a) and (b)(6), (7), and
2    (8), (c) and (d) of Section 201 of this Act during the
3    preceding fiscal year; except that in State fiscal year
4    2002, the Annual Percentage shall in no event exceed 23%.
5    The Director of Revenue shall certify the Annual Percentage
6    to the Comptroller on the last business day of the fiscal
7    year immediately preceding the fiscal year for which it is
8    to be effective.
9        (3) The Comptroller shall order transferred and the
10    Treasurer shall transfer from the Tobacco Settlement
11    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
12    in January, 2001, (ii) $35,000,000 in January, 2002, and
13    (iii) $35,000,000 in January, 2003.
14    (d) Expenditures from Income Tax Refund Fund.
15        (1) Beginning January 1, 1989, money in the Income Tax
16    Refund Fund shall be expended exclusively for the purpose
17    of paying refunds resulting from overpayment of tax
18    liability under Section 201 of this Act, for paying rebates
19    under Section 208.1 in the event that the amounts in the
20    Homeowners' Tax Relief Fund are insufficient for that
21    purpose, and for making transfers pursuant to this
22    subsection (d).
23        (2) The Director shall order payment of refunds
24    resulting from overpayment of tax liability under Section
25    201 of this Act from the Income Tax Refund Fund only to the
26    extent that amounts collected pursuant to Section 201 of

 

 

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1    this Act and transfers pursuant to this subsection (d) and
2    item (3) of subsection (c) have been deposited and retained
3    in the Fund.
4        (3) As soon as possible after the end of each fiscal
5    year, the Director shall order transferred and the State
6    Treasurer and State Comptroller shall transfer from the
7    Income Tax Refund Fund to the Personal Property Tax
8    Replacement Fund an amount, certified by the Director to
9    the Comptroller, equal to the excess of the amount
10    collected pursuant to subsections (c) and (d) of Section
11    201 of this Act deposited into the Income Tax Refund Fund
12    during the fiscal year over the amount of refunds resulting
13    from overpayment of tax liability under subsections (c) and
14    (d) of Section 201 of this Act paid from the Income Tax
15    Refund Fund during the fiscal year.
16        (4) As soon as possible after the end of each fiscal
17    year, the Director shall order transferred and the State
18    Treasurer and State Comptroller shall transfer from the
19    Personal Property Tax Replacement Fund to the Income Tax
20    Refund Fund an amount, certified by the Director to the
21    Comptroller, equal to the excess of the amount of refunds
22    resulting from overpayment of tax liability under
23    subsections (c) and (d) of Section 201 of this Act paid
24    from the Income Tax Refund Fund during the fiscal year over
25    the amount collected pursuant to subsections (c) and (d) of
26    Section 201 of this Act deposited into the Income Tax

 

 

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1    Refund Fund during the fiscal year.
2        (4.5) As soon as possible after the end of fiscal year
3    1999 and of each fiscal year thereafter, the Director shall
4    order transferred and the State Treasurer and State
5    Comptroller shall transfer from the Income Tax Refund Fund
6    to the General Revenue Fund any surplus remaining in the
7    Income Tax Refund Fund as of the end of such fiscal year;
8    excluding for fiscal years 2000, 2001, and 2002 amounts
9    attributable to transfers under item (3) of subsection (c)
10    less refunds resulting from the earned income tax credit.
11        (5) This Act shall constitute an irrevocable and
12    continuing appropriation from the Income Tax Refund Fund
13    for the purpose of paying refunds upon the order of the
14    Director in accordance with the provisions of this Section.
15    (e) Deposits into the Education Assistance Fund and the
16Income Tax Surcharge Local Government Distributive Fund.
17    On July 1, 1991, and thereafter, of the amounts collected
18pursuant to subsections (a) and (b) of Section 201 of this Act,
19minus deposits into the Income Tax Refund Fund, the Department
20shall deposit 7.3% into the Education Assistance Fund in the
21State Treasury. Beginning July 1, 1991, and continuing through
22January 31, 1993, of the amounts collected pursuant to
23subsections (a) and (b) of Section 201 of the Illinois Income
24Tax Act, minus deposits into the Income Tax Refund Fund, the
25Department shall deposit 3.0% into the Income Tax Surcharge
26Local Government Distributive Fund in the State Treasury.

 

 

SB2224- 296 -LRB100 13364 AXK 27964 b

1Beginning February 1, 1993 and continuing through June 30,
21993, of the amounts collected pursuant to subsections (a) and
3(b) of Section 201 of the Illinois Income Tax Act, minus
4deposits into the Income Tax Refund Fund, the Department shall
5deposit 4.4% into the Income Tax Surcharge Local Government
6Distributive Fund in the State Treasury. Beginning July 1,
71993, and continuing through June 30, 1994, of the amounts
8collected under subsections (a) and (b) of Section 201 of this
9Act, minus deposits into the Income Tax Refund Fund, the
10Department shall deposit 1.475% into the Income Tax Surcharge
11Local Government Distributive Fund in the State Treasury.
12    (f) Deposits into the Fund for the Advancement of
13Education. Beginning February 1, 2015, the Department shall
14deposit the following portions of the revenue realized from the
15tax imposed upon individuals, trusts, and estates by
16subsections (a) and (b) of Section 201 of this Act during the
17preceding month, minus deposits into the Income Tax Refund
18Fund, into the Fund for the Advancement of Education:
19        (1) beginning February 1, 2015, and prior to February
20    1, 2025, 1/30; and
21        (2) beginning February 1, 2025, 1/26.
22    If the rate of tax imposed by subsection (a) and (b) of
23Section 201 is reduced pursuant to Section 201.5 of this Act,
24the Department shall not make the deposits required by this
25subsection (f) on or after the effective date of the reduction.
26    (g) Deposits into the Commitment to Human Services Fund.

 

 

SB2224- 297 -LRB100 13364 AXK 27964 b

1Beginning February 1, 2015, the Department shall deposit the
2following portions of the revenue realized from the tax imposed
3upon individuals, trusts, and estates by subsections (a) and
4(b) of Section 201 of this Act during the preceding month,
5minus deposits into the Income Tax Refund Fund, into the
6Commitment to Human Services Fund:
7        (1) beginning February 1, 2015, and prior to February
8    1, 2025, 1/30; and
9        (2) beginning February 1, 2025, 1/26.
10    If the rate of tax imposed by subsection (a) and (b) of
11Section 201 is reduced pursuant to Section 201.5 of this Act,
12the Department shall not make the deposits required by this
13subsection (g) on or after the effective date of the reduction.
14    (h) Deposits into the Tax Compliance and Administration
15Fund. Beginning on the first day of the first calendar month to
16occur on or after August 26, 2014 (the effective date of Public
17Act 98-1098), each month the Department shall pay into the Tax
18Compliance and Administration Fund, to be used, subject to
19appropriation, to fund additional auditors and compliance
20personnel at the Department, an amount equal to 1/12 of 5% of
21the cash receipts collected during the preceding fiscal year by
22the Audit Bureau of the Department from the tax imposed by
23subsections (a), (b), (c), and (d) of Section 201 of this Act,
24net of deposits into the Income Tax Refund Fund made from those
25cash receipts.
26(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;

 

 

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198-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
27-20-15; 10000SB0009ham003.)
 
3    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)
4    Sec. 1501. Definitions.
5    (a) In general. When used in this Act, where not otherwise
6distinctly expressed or manifestly incompatible with the
7intent thereof:
8        (1) Business income. The term "business income" means
9    all income that may be treated as apportionable business
10    income under the Constitution of the United States.
11    Business income is net of the deductions allocable thereto.
12    Such term does not include compensation or the deductions
13    allocable thereto. For each taxable year beginning on or
14    after January 1, 2003, a taxpayer may elect to treat all
15    income other than compensation as business income. This
16    election shall be made in accordance with rules adopted by
17    the Department and, once made, shall be irrevocable.
18        (1.5) Captive real estate investment trust:
19            (A) The term "captive real estate investment
20        trust" means a corporation, trust, or association:
21                (i) that is considered a real estate
22            investment trust for the taxable year under
23            Section 856 of the Internal Revenue Code;
24                (ii) the certificates of beneficial interest
25            or shares of which are not regularly traded on an

 

 

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1            established securities market; and
2                (iii) of which more than 50% of the voting
3            power or value of the beneficial interest or
4            shares, at any time during the last half of the
5            taxable year, is owned or controlled, directly,
6            indirectly, or constructively, by a single
7            corporation.
8            (B) The term "captive real estate investment
9        trust" does not include:
10                (i) a real estate investment trust of which
11            more than 50% of the voting power or value of the
12            beneficial interest or shares is owned or
13            controlled, directly, indirectly, or
14            constructively, by:
15                    (a) a real estate investment trust, other
16                than a captive real estate investment trust;
17                    (b) a person who is exempt from taxation
18                under Section 501 of the Internal Revenue Code,
19                and who is not required to treat income
20                received from the real estate investment trust
21                as unrelated business taxable income under
22                Section 512 of the Internal Revenue Code;
23                    (c) a listed Australian property trust, if
24                no more than 50% of the voting power or value
25                of the beneficial interest or shares of that
26                trust, at any time during the last half of the

 

 

SB2224- 300 -LRB100 13364 AXK 27964 b

1                taxable year, is owned or controlled, directly
2                or indirectly, by a single person;
3                    (d) an entity organized as a trust,
4                provided a listed Australian property trust
5                described in subparagraph (c) owns or
6                controls, directly or indirectly, or
7                constructively, 75% or more of the voting power
8                or value of the beneficial interests or shares
9                of such entity; or
10                    (e) an entity that is organized outside of
11                the laws of the United States and that
12                satisfies all of the following criteria:
13                        (1) at least 75% of the entity's total
14                    asset value at the close of its taxable
15                    year is represented by real estate assets
16                    (as defined in Section 856(c)(5)(B) of the
17                    Internal Revenue Code, thereby including
18                    shares or certificates of beneficial
19                    interest in any real estate investment
20                    trust), cash and cash equivalents, and
21                    U.S. Government securities;
22                        (2) the entity is not subject to tax on
23                    amounts that are distributed to its
24                    beneficial owners or is exempt from
25                    entity-level taxation;
26                        (3) the entity distributes at least

 

 

SB2224- 301 -LRB100 13364 AXK 27964 b

1                    85% of its taxable income (as computed in
2                    the jurisdiction in which it is organized)
3                    to the holders of its shares or
4                    certificates of beneficial interest on an
5                    annual basis;
6                        (4) either (i) the shares or
7                    beneficial interests of the entity are
8                    regularly traded on an established
9                    securities market or (ii) not more than 10%
10                    of the voting power or value in the entity
11                    is held, directly, indirectly, or
12                    constructively, by a single entity or
13                    individual; and
14                        (5) the entity is organized in a
15                    country that has entered into a tax treaty
16                    with the United States; or
17                (ii) during its first taxable year for which it
18            elects to be treated as a real estate investment
19            trust under Section 856(c)(1) of the Internal
20            Revenue Code, a real estate investment trust the
21            certificates of beneficial interest or shares of
22            which are not regularly traded on an established
23            securities market, but only if the certificates of
24            beneficial interest or shares of the real estate
25            investment trust are regularly traded on an
26            established securities market prior to the earlier

 

 

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1            of the due date (including extensions) for filing
2            its return under this Act for that first taxable
3            year or the date it actually files that return.
4            (C) For the purposes of this subsection (1.5), the
5        constructive ownership rules prescribed under Section
6        318(a) of the Internal Revenue Code, as modified by
7        Section 856(d)(5) of the Internal Revenue Code, apply
8        in determining the ownership of stock, assets, or net
9        profits of any person.
10            (D) For the purposes of this item (1.5), for
11        taxable years ending on or after August 16, 2007, the
12        voting power or value of the beneficial interest or
13        shares of a real estate investment trust does not
14        include any voting power or value of beneficial
15        interest or shares in a real estate investment trust
16        held directly or indirectly in a segregated asset
17        account by a life insurance company (as described in
18        Section 817 of the Internal Revenue Code) to the extent
19        such voting power or value is for the benefit of
20        entities or persons who are either immune from taxation
21        or exempt from taxation under subtitle A of the
22        Internal Revenue Code.
23        (2) Commercial domicile. The term "commercial
24    domicile" means the principal place from which the trade or
25    business of the taxpayer is directed or managed.
26        (3) Compensation. The term "compensation" means wages,

 

 

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1    salaries, commissions and any other form of remuneration
2    paid to employees for personal services.
3        (4) Corporation. The term "corporation" includes
4    associations, joint-stock companies, insurance companies
5    and cooperatives. Any entity, including a limited
6    liability company formed under the Illinois Limited
7    Liability Company Act, shall be treated as a corporation if
8    it is so classified for federal income tax purposes.
9        (5) Department. The term "Department" means the
10    Department of Revenue of this State.
11        (6) Director. The term "Director" means the Director of
12    Revenue of this State.
13        (7) Fiduciary. The term "fiduciary" means a guardian,
14    trustee, executor, administrator, receiver, or any person
15    acting in any fiduciary capacity for any person.
16        (8) Financial organization.
17            (A) The term "financial organization" means any
18        bank, bank holding company, trust company, savings
19        bank, industrial bank, land bank, safe deposit
20        company, private banker, savings and loan association,
21        building and loan association, credit union, currency
22        exchange, cooperative bank, small loan company, sales
23        finance company, investment company, or any person
24        which is owned by a bank or bank holding company. For
25        the purpose of this Section a "person" will include
26        only those persons which a bank holding company may

 

 

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1        acquire and hold an interest in, directly or
2        indirectly, under the provisions of the Bank Holding
3        Company Act of 1956 (12 U.S.C. 1841, et seq.), except
4        where interests in any person must be disposed of
5        within certain required time limits under the Bank
6        Holding Company Act of 1956.
7            (B) For purposes of subparagraph (A) of this
8        paragraph, the term "bank" includes (i) any entity that
9        is regulated by the Comptroller of the Currency under
10        the National Bank Act, or by the Federal Reserve Board,
11        or by the Federal Deposit Insurance Corporation and
12        (ii) any federally or State chartered bank operating as
13        a credit card bank.
14            (C) For purposes of subparagraph (A) of this
15        paragraph, the term "sales finance company" has the
16        meaning provided in the following item (i) or (ii):
17                (i) A person primarily engaged in one or more
18            of the following businesses: the business of
19            purchasing customer receivables, the business of
20            making loans upon the security of customer
21            receivables, the business of making loans for the
22            express purpose of funding purchases of tangible
23            personal property or services by the borrower, or
24            the business of finance leasing. For purposes of
25            this item (i), "customer receivable" means:
26                    (a) a retail installment contract or

 

 

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1                retail charge agreement within the meaning of
2                the Sales Finance Agency Act, the Retail
3                Installment Sales Act, or the Motor Vehicle
4                Retail Installment Sales Act;
5                    (b) an installment, charge, credit, or
6                similar contract or agreement arising from the
7                sale of tangible personal property or services
8                in a transaction involving a deferred payment
9                price payable in one or more installments
10                subsequent to the sale; or
11                    (c) the outstanding balance of a contract
12                or agreement described in provisions (a) or (b)
13                of this item (i).
14                A customer receivable need not provide for
15            payment of interest on deferred payments. A sales
16            finance company may purchase a customer receivable
17            from, or make a loan secured by a customer
18            receivable to, the seller in the original
19            transaction or to a person who purchased the
20            customer receivable directly or indirectly from
21            that seller.
22                (ii) A corporation meeting each of the
23            following criteria:
24                    (a) the corporation must be a member of an
25                "affiliated group" within the meaning of
26                Section 1504(a) of the Internal Revenue Code,

 

 

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1                determined without regard to Section 1504(b)
2                of the Internal Revenue Code;
3                    (b) more than 50% of the gross income of
4                the corporation for the taxable year must be
5                interest income derived from qualifying loans.
6                A "qualifying loan" is a loan made to a member
7                of the corporation's affiliated group that
8                originates customer receivables (within the
9                meaning of item (i)) or to whom customer
10                receivables originated by a member of the
11                affiliated group have been transferred, to the
12                extent the average outstanding balance of
13                loans from that corporation to members of its
14                affiliated group during the taxable year do not
15                exceed the limitation amount for that
16                corporation. The "limitation amount" for a
17                corporation is the average outstanding
18                balances during the taxable year of customer
19                receivables (within the meaning of item (i))
20                originated by all members of the affiliated
21                group. If the average outstanding balances of
22                the loans made by a corporation to members of
23                its affiliated group exceed the limitation
24                amount, the interest income of that
25                corporation from qualifying loans shall be
26                equal to its interest income from loans to

 

 

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1                members of its affiliated groups times a
2                fraction equal to the limitation amount
3                divided by the average outstanding balances of
4                the loans made by that corporation to members
5                of its affiliated group;
6                    (c) the total of all shareholder's equity
7                (including, without limitation, paid-in
8                capital on common and preferred stock and
9                retained earnings) of the corporation plus the
10                total of all of its loans, advances, and other
11                obligations payable or owed to members of its
12                affiliated group may not exceed 20% of the
13                total assets of the corporation at any time
14                during the tax year; and
15                    (d) more than 50% of all interest-bearing
16                obligations of the affiliated group payable to
17                persons outside the group determined in
18                accordance with generally accepted accounting
19                principles must be obligations of the
20                corporation.
21            This amendatory Act of the 91st General Assembly is
22        declaratory of existing law.
23            (D) Subparagraphs (B) and (C) of this paragraph are
24        declaratory of existing law and apply retroactively,
25        for all tax years beginning on or before December 31,
26        1996, to all original returns, to all amended returns

 

 

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1        filed no later than 30 days after the effective date of
2        this amendatory Act of 1996, and to all notices issued
3        on or before the effective date of this amendatory Act
4        of 1996 under subsection (a) of Section 903, subsection
5        (a) of Section 904, subsection (e) of Section 909, or
6        Section 912. A taxpayer that is a "financial
7        organization" that engages in any transaction with an
8        affiliate shall be a "financial organization" for all
9        purposes of this Act.
10            (E) For all tax years beginning on or before
11        December 31, 1996, a taxpayer that falls within the
12        definition of a "financial organization" under
13        subparagraphs (B) or (C) of this paragraph, but who
14        does not fall within the definition of a "financial
15        organization" under the Proposed Regulations issued by
16        the Department of Revenue on July 19, 1996, may
17        irrevocably elect to apply the Proposed Regulations
18        for all of those years as though the Proposed
19        Regulations had been lawfully promulgated, adopted,
20        and in effect for all of those years. For purposes of
21        applying subparagraphs (B) or (C) of this paragraph to
22        all of those years, the election allowed by this
23        subparagraph applies only to the taxpayer making the
24        election and to those members of the taxpayer's unitary
25        business group who are ordinarily required to
26        apportion business income under the same subsection of

 

 

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1        Section 304 of this Act as the taxpayer making the
2        election. No election allowed by this subparagraph
3        shall be made under a claim filed under subsection (d)
4        of Section 909 more than 30 days after the effective
5        date of this amendatory Act of 1996.
6            (F) Finance Leases. For purposes of this
7        subsection, a finance lease shall be treated as a loan
8        or other extension of credit, rather than as a lease,
9        regardless of how the transaction is characterized for
10        any other purpose, including the purposes of any
11        regulatory agency to which the lessor is subject. A
12        finance lease is any transaction in the form of a lease
13        in which the lessee is treated as the owner of the
14        leased asset entitled to any deduction for
15        depreciation allowed under Section 167 of the Internal
16        Revenue Code.
17        (9) Fiscal year. The term "fiscal year" means an
18    accounting period of 12 months ending on the last day of
19    any month other than December.
20        (9.5) Fixed place of business. The term "fixed place of
21    business" has the same meaning as that term is given in
22    Section 864 of the Internal Revenue Code and the related
23    Treasury regulations.
24        (10) Includes and including. The terms "includes" and
25    "including" when used in a definition contained in this Act
26    shall not be deemed to exclude other things otherwise

 

 

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1    within the meaning of the term defined.
2        (11) Internal Revenue Code. The term "Internal Revenue
3    Code" means the United States Internal Revenue Code of 1954
4    or any successor law or laws relating to federal income
5    taxes in effect for the taxable year.
6        (11.5) Investment partnership.
7            (A) The term "investment partnership" means any
8        entity that is treated as a partnership for federal
9        income tax purposes that meets the following
10        requirements:
11                (i) no less than 90% of the partnership's cost
12            of its total assets consists of qualifying
13            investment securities, deposits at banks or other
14            financial institutions, and office space and
15            equipment reasonably necessary to carry on its
16            activities as an investment partnership;
17                (ii) no less than 90% of its gross income
18            consists of interest, dividends, and gains from
19            the sale or exchange of qualifying investment
20            securities; and
21                (iii) the partnership is not a dealer in
22            qualifying investment securities.
23            (B) For purposes of this paragraph (11.5), the term
24        "qualifying investment securities" includes all of the
25        following:
26                (i) common stock, including preferred or debt

 

 

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1            securities convertible into common stock, and
2            preferred stock;
3                (ii) bonds, debentures, and other debt
4            securities;
5                (iii) foreign and domestic currency deposits
6            secured by federal, state, or local governmental
7            agencies;
8                (iv) mortgage or asset-backed securities
9            secured by federal, state, or local governmental
10            agencies;
11                (v) repurchase agreements and loan
12            participations;
13                (vi) foreign currency exchange contracts and
14            forward and futures contracts on foreign
15            currencies;
16                (vii) stock and bond index securities and
17            futures contracts and other similar financial
18            securities and futures contracts on those
19            securities;
20                (viii) options for the purchase or sale of any
21            of the securities, currencies, contracts, or
22            financial instruments described in items (i) to
23            (vii), inclusive;
24                (ix) regulated futures contracts;
25                (x) commodities (not described in Section
26            1221(a)(1) of the Internal Revenue Code) or

 

 

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1            futures, forwards, and options with respect to
2            such commodities, provided, however, that any item
3            of a physical commodity to which title is actually
4            acquired in the partnership's capacity as a dealer
5            in such commodity shall not be a qualifying
6            investment security;
7                (xi) derivatives; and
8                (xii) a partnership interest in another
9            partnership that is an investment partnership.
10        (12) Mathematical error. The term "mathematical error"
11    includes the following types of errors, omissions, or
12    defects in a return filed by a taxpayer which prevents
13    acceptance of the return as filed for processing:
14            (A) arithmetic errors or incorrect computations on
15        the return or supporting schedules;
16            (B) entries on the wrong lines;
17            (C) omission of required supporting forms or
18        schedules or the omission of the information in whole
19        or in part called for thereon; and
20            (D) an attempt to claim, exclude, deduct, or
21        improperly report, in a manner directly contrary to the
22        provisions of the Act and regulations thereunder any
23        item of income, exemption, deduction, or credit.
24        (13) Nonbusiness income. The term "nonbusiness income"
25    means all income other than business income or
26    compensation.

 

 

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1        (14) Nonresident. The term "nonresident" means a
2    person who is not a resident.
3        (15) Paid, incurred and accrued. The terms "paid",
4    "incurred" and "accrued" shall be construed according to
5    the method of accounting upon the basis of which the
6    person's base income is computed under this Act.
7        (16) Partnership and partner. The term "partnership"
8    includes a syndicate, group, pool, joint venture or other
9    unincorporated organization, through or by means of which
10    any business, financial operation, or venture is carried
11    on, and which is not, within the meaning of this Act, a
12    trust or estate or a corporation; and the term "partner"
13    includes a member in such syndicate, group, pool, joint
14    venture or organization.
15        The term "partnership" includes any entity, including
16    a limited liability company formed under the Illinois
17    Limited Liability Company Act, classified as a partnership
18    for federal income tax purposes.
19        The term "partnership" does not include a syndicate,
20    group, pool, joint venture, or other unincorporated
21    organization established for the sole purpose of playing
22    the Illinois State Lottery.
23        (17) Part-year resident. The term "part-year resident"
24    means an individual who became a resident during the
25    taxable year or ceased to be a resident during the taxable
26    year. Under Section 1501(a)(20)(A)(i) residence commences

 

 

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1    with presence in this State for other than a temporary or
2    transitory purpose and ceases with absence from this State
3    for other than a temporary or transitory purpose. Under
4    Section 1501(a)(20)(A)(ii) residence commences with the
5    establishment of domicile in this State and ceases with the
6    establishment of domicile in another State.
7        (18) Person. The term "person" shall be construed to
8    mean and include an individual, a trust, estate,
9    partnership, association, firm, company, corporation,
10    limited liability company, or fiduciary. For purposes of
11    Section 1301 and 1302 of this Act, a "person" means (i) an
12    individual, (ii) a corporation, (iii) an officer, agent, or
13    employee of a corporation, (iv) a member, agent or employee
14    of a partnership, or (v) a member, manager, employee,
15    officer, director, or agent of a limited liability company
16    who in such capacity commits an offense specified in
17    Section 1301 and 1302.
18        (18A) Records. The term "records" includes all data
19    maintained by the taxpayer, whether on paper, microfilm,
20    microfiche, or any type of machine-sensible data
21    compilation.
22        (19) Regulations. The term "regulations" includes
23    rules promulgated and forms prescribed by the Department.
24        (20) Resident. The term "resident" means:
25            (A) an individual (i) who is in this State for
26        other than a temporary or transitory purpose during the

 

 

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1        taxable year; or (ii) who is domiciled in this State
2        but is absent from the State for a temporary or
3        transitory purpose during the taxable year;
4            (B) The estate of a decedent who at his or her
5        death was domiciled in this State;
6            (C) A trust created by a will of a decedent who at
7        his death was domiciled in this State; and
8            (D) An irrevocable trust, the grantor of which was
9        domiciled in this State at the time such trust became
10        irrevocable. For purpose of this subparagraph, a trust
11        shall be considered irrevocable to the extent that the
12        grantor is not treated as the owner thereof under
13        Sections 671 through 678 of the Internal Revenue Code.
14        (21) Sales. The term "sales" means all gross receipts
15    of the taxpayer not allocated under Sections 301, 302 and
16    303.
17        (22) State. The term "state" when applied to a
18    jurisdiction other than this State means any state of the
19    United States, the District of Columbia, the Commonwealth
20    of Puerto Rico, any Territory or Possession of the United
21    States, and any foreign country, or any political
22    subdivision of any of the foregoing. For purposes of the
23    foreign tax credit under Section 601, the term "state"
24    means any state of the United States, the District of
25    Columbia, the Commonwealth of Puerto Rico, and any
26    territory or possession of the United States, or any

 

 

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1    political subdivision of any of the foregoing, effective
2    for tax years ending on or after December 31, 1989.
3        (23) Taxable year. The term "taxable year" means the
4    calendar year, or the fiscal year ending during such
5    calendar year, upon the basis of which the base income is
6    computed under this Act. "Taxable year" means, in the case
7    of a return made for a fractional part of a year under the
8    provisions of this Act, the period for which such return is
9    made.
10        (24) Taxpayer. The term "taxpayer" means any person
11    subject to the tax imposed by this Act.
12        (25) International banking facility. The term
13    international banking facility shall have the same meaning
14    as is set forth in the Illinois Banking Act or as is set
15    forth in the laws of the United States or regulations of
16    the Board of Governors of the Federal Reserve System.
17        (26) Income Tax Return Preparer.
18            (A) The term "income tax return preparer" means any
19        person who prepares for compensation, or who employs
20        one or more persons to prepare for compensation, any
21        return of tax imposed by this Act or any claim for
22        refund of tax imposed by this Act. The preparation of a
23        substantial portion of a return or claim for refund
24        shall be treated as the preparation of that return or
25        claim for refund.
26            (B) A person is not an income tax return preparer

 

 

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1        if all he or she does is
2                (i) furnish typing, reproducing, or other
3            mechanical assistance;
4                (ii) prepare returns or claims for refunds for
5            the employer by whom he or she is regularly and
6            continuously employed;
7                (iii) prepare as a fiduciary returns or claims
8            for refunds for any person; or
9                (iv) prepare claims for refunds for a taxpayer
10            in response to any notice of deficiency issued to
11            that taxpayer or in response to any waiver of
12            restriction after the commencement of an audit of
13            that taxpayer or of another taxpayer if a
14            determination in the audit of the other taxpayer
15            directly or indirectly affects the tax liability
16            of the taxpayer whose claims he or she is
17            preparing.
18        (27) Unitary business group.
19            (A) The term "unitary business group" means a group
20        of persons related through common ownership whose
21        business activities are integrated with, dependent
22        upon and contribute to each other. The group will not
23        include those members whose business activity outside
24        the United States is 80% or more of any such member's
25        total business activity; for purposes of this
26        paragraph and clause (a)(3)(B)(ii) of Section 304,

 

 

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1        business activity within the United States shall be
2        measured by means of the factors ordinarily applicable
3        under subsections (a), (b), (c), (d), or (h) of Section
4        304 except that, in the case of members ordinarily
5        required to apportion business income by means of the 3
6        factor formula of property, payroll and sales
7        specified in subsection (a) of Section 304, including
8        the formula as weighted in subsection (h) of Section
9        304, such members shall not use the sales factor in the
10        computation and the results of the property and payroll
11        factor computations of subsection (a) of Section 304
12        shall be divided by 2 (by one if either the property or
13        payroll factor has a denominator of zero). The
14        computation required by the preceding sentence shall,
15        in each case, involve the division of the member's
16        property, payroll, or revenue miles in the United
17        States, insurance premiums on property or risk in the
18        United States, or financial organization business
19        income from sources within the United States, as the
20        case may be, by the respective worldwide figures for
21        such items. Common ownership in the case of
22        corporations is the direct or indirect control or
23        ownership of more than 50% of the outstanding voting
24        stock of the persons carrying on unitary business
25        activity. Unitary business activity can ordinarily be
26        illustrated where the activities of the members are:

 

 

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1        (1) in the same general line (such as manufacturing,
2        wholesaling, retailing of tangible personal property,
3        insurance, transportation or finance); or (2) are
4        steps in a vertically structured enterprise or process
5        (such as the steps involved in the production of
6        natural resources, which might include exploration,
7        mining, refining, and marketing); and, in either
8        instance, the members are functionally integrated
9        through the exercise of strong centralized management
10        (where, for example, authority over such matters as
11        purchasing, financing, tax compliance, product line,
12        personnel, marketing and capital investment is not
13        left to each member).
14            (B) In no event, for taxable years ending prior to
15        December 31, 2017, shall any unitary business group
16        include members which are ordinarily required to
17        apportion business income under different subsections
18        of Section 304 except that for tax years ending on or
19        after December 31, 1987 this prohibition shall not
20        apply to a holding company that would otherwise be a
21        member of a unitary business group with taxpayers that
22        apportion business income under any of subsections
23        (b), (c), (c-1), or (d) of Section 304. If a unitary
24        business group would, but for the preceding sentence,
25        include members that are ordinarily required to
26        apportion business income under different subsections

 

 

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1        of Section 304, then for each subsection of Section 304
2        for which there are two or more members, there shall be
3        a separate unitary business group composed of such
4        members. For purposes of the preceding two sentences, a
5        member is "ordinarily required to apportion business
6        income" under a particular subsection of Section 304 if
7        it would be required to use the apportionment method
8        prescribed by such subsection except for the fact that
9        it derives business income solely from Illinois. As
10        used in this paragraph, for taxable years ending before
11        December 31, 2017, the phrase "United States" means
12        only the 50 states and the District of Columbia, but
13        does not include any territory or possession of the
14        United States or any area over which the United States
15        has asserted jurisdiction or claimed exclusive rights
16        with respect to the exploration for or exploitation of
17        natural resources. For taxable years ending on or after
18        December 31, 2017, the phrase "United States", as used
19        in this paragraph, means only the 50 states, the
20        District of Columbia, and any area over which the
21        United States has asserted jurisdiction or claimed
22        exclusive rights with respect to the exploration for or
23        exploitation of natural resources, but does not
24        include any territory or possession of the United
25        States.
26            (C) Holding companies.

 

 

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1                (i) For purposes of this subparagraph, a
2            "holding company" is a corporation (other than a
3            corporation that is a financial organization under
4            paragraph (8) of this subsection (a) of Section
5            1501 because it is a bank holding company under the
6            provisions of the Bank Holding Company Act of 1956
7            (12 U.S.C. 1841, et seq.) or because it is owned by
8            a bank or a bank holding company) that owns a
9            controlling interest in one or more other
10            taxpayers ("controlled taxpayers"); that, during
11            the period that includes the taxable year and the 2
12            immediately preceding taxable years or, if the
13            corporation was formed during the current or
14            immediately preceding taxable year, the taxable
15            years in which the corporation has been in
16            existence, derived substantially all its gross
17            income from dividends, interest, rents, royalties,
18            fees or other charges received from controlled
19            taxpayers for the provision of services, and gains
20            on the sale or other disposition of interests in
21            controlled taxpayers or in property leased or
22            licensed to controlled taxpayers or used by the
23            taxpayer in providing services to controlled
24            taxpayers; and that incurs no substantial expenses
25            other than expenses (including interest and other
26            costs of borrowing) incurred in connection with

 

 

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1            the acquisition and holding of interests in
2            controlled taxpayers and in the provision of
3            services to controlled taxpayers or in the leasing
4            or licensing of property to controlled taxpayers.
5                (ii) The income of a holding company which is a
6            member of more than one unitary business group
7            shall be included in each unitary business group of
8            which it is a member on a pro rata basis, by
9            including in each unitary business group that
10            portion of the base income of the holding company
11            that bears the same proportion to the total base
12            income of the holding company as the gross receipts
13            of the unitary business group bears to the combined
14            gross receipts of all unitary business groups (in
15            both cases without regard to the holding company)
16            or on any other reasonable basis, consistently
17            applied.
18                (iii) A holding company shall apportion its
19            business income under the subsection of Section
20            304 used by the other members of its unitary
21            business group. The apportionment factors of a
22            holding company which would be a member of more
23            than one unitary business group shall be included
24            with the apportionment factors of each unitary
25            business group of which it is a member on a pro
26            rata basis using the same method used in clause

 

 

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1            (ii).
2                (iv) The provisions of this subparagraph (C)
3            are intended to clarify existing law.
4            (D) If including the base income and factors of a
5        holding company in more than one unitary business group
6        under subparagraph (C) does not fairly reflect the
7        degree of integration between the holding company and
8        one or more of the unitary business groups, the
9        dependence of the holding company and one or more of
10        the unitary business groups upon each other, or the
11        contributions between the holding company and one or
12        more of the unitary business groups, the holding
13        company may petition the Director, under the
14        procedures provided under Section 304(f), for
15        permission to include all base income and factors of
16        the holding company only with members of a unitary
17        business group apportioning their business income
18        under one subsection of subsections (a), (b), (c), or
19        (d) of Section 304. If the petition is granted, the
20        holding company shall be included in a unitary business
21        group only with persons apportioning their business
22        income under the selected subsection of Section 304
23        until the Director grants a petition of the holding
24        company either to be included in more than one unitary
25        business group under subparagraph (C) or to include its
26        base income and factors only with members of a unitary

 

 

SB2224- 324 -LRB100 13364 AXK 27964 b

1        business group apportioning their business income
2        under a different subsection of Section 304.
3            (E) If the unitary business group members'
4        accounting periods differ, the common parent's
5        accounting period or, if there is no common parent, the
6        accounting period of the member that is expected to
7        have, on a recurring basis, the greatest Illinois
8        income tax liability must be used to determine whether
9        to use the apportionment method provided in subsection
10        (a) or subsection (h) of Section 304. The prohibition
11        against membership in a unitary business group for
12        taxpayers ordinarily required to apportion income
13        under different subsections of Section 304 does not
14        apply to taxpayers required to apportion income under
15        subsection (a) and subsection (h) of Section 304. The
16        provisions of this amendatory Act of 1998 apply to tax
17        years ending on or after December 31, 1998.
18        (28) Subchapter S corporation. The term "Subchapter S
19    corporation" means a corporation for which there is in
20    effect an election under Section 1362 of the Internal
21    Revenue Code, or for which there is a federal election to
22    opt out of the provisions of the Subchapter S Revision Act
23    of 1982 and have applied instead the prior federal
24    Subchapter S rules as in effect on July 1, 1982.
25        (30) Foreign person. The term "foreign person" means
26    any person who is a nonresident alien individual and any

 

 

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1    nonindividual entity, regardless of where created or
2    organized, whose business activity outside the United
3    States is 80% or more of the entity's total business
4    activity.
 
5    (b) Other definitions.
6        (1) Words denoting number, gender, and so forth, when
7    used in this Act, where not otherwise distinctly expressed
8    or manifestly incompatible with the intent thereof:
9            (A) Words importing the singular include and apply
10        to several persons, parties or things;
11            (B) Words importing the plural include the
12        singular; and
13            (C) Words importing the masculine gender include
14        the feminine as well.
15        (2) "Company" or "association" as including successors
16    and assigns. The word "company" or "association", when used
17    in reference to a corporation, shall be deemed to embrace
18    the words "successors and assigns of such company or
19    association", and in like manner as if these last-named
20    words, or words of similar import, were expressed.
21        (3) Other terms. Any term used in any Section of this
22    Act with respect to the application of, or in connection
23    with, the provisions of any other Section of this Act shall
24    have the same meaning as in such other Section.
25(Source: P.A. 99-213, eff. 7-31-15; 10000SB0009ham003.)
 

 

 

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1    Section 25-5. If and only if Senate Bill 9 of the 100th
2General Assembly becomes law in the form in which it was
3amended by House Amendment No. 3, then the Illinois Income Tax
4Act is amended by changing Sections 1102, 1103, and 1105 as
5follows:
 
6    (35 ILCS 5/1102)  (from Ch. 120, par. 11-1102)
7    Sec. 1102. Jeopardy Assessments.
8    (a) Jeopardy assessment and lien.
9        (1) Assessment. If the Department finds that a taxpayer
10    is about to depart from the State, or to conceal himself or
11    his property, or to do any other act tending to prejudice
12    or to render wholly or partly ineffectual proceedings to
13    collect any amount of tax or penalties imposed under this
14    Act unless court proceedings are brought without delay, or
15    if the Department finds that the collection of such amount
16    will be jeopardized by delay, the Department shall give the
17    taxpayer notice of such findings and shall make demand for
18    immediate return and payment of such amount, whereupon such
19    amount shall be deemed assessed and shall become
20    immediately due and payable.
21        (2) Filing of lien. If the taxpayer, within 5 days
22    after such notice (or within such extension of time as the
23    Department may grant), does not comply with such notice or
24    show to the Department that the findings in such notice are

 

 

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1    erroneous, the Department may file a notice of jeopardy
2    assessment lien in the State Tax Lien Registry office of
3    the recorder of the county in which any property of the
4    taxpayer may be located and shall notify the taxpayer of
5    such filing. Such jeopardy assessment lien shall have the
6    same scope and effect as a statutory lien under this Act.
7    The taxpayer is liable for any administrative fee imposed
8    by the Department by rule in connection with the State Tax
9    Lien Registry the filing fee incurred by the Department for
10    filing the lien and the filing fee incurred by the
11    Department to file the release of that lien. The filing
12    fees shall be paid to the Department in addition to payment
13    of the tax, penalty, and interest included in the amount of
14    the lien.
15    (b) Termination of taxable year. In the case of a tax for a
16current taxable year, the Director shall declare the taxable
17period of the taxpayer immediately terminated and his notice
18and demand for a return and immediate payment of the tax shall
19relate to the period declared terminated, including therein
20income accrued and deductions incurred up to the date of
21termination if not otherwise properly includible or deductible
22in respect of such taxable year.
23    (c) Protest. If the taxpayer believes that he does not owe
24some or all of the amount for which the jeopardy assessment
25lien against him has been filed, or that no jeopardy to the
26revenue in fact exists, he may protest within 20 days after

 

 

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1being notified by the Department of the filing of such jeopardy
2assessment lien and request a hearing, whereupon the Department
3shall hold a hearing in conformity with the provisions of
4section 908 and, pursuant thereto, shall notify the taxpayer of
5its decision as to whether or not such jeopardy assessment lien
6will be released.
7(Source: P.A. 92-826, eff. 1-1-03; 10000SB0009ham003.)
 
8    (35 ILCS 5/1103)  (from Ch. 120, par. 11-1103)
9    Sec. 1103. Filing and Priority of Liens.
10    (a) Filing in the State Tax Lien Registry with Recorder.
11Nothing in this Article shall be construed to give the
12Department a preference over the rights of any bona fide
13purchaser, holder of a security interest, mechanics lienor,
14mortgagee, or judgment lien creditor arising prior to the
15filing of a regular notice of lien or a notice of jeopardy
16assessment lien in the State Tax Lien Registry office of the
17recorder in the county in which the property subject to the
18lien is located. For purposes of this Section section, the term
19"bona fide," shall not include any mortgage of real or personal
20property or any other credit transaction that results in the
21mortgagee or the holder of the security acting as trustee for
22unsecured creditors of the taxpayer mentioned in the notice of
23lien who executed such chattel or real property mortgage or the
24document evidencing such credit transaction. Such lien shall be
25inferior to the lien of general taxes, special assessments and

 

 

SB2224- 329 -LRB100 13364 AXK 27964 b

1special taxes heretofore or hereafter levied by any political
2subdivision of this State.
3    (b) Filing in the State Tax Lien Registry with Registrar.
4In case title to land to be affected by the notice of lien or
5notice of jeopardy assessment lien is registered under the
6provisions of "An Act concerning land titles," approved May 1,
71897, as amended, such notice shall also be filed in the State
8Tax Lien Registry office of the Registrar of Titles of the
9county within which the property subject to the lien is
10situated and shall be entered upon the register of titles as a
11memorial of charge upon each folium of the register of titles
12affected by such notice, and the Department shall not have a
13preference over the rights of any bona fide purchaser,
14mortgagee, judgment creditor or other lien holder arising prior
15to the registration of such notice.
16    (c) Index. The Department of Revenue shall maintain a State
17Tax Lien Index of all tax liens filed in the State Tax Lien
18Registry as provided for by the State Tax Lien Registration
19Act. The recorder of each county shall procure a file labeled
20"State Tax Lien Notices" and an index book labeled "State Tax
21Lien Index." When notice of any lien or jeopardy assessment
22lien is presented to him for filing, he shall file it in
23numerical order in the file and shall enter it alphabetically
24in the index. The entry shall show the name and last known
25address of the person named in the notice, the serial number of
26the notice, the date and hour of filing, whether it is a

 

 

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1regular lien or a jeopardy assessment lien, and the amount of
2tax and penalty due and unpaid, plus the amount of interest due
3at the time when the notice of lien or jeopardy assessment is
4filed.
5    (d) (Blank). No recorder or registrar of titles of any
6county shall require that the Department pay any costs or fees
7in connection with recordation of any notice or other document
8filed by the Department under this Act at the time such notice
9or other document is presented for recordation. The recorder or
10registrar of each county, in order to receive payment for fees
11or costs incurred by the Department, shall present the
12Department with monthly statements indicating the amount of
13fees and costs incurred by the Department and for which no
14payment has been received. This amendatory Act of 1987 applies
15to all liens heretofore or hereafter filed.
16    (e) The taxpayer is liable for any the filing fees imposed
17fee incurred by the Department for filing the lien in the State
18Tax Lien Registry and any the filing fees imposed fee incurred
19by the Department for to file the release of that lien. The
20filing fees shall be paid to the Department in addition to
21payment of the tax, penalty, and interest included in the
22amount of the lien.
23(Source: P.A. 92-826, eff. 1-1-03; 10000SB0009ham003.)
 
24    (35 ILCS 5/1105)  (from Ch. 120, par. 11-1105)
25    Sec. 1105. Release of Liens.

 

 

SB2224- 331 -LRB100 13364 AXK 27964 b

1    (a) In general. Upon payment by the taxpayer to the
2Department in cash or by guaranteed remittance of an amount
3representing the filing fees and charges for the lien and the
4filing fees and charges for the release of that lien, the
5Department shall release all or any portion of the property
6subject to any lien provided for in this Act and file that
7complete or partial release of lien in the State Tax Lien
8Registry with the recorder of the county where that lien was
9filed if it determines that the release will not endanger or
10jeopardize the collection of the amount secured thereby.
11    (b) Judicial determination. If on judicial review the final
12judgment of the court is that the taxpayer does not owe some or
13all of the amount secured by the lien against him, or that no
14jeopardy to the revenue exists, the Department shall release
15its lien to the extent of such finding of nonliability, or to
16the extent of such finding of no jeopardy to the revenue. The
17taxpayer shall, however, be liable for the filing fee imposed
18paid by the Department to file the lien and the filing fee
19imposed to release required to file a release of the lien. The
20filing fees shall be paid to the Department.
21    (c) Payment. The Department shall also release its jeopardy
22assessment lien against the taxpayer whenever the tax and
23penalty covered by such lien, plus any interest which may be
24due and an amount representing the filing fee to file the lien
25and the filing fee imposed to release required to file a
26release of that lien, are paid by the taxpayer to the

 

 

SB2224- 332 -LRB100 13364 AXK 27964 b

1Department in cash or by guaranteed remittance.
2    (d) Certificate of release. The Department shall issue a
3certificate of complete or partial release of the lien upon
4payment by the taxpayer to the Department in cash or by
5guaranteed remittance of an amount representing the filing fee
6imposed paid by the Department to file the lien and the filing
7fee imposed to release required to file the release of that
8lien:
9        (1) to the extent that the fair market value of any
10    property subject to the lien exceeds the amount of the lien
11    plus the amount of all prior liens upon such property;
12        (2) to the extent that such lien shall become
13    unenforceable;
14        (3) to the extent that the amount of such lien is paid
15    by the person whose property is subject to such lien,
16    together with any interest and penalty which may become due
17    under this Act between the date when the notice of lien is
18    filed and the date when the amount of such lien is paid;
19        (4) to the extent that there is furnished to the
20    Department on a form to be approved and with a surety or
21    sureties satisfactory to the Department a bond that is
22    conditioned upon the payment of the amount of such lien,
23    together with any interest which may become due under this
24    Act after the notice of lien is filed, but before the
25    amount thereof is fully paid;
26        (5) to the extent and under the circumstances specified

 

 

SB2224- 333 -LRB100 13364 AXK 27964 b

1    in this Section.
2    A certificate of complete or partial release of any lien
3shall be held conclusive that the lien upon the property
4covered by the certificate is extinguished to the extent
5indicated by such certificate.
6    Such release of lien shall be issued to the person, or his
7agent, against whom the lien was obtained and shall contain in
8legible letters a statement as follows:
9    FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL
10    BE FILED IN THE STATE TAX LIEN REGISTRY WITH THE RECORDER 
11OR THE REGISTRAR
12    OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.
13    (e) Filing. When a certificate of complete or partial
14release of lien issued by the Department is filed in the State
15Tax Lien Registry, the Department presented for filing in the
16office of the recorder or Registrar of Titles where a notice of
17lien or notice of jeopardy assessment lien was filed:
18        (1) the recorder, in the case of nonregistered
19    property, shall permanently attach the certificate of
20    release to the notice of lien or notice of jeopardy
21    assessment lien and shall enter the certificate of release
22    and the date in the "State Tax Lien Index" on the line
23    where the notice of lien or notice of jeopardy assessment
24    lien is entered. ; and
25        (2) in the case of registered property, the Registrar
26    of Titles shall file and enter upon each folium of the

 

 

SB2224- 334 -LRB100 13364 AXK 27964 b

1    register of titles affected thereby a memorial of the
2    certificate of release which memorial when so entered shall
3    act as a release pro tanto of any memorial of such notice
4    of lien or notice of jeopardy assessment lien previously
5    filed and registered.
6(Source: P.A. 92-826, eff. 1-1-03; 10000SB0009ham003.)
 
7    Section 25-10. If and only if Senate Bill 9 of the 100th
8General Assembly becomes law in the form in which it was
9amended by House Amendment No. 3, then the Retailers'
10Occupation Tax Act is amended by changing Sections 5a, 5b, and
115c as follows:
 
12    (35 ILCS 120/5a)  (from Ch. 120, par. 444a)
13    Sec. 5a. The Department shall have a lien for the tax
14herein imposed or any portion thereof, or for any penalty
15provided for in this Act, or for any amount of interest which
16may be due as provided for in Section 5 of this Act, upon all
17the real and personal property of any person to whom a final
18assessment or revised final assessment has been issued as
19provided in this Act, or whenever a return is filed without
20payment of the tax or penalty shown therein to be due,
21including all such property of such persons acquired after
22receipt of such assessment or filing of such return. The
23taxpayer is liable for the filing fee imposed incurred by the
24Department for filing the lien and the filing fee imposed

 

 

SB2224- 335 -LRB100 13364 AXK 27964 b

1incurred by the Department to file the release the of that
2lien. The filing fees shall be paid to the Department in
3addition to payment of the tax, penalty, and interest included
4in the amount of the lien.
5    However, where the lien arises because of the issuance of a
6final assessment or revised final assessment by the Department,
7such lien shall not attach and the notice hereinafter referred
8to in this Section shall not be filed until all proceedings in
9court for review of such final assessment or revised final
10assessment have terminated or the time for the taking thereof
11has expired without such proceedings being instituted.
12    Upon the granting of a rehearing or departmental review
13pursuant to Section 4 or Section 5 of this Act after a lien has
14attached, such lien shall remain in full force except to the
15extent to which the final assessment may be reduced by a
16revised final assessment following such rehearing or review.
17    The lien created by the issuance of a final assessment
18shall terminate unless a notice of lien is filed, as provided
19in Section 5b hereof, within 3 years from the date all
20proceedings in court for the review of such final assessment
21have terminated or the time for the taking thereof has expired
22without such proceedings being instituted, or (in the case of a
23revised final assessment issued pursuant to a rehearing or
24departmental review) within 3 years from the date all
25proceedings in court for the review of such revised final
26assessment have terminated or the time for the taking thereof

 

 

SB2224- 336 -LRB100 13364 AXK 27964 b

1has expired without such proceedings being instituted; and
2where the lien results from the filing of a return without
3payment of the tax or penalty shown therein to be due, the lien
4shall terminate unless a notice of lien is filed, as provided
5in Section 5b hereof, within 3 years from the date when such
6return is filed with the Department: Provided that the time
7limitation period on the Department's right to file a notice of
8lien shall not run (1) during any period of time in which the
9order of any court has the effect of enjoining or restraining
10the Department from filing such notice of lien, or (2) during
11the term of a repayment plan that taxpayer has entered into
12with the Department, as long as taxpayer remains in compliance
13with the terms of the repayment plan.
14    If the Department finds that a taxpayer is about to depart
15from the State, or to conceal himself or his property, or to do
16any other act tending to prejudice or to render wholly or
17partly ineffectual proceedings to collect such tax unless such
18proceedings are brought without delay, or if the Department
19finds that the collection of the amount due from any taxpayer
20will be jeopardized by delay, the Department shall give the
21taxpayer notice of such findings and shall make demand for
22immediate return and payment of such tax, whereupon such tax
23shall become immediately due and payable. If the taxpayer,
24within 5 days after such notice (or within such extension of
25time as the Department may grant), does not comply with such
26notice or show to the Department that the findings in such

 

 

SB2224- 337 -LRB100 13364 AXK 27964 b

1notice are erroneous, the Department may file a notice of
2jeopardy assessment lien in the State Tax Lien Registry office
3of the recorder of the county in which any property of the
4taxpayer may be located and shall notify the taxpayer of such
5filing. Such jeopardy assessment lien shall have the same scope
6and effect as the statutory lien hereinbefore provided for in
7this Section.
8    If the taxpayer believes that he does not owe some or all
9of the tax for which the jeopardy assessment lien against him
10has been filed, or that no jeopardy to the revenue in fact
11exists, he may protest within 20 days after being notified by
12the Department of the filing of such jeopardy assessment lien
13and request a hearing, whereupon the Department shall hold a
14hearing in conformity with the provisions of this Act and,
15pursuant thereto, shall notify the taxpayer of its findings as
16to whether or not such jeopardy assessment lien will be
17released. If not, and if the taxpayer is aggrieved by this
18decision, he may file an action for judicial review of such
19final determination of the Department in accordance with
20Section 12 of this Act and the Administrative Review Law.
21    On and after July 1, 2013, protests concerning matters that
22are subject to the jurisdiction of the Illinois Independent Tax
23Tribunal shall be filed with the Tribunal, and hearings on
24those matters shall be held before the Tribunal in accordance
25with the Illinois Independent Tax Tribunal Act of 2012. The
26Tribunal shall notify the taxpayer of its findings as to

 

 

SB2224- 338 -LRB100 13364 AXK 27964 b

1whether or not such jeopardy assessment lien will be released.
2If not, and if the taxpayer is aggrieved by this decision, he
3may file an action for judicial review of such final
4determination of the Department in accordance with Section 12
5of this Act and the Illinois Independent Tax Tribunal Act of
62012.
7    With respect to protests filed with the Department prior to
8July 1, 2013 that would otherwise be subject to the
9jurisdiction of the Illinois Independent Tax Tribunal, the
10taxpayer may elect to be subject to the provisions of the
11Illinois Independent Tax Tribunal Act of 2012 at any time on or
12after July 1, 2013, but not later than 30 days after the date
13on which the protest was filed. If made, the election shall be
14irrevocable.
15    If, pursuant to such hearing (or after an independent
16determination of the facts by the Department without a
17hearing), the Department or the Tribunal determines that some
18or all of the tax covered by the jeopardy assessment lien is
19not owed by the taxpayer, or that no jeopardy to the revenue
20exists, or if on judicial review the final judgment of the
21court is that the taxpayer does not owe some or all of the tax
22covered by the jeopardy assessment lien against him, or that no
23jeopardy to the revenue exists, the Department shall release
24its jeopardy assessment lien to the extent of such finding of
25nonliability for the tax, or to the extent of such finding of
26no jeopardy to the revenue.

 

 

SB2224- 339 -LRB100 13364 AXK 27964 b

1    The Department shall also release its jeopardy assessment
2lien against the taxpayer whenever the tax and penalty covered
3by such lien, plus any interest which may be due, are paid and
4the taxpayer has paid the Department in cash or by guaranteed
5remittance an amount representing the filing fee for the lien
6and the filing fee for the release of that lien. The Department
7shall file that release of lien in the State Tax Lien Registry
8with the recorder of the county where that lien was filed.
9    Nothing in this Section shall be construed to give the
10Department a preference over the rights of any bona fide
11purchaser, holder of a security interest, mechanics
12lienholder, mortgagee, or judgment lien creditor arising prior
13to the filing of a regular notice of lien or a notice of
14jeopardy assessment lien in the State Tax Lien Registry office
15of the recorder in the county in which the property subject to
16the lien is located: Provided, however, that the word "bona
17fide", as used in this Section shall not include any mortgage
18of real or personal property or any other credit transaction
19that results in the mortgagee or the holder of the security
20acting as trustee for unsecured creditors of the taxpayer
21mentioned in the notice of lien who executed such chattel or
22real property mortgage or the document evidencing such credit
23transaction. Such lien shall be inferior to the lien of general
24taxes, special assessments and special taxes heretofore or
25hereafter levied by any political subdivision of this State.
26    In case title to land to be affected by the notice of lien

 

 

SB2224- 340 -LRB100 13364 AXK 27964 b

1or notice of jeopardy assessment lien is registered under the
2provisions of "An Act concerning land titles", approved May 1,
31897, as amended, such notice shall also be filed in the State
4Tax Lien Registry office of the Registrar of Titles of the
5county within which the property subject to the lien is
6situated and shall be entered upon the register of titles as a
7memorial or charge upon each folium of the register of titles
8affected by such notice, and the Department shall not have a
9preference over the rights of any bona fide purchaser,
10mortgagee, judgment creditor or other lien holder arising prior
11to the registration of such notice: Provided, however, that the
12word "bona fide" shall not include any mortgage of real or
13personal property or any other credit transaction that results
14in the mortgagee or the holder of the security acting as
15trustee for unsecured creditors of the taxpayer mentioned in
16the notice of lien who executed such chattel or real property
17mortgage or the document evidencing such credit transaction.
18    Such regular lien or jeopardy assessment lien shall not be
19effective against any purchaser with respect to any item in a
20retailer's stock in trade purchased from the retailer in the
21usual course of such retailer's business.
22(Source: P.A. 97-1129, eff. 8-28-12; 98-446, eff. 8-16-13;
2310000SB0009ham003.)
 
24    (35 ILCS 120/5b)  (from Ch. 120, par. 444b)
25    Sec. 5b. State Tax Lien Index. The Department of Revenue

 

 

SB2224- 341 -LRB100 13364 AXK 27964 b

1shall maintain a State Tax Lien Index of all tax liens filed in
2the State Tax Lien Registry as provided for by the State Tax
3Lien Registration Act. The recorder of each county shall
4procure a file labeled "State Tax Lien Notices" and an index
5book labeled "State Tax Lien Index". When notice of any lien or
6jeopardy assessment lien is presented to him for filing, he
7shall file it in numerical order in the file and shall enter it
8alphabetically in the index. The entry shall show the name and
9last known business address of the person named in the notice,
10the serial number of the notice, the date and hour of filing,
11whether it is a regular lien or a jeopardy assessment lien, and
12the amount of tax and penalty due and unpaid, plus the amount
13of interest due under Section 5 of this Act at the time when
14the notice of lien or jeopardy assessment lien is filed.
15    No recorder or registrar of titles of any county shall
16require that the Department pay any costs or fees in connection
17with recordation of any notice or other document filed by the
18Department under this Act at the time such notice or other
19document is presented for recordation. The recorder or
20registrar of each county, in order to receive payment for fees
21or costs incurred by the Department, shall present the
22Department with monthly statements indicating the amount of
23fees and costs incurred by the Department and for which no
24payment has been received.
25    A notice of lien may be filed after the issuance of a
26revised final assessment pursuant to a rehearing or

 

 

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1departmental review under Section 4 or Section 5 of this Act.
2    When the lien obtained pursuant to this Act has been
3satisfied and the taxpayer has paid the Department in cash or
4by guaranteed remittance an amount representing the filing fee
5for the lien and the filing fee for the release of that lien,
6the Department shall issue a release of lien and file that
7release of lien in the State Tax Lien Registry with the
8recorder of the county where that lien was filed. The release
9of lien shall contain in legible letters a statement as
10follows:
11    FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL
12    BE FILED IN THE STATE TAX LIEN REGISTRY WITH THE RECORDER 
13OR THE REGISTRAR
14    OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.
15    When a certificate of complete or partial release of lien
16issued by the Department is filed in the State Tax Lien
17Registry, the Department of Revenue presented for filing in the
18office of the recorder or Registrar of Titles where a notice of
19lien or notice of jeopardy assessment lien was filed, the
20recorder, in the case of nonregistered property, shall
21permanently attach the certificate of release to the notice of
22lien or notice of jeopardy assessment lien and shall enter the
23certificate of release and the date in the "State Tax Lien
24Index" on the line where the notice of lien or notice of
25jeopardy assessment lien is entered.
26    In the case of registered property, the Registrar of Titles

 

 

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1shall file and enter upon each folium of the register of titles
2affected thereby a memorial of the certificate of release which
3memorial when so entered shall act as a release pro tanto of
4any memorial of such notice of lien or notice of jeopardy
5assessment lien previously filed and registered.
6(Source: P.A. 92-826, eff. 1-1-03; 10000SB0009ham003.)
 
7    (35 ILCS 120/5c)  (from Ch. 120, par. 444c)
8    Sec. 5c. Upon payment by the taxpayer to the Department in
9cash or by guaranteed remittance of an amount representing the
10filing fee for the lien and the filing fee for the release of
11that lien, the Department shall issue a certificate of complete
12or partial release of the lien and file that complete or
13partial release of lien in the State Tax Lien Registry with the
14recorder of the county where the lien was filed:
15        (a) to the extent that the fair market value of any
16    property subject to the lien exceeds the amount of the lien
17    plus the amount of all prior liens upon such property;
18        (b) to the extent that such lien shall become
19    unenforceable;
20        (c) to the extent that the amount of such lien is paid
21    by the retailer whose property is subject to such lien,
22    together with any interest which may become due under
23    Section 5 of this Act between the date when the notice of
24    lien is filed and the date when the amount of such lien is
25    paid;

 

 

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1        (d) to the extent that there is furnished to the
2    Department on a form to be approved and with a surety or
3    sureties satisfactory to the Department a bond that is
4    conditioned upon the payment of the amount of such lien,
5    together with any interest which may become due under
6    Section 5 of this Act after the notice of lien is filed,
7    but before the amount thereof is fully paid;
8        (e) to the extent and under the circumstances specified
9    in Section 5a of this Act in the case of jeopardy
10    assessment liens;
11        (f) to the extent to which an assessment is reduced
12    pursuant to a rehearing or departmental review under
13    Section 4 or Section 5 of this Act.
14    A certificate of complete or partial release of any lien
15shall be held conclusive that the lien upon the property
16covered by the certificate is extinguished to the extent
17indicated by such certificate.
18(Source: P.A. 92-826, eff. 1-1-03; 10000SB0009ham003.)
 
19    Section 25-15. If and only if Senate Bill 9 of the 100th
20General Assembly becomes law in the form in which it was
21amended by House Amendment No. 3, then the Cannabis and
22Controlled Substances Tax Act is amended by changing Sections
2316, 17, and 19 as follows:
 
24    (35 ILCS 520/16)  (from Ch. 120, par. 2166)

 

 

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1    Sec. 16. All assessments are Jeopardy Assessments - lien.
2    (a) Assessment. An assessment for a dealer not possessing
3valid stamps or other official indicia showing that the tax has
4been paid shall be considered a jeopardy assessment or
5collection, as provided by Section 1102 of the Illinois Income
6Tax Act. The Department shall determine and assess a tax and
7applicable penalties and interest according to the best
8judgment and information available to the Department, which
9amount so fixed by the Department shall be prima facie correct
10and shall be prima facie evidence of the correctness of the
11amount of tax due, as shown in such determination. When,
12according to the best judgment and information available to the
13Department with regard to all real and personal property and
14rights to property of the dealer, there is no reasonable
15expectation of collection of the amount of tax and penalty to
16be assessed, the Department may issue an assessment under this
17Section for the amount of tax without penalty.
18    (b) Filing of Lien. Upon issuance of a jeopardy assessment
19as provided by subsection (a) of this Section, the Department
20may file a notice of jeopardy assessment lien in the State Tax
21Lien Registry office of the recorder of the county in which any
22property of the taxpayer may be located and shall notify the
23taxpayer of such filing.
24    (c) Protest. If the taxpayer believes that he does not owe
25some or all of the amount for which the jeopardy assessment
26lien against him has been filed, he may protest within 20 days

 

 

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1after being notified by the Department of the filing of such
2jeopardy assessment lien and request a hearing, whereupon the
3Department shall hold a hearing in conformity with the
4provisions of Section 908 of the Illinois Income Tax Act and,
5pursuant thereto, shall notify the taxpayer of its decision as
6to whether or not such jeopardy assessment lien will be
7released.
8    After the expiration of the period within which the person
9assessed may file an action for judicial review without such
10action being filed, a certified copy of the final assessment or
11revised final assessment of the Department may be filed with
12the Circuit Court of the county in which the dealer resides, or
13of Cook County in the case of a dealer who does not reside in
14this State, or in the county where the violation of this Act
15took place. The certified copy of the final assessment or
16revised final assessment shall be accompanied by a
17certification which recites facts that are sufficient to show
18that the Department complied with the jurisdictional
19requirements of the Act in arriving at its final assessment or
20its revised final assessment and that the dealer had this
21opportunity for an administrative hearing and for judicial
22review, whether he availed himself or herself of either or both
23of these opportunities or not. If the court is satisfied that
24the Department complied with the jurisdictional requirements
25of the Act in arriving at its final assessment or its revised
26final assessment and that the taxpayer had his opportunity for

 

 

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1an administrative hearing and for judicial review, whether he
2availed himself of either or both of these opportunities or
3not, the court shall render judgment in favor of the Department
4and against the taxpayer for the amount shown to be due by the
5final assessment or the revised final assessment, plus any
6interest which may be due, and such judgment shall be entered
7in the judgment docket of the court. Such judgment shall bear
8the same rate of interest and shall have the same effect as
9other judgments. The judgment may be enforced, and all laws
10applicable to sales for the enforcement of a judgment shall be
11applicable to sales made under such judgments. The Department
12shall file the certified copy of its assessment, as herein
13provided, with the Circuit Court within 2 years after such
14assessment becomes final except when the taxpayer consents in
15writing to an extension of such filing period, and except that
16the time limitation period on the Department's right to file
17the certified copy of its assessment with the Circuit Court
18shall not run during any period of time in which the order of
19any court has the effect of enjoining or restraining the
20Department from filing such certified copy of its assessment
21with the Circuit Court.
22    If, when the cause of action for a proceeding in court
23accrues against a person, he or she is out of the State, the
24action may be commenced within the times herein limited, after
25his or her coming into or returning to the State; and if, after
26the cause of action accrues, he or she departs from and remains

 

 

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1out of the State, the time of his or her absence from the
2State, the time of his or her absence is no part of the time
3limited for the commencement of the action; but the foregoing
4provisions concerning absence from the State shall not apply to
5any case in which, at the time the cause of action accrues, the
6party against whom the cause of action accrues is not a
7resident of this State. The time within which a court action is
8to be commenced by the Department hereunder shall not run from
9the date the taxpayer files a petition in bankruptcy under the
10Federal Bankruptcy Act until 30 days after notice of
11termination or expiration of the automatic stay imposed by the
12Federal Bankruptcy Act.
13    No claim shall be filed against the estate of any deceased
14person or any person under legal disability for any tax or
15penalty or part of either, or interest, except in the manner
16prescribed and within the time limited by the Probate Act of
171975, as amended.
18    The collection of tax or penalty or interest by any means
19provided for herein shall not be a bar to any prosecution under
20this Act.
21    In addition to any penalty provided for in this Act, any
22amount of tax which is not paid when due shall bear interest at
23the rate determined in accordance with the Uniform Penalty and
24Interest Act, per month or fraction thereof from the date when
25such tax becomes past due until such tax is paid or a judgment
26therefor is obtained by the Department. If the time for making

 

 

SB2224- 349 -LRB100 13364 AXK 27964 b

1or completing an audit of a taxpayer's books and records is
2extended with the taxpayer's consent, at the request of and for
3the convenience of the Department, beyond the date on which the
4statute of limitations upon the issuance of a notice of tax
5liability by the Department otherwise run, no interest shall
6accrue during the period of such extension. Interest shall be
7collected in the same manner and as part of the tax.
8    If the Department determines that an amount of tax or
9penalty or interest was incorrectly assessed, whether as the
10result of a mistake of fact or an error of law, the Department
11shall waive the amount of tax or penalty or interest that
12accrued due to the incorrect assessment.
13(Source: P.A. 97-1129, eff. 8-28-12; 10000SB0009ham003.)
 
14    (35 ILCS 520/17)  (from Ch. 120, par. 2167)
15    Sec. 17. Filing and Priority of Liens. (a) Filing in the
16State Tax Lien Registry with Recorder. Nothing in this Act
17shall be construed to give the Department a preference over the
18rights of any bona fide purchaser, holder of a security
19interest, mechanics lienholder, mortgagee, or judgment lien
20creditor arising prior to the filing of a regular notice of
21lien or a notice of jeopardy assessment lien in the State Tax
22Lien Registry office of the recorder in the county in which the
23property subject to the lien is located. For purposes of this
24section, the term "bona fide," shall not include any mortgage
25of real or personal property or any other credit transaction

 

 

SB2224- 350 -LRB100 13364 AXK 27964 b

1that results in the mortgagee or the holder of the security
2acting as trustee for unsecured creditors of the taxpayer
3mentioned in the notice of lien who executed such chattel or
4real property mortgage or the document evidencing such credit
5transaction. Such lien shall be inferior to the lien of general
6taxes, special assessments and special taxes heretofore or
7hereafter levied by any political subdivision of this State.
8    (b) Filing with Registrar. In case title to land to be
9affected by the notice of lien or notice of jeopardy assessment
10lien is registered under the provisions of "An Act concerning
11land titles," approved May 1, 1897, as amended, such notice
12shall also be filed in the State Tax Lien Registry office of
13the Registrar of Titles of the county within which the property
14subject to the lien is situated and shall be entered upon the
15register of titles as a memorial of charge upon each folium of
16the register of titles affected by such notice, and the
17Department shall not have a preference over the rights of any
18bona fide purchaser, mortgagee, judgment creditor or other lien
19holder arising prior to the registration of such notice.
20    (c) (Blank). No recorder or registrar of titles of any
21county shall require that the Department pay any costs or fees
22in connection with recordation of any notice or other document
23filed by the Department under this Act at the time such notice
24or other document is presented for recordation.
25(Source: P.A. 86-905; 10000SB0009ham003.)
 

 

 

SB2224- 351 -LRB100 13364 AXK 27964 b

1    (35 ILCS 520/19)  (from Ch. 120, par. 2169)
2    Sec. 19. Release of Liens.
3    (a) In general. The Department shall release all or any
4portion of the property subject to any lien provided for in
5this Act if it determines that the release will not endanger or
6jeopardize the collection of the amount secured thereby. The
7Department shall release its lien on property which is the
8subject of forfeiture proceedings under the Narcotics Profit
9Forfeiture Act, the Criminal Code of 2012, or the Drug Asset
10Forfeiture Procedure Act until all forfeiture proceedings are
11concluded. Property forfeited shall not be subject to a lien
12under this Act.
13    (b) Judicial determination. If on judicial review the final
14judgment of the court is that the taxpayer does not owe some or
15all of the amount secured by the lien against him, or that no
16jeopardy to the revenue exists, the Department shall release
17its lien to the extent of such finding of nonliability, or to
18the extent of such finding of no jeopardy to the revenue.
19    (c) Payment. The Department shall also release its jeopardy
20assessment lien against the taxpayer whenever the tax and
21penalty covered by such lien, plus any interest which may be
22due, are paid.
23    (d) Certificate of release. The Department shall issue a
24certificate of complete or partial release of the lien:
25        (1) To the extent that the fair market value of any
26    property subject to the lien exceeds the amount of the lien

 

 

SB2224- 352 -LRB100 13364 AXK 27964 b

1    plus the amount of all prior liens upon such property;
2        (2) To the extent that such lien shall become
3    unenforceable;
4        (3) To the extent that the amount of such lien is paid
5    by the person whose property is subject to such lien,
6    together with any interest and penalty which may become due
7    under this Act between the date when the notice of lien is
8    filed and the date when the amount of such lien is paid;
9        (4) To the extent and under the circumstances specified
10    in this Section. A certificate of complete or partial
11    release of any lien shall be held conclusive that the lien
12    upon the property covered by the certificate is
13    extinguished to the extent indicated by such certificate.
14    Such release of lien shall be issued to the person, or his
15agent, against whom the lien was obtained and shall contain in
16legible letters a statement as follows:
17    FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL
18    BE FILED IN THE STATE TAX LIEN REGISTRY WITH THE RECORDER 
19OR THE REGISTRAR
20    OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.
21    (e) Filing. When a certificate of complete or partial
22release of lien issued by the Department is filed in the State
23Tax Lien Registry, the Department presented for filing in the
24office of the recorder or Registrar of Titles where a notice of
25lien or notice of jeopardy assessment lien was filed:
26        (1) The recorder, in the case of nonregistered

 

 

SB2224- 353 -LRB100 13364 AXK 27964 b

1    property, shall permanently attach the certificate of
2    release to the notice of lien or notice of jeopardy
3    assessment lien and shall enter the certificate of release
4    and the date in the "State Tax Lien Index" on the line
5    where the notice of lien or notice of jeopardy assessment
6    lien is entered. ; and
7        (2) In the case of registered property, the Registrar
8    of Titles shall file and enter upon each folium of the
9    register of titles affected thereby a memorial of the
10    certificate of release which memorial when so entered shall
11    act as a release pro tanto of any memorial of such notice
12    of lien or notice of jeopardy assessment lien previously
13    filed and registered.
14(Source: P.A. 97-1150, eff. 1-25-13; 10000SB0009ham003.)
 
15    Section 25-20. If and only if Senate Bill 9 of the 100th
16General Assembly becomes law in the form in which it was
17amended by House Amendment No. 3, then the Illinois Municipal
18Code is amended by changing Section 8-3-15 as follows:
 
19    (65 ILCS 5/8-3-15)  (from Ch. 24, par. 8-3-15)
20    Sec. 8-3-15. The corporate authorities of each
21municipality shall have all powers necessary to enforce the
22collection of any tax imposed and collected by such
23municipality, whether such tax was imposed pursuant to its home
24rule powers or statutory authorization, including but not

 

 

SB2224- 354 -LRB100 13364 AXK 27964 b

1limited to subpoena power and the power to create and enforce
2liens. No such lien shall affect the rights of bona fide
3purchasers, mortgagees, judgment creditors or other
4lienholders who acquire their interests in such property prior
5to the time a notice of such lien is placed on record in the
6office of the recorder or the registrar of titles of the county
7in which the property is located. However, nothing in this
8Section shall permit a municipality to place a lien upon
9property not located or found within its corporate boundaries.
10A municipality creating a lien may provide that the procedures
11for its notice and enforcement shall be the same as that
12provided in the Retailers' Occupation Tax Act, as that Act
13existed prior to the adoption of the State Tax Lien
14Registration Act now or hereafter amended, for State tax liens,
15and any recorder or registrar of titles with whom a notice of
16such lien is filed shall treat such lien as a State tax lien
17for recording purposes.
18(Source: P.A. 86-680; 10000SB0009ham003.)
 
19    Section 25-25. If and only if Senate Bill 9 of the 100th
20General Assembly becomes law in the form in which it was
21amended by House Amendment No. 3, then the Title Insurance Act
22is amended by changing Section 22 as follows:
 
23    (215 ILCS 155/22)  (from Ch. 73, par. 1422)
24    Sec. 22. Tax indemnity; notice. A corporation authorized to

 

 

SB2224- 355 -LRB100 13364 AXK 27964 b

1do business under this Act shall notify the Director of Revenue
2of the State of Illinois, by notice directed to his office in
3the City of Chicago, of each trust account or similar account
4established which relates to title exceptions due to a judgment
5lien or any other lien arising under any tax Act administered
6by the Illinois Department of Revenue, when notice of such lien
7has been filed with the registrar of titles or recorder or in
8the State Tax Lien Registry, as the case may be, in the manner
9prescribed by law. Such notice shall contain the name, address,
10and tax identification number of the debtor, the permanent real
11estate index numbers, if any, and the address and legal
12description of the property, the type of lien claimed by the
13Department and identification of any trust fund or similar
14account held by such corporation or any agent thereof relating
15to such lien. Any trust fund or similar account established by
16such corporation or agent relating to any such lien shall
17include provisions requiring such corporation or agent to apply
18such fund in satisfaction or release of such lien upon written
19demand therefor by the Department of Revenue.
20(Source: P.A. 94-893, eff. 6-20-06; 10000SB0009ham003.)
 
21    Section 30-5. If and only if Senate Bill 9 of the 100th
22General Assembly becomes law in the form in which it was
23amended by House Amendment No. 3, then the Use Tax Act is
24amended by changing Section 3-10 as follows:
 

 

 

SB2224- 356 -LRB100 13364 AXK 27964 b

1    (35 ILCS 105/3-10)
2    Sec. 3-10. Rate of tax. Unless otherwise provided in this
3Section, the tax imposed by this Act is at the rate of 6.25% of
4either the selling price or the fair market value, if any, of
5the tangible personal property. In all cases where property
6functionally used or consumed is the same as the property that
7was purchased at retail, then the tax is imposed on the selling
8price of the property. In all cases where property functionally
9used or consumed is a by-product or waste product that has been
10refined, manufactured, or produced from property purchased at
11retail, then the tax is imposed on the lower of the fair market
12value, if any, of the specific property so used in this State
13or on the selling price of the property purchased at retail.
14For purposes of this Section "fair market value" means the
15price at which property would change hands between a willing
16buyer and a willing seller, neither being under any compulsion
17to buy or sell and both having reasonable knowledge of the
18relevant facts. The fair market value shall be established by
19Illinois sales by the taxpayer of the same property as that
20functionally used or consumed, or if there are no such sales by
21the taxpayer, then comparable sales or purchases of property of
22like kind and character in Illinois.
23    Beginning on July 1, 2000 and through December 31, 2000,
24with respect to motor fuel, as defined in Section 1.1 of the
25Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
26the Use Tax Act, the tax is imposed at the rate of 1.25%.

 

 

SB2224- 357 -LRB100 13364 AXK 27964 b

1    Beginning on August 6, 2010 through August 15, 2010, with
2respect to sales tax holiday items as defined in Section 3-6 of
3this Act, the tax is imposed at the rate of 1.25%.
4    With respect to gasohol, the tax imposed by this Act
5applies to (i) 70% of the proceeds of sales made on or after
6January 1, 1990, and before July 1, 2003, (ii) 80% of the
7proceeds of sales made on or after July 1, 2003 and on or
8before July 1, 2017 December 31, 2018, and (iii) 100% of the
9proceeds of sales made thereafter. If, at any time, however,
10the tax under this Act on sales of gasohol is imposed at the
11rate of 1.25%, then the tax imposed by this Act applies to 100%
12of the proceeds of sales of gasohol made during that time.
13    With respect to majority blended ethanol fuel, the tax
14imposed by this Act does not apply to the proceeds of sales
15made on or after July 1, 2003 and on or before December 31,
162023 December 31, 2018 but applies to 100% of the proceeds of
17sales made thereafter.
18    With respect to biodiesel blends with no less than 1% and
19no more than 10% biodiesel, the tax imposed by this Act applies
20to (i) 80% of the proceeds of sales made on or after July 1,
212003 and on or before December 31, 2018 and (ii) 100% of the
22proceeds of sales made thereafter. If, at any time, however,
23the tax under this Act on sales of biodiesel blends with no
24less than 1% and no more than 10% biodiesel is imposed at the
25rate of 1.25%, then the tax imposed by this Act applies to 100%
26of the proceeds of sales of biodiesel blends with no less than

 

 

SB2224- 358 -LRB100 13364 AXK 27964 b

11% and no more than 10% biodiesel made during that time.
2    With respect to 100% biodiesel and biodiesel blends with
3more than 10% but no more than 99% biodiesel, the tax imposed
4by this Act does not apply to the proceeds of sales made on or
5after July 1, 2003 and on or before December 31, 2023 December
631, 2018 but applies to 100% of the proceeds of sales made
7thereafter.
8    With respect to food for human consumption that is to be
9consumed off the premises where it is sold (other than
10alcoholic beverages, soft drinks, and food that has been
11prepared for immediate consumption) and prescription and
12nonprescription medicines, drugs, medical appliances, products
13classified as Class III medical devices by the United States
14Food and Drug Administration that are used for cancer treatment
15pursuant to a prescription, as well as any accessories and
16components related to those devices, modifications to a motor
17vehicle for the purpose of rendering it usable by a person with
18a disability, and insulin, urine testing materials, syringes,
19and needles used by diabetics, for human use, the tax is
20imposed at the rate of 1%. For the purposes of this Section,
21until September 1, 2009: the term "soft drinks" means any
22complete, finished, ready-to-use, non-alcoholic drink, whether
23carbonated or not, including but not limited to soda water,
24cola, fruit juice, vegetable juice, carbonated water, and all
25other preparations commonly known as soft drinks of whatever
26kind or description that are contained in any closed or sealed

 

 

SB2224- 359 -LRB100 13364 AXK 27964 b

1bottle, can, carton, or container, regardless of size; but
2"soft drinks" does not include coffee, tea, non-carbonated
3water, infant formula, milk or milk products as defined in the
4Grade A Pasteurized Milk and Milk Products Act, or drinks
5containing 50% or more natural fruit or vegetable juice.
6    Notwithstanding any other provisions of this Act,
7beginning September 1, 2009, "soft drinks" means non-alcoholic
8beverages that contain natural or artificial sweeteners. "Soft
9drinks" do not include beverages that contain milk or milk
10products, soy, rice or similar milk substitutes, or greater
11than 50% of vegetable or fruit juice by volume.
12    Until August 1, 2009, and notwithstanding any other
13provisions of this Act, "food for human consumption that is to
14be consumed off the premises where it is sold" includes all
15food sold through a vending machine, except soft drinks and
16food products that are dispensed hot from a vending machine,
17regardless of the location of the vending machine. Beginning
18August 1, 2009, and notwithstanding any other provisions of
19this Act, "food for human consumption that is to be consumed
20off the premises where it is sold" includes all food sold
21through a vending machine, except soft drinks, candy, and food
22products that are dispensed hot from a vending machine,
23regardless of the location of the vending machine.
24    Notwithstanding any other provisions of this Act,
25beginning September 1, 2009, "food for human consumption that
26is to be consumed off the premises where it is sold" does not

 

 

SB2224- 360 -LRB100 13364 AXK 27964 b

1include candy. For purposes of this Section, "candy" means a
2preparation of sugar, honey, or other natural or artificial
3sweeteners in combination with chocolate, fruits, nuts or other
4ingredients or flavorings in the form of bars, drops, or
5pieces. "Candy" does not include any preparation that contains
6flour or requires refrigeration.
7    Notwithstanding any other provisions of this Act,
8beginning September 1, 2009, "nonprescription medicines and
9drugs" does not include grooming and hygiene products. For
10purposes of this Section, "grooming and hygiene products"
11includes, but is not limited to, soaps and cleaning solutions,
12shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
13lotions and screens, unless those products are available by
14prescription only, regardless of whether the products meet the
15definition of "over-the-counter-drugs". For the purposes of
16this paragraph, "over-the-counter-drug" means a drug for human
17use that contains a label that identifies the product as a drug
18as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
19label includes:
20        (A) A "Drug Facts" panel; or
21        (B) A statement of the "active ingredient(s)" with a
22    list of those ingredients contained in the compound,
23    substance or preparation.
24    Beginning on the effective date of this amendatory Act of
25the 98th General Assembly, "prescription and nonprescription
26medicines and drugs" includes medical cannabis purchased from a

 

 

SB2224- 361 -LRB100 13364 AXK 27964 b

1registered dispensing organization under the Compassionate Use
2of Medical Cannabis Pilot Program Act.
3    If the property that is purchased at retail from a retailer
4is acquired outside Illinois and used outside Illinois before
5being brought to Illinois for use here and is taxable under
6this Act, the "selling price" on which the tax is computed
7shall be reduced by an amount that represents a reasonable
8allowance for depreciation for the period of prior out-of-state
9use.
10(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
1199-858, eff. 8-19-16; 10000SB0009ham003.)
 
12    Section 30-10. If and only if Senate Bill 9 of the 100th
13General Assembly becomes law in the form in which it was
14amended by House Amendment No. 3, then the Service Use Tax Act
15is amended by changing Section 3-10 as follows:
 
16    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
17    Sec. 3-10. Rate of tax. Unless otherwise provided in this
18Section, the tax imposed by this Act is at the rate of 6.25% of
19the selling price of tangible personal property transferred as
20an incident to the sale of service, but, for the purpose of
21computing this tax, in no event shall the selling price be less
22than the cost price of the property to the serviceman.
23    Beginning on July 1, 2000 and through December 31, 2000,
24with respect to motor fuel, as defined in Section 1.1 of the

 

 

SB2224- 362 -LRB100 13364 AXK 27964 b

1Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
2the Use Tax Act, the tax is imposed at the rate of 1.25%.
3    With respect to gasohol, as defined in the Use Tax Act, the
4tax imposed by this Act applies to (i) 70% of the selling price
5of property transferred as an incident to the sale of service
6on or after January 1, 1990, and before July 1, 2003, (ii) 80%
7of the selling price of property transferred as an incident to
8the sale of service on or after July 1, 2003 and on or before
9July 1, 2017 December 31, 2018, and (iii) 100% of the selling
10price thereafter. If, at any time, however, the tax under this
11Act on sales of gasohol, as defined in the Use Tax Act, is
12imposed at the rate of 1.25%, then the tax imposed by this Act
13applies to 100% of the proceeds of sales of gasohol made during
14that time.
15    With respect to majority blended ethanol fuel, as defined
16in the Use Tax Act, the tax imposed by this Act does not apply
17to the selling price of property transferred as an incident to
18the sale of service on or after July 1, 2003 and on or before
19December 31, 2023 December 31, 2018 but applies to 100% of the
20selling price thereafter.
21    With respect to biodiesel blends, as defined in the Use Tax
22Act, with no less than 1% and no more than 10% biodiesel, the
23tax imposed by this Act applies to (i) 80% of the selling price
24of property transferred as an incident to the sale of service
25on or after July 1, 2003 and on or before December 31, 2018 and
26(ii) 100% of the proceeds of the selling price thereafter. If,

 

 

SB2224- 363 -LRB100 13364 AXK 27964 b

1at any time, however, the tax under this Act on sales of
2biodiesel blends, as defined in the Use Tax Act, with no less
3than 1% and no more than 10% biodiesel is imposed at the rate
4of 1.25%, then the tax imposed by this Act applies to 100% of
5the proceeds of sales of biodiesel blends with no less than 1%
6and no more than 10% biodiesel made during that time.
7    With respect to 100% biodiesel, as defined in the Use Tax
8Act, and biodiesel blends, as defined in the Use Tax Act, with
9more than 10% but no more than 99% biodiesel, the tax imposed
10by this Act does not apply to the proceeds of the selling price
11of property transferred as an incident to the sale of service
12on or after July 1, 2003 and on or before December 31, 2023
13December 31, 2018 but applies to 100% of the selling price
14thereafter.
15    At the election of any registered serviceman made for each
16fiscal year, sales of service in which the aggregate annual
17cost price of tangible personal property transferred as an
18incident to the sales of service is less than 35%, or 75% in
19the case of servicemen transferring prescription drugs or
20servicemen engaged in graphic arts production, of the aggregate
21annual total gross receipts from all sales of service, the tax
22imposed by this Act shall be based on the serviceman's cost
23price of the tangible personal property transferred as an
24incident to the sale of those services.
25    The tax shall be imposed at the rate of 1% on food prepared
26for immediate consumption and transferred incident to a sale of

 

 

SB2224- 364 -LRB100 13364 AXK 27964 b

1service subject to this Act or the Service Occupation Tax Act
2by an entity licensed under the Hospital Licensing Act, the
3Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD
4Act, the Specialized Mental Health Rehabilitation Act of 2013,
5or the Child Care Act of 1969. The tax shall also be imposed at
6the rate of 1% on food for human consumption that is to be
7consumed off the premises where it is sold (other than
8alcoholic beverages, soft drinks, and food that has been
9prepared for immediate consumption and is not otherwise
10included in this paragraph) and prescription and
11nonprescription medicines, drugs, medical appliances, products
12classified as Class III medical devices by the United States
13Food and Drug Administration that are used for cancer treatment
14pursuant to a prescription, as well as any accessories and
15components related to those devices, modifications to a motor
16vehicle for the purpose of rendering it usable by a person with
17a disability, and insulin, urine testing materials, syringes,
18and needles used by diabetics, for human use. For the purposes
19of this Section, until September 1, 2009: the term "soft
20drinks" means any complete, finished, ready-to-use,
21non-alcoholic drink, whether carbonated or not, including but
22not limited to soda water, cola, fruit juice, vegetable juice,
23carbonated water, and all other preparations commonly known as
24soft drinks of whatever kind or description that are contained
25in any closed or sealed bottle, can, carton, or container,
26regardless of size; but "soft drinks" does not include coffee,

 

 

SB2224- 365 -LRB100 13364 AXK 27964 b

1tea, non-carbonated water, infant formula, milk or milk
2products as defined in the Grade A Pasteurized Milk and Milk
3Products Act, or drinks containing 50% or more natural fruit or
4vegetable juice.
5    Notwithstanding any other provisions of this Act,
6beginning September 1, 2009, "soft drinks" means non-alcoholic
7beverages that contain natural or artificial sweeteners. "Soft
8drinks" do not include beverages that contain milk or milk
9products, soy, rice or similar milk substitutes, or greater
10than 50% of vegetable or fruit juice by volume.
11    Until August 1, 2009, and notwithstanding any other
12provisions of this Act, "food for human consumption that is to
13be consumed off the premises where it is sold" includes all
14food sold through a vending machine, except soft drinks and
15food products that are dispensed hot from a vending machine,
16regardless of the location of the vending machine. Beginning
17August 1, 2009, and notwithstanding any other provisions of
18this Act, "food for human consumption that is to be consumed
19off the premises where it is sold" includes all food sold
20through a vending machine, except soft drinks, candy, and food
21products that are dispensed hot from a vending machine,
22regardless of the location of the vending machine.
23    Notwithstanding any other provisions of this Act,
24beginning September 1, 2009, "food for human consumption that
25is to be consumed off the premises where it is sold" does not
26include candy. For purposes of this Section, "candy" means a

 

 

SB2224- 366 -LRB100 13364 AXK 27964 b

1preparation of sugar, honey, or other natural or artificial
2sweeteners in combination with chocolate, fruits, nuts or other
3ingredients or flavorings in the form of bars, drops, or
4pieces. "Candy" does not include any preparation that contains
5flour or requires refrigeration.
6    Notwithstanding any other provisions of this Act,
7beginning September 1, 2009, "nonprescription medicines and
8drugs" does not include grooming and hygiene products. For
9purposes of this Section, "grooming and hygiene products"
10includes, but is not limited to, soaps and cleaning solutions,
11shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
12lotions and screens, unless those products are available by
13prescription only, regardless of whether the products meet the
14definition of "over-the-counter-drugs". For the purposes of
15this paragraph, "over-the-counter-drug" means a drug for human
16use that contains a label that identifies the product as a drug
17as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
18label includes:
19        (A) A "Drug Facts" panel; or
20        (B) A statement of the "active ingredient(s)" with a
21    list of those ingredients contained in the compound,
22    substance or preparation.
23    Beginning on January 1, 2014 (the effective date of Public
24Act 98-122), "prescription and nonprescription medicines and
25drugs" includes medical cannabis purchased from a registered
26dispensing organization under the Compassionate Use of Medical

 

 

SB2224- 367 -LRB100 13364 AXK 27964 b

1Cannabis Pilot Program Act.
2    If the property that is acquired from a serviceman is
3acquired outside Illinois and used outside Illinois before
4being brought to Illinois for use here and is taxable under
5this Act, the "selling price" on which the tax is computed
6shall be reduced by an amount that represents a reasonable
7allowance for depreciation for the period of prior out-of-state
8use.
9(Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;
1098-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.
117-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16;
1210000SB0009ham003.)
 
13    Section 30-15. If and only if Senate Bill 9 of the 100th
14General Assembly becomes law in the form in which it was
15amended by House Amendment No. 3, then the Service Occupation
16Tax Act is amended by changing Section 3-10 as follows:
 
17    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
18    Sec. 3-10. Rate of tax. Unless otherwise provided in this
19Section, the tax imposed by this Act is at the rate of 6.25% of
20the "selling price", as defined in Section 2 of the Service Use
21Tax Act, of the tangible personal property. For the purpose of
22computing this tax, in no event shall the "selling price" be
23less than the cost price to the serviceman of the tangible
24personal property transferred. The selling price of each item

 

 

SB2224- 368 -LRB100 13364 AXK 27964 b

1of tangible personal property transferred as an incident of a
2sale of service may be shown as a distinct and separate item on
3the serviceman's billing to the service customer. If the
4selling price is not so shown, the selling price of the
5tangible personal property is deemed to be 50% of the
6serviceman's entire billing to the service customer. When,
7however, a serviceman contracts to design, develop, and produce
8special order machinery or equipment, the tax imposed by this
9Act shall be based on the serviceman's cost price of the
10tangible personal property transferred incident to the
11completion of the contract.
12    Beginning on July 1, 2000 and through December 31, 2000,
13with respect to motor fuel, as defined in Section 1.1 of the
14Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
15the 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
17tax imposed by this Act shall apply to (i) 70% of the cost
18price of property transferred as an incident to the sale of
19service on or after January 1, 1990, and before July 1, 2003,
20(ii) 80% of the selling price of property transferred as an
21incident to the sale of service on or after July 1, 2003 and on
22or before July 1, 2017 December 31, 2018, and (iii) 100% of the
23cost price thereafter. If, at any time, however, the tax under
24this Act on sales of gasohol, as defined in the Use Tax Act, is
25imposed at the rate of 1.25%, then the tax imposed by this Act
26applies to 100% of the proceeds of sales of gasohol made during

 

 

SB2224- 369 -LRB100 13364 AXK 27964 b

1that time.
2    With respect to majority blended ethanol fuel, as defined
3in the Use Tax Act, the tax imposed by this Act does not apply
4to the selling price of property transferred as an incident to
5the sale of service on or after July 1, 2003 and on or before
6December 31, 2023 December 31, 2018 but applies to 100% of the
7selling price thereafter.
8    With respect to biodiesel blends, as defined in the Use Tax
9Act, with no less than 1% and no more than 10% biodiesel, the
10tax imposed by this Act applies to (i) 80% of the selling price
11of property transferred as an incident to the sale of service
12on or after July 1, 2003 and on or before December 31, 2018 and
13(ii) 100% of the proceeds of the selling price thereafter. If,
14at any time, however, the tax under this Act on sales of
15biodiesel blends, as defined in the Use Tax Act, with no less
16than 1% and no more than 10% biodiesel is imposed at the rate
17of 1.25%, then the tax imposed by this Act applies to 100% of
18the proceeds of sales of biodiesel blends with no less than 1%
19and no more than 10% biodiesel made during that time.
20    With respect to 100% biodiesel, as defined in the Use Tax
21Act, and biodiesel blends, as defined in the Use Tax Act, with
22more than 10% but no more than 99% biodiesel material, the tax
23imposed by this Act does not apply to the proceeds of the
24selling price of property transferred as an incident to the
25sale of service on or after July 1, 2003 and on or before
26December 31, 2023 December 31, 2018 but applies to 100% of the

 

 

SB2224- 370 -LRB100 13364 AXK 27964 b

1selling price thereafter.
2    At the election of any registered serviceman made for each
3fiscal year, sales of service in which the aggregate annual
4cost price of tangible personal property transferred as an
5incident to the sales of service is less than 35%, or 75% in
6the case of servicemen transferring prescription drugs or
7servicemen engaged in graphic arts production, of the aggregate
8annual total gross receipts from all sales of service, the tax
9imposed by this Act shall be based on the serviceman's cost
10price of the tangible personal property transferred incident to
11the sale of those services.
12    The tax shall be imposed at the rate of 1% on food prepared
13for immediate consumption and transferred incident to a sale of
14service subject to this Act or the Service Occupation Tax Act
15by an entity licensed under the Hospital Licensing Act, the
16Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD
17Act, the Specialized Mental Health Rehabilitation Act of 2013,
18or the Child Care Act of 1969. The tax shall also be imposed at
19the rate of 1% on food for human consumption that is to be
20consumed off the premises where it is sold (other than
21alcoholic beverages, soft drinks, and food that has been
22prepared for immediate consumption and is not otherwise
23included in this paragraph) and prescription and
24nonprescription medicines, drugs, medical appliances, products
25classified as Class III medical devices by the United States
26Food and Drug Administration that are used for cancer treatment

 

 

SB2224- 371 -LRB100 13364 AXK 27964 b

1pursuant to a prescription, as well as any accessories and
2components related to those devices, modifications to a motor
3vehicle for the purpose of rendering it usable by a person with
4a disability, and insulin, urine testing materials, syringes,
5and needles used by diabetics, for human use. For the purposes
6of this Section, until September 1, 2009: the term "soft
7drinks" means any complete, finished, ready-to-use,
8non-alcoholic drink, whether carbonated or not, including but
9not limited to soda water, cola, fruit juice, vegetable juice,
10carbonated water, and all other preparations commonly known as
11soft drinks of whatever kind or description that are contained
12in any closed or sealed can, carton, or container, regardless
13of size; but "soft drinks" does not include coffee, tea,
14non-carbonated water, infant formula, milk or milk products as
15defined in the Grade A Pasteurized Milk and Milk Products Act,
16or drinks containing 50% or more natural fruit or vegetable
17juice.
18    Notwithstanding any other provisions of this Act,
19beginning September 1, 2009, "soft drinks" means non-alcoholic
20beverages that contain natural or artificial sweeteners. "Soft
21drinks" do not include beverages that contain milk or milk
22products, soy, rice or similar milk substitutes, or greater
23than 50% of vegetable or fruit juice by volume.
24    Until August 1, 2009, and notwithstanding any other
25provisions of this Act, "food for human consumption that is to
26be consumed off the premises where it is sold" includes all

 

 

SB2224- 372 -LRB100 13364 AXK 27964 b

1food sold through a vending machine, except soft drinks and
2food products that are dispensed hot from a vending machine,
3regardless of the location of the vending machine. Beginning
4August 1, 2009, and notwithstanding any other provisions of
5this Act, "food for human consumption that is to be consumed
6off the premises where it is sold" includes all food sold
7through a vending machine, except soft drinks, candy, and food
8products that are dispensed hot from a vending machine,
9regardless of the location of the vending machine.
10    Notwithstanding any other provisions of this Act,
11beginning September 1, 2009, "food for human consumption that
12is to be consumed off the premises where it is sold" does not
13include candy. For purposes of this Section, "candy" means a
14preparation of sugar, honey, or other natural or artificial
15sweeteners in combination with chocolate, fruits, nuts or other
16ingredients or flavorings in the form of bars, drops, or
17pieces. "Candy" does not include any preparation that contains
18flour or requires refrigeration.
19    Notwithstanding any other provisions of this Act,
20beginning September 1, 2009, "nonprescription medicines and
21drugs" does not include grooming and hygiene products. For
22purposes of this Section, "grooming and hygiene products"
23includes, but is not limited to, soaps and cleaning solutions,
24shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
25lotions and screens, unless those products are available by
26prescription only, regardless of whether the products meet the

 

 

SB2224- 373 -LRB100 13364 AXK 27964 b

1definition of "over-the-counter-drugs". For the purposes of
2this paragraph, "over-the-counter-drug" means a drug for human
3use that contains a label that identifies the product as a drug
4as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
5label includes:
6        (A) A "Drug Facts" panel; or
7        (B) A statement of the "active ingredient(s)" with a
8    list of those ingredients contained in the compound,
9    substance or preparation.
10    Beginning on January 1, 2014 (the effective date of Public
11Act 98-122), "prescription and nonprescription medicines and
12drugs" includes medical cannabis purchased from a registered
13dispensing organization under the Compassionate Use of Medical
14Cannabis Pilot Program Act.
15(Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;
1698-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.
177-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16;
1810000SB0009ham003.)
 
19    Section 30-20. If and only if Senate Bill 9 of the 100th
20General Assembly becomes law in the form in which it was
21amended by House Amendment No. 3, then the Retailers'
22Occupation Tax Act is amended by changing Section 2-10 as
23follows:
 
24    (35 ILCS 120/2-10)

 

 

SB2224- 374 -LRB100 13364 AXK 27964 b

1    Sec. 2-10. Rate of tax. Unless otherwise provided in this
2Section, the tax imposed by this Act is at the rate of 6.25% of
3gross receipts from sales of tangible personal property made in
4the course of business.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    Beginning on August 6, 2010 through August 15, 2010, with
10respect to sales tax holiday items as defined in Section 2-8 of
11this Act, the tax is imposed at the rate of 1.25%.
12    Within 14 days after the effective date of this amendatory
13Act of the 91st General Assembly, each retailer of motor fuel
14and gasohol shall cause the following notice to be posted in a
15prominently visible place on each retail dispensing device that
16is used to dispense motor fuel or gasohol in the State of
17Illinois: "As of July 1, 2000, the State of Illinois has
18eliminated the State's share of sales tax on motor fuel and
19gasohol through December 31, 2000. The price on this pump
20should reflect the elimination of the tax." The notice shall be
21printed in bold print on a sign that is no smaller than 4
22inches by 8 inches. The sign shall be clearly visible to
23customers. Any retailer who fails to post or maintain a
24required sign through December 31, 2000 is guilty of a petty
25offense for which the fine shall be $500 per day per each
26retail premises where a violation occurs.

 

 

SB2224- 375 -LRB100 13364 AXK 27964 b

1    With respect to gasohol, as defined in the Use Tax Act, the
2tax imposed by this Act applies to (i) 70% of the proceeds of
3sales made on or after January 1, 1990, and before July 1,
42003, (ii) 80% of the proceeds of sales made on or after July
51, 2003 and on or before July 1, 2017 December 31, 2018, and
6(iii) 100% of the proceeds of sales made thereafter. If, at any
7time, however, the tax under this Act on sales of gasohol, as
8defined in the Use Tax Act, is imposed at the rate of 1.25%,
9then the tax imposed by this Act applies to 100% of the
10proceeds of sales of gasohol made during that time.
11    With respect to majority blended ethanol fuel, as defined
12in the Use Tax Act, the tax imposed by this Act does not apply
13to the proceeds of sales made on or after July 1, 2003 and on or
14before December 31, 2023 December 31, 2018 but applies to 100%
15of the proceeds of sales made thereafter.
16    With respect to biodiesel blends, as defined in the Use Tax
17Act, with no less than 1% and no more than 10% biodiesel, the
18tax imposed by this Act applies to (i) 80% of the proceeds of
19sales made on or after July 1, 2003 and on or before December
2031, 2018 and (ii) 100% of the proceeds of sales made
21thereafter. If, at any time, however, the tax under this Act on
22sales of biodiesel blends, as defined in the Use Tax Act, with
23no less than 1% and no more than 10% biodiesel is imposed at
24the rate of 1.25%, then the tax imposed by this Act applies to
25100% of the proceeds of sales of biodiesel blends with no less
26than 1% and no more than 10% biodiesel made during that time.

 

 

SB2224- 376 -LRB100 13364 AXK 27964 b

1    With respect to 100% biodiesel, as defined in the Use Tax
2Act, and biodiesel blends, as defined in the Use Tax Act, with
3more than 10% but no more than 99% biodiesel, the tax imposed
4by this Act does not apply to the proceeds of sales made on or
5after July 1, 2003 and on or before December 31, 2023 December
631, 2018 but applies to 100% of the proceeds of sales made
7thereafter.
8    With respect to food for human consumption that is to be
9consumed off the premises where it is sold (other than
10alcoholic beverages, soft drinks, and food that has been
11prepared for immediate consumption) and prescription and
12nonprescription medicines, drugs, medical appliances, products
13classified as Class III medical devices by the United States
14Food and Drug Administration that are used for cancer treatment
15pursuant to a prescription, as well as any accessories and
16components related to those devices, modifications to a motor
17vehicle for the purpose of rendering it usable by a person with
18a disability, and insulin, urine testing materials, syringes,
19and needles used by diabetics, for human use, the tax is
20imposed at the rate of 1%. For the purposes of this Section,
21until September 1, 2009: the term "soft drinks" means any
22complete, finished, ready-to-use, non-alcoholic drink, whether
23carbonated or not, including but not limited to soda water,
24cola, fruit juice, vegetable juice, carbonated water, and all
25other preparations commonly known as soft drinks of whatever
26kind or description that are contained in any closed or sealed

 

 

SB2224- 377 -LRB100 13364 AXK 27964 b

1bottle, can, carton, or container, regardless of size; but
2"soft drinks" does not include coffee, tea, non-carbonated
3water, infant formula, milk or milk products as defined in the
4Grade A Pasteurized Milk and Milk Products Act, or drinks
5containing 50% or more natural fruit or vegetable juice.
6    Notwithstanding any other provisions of this Act,
7beginning September 1, 2009, "soft drinks" means non-alcoholic
8beverages that contain natural or artificial sweeteners. "Soft
9drinks" do not include beverages that contain milk or milk
10products, soy, rice or similar milk substitutes, or greater
11than 50% of vegetable or fruit juice by volume.
12    Until August 1, 2009, and notwithstanding any other
13provisions of this Act, "food for human consumption that is to
14be consumed off the premises where it is sold" includes all
15food sold through a vending machine, except soft drinks and
16food products that are dispensed hot from a vending machine,
17regardless of the location of the vending machine. Beginning
18August 1, 2009, and notwithstanding any other provisions of
19this Act, "food for human consumption that is to be consumed
20off the premises where it is sold" includes all food sold
21through a vending machine, except soft drinks, candy, and food
22products that are dispensed hot from a vending machine,
23regardless of the location of the vending machine.
24    Notwithstanding any other provisions of this Act,
25beginning September 1, 2009, "food for human consumption that
26is to be consumed off the premises where it is sold" does not

 

 

SB2224- 378 -LRB100 13364 AXK 27964 b

1include candy. For purposes of this Section, "candy" means a
2preparation of sugar, honey, or other natural or artificial
3sweeteners in combination with chocolate, fruits, nuts or other
4ingredients or flavorings in the form of bars, drops, or
5pieces. "Candy" does not include any preparation that contains
6flour or requires refrigeration.
7    Notwithstanding any other provisions of this Act,
8beginning September 1, 2009, "nonprescription medicines and
9drugs" does not include grooming and hygiene products. For
10purposes of this Section, "grooming and hygiene products"
11includes, but is not limited to, soaps and cleaning solutions,
12shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
13lotions and screens, unless those products are available by
14prescription only, regardless of whether the products meet the
15definition of "over-the-counter-drugs". For the purposes of
16this paragraph, "over-the-counter-drug" means a drug for human
17use that contains a label that identifies the product as a drug
18as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
19label includes:
20        (A) A "Drug Facts" panel; or
21        (B) A statement of the "active ingredient(s)" with a
22    list of those ingredients contained in the compound,
23    substance or preparation.
24    Beginning on the effective date of this amendatory Act of
25the 98th General Assembly, "prescription and nonprescription
26medicines and drugs" includes medical cannabis purchased from a

 

 

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1registered dispensing organization under the Compassionate Use
2of Medical Cannabis Pilot Program Act.
3(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
499-858, eff. 8-19-16; 10000SB0009ham003.)
 
5    Section 35-5. If and only if Senate Bill 9 of the 100th
6General Assembly becomes law in the form in which it was
7amended by House Amendment No. 3, then the Use Tax Act is
8amended by changing Sections 3-5 and 3-50 as follows:
 
9    (35 ILCS 105/3-5)
10    Sec. 3-5. Exemptions. Use of the following tangible
11personal property is exempt from the tax imposed by this Act:
12    (1) Personal property purchased from a corporation,
13society, association, foundation, institution, or
14organization, other than a limited liability company, that is
15organized and operated as a not-for-profit service enterprise
16for the benefit of persons 65 years of age or older if the
17personal property was not purchased by the enterprise for the
18purpose of resale by the enterprise.
19    (2) Personal property purchased by a not-for-profit
20Illinois county fair association for use in conducting,
21operating, or promoting the county fair.
22    (3) Personal property purchased by a not-for-profit arts or
23cultural organization that establishes, by proof required by
24the Department by rule, that it has received an exemption under

 

 

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1Section 501(c)(3) of the Internal Revenue Code and that is
2organized and operated primarily for the presentation or
3support of arts or cultural programming, activities, or
4services. These organizations include, but are not limited to,
5music and dramatic arts organizations such as symphony
6orchestras and theatrical groups, arts and cultural service
7organizations, local arts councils, visual arts organizations,
8and media arts organizations. On and after the effective date
9of this amendatory Act of the 92nd General Assembly, however,
10an entity otherwise eligible for this exemption shall not make
11tax-free purchases unless it has an active identification
12number issued by the Department.
13    (4) Personal property purchased by a governmental body, by
14a corporation, society, association, foundation, or
15institution organized and operated exclusively for charitable,
16religious, or educational purposes, or by a not-for-profit
17corporation, society, association, foundation, institution, or
18organization that has no compensated officers or employees and
19that is organized and operated primarily for the recreation of
20persons 55 years of age or older. A limited liability company
21may qualify for the exemption under this paragraph only if the
22limited liability company is organized and operated
23exclusively for educational purposes. On and after July 1,
241987, however, no entity otherwise eligible for this exemption
25shall make tax-free purchases unless it has an active exemption
26identification number issued by the Department.

 

 

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1    (5) Until July 1, 2003, a passenger car that is a
2replacement vehicle to the extent that the purchase price of
3the car is subject to the Replacement Vehicle Tax.
4    (6) Until July 1, 2003 and beginning again on September 1,
52004 through August 30, 2014, graphic arts machinery and
6equipment, including repair and replacement parts, both new and
7used, and including that manufactured on special order,
8certified by the purchaser to be used primarily for graphic
9arts production, and including machinery and equipment
10purchased for lease. Equipment includes chemicals or chemicals
11acting as catalysts but only if the chemicals or chemicals
12acting as catalysts effect a direct and immediate change upon a
13graphic arts product. Beginning on July 1, 2017, graphic arts
14machinery and equipment is included in the manufacturing and
15assembling machinery and equipment exemption under paragraph
16(18).
17    (7) Farm chemicals.
18    (8) Legal tender, currency, medallions, or gold or silver
19coinage issued by the State of Illinois, the government of the
20United States of America, or the government of any foreign
21country, and bullion.
22    (9) Personal property purchased from a teacher-sponsored
23student organization affiliated with an elementary or
24secondary school located in Illinois.
25    (10) A motor vehicle that is used for automobile renting,
26as defined in the Automobile Renting Occupation and Use Tax

 

 

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1Act.
2    (11) Farm machinery and equipment, both new and used,
3including that manufactured on special order, certified by the
4purchaser to be used primarily for production agriculture or
5State or federal agricultural programs, including individual
6replacement parts for the machinery and equipment, including
7machinery and equipment purchased for lease, and including
8implements of husbandry defined in Section 1-130 of the
9Illinois Vehicle Code, farm machinery and agricultural
10chemical and fertilizer spreaders, and nurse wagons required to
11be registered under Section 3-809 of the Illinois Vehicle Code,
12but excluding other motor vehicles required to be registered
13under the Illinois Vehicle Code. Horticultural polyhouses or
14hoop houses used for propagating, growing, or overwintering
15plants shall be considered farm machinery and equipment under
16this item (11). Agricultural chemical tender tanks and dry
17boxes shall include units sold separately from a motor vehicle
18required to be licensed and units sold mounted on a motor
19vehicle required to be licensed if the selling price of the
20tender is separately stated.
21    Farm machinery and equipment shall include precision
22farming equipment that is installed or purchased to be
23installed on farm machinery and equipment including, but not
24limited to, tractors, harvesters, sprayers, planters, seeders,
25or spreaders. Precision farming equipment includes, but is not
26limited to, soil testing sensors, computers, monitors,

 

 

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1software, global positioning and mapping systems, and other
2such equipment.
3    Farm machinery and equipment also includes computers,
4sensors, software, and related equipment used primarily in the
5computer-assisted operation of production agriculture
6facilities, equipment, and activities such as, but not limited
7to, the collection, monitoring, and correlation of animal and
8crop data for the purpose of formulating animal diets and
9agricultural chemicals. This item (11) is exempt from the
10provisions of Section 3-90.
11    (12) Until June 30, 2013, fuel and petroleum products sold
12to or used by an air common carrier, certified by the carrier
13to be used for consumption, shipment, or storage in the conduct
14of its business as an air common carrier, for a flight destined
15for or returning from a location or locations outside the
16United States without regard to previous or subsequent domestic
17stopovers.
18    Beginning July 1, 2013, fuel and petroleum products sold to
19or used by an air carrier, certified by the carrier to be used
20for consumption, shipment, or storage in the conduct of its
21business as an air common carrier, for a flight that (i) is
22engaged in foreign trade or is engaged in trade between the
23United States and any of its possessions and (ii) transports at
24least one individual or package for hire from the city of
25origination to the city of final destination on the same
26aircraft, without regard to a change in the flight number of

 

 

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1that aircraft.
2    (13) Proceeds of mandatory service charges separately
3stated on customers' bills for the purchase and consumption of
4food and beverages purchased at retail from a retailer, to the
5extent that the proceeds of the service charge are in fact
6turned over as tips or as a substitute for tips to the
7employees who participate directly in preparing, serving,
8hosting or cleaning up the food or beverage function with
9respect to which the service charge is imposed.
10    (14) Until July 1, 2003, oil field exploration, drilling,
11and production equipment, including (i) rigs and parts of rigs,
12rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
13tubular goods, including casing and drill strings, (iii) pumps
14and pump-jack units, (iv) storage tanks and flow lines, (v) any
15individual replacement part for oil field exploration,
16drilling, and production equipment, and (vi) machinery and
17equipment purchased for lease; but excluding motor vehicles
18required to be registered under the Illinois Vehicle Code.
19    (15) Photoprocessing machinery and equipment, including
20repair and replacement parts, both new and used, including that
21manufactured on special order, certified by the purchaser to be
22used primarily for photoprocessing, and including
23photoprocessing machinery and equipment purchased for lease.
24    (16) Coal and aggregate exploration, mining, off-highway
25hauling, processing, maintenance, and reclamation equipment,
26including replacement parts and equipment, and including

 

 

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1equipment purchased for lease, but excluding motor vehicles
2required to be registered under the Illinois Vehicle Code. The
3changes made to this Section by Public Act 97-767 apply on and
4after July 1, 2003, but no claim for credit or refund is
5allowed on or after August 16, 2013 (the effective date of
6Public Act 98-456) for such taxes paid during the period
7beginning July 1, 2003 and ending on August 16, 2013 (the
8effective date of Public Act 98-456).
9    (17) Until July 1, 2003, distillation machinery and
10equipment, sold as a unit or kit, assembled or installed by the
11retailer, certified by the user to be used only for the
12production of ethyl alcohol that will be used for consumption
13as motor fuel or as a component of motor fuel for the personal
14use of the user, and not subject to sale or resale.
15    (18) Manufacturing and assembling machinery and equipment
16used primarily in the process of manufacturing or assembling
17tangible personal property for wholesale or retail sale or
18lease, whether that sale or lease is made directly by the
19manufacturer or by some other person, whether the materials
20used in the process are owned by the manufacturer or some other
21person, or whether that sale or lease is made apart from or as
22an incident to the seller's engaging in the service occupation
23of producing machines, tools, dies, jigs, patterns, gauges, or
24other similar items of no commercial value on special order for
25a particular purchaser. The exemption provided by this
26paragraph (18) does not include machinery and equipment used in

 

 

SB2224- 386 -LRB100 13364 AXK 27964 b

1(i) the generation of electricity for wholesale or retail sale;
2(ii) the generation or treatment of natural or artificial gas
3for wholesale or retail sale that is delivered to customers
4through pipes, pipelines, or mains; or (iii) the treatment of
5water for wholesale or retail sale that is delivered to
6customers through pipes, pipelines, or mains. The provisions of
7Public Act 98-583 are declaratory of existing law as to the
8meaning and scope of this exemption. Beginning on July 1, 2017,
9the exemption provided by this paragraph (18) includes, but is
10not limited to, graphic arts machinery and equipment, as
11defined in paragraph (6) of this Section.
12    (19) Personal property delivered to a purchaser or
13purchaser's donee inside Illinois when the purchase order for
14that personal property was received by a florist located
15outside Illinois who has a florist located inside Illinois
16deliver the personal property.
17    (20) Semen used for artificial insemination of livestock
18for direct agricultural production.
19    (21) Horses, or interests in horses, registered with and
20meeting the requirements of any of the Arabian Horse Club
21Registry of America, Appaloosa Horse Club, American Quarter
22Horse Association, United States Trotting Association, or
23Jockey Club, as appropriate, used for purposes of breeding or
24racing for prizes. This item (21) is exempt from the provisions
25of Section 3-90, and the exemption provided for under this item
26(21) applies for all periods beginning May 30, 1995, but no

 

 

SB2224- 387 -LRB100 13364 AXK 27964 b

1claim for credit or refund is allowed on or after January 1,
22008 for such taxes paid during the period beginning May 30,
32000 and ending on January 1, 2008.
4    (22) Computers and communications equipment utilized for
5any hospital purpose and equipment used in the diagnosis,
6analysis, or treatment of hospital patients purchased by a
7lessor who leases the equipment, under a lease of one year or
8longer executed or in effect at the time the lessor would
9otherwise be subject to the tax imposed by this Act, to a
10hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of the
12Retailers' Occupation Tax Act. If the equipment is leased in a
13manner that does not qualify for this exemption or is used in
14any other non-exempt manner, the lessor shall be liable for the
15tax imposed under this Act or the Service Use Tax Act, as the
16case may be, based on the fair market value of the property at
17the time the non-qualifying use occurs. No lessor shall collect
18or attempt to collect an amount (however designated) that
19purports to reimburse that lessor for the tax imposed by this
20Act or the Service Use Tax Act, as the case may be, if the tax
21has not been paid by the lessor. If a lessor improperly
22collects any such amount from the lessee, the lessee shall have
23a legal right to claim a refund of that amount from the lessor.
24If, however, that amount is not refunded to the lessee for any
25reason, the lessor is liable to pay that amount to the
26Department.

 

 

SB2224- 388 -LRB100 13364 AXK 27964 b

1    (23) Personal property purchased by a lessor who leases the
2property, under a lease of one year or longer executed or in
3effect at the time the lessor would otherwise be subject to the
4tax imposed by this Act, to a governmental body that has been
5issued an active sales tax exemption identification number by
6the Department under Section 1g of the Retailers' Occupation
7Tax Act. If the property is leased in a manner that does not
8qualify for this exemption or used in any other non-exempt
9manner, the lessor shall be liable for the tax imposed under
10this Act or the Service Use Tax Act, as the case may be, based
11on the fair market value of the property at the time the
12non-qualifying use occurs. No lessor shall collect or attempt
13to collect an amount (however designated) that purports to
14reimburse that lessor for the tax imposed by this Act or the
15Service Use Tax Act, as the case may be, if the tax has not been
16paid by the lessor. If a lessor improperly collects any such
17amount from the lessee, the lessee shall have a legal right to
18claim a refund of that amount from the lessor. If, however,
19that amount is not refunded to the lessee for any reason, the
20lessor is liable to pay that amount to the Department.
21    (24) Beginning with taxable years ending on or after
22December 31, 1995 and ending with taxable years ending on or
23before December 31, 2004, personal property that is donated for
24disaster relief to be used in a State or federally declared
25disaster area in Illinois or bordering Illinois by a
26manufacturer or retailer that is registered in this State to a

 

 

SB2224- 389 -LRB100 13364 AXK 27964 b

1corporation, society, association, foundation, or institution
2that has been issued a sales tax exemption identification
3number by the Department that assists victims of the disaster
4who reside within the declared disaster area.
5    (25) Beginning with taxable years ending on or after
6December 31, 1995 and ending with taxable years ending on or
7before December 31, 2004, personal property that is used in the
8performance of infrastructure repairs in this State, including
9but not limited to municipal roads and streets, access roads,
10bridges, sidewalks, waste disposal systems, water and sewer
11line extensions, water distribution and purification
12facilities, storm water drainage and retention facilities, and
13sewage treatment facilities, resulting from a State or
14federally declared disaster in Illinois or bordering Illinois
15when such repairs are initiated on facilities located in the
16declared disaster area within 6 months after the disaster.
17    (26) Beginning July 1, 1999, game or game birds purchased
18at a "game breeding and hunting preserve area" as that term is
19used in the Wildlife Code. This paragraph is exempt from the
20provisions of Section 3-90.
21    (27) A motor vehicle, as that term is defined in Section
221-146 of the Illinois Vehicle Code, that is donated to a
23corporation, limited liability company, society, association,
24foundation, or institution that is determined by the Department
25to be organized and operated exclusively for educational
26purposes. For purposes of this exemption, "a corporation,

 

 

SB2224- 390 -LRB100 13364 AXK 27964 b

1limited liability company, society, association, foundation,
2or institution organized and operated exclusively for
3educational purposes" means all tax-supported public schools,
4private schools that offer systematic instruction in useful
5branches of learning by methods common to public schools and
6that compare favorably in their scope and intensity with the
7course of study presented in tax-supported schools, and
8vocational or technical schools or institutes organized and
9operated exclusively to provide a course of study of not less
10than 6 weeks duration and designed to prepare individuals to
11follow a trade or to pursue a manual, technical, mechanical,
12industrial, business, or commercial occupation.
13    (28) Beginning January 1, 2000, personal property,
14including food, purchased through fundraising events for the
15benefit of a public or private elementary or secondary school,
16a group of those schools, or one or more school districts if
17the events are sponsored by an entity recognized by the school
18district that consists primarily of volunteers and includes
19parents and teachers of the school children. This paragraph
20does not apply to fundraising events (i) for the benefit of
21private home instruction or (ii) for which the fundraising
22entity purchases the personal property sold at the events from
23another individual or entity that sold the property for the
24purpose of resale by the fundraising entity and that profits
25from the sale to the fundraising entity. This paragraph is
26exempt from the provisions of Section 3-90.

 

 

SB2224- 391 -LRB100 13364 AXK 27964 b

1    (29) Beginning January 1, 2000 and through December 31,
22001, new or used automatic vending machines that prepare and
3serve hot food and beverages, including coffee, soup, and other
4items, and replacement parts for these machines. Beginning
5January 1, 2002 and through June 30, 2003, machines and parts
6for machines used in commercial, coin-operated amusement and
7vending business if a use or occupation tax is paid on the
8gross receipts derived from the use of the commercial,
9coin-operated amusement and vending machines. This paragraph
10is exempt from the provisions of Section 3-90.
11    (30) Beginning January 1, 2001 and through June 30, 2016,
12food for human consumption that is to be consumed off the
13premises where it is sold (other than alcoholic beverages, soft
14drinks, and food that has been prepared for immediate
15consumption) and prescription and nonprescription medicines,
16drugs, medical appliances, and insulin, urine testing
17materials, syringes, and needles used by diabetics, for human
18use, when purchased for use by a person receiving medical
19assistance under Article V of the Illinois Public Aid Code who
20resides in a licensed long-term care facility, as defined in
21the Nursing Home Care Act, or in a licensed facility as defined
22in the ID/DD Community Care Act, the MC/DD Act, or the
23Specialized Mental Health Rehabilitation Act of 2013.
24    (31) Beginning on the effective date of this amendatory Act
25of the 92nd General Assembly, computers and communications
26equipment utilized for any hospital purpose and equipment used

 

 

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1in the diagnosis, analysis, or treatment of hospital patients
2purchased by a lessor who leases the equipment, under a lease
3of one year or longer executed or in effect at the time the
4lessor would otherwise be subject to the tax imposed by this
5Act, to a hospital that has been issued an active tax exemption
6identification number by the Department under Section 1g of the
7Retailers' Occupation Tax Act. If the equipment is leased in a
8manner that does not qualify for this exemption or is used in
9any other nonexempt manner, the lessor shall be liable for the
10tax imposed under this Act or the Service Use Tax Act, as the
11case may be, based on the fair market value of the property at
12the time the nonqualifying use occurs. No lessor shall collect
13or attempt to collect an amount (however designated) that
14purports to reimburse that lessor for the tax imposed by this
15Act or the Service Use Tax Act, as the case may be, if the tax
16has not been paid by the lessor. If a lessor improperly
17collects any such amount from the lessee, the lessee shall have
18a legal right to claim a refund of that amount from the lessor.
19If, however, that amount is not refunded to the lessee for any
20reason, the lessor is liable to pay that amount to the
21Department. This paragraph is exempt from the provisions of
22Section 3-90.
23    (32) Beginning on the effective date of this amendatory Act
24of the 92nd General Assembly, personal property purchased by a
25lessor who leases the property, under a lease of one year or
26longer executed or in effect at the time the lessor would

 

 

SB2224- 393 -LRB100 13364 AXK 27964 b

1otherwise be subject to the tax imposed by this Act, to a
2governmental body that has been issued an active sales tax
3exemption identification number by the Department under
4Section 1g of the Retailers' Occupation Tax Act. If the
5property is leased in a manner that does not qualify for this
6exemption or used in any other nonexempt manner, the lessor
7shall be liable for the tax imposed under this Act or the
8Service Use Tax Act, as the case may be, based on the fair
9market value of the property at the time the nonqualifying use
10occurs. No lessor shall collect or attempt to collect an amount
11(however designated) that purports to reimburse that lessor for
12the tax imposed by this Act or the Service Use Tax Act, as the
13case may be, if the tax has not been paid by the lessor. If a
14lessor improperly collects any such amount from the lessee, the
15lessee shall have a legal right to claim a refund of that
16amount from the lessor. If, however, that amount is not
17refunded to the lessee for any reason, the lessor is liable to
18pay that amount to the Department. This paragraph is exempt
19from the provisions of Section 3-90.
20    (33) On and after July 1, 2003 and through June 30, 2004,
21the use in this State of motor vehicles of the second division
22with a gross vehicle weight in excess of 8,000 pounds and that
23are subject to the commercial distribution fee imposed under
24Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
251, 2004 and through June 30, 2005, the use in this State of
26motor vehicles of the second division: (i) with a gross vehicle

 

 

SB2224- 394 -LRB100 13364 AXK 27964 b

1weight rating in excess of 8,000 pounds; (ii) that are subject
2to the commercial distribution fee imposed under Section
33-815.1 of the Illinois Vehicle Code; and (iii) that are
4primarily used for commercial purposes. Through June 30, 2005,
5this exemption applies to repair and replacement parts added
6after the initial purchase of such a motor vehicle if that
7motor vehicle is used in a manner that would qualify for the
8rolling stock exemption otherwise provided for in this Act. For
9purposes of this paragraph, the term "used for commercial
10purposes" means the transportation of persons or property in
11furtherance of any commercial or industrial enterprise,
12whether for-hire or not.
13    (34) Beginning January 1, 2008, tangible personal property
14used in the construction or maintenance of a community water
15supply, as defined under Section 3.145 of the Environmental
16Protection Act, that is operated by a not-for-profit
17corporation that holds a valid water supply permit issued under
18Title IV of the Environmental Protection Act. This paragraph is
19exempt from the provisions of Section 3-90.
20    (35) Beginning January 1, 2010, materials, parts,
21equipment, components, and furnishings incorporated into or
22upon an aircraft as part of the modification, refurbishment,
23completion, replacement, repair, or maintenance of the
24aircraft. This exemption includes consumable supplies used in
25the modification, refurbishment, completion, replacement,
26repair, and maintenance of aircraft, but excludes any

 

 

SB2224- 395 -LRB100 13364 AXK 27964 b

1materials, parts, equipment, components, and consumable
2supplies used in the modification, replacement, repair, and
3maintenance of aircraft engines or power plants, whether such
4engines or power plants are installed or uninstalled upon any
5such aircraft. "Consumable supplies" include, but are not
6limited to, adhesive, tape, sandpaper, general purpose
7lubricants, cleaning solution, latex gloves, and protective
8films. This exemption applies only to the use of qualifying
9tangible personal property by persons who modify, refurbish,
10complete, repair, replace, or maintain aircraft and who (i)
11hold an Air Agency Certificate and are empowered to operate an
12approved repair station by the Federal Aviation
13Administration, (ii) have a Class IV Rating, and (iii) conduct
14operations in accordance with Part 145 of the Federal Aviation
15Regulations. The exemption does not include aircraft operated
16by a commercial air carrier providing scheduled passenger air
17service pursuant to authority issued under Part 121 or Part 129
18of the Federal Aviation Regulations. The changes made to this
19paragraph (35) by Public Act 98-534 are declarative of existing
20law.
21    (36) Tangible personal property purchased by a
22public-facilities corporation, as described in Section
2311-65-10 of the Illinois Municipal Code, for purposes of
24constructing or furnishing a municipal convention hall, but
25only if the legal title to the municipal convention hall is
26transferred to the municipality without any further

 

 

SB2224- 396 -LRB100 13364 AXK 27964 b

1consideration by or on behalf of the municipality at the time
2of the completion of the municipal convention hall or upon the
3retirement or redemption of any bonds or other debt instruments
4issued by the public-facilities corporation in connection with
5the development of the municipal convention hall. This
6exemption includes existing public-facilities corporations as
7provided in Section 11-65-25 of the Illinois Municipal Code.
8This paragraph is exempt from the provisions of Section 3-90.
9    (37) Beginning January 1, 2017, menstrual pads, tampons,
10and menstrual cups.
11(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1298-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
131-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
147-29-15; 99-855, eff. 8-19-16; 10000SB0009ham003.)
 
15    (35 ILCS 105/3-50)  (from Ch. 120, par. 439.3-50)
16    Sec. 3-50. Manufacturing and assembly exemption. The
17manufacturing and assembling machinery and equipment exemption
18includes machinery and equipment that replaces machinery and
19equipment in an existing manufacturing facility as well as
20machinery and equipment that are for use in an expanded or new
21manufacturing facility. The machinery and equipment exemption
22also includes machinery and equipment used in the general
23maintenance or repair of exempt machinery and equipment or for
24in-house manufacture of exempt machinery and equipment.
25Beginning on July 1, 2017, the manufacturing and assembling

 

 

SB2224- 397 -LRB100 13364 AXK 27964 b

1machinery and equipment exemption also includes graphic arts
2machinery and equipment, as defined in paragraph (6) of Section
33-5. The machinery and equipment exemption does not include
4machinery and equipment used in (i) the generation of
5electricity for wholesale or retail sale; (ii) the generation
6or treatment of natural or artificial gas for wholesale or
7retail sale that is delivered to customers through pipes,
8pipelines, or mains; or (iii) the treatment of water for
9wholesale or retail sale that is delivered to customers through
10pipes, pipelines, or mains. The provisions of this amendatory
11Act of the 98th General Assembly are declaratory of existing
12law as to the meaning and scope of this exemption. For the
13purposes of this exemption, terms have the following meanings:
14        (1) "Manufacturing process" means the production of an
15    article of tangible personal property, whether the article
16    is a finished product or an article for use in the process
17    of manufacturing or assembling a different article of
18    tangible personal property, by a procedure commonly
19    regarded as manufacturing, processing, fabricating, or
20    refining that changes some existing material into a
21    material with a different form, use, or name. In relation
22    to a recognized integrated business composed of a series of
23    operations that collectively constitute manufacturing, or
24    individually constitute manufacturing operations, the
25    manufacturing process commences with the first operation
26    or stage of production in the series and does not end until

 

 

SB2224- 398 -LRB100 13364 AXK 27964 b

1    the completion of the final product in the last operation
2    or stage of production in the series. For purposes of this
3    exemption, photoprocessing is a manufacturing process of
4    tangible personal property for wholesale or retail sale.
5        (2) "Assembling process" means the production of an
6    article of tangible personal property, whether the article
7    is a finished product or an article for use in the process
8    of manufacturing or assembling a different article of
9    tangible personal property, by the combination of existing
10    materials in a manner commonly regarded as assembling that
11    results in an article or material of a different form, use,
12    or name.
13        (3) "Machinery" means major mechanical machines or
14    major components of those machines contributing to a
15    manufacturing or assembling process.
16        (4) "Equipment" includes an independent device or tool
17    separate from machinery but essential to an integrated
18    manufacturing or assembly process; including computers
19    used primarily in a manufacturer's computer assisted
20    design, computer assisted manufacturing (CAD/CAM) system;
21    any subunit or assembly comprising a component of any
22    machinery or auxiliary, adjunct, or attachment parts of
23    machinery, such as tools, dies, jigs, fixtures, patterns,
24    and molds; and any parts that require periodic replacement
25    in the course of normal operation; but does not include
26    hand tools. Equipment includes chemicals or chemicals

 

 

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1    acting as catalysts but only if the chemicals or chemicals
2    acting as catalysts effect a direct and immediate change
3    upon a product being manufactured or assembled for
4    wholesale or retail sale or lease.
5        (5) "Production related tangible personal property"
6    means all tangible personal property that is used or
7    consumed by the purchaser in a manufacturing facility in
8    which a manufacturing process takes place and includes,
9    without limitation, tangible personal property that is
10    purchased for incorporation into real estate within a
11    manufacturing facility and tangible personal property that
12    is used or consumed in activities such as research and
13    development, preproduction material handling, receiving,
14    quality control, inventory control, storage, staging, and
15    packaging for shipping and transportation purposes.
16    "Production related tangible personal property" does not
17    include (i) tangible personal property that is used, within
18    or without a manufacturing facility, in sales, purchasing,
19    accounting, fiscal management, marketing, personnel
20    recruitment or selection, or landscaping or (ii) tangible
21    personal property that is required to be titled or
22    registered with a department, agency, or unit of federal,
23    State, or local government.
24    The manufacturing and assembling machinery and equipment
25exemption includes production related tangible personal
26property that is purchased on or after July 1, 2007 and on or

 

 

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1before June 30, 2008. The exemption for production related
2tangible personal property is subject to both of the following
3limitations:
4        (1) The maximum amount of the exemption for any one
5    taxpayer may not exceed 5% of the purchase price of
6    production related tangible personal property that is
7    purchased on or after July 1, 2007 and on or before June
8    30, 2008. A credit under Section 3-85 of this Act may not
9    be earned by the purchase of production related tangible
10    personal property for which an exemption is received under
11    this Section.
12        (2) The maximum aggregate amount of the exemptions for
13    production related tangible personal property awarded
14    under this Act and the Retailers' Occupation Tax Act to all
15    taxpayers may not exceed $10,000,000. If the claims for the
16    exemption exceed $10,000,000, then the Department shall
17    reduce the amount of the exemption to each taxpayer on a
18    pro rata basis.
19The Department may adopt rules to implement and administer the
20exemption for production related tangible personal property.
21    The manufacturing and assembling machinery and equipment
22exemption includes the sale of materials to a purchaser who
23produces exempted types of machinery, equipment, or tools and
24who rents or leases that machinery, equipment, or tools to a
25manufacturer of tangible personal property. This exemption
26also includes the sale of materials to a purchaser who

 

 

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1manufactures those materials into an exempted type of
2machinery, equipment, or tools that the purchaser uses himself
3or herself in the manufacturing of tangible personal property.
4This exemption includes the sale of exempted types of machinery
5or equipment to a purchaser who is not the manufacturer, but
6who rents or leases the use of the property to a manufacturer.
7The purchaser of the machinery and equipment who has an active
8resale registration number shall furnish that number to the
9seller at the time of purchase. A user of the machinery,
10equipment, or tools without an active resale registration
11number shall prepare a certificate of exemption for each
12transaction stating facts establishing the exemption for that
13transaction, and that certificate shall be available to the
14Department for inspection or audit. The Department shall
15prescribe the form of the certificate. Informal rulings,
16opinions, or letters issued by the Department in response to an
17inquiry or request for an opinion from any person regarding the
18coverage and applicability of this exemption to specific
19devices shall be published, maintained as a public record, and
20made available for public inspection and copying. If the
21informal ruling, opinion, or letter contains trade secrets or
22other confidential information, where possible, the Department
23shall delete that information before publication. Whenever
24informal rulings, opinions, or letters contain a policy of
25general applicability, the Department shall formulate and
26adopt that policy as a rule in accordance with the Illinois

 

 

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1Administrative Procedure Act.
2    The manufacturing and assembling machinery and equipment
3exemption is exempt from the provisions of Section 3-90.
4(Source: P.A. 98-583, eff. 1-1-14; 10000SB0009ham003.)
 
5    Section 35-10. If and only if Senate Bill 9 of the 100th
6General Assembly becomes law in the form in which it was
7amended by House Amendment No. 3, then the Service Use Tax Act
8is amended by changing Sections 2 and 3-5 as follows:
 
9    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
10    Sec. 2. Definitions.
11    "Use" means the exercise by any person of any right or
12power over tangible personal property incident to the ownership
13of that property, but does not include the sale or use for
14demonstration by him of that property in any form as tangible
15personal property in the regular course of business. "Use" does
16not mean the interim use of tangible personal property nor the
17physical incorporation of tangible personal property, as an
18ingredient or constituent, into other tangible personal
19property, (a) which is sold in the regular course of business
20or (b) which the person incorporating such ingredient or
21constituent therein has undertaken at the time of such purchase
22to cause to be transported in interstate commerce to
23destinations outside the State of Illinois.
24    "Purchased from a serviceman" means the acquisition of the

 

 

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1ownership of, or title to, tangible personal property through a
2sale of service.
3    "Purchaser" means any person who, through a sale of
4service, acquires the ownership of, or title to, any tangible
5personal property.
6    "Cost price" means the consideration paid by the serviceman
7for a purchase valued in money, whether paid in money or
8otherwise, including cash, credits and services, and shall be
9determined without any deduction on account of the supplier's
10cost of the property sold or on account of any other expense
11incurred by the supplier. When a serviceman contracts out part
12or all of the services required in his sale of service, it
13shall be presumed that the cost price to the serviceman of the
14property transferred to him or her by his or her subcontractor
15is equal to 50% of the subcontractor's charges to the
16serviceman in the absence of proof of the consideration paid by
17the subcontractor for the purchase of such property.
18    "Selling price" means the consideration for a sale valued
19in money whether received in money or otherwise, including
20cash, credits and service, and shall be determined without any
21deduction on account of the serviceman's cost of the property
22sold, the cost of materials used, labor or service cost or any
23other expense whatsoever, but does not include interest or
24finance charges which appear as separate items on the bill of
25sale or sales contract nor charges that are added to prices by
26sellers on account of the seller's duty to collect, from the

 

 

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1purchaser, the tax that is imposed by this Act.
2    "Department" means the Department of Revenue.
3    "Person" means any natural individual, firm, partnership,
4association, joint stock company, joint venture, public or
5private corporation, limited liability company, and any
6receiver, executor, trustee, guardian or other representative
7appointed by order of any court.
8    "Sale of service" means any transaction except:
9        (1) a retail sale of tangible personal property taxable
10    under the Retailers' Occupation Tax Act or under the Use
11    Tax Act.
12        (2) a sale of tangible personal property for the
13    purpose of resale made in compliance with Section 2c of the
14    Retailers' Occupation Tax Act.
15        (3) except as hereinafter provided, a sale or transfer
16    of tangible personal property as an incident to the
17    rendering of service for or by any governmental body, or
18    for or by any corporation, society, association,
19    foundation or institution organized and operated
20    exclusively for charitable, religious or educational
21    purposes or any not-for-profit corporation, society,
22    association, foundation, institution or organization which
23    has no compensated officers or employees and which is
24    organized and operated primarily for the recreation of
25    persons 55 years of age or older. A limited liability
26    company may qualify for the exemption under this paragraph

 

 

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1    only if the limited liability company is organized and
2    operated exclusively for educational purposes.
3        (4) a sale or transfer of tangible personal property as
4    an incident to the rendering of service for interstate
5    carriers for hire for use as rolling stock moving in
6    interstate commerce or by lessors under a lease of one year
7    or longer, executed or in effect at the time of purchase of
8    personal property, to interstate carriers for hire for use
9    as rolling stock moving in interstate commerce so long as
10    so used by such interstate carriers for hire, and equipment
11    operated by a telecommunications provider, licensed as a
12    common carrier by the Federal Communications Commission,
13    which is permanently installed in or affixed to aircraft
14    moving in interstate commerce.
15        (4a) a sale or transfer of tangible personal property
16    as an incident to the rendering of service for owners,
17    lessors, or shippers of tangible personal property which is
18    utilized by interstate carriers for hire for use as rolling
19    stock moving in interstate commerce so long as so used by
20    interstate carriers for hire, and equipment operated by a
21    telecommunications provider, licensed as a common carrier
22    by the Federal Communications Commission, which is
23    permanently installed in or affixed to aircraft moving in
24    interstate commerce.
25        (4a-5) 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
2    pounds as an incident to the rendering of service if that
3    motor vehicle is subject to the commercial distribution fee
4    imposed under Section 3-815.1 of the Illinois Vehicle Code.
5    Beginning on July 1, 2004 and through June 30, 2005, the
6    use in this State of motor vehicles of the second division:
7    (i) with a gross vehicle weight rating in excess of 8,000
8    pounds; (ii) that are subject to the commercial
9    distribution fee imposed under Section 3-815.1 of the
10    Illinois Vehicle Code; and (iii) that are primarily used
11    for commercial purposes. Through June 30, 2005, this
12    exemption applies to repair and replacement parts added
13    after the initial purchase of such a motor vehicle if that
14    motor vehicle is used in a manner that would qualify for
15    the rolling stock exemption otherwise provided for in this
16    Act. For purposes of this paragraph, "used for commercial
17    purposes" means the transportation of persons or property
18    in furtherance of any commercial or industrial enterprise
19    whether for-hire or not.
20        (5) a sale or transfer of machinery and equipment used
21    primarily in the process of the manufacturing or
22    assembling, either in an existing, an expanded or a new
23    manufacturing facility, of tangible personal property for
24    wholesale or retail sale or lease, whether such sale or
25    lease is made directly by the manufacturer or by some other
26    person, whether the materials used in the process are owned

 

 

SB2224- 407 -LRB100 13364 AXK 27964 b

1    by the manufacturer or some other person, or whether such
2    sale or lease is made apart from or as an incident to the
3    seller's engaging in a service occupation and the
4    applicable tax is a Service Use Tax or Service Occupation
5    Tax, rather than Use Tax or Retailers' Occupation Tax. The
6    exemption provided by this paragraph (5) does not include
7    machinery and equipment used in (i) the generation of
8    electricity for wholesale or retail sale; (ii) the
9    generation or treatment of natural or artificial gas for
10    wholesale or retail sale that is delivered to customers
11    through pipes, pipelines, or mains; or (iii) the treatment
12    of water for wholesale or retail sale that is delivered to
13    customers through pipes, pipelines, or mains. The
14    provisions of this amendatory Act of the 98th General
15    Assembly are declaratory of existing law as to the meaning
16    and scope of this exemption. The exemption under this
17    paragraph (5) is exempt from the provisions of Section
18    3-75.
19        (5a) the repairing, reconditioning or remodeling, for
20    a common carrier by rail, of tangible personal property
21    which belongs to such carrier for hire, and as to which
22    such carrier receives the physical possession of the
23    repaired, reconditioned or remodeled item of tangible
24    personal property in Illinois, and which such carrier
25    transports, or shares with another common carrier in the
26    transportation of such property, out of Illinois on a

 

 

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1    standard uniform bill of lading showing the person who
2    repaired, reconditioned or remodeled the property to a
3    destination outside Illinois, for use outside Illinois.
4        (5b) 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
10    such property in Illinois, and which transports such
11    property, or shares with another common carrier in the
12    transportation of such property, out of Illinois on a
13    standard uniform bill of lading showing the seller of the
14    property as the shipper or consignor of such property to a
15    destination outside Illinois, for use outside Illinois.
16        (6) until July 1, 2003, a sale or transfer of
17    distillation machinery and equipment, sold as a unit or kit
18    and assembled or installed by the retailer, which machinery
19    and equipment is certified by the user to be used only for
20    the production of ethyl alcohol that will be used for
21    consumption as motor fuel or as a component of motor fuel
22    for the personal use of such user and not subject to sale
23    or resale.
24        (7) at the election of any serviceman not required to
25    be otherwise registered as a retailer under Section 2a of
26    the Retailers' Occupation Tax Act, made for each fiscal

 

 

SB2224- 409 -LRB100 13364 AXK 27964 b

1    year sales of service in which the aggregate annual cost
2    price of tangible personal property transferred as an
3    incident to the sales of service is less than 35%, or 75%
4    in the case of servicemen transferring prescription drugs
5    or servicemen engaged in graphic arts production, of the
6    aggregate annual total gross receipts from all sales of
7    service. The purchase of such tangible personal property by
8    the serviceman shall be subject to tax under the Retailers'
9    Occupation Tax Act and the Use Tax Act. However, if a
10    primary serviceman who has made the election described in
11    this paragraph subcontracts service work to a secondary
12    serviceman who has also made the election described in this
13    paragraph, the primary serviceman does not incur a Use Tax
14    liability if the secondary serviceman (i) has paid or will
15    pay Use Tax on his or her cost price of any tangible
16    personal property transferred to the primary serviceman
17    and (ii) certifies that fact in writing to the primary
18    serviceman.
19    Tangible personal property transferred incident to the
20completion of a maintenance agreement is exempt from the tax
21imposed pursuant to this Act.
22    Exemption (5) also includes machinery and equipment used in
23the general maintenance or repair of such exempt machinery and
24equipment or for in-house manufacture of exempt machinery and
25equipment. On and after July 1, 2017, exemption (5) also
26includes graphic arts machinery and equipment, as defined in

 

 

SB2224- 410 -LRB100 13364 AXK 27964 b

1paragraph (5) of Section 3-5. The machinery and equipment
2exemption does not include machinery and equipment used in (i)
3the generation of electricity for wholesale or retail sale;
4(ii) the generation or treatment of natural or artificial gas
5for wholesale or retail sale that is delivered to customers
6through pipes, pipelines, or mains; or (iii) the treatment of
7water for wholesale or retail sale that is delivered to
8customers through pipes, pipelines, or mains. The provisions of
9this amendatory Act of the 98th General Assembly are
10declaratory of existing law as to the meaning and scope of this
11exemption. For the purposes of exemption (5), each of these
12terms shall have the following meanings: (1) "manufacturing
13process" shall mean the production of any article of tangible
14personal property, whether such article is a finished product
15or an article for use in the process of manufacturing or
16assembling a different article of tangible personal property,
17by procedures commonly regarded as manufacturing, processing,
18fabricating, or refining which changes some existing material
19or materials into a material with a different form, use or
20name. In relation to a recognized integrated business composed
21of a series of operations which collectively constitute
22manufacturing, or individually constitute manufacturing
23operations, the manufacturing process shall be deemed to
24commence with the first operation or stage of production in the
25series, and shall not be deemed to end until the completion of
26the final product in the last operation or stage of production

 

 

SB2224- 411 -LRB100 13364 AXK 27964 b

1in the series; and further, for purposes of exemption (5),
2photoprocessing is deemed to be a manufacturing process of
3tangible personal property for wholesale or retail sale; (2)
4"assembling process" shall mean the production of any article
5of tangible personal property, whether such article is a
6finished product or an article for use in the process of
7manufacturing or assembling a different article of tangible
8personal property, by the combination of existing materials in
9a manner commonly regarded as assembling which results in a
10material of a different form, use or name; (3) "machinery"
11shall mean major mechanical machines or major components of
12such machines contributing to a manufacturing or assembling
13process; and (4) "equipment" shall include any independent
14device or tool separate from any machinery but essential to an
15integrated manufacturing or assembly process; including
16computers used primarily in a manufacturer's computer assisted
17design, computer assisted manufacturing (CAD/CAM) system; or
18any subunit or assembly comprising a component of any machinery
19or auxiliary, adjunct or attachment parts of machinery, such as
20tools, dies, jigs, fixtures, patterns and molds; or any parts
21which require periodic replacement in the course of normal
22operation; but shall not include hand tools. Equipment includes
23chemicals or chemicals acting as catalysts but only if the
24chemicals or chemicals acting as catalysts effect a direct and
25immediate change upon a product being manufactured or assembled
26for wholesale or retail sale or lease. The purchaser of such

 

 

SB2224- 412 -LRB100 13364 AXK 27964 b

1machinery and equipment who has an active resale registration
2number shall furnish such number to the seller at the time of
3purchase. The user of such machinery and equipment and tools
4without an active resale registration number shall prepare a
5certificate of exemption for each transaction stating facts
6establishing the exemption for that transaction, which
7certificate shall be available to the Department for inspection
8or audit. The Department shall prescribe the form of the
9certificate.
10    Any informal rulings, opinions or letters issued by the
11Department in response to an inquiry or request for any opinion
12from any person regarding the coverage and applicability of
13exemption (5) to specific devices shall be published,
14maintained as a public record, and made available for public
15inspection and copying. If the informal ruling, opinion or
16letter contains trade secrets or other confidential
17information, where possible the Department shall delete such
18information prior to publication. Whenever such informal
19rulings, opinions, or letters contain any policy of general
20applicability, the Department shall formulate and adopt such
21policy as a rule in accordance with the provisions of the
22Illinois Administrative Procedure Act.
23    On and after July 1, 1987, no entity otherwise eligible
24under exemption (3) of this Section shall make tax free
25purchases unless it has an active exemption identification
26number issued by the Department.

 

 

SB2224- 413 -LRB100 13364 AXK 27964 b

1    The purchase, employment and transfer of such tangible
2personal property as newsprint and ink for the primary purpose
3of conveying news (with or without other information) is not a
4purchase, use or sale of service or of tangible personal
5property within the meaning of this Act.
6    "Serviceman" means any person who is engaged in the
7occupation of making sales of service.
8    "Sale at retail" means "sale at retail" as defined in the
9Retailers' Occupation Tax Act.
10    "Supplier" means any person who makes sales of tangible
11personal property to servicemen for the purpose of resale as an
12incident to a sale of service.
13    "Serviceman maintaining a place of business in this State",
14or any like term, means and includes any serviceman:
15        1. having or maintaining within this State, directly or
16    by a subsidiary, an office, distribution house, sales
17    house, warehouse or other place of business, or any agent
18    or other representative operating within this State under
19    the authority of the serviceman or its subsidiary,
20    irrespective of whether such place of business or agent or
21    other representative is located here permanently or
22    temporarily, or whether such serviceman or subsidiary is
23    licensed to do business in this State;
24        1.1. having a contract with a person located in this
25    State under which the person, for a commission or other
26    consideration based on the sale of service by the

 

 

SB2224- 414 -LRB100 13364 AXK 27964 b

1    serviceman, directly or indirectly refers potential
2    customers to the serviceman by providing to the potential
3    customers a promotional code or other mechanism that allows
4    the serviceman to track purchases referred by such persons.
5    Examples of mechanisms that allow the serviceman to track
6    purchases referred by such persons include but are not
7    limited to the use of a link on the person's Internet
8    website, promotional codes distributed through the
9    person's hand-delivered or mailed material, and
10    promotional codes distributed by the person through radio
11    or other broadcast media. The provisions of this paragraph
12    1.1 shall apply only if the cumulative gross receipts from
13    sales of service by the serviceman to customers who are
14    referred to the serviceman by all persons in this State
15    under such contracts exceed $10,000 during the preceding 4
16    quarterly periods ending on the last day of March, June,
17    September, and December; a serviceman meeting the
18    requirements of this paragraph 1.1 shall be presumed to be
19    maintaining a place of business in this State but may rebut
20    this presumption by submitting proof that the referrals or
21    other activities pursued within this State by such persons
22    were not sufficient to meet the nexus standards of the
23    United States Constitution during the preceding 4
24    quarterly periods;
25        1.2. beginning July 1, 2011, having a contract with a
26    person located in this State under which:

 

 

SB2224- 415 -LRB100 13364 AXK 27964 b

1            A. the serviceman sells the same or substantially
2        similar line of services as the person located in this
3        State and does so using an identical or substantially
4        similar name, trade name, or trademark as the person
5        located in this State; and
6            B. the serviceman provides a commission or other
7        consideration to the person located in this State based
8        upon the sale of services by the serviceman.
9    The provisions of this paragraph 1.2 shall apply only if
10    the cumulative gross receipts from sales of service by the
11    serviceman to customers in this State under all such
12    contracts exceed $10,000 during the preceding 4 quarterly
13    periods ending on the last day of March, June, September,
14    and December;
15        2. soliciting orders for tangible personal property by
16    means of a telecommunication or television shopping system
17    (which utilizes toll free numbers) which is intended by the
18    retailer to be broadcast by cable television or other means
19    of broadcasting, to consumers located in this State;
20        3. pursuant to a contract with a broadcaster or
21    publisher located in this State, soliciting orders for
22    tangible personal property by means of advertising which is
23    disseminated primarily to consumers located in this State
24    and only secondarily to bordering jurisdictions;
25        4. soliciting orders for tangible personal property by
26    mail if the solicitations are substantial and recurring and

 

 

SB2224- 416 -LRB100 13364 AXK 27964 b

1    if the retailer benefits from any banking, financing, debt
2    collection, telecommunication, or marketing activities
3    occurring in this State or benefits from the location in
4    this State of authorized installation, servicing, or
5    repair facilities;
6        5. being owned or controlled by the same interests
7    which own or control any retailer engaging in business in
8    the same or similar line of business in this State;
9        6. having a franchisee or licensee operating under its
10    trade name if the franchisee or licensee is required to
11    collect the tax under this Section;
12        7. pursuant to a contract with a cable television
13    operator located in this State, soliciting orders for
14    tangible personal property by means of advertising which is
15    transmitted or distributed over a cable television system
16    in this State; or
17        8. engaging in activities in Illinois, which
18    activities in the state in which the supply business
19    engaging in such activities is located would constitute
20    maintaining a place of business in that state.
21(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15;
2210000SB0009ham003.)
 
23    (35 ILCS 110/3-5)
24    Sec. 3-5. Exemptions. Use of the following tangible
25personal property is exempt from the tax imposed by this Act:

 

 

SB2224- 417 -LRB100 13364 AXK 27964 b

1    (1) Personal property purchased from a corporation,
2society, association, foundation, institution, or
3organization, other than a limited liability company, that is
4organized and operated as a not-for-profit service enterprise
5for the benefit of persons 65 years of age or older if the
6personal property was not purchased by the enterprise for the
7purpose of resale by the enterprise.
8    (2) Personal property purchased by a non-profit Illinois
9county fair association for use in conducting, operating, or
10promoting the county fair.
11    (3) Personal property purchased by a not-for-profit arts or
12cultural organization that establishes, by proof required by
13the Department by rule, that it has received an exemption under
14Section 501(c)(3) of the Internal Revenue Code and that is
15organized and operated primarily for the presentation or
16support of arts or cultural programming, activities, or
17services. These organizations include, but are not limited to,
18music and dramatic arts organizations such as symphony
19orchestras and theatrical groups, arts and cultural service
20organizations, local arts councils, visual arts organizations,
21and media arts organizations. On and after the effective date
22of this amendatory Act of the 92nd General Assembly, however,
23an entity otherwise eligible for this exemption shall not make
24tax-free purchases unless it has an active identification
25number issued by the Department.
26    (4) Legal tender, currency, medallions, or gold or silver

 

 

SB2224- 418 -LRB100 13364 AXK 27964 b

1coinage issued by the State of Illinois, the government of the
2United States of America, or the government of any foreign
3country, and bullion.
4    (5) Until July 1, 2003 and beginning again on September 1,
52004 through August 30, 2014, graphic arts machinery and
6equipment, including repair and replacement parts, both new and
7used, and including that manufactured on special order or
8purchased for lease, certified by the purchaser to be used
9primarily for graphic arts production. Equipment includes
10chemicals or chemicals acting as catalysts but only if the
11chemicals or chemicals acting as catalysts effect a direct and
12immediate change upon a graphic arts product. Beginning on July
131, 2017, graphic arts machinery and equipment is included in
14the manufacturing and assembling machinery and equipment
15exemption under Section 2 of this Act.
16    (6) Personal property purchased from a teacher-sponsored
17student organization affiliated with an elementary or
18secondary school located in Illinois.
19    (7) Farm machinery and equipment, both new and used,
20including that manufactured on special order, certified by the
21purchaser to be used primarily for production agriculture or
22State or federal agricultural programs, including individual
23replacement parts for the machinery and equipment, including
24machinery and equipment purchased for lease, and including
25implements of husbandry defined in Section 1-130 of the
26Illinois Vehicle Code, farm machinery and agricultural

 

 

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1chemical and fertilizer spreaders, and nurse wagons required to
2be registered under Section 3-809 of the Illinois Vehicle Code,
3but excluding other motor vehicles required to be registered
4under the Illinois Vehicle Code. Horticultural polyhouses or
5hoop houses used for propagating, growing, or overwintering
6plants shall be considered farm machinery and equipment under
7this item (7). Agricultural chemical tender tanks and dry boxes
8shall include units sold separately from a motor vehicle
9required to be licensed and units sold mounted on a motor
10vehicle required to be licensed if the selling price of the
11tender is separately stated.
12    Farm machinery and equipment shall include precision
13farming equipment that is installed or purchased to be
14installed on farm machinery and equipment including, but not
15limited to, tractors, harvesters, sprayers, planters, seeders,
16or spreaders. Precision farming equipment includes, but is not
17limited to, soil testing sensors, computers, monitors,
18software, global positioning and mapping systems, and other
19such equipment.
20    Farm machinery and equipment also includes computers,
21sensors, software, and related equipment used primarily in the
22computer-assisted operation of production agriculture
23facilities, equipment, and activities such as, but not limited
24to, the collection, monitoring, and correlation of animal and
25crop data for the purpose of formulating animal diets and
26agricultural chemicals. This item (7) is exempt from the

 

 

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1provisions of Section 3-75.
2    (8) Until June 30, 2013, fuel and petroleum products sold
3to or used by an air common carrier, certified by the carrier
4to be used for consumption, shipment, or storage in the conduct
5of its business as an air common carrier, for a flight destined
6for or returning from a location or locations outside the
7United States without regard to previous or subsequent domestic
8stopovers.
9    Beginning July 1, 2013, fuel and petroleum products sold to
10or used by an air carrier, certified by the carrier to be used
11for consumption, shipment, or storage in the conduct of its
12business as an air common carrier, for a flight that (i) is
13engaged in foreign trade or is engaged in trade between the
14United States and any of its possessions and (ii) transports at
15least one individual or package for hire from the city of
16origination to the city of final destination on the same
17aircraft, without regard to a change in the flight number of
18that aircraft.
19    (9) Proceeds of mandatory service charges separately
20stated on customers' bills for the purchase and consumption of
21food and beverages acquired as an incident to the purchase of a
22service from a serviceman, to the extent that the proceeds of
23the service charge are in fact turned over as tips or as a
24substitute for tips to the employees who participate directly
25in preparing, serving, hosting or cleaning up the food or
26beverage function with respect to which the service charge is

 

 

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1imposed.
2    (10) Until July 1, 2003, oil field exploration, drilling,
3and production equipment, including (i) rigs and parts of rigs,
4rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
5tubular goods, including casing and drill strings, (iii) pumps
6and pump-jack units, (iv) storage tanks and flow lines, (v) any
7individual replacement part for oil field exploration,
8drilling, and production equipment, and (vi) machinery and
9equipment purchased for lease; but excluding motor vehicles
10required to be registered under the Illinois Vehicle Code.
11    (11) Proceeds from the sale of photoprocessing machinery
12and equipment, including repair and replacement parts, both new
13and used, including that manufactured on special order,
14certified by the purchaser to be used primarily for
15photoprocessing, and including photoprocessing machinery and
16equipment purchased for lease.
17    (12) Coal and aggregate exploration, mining, off-highway
18hauling, processing, maintenance, and reclamation equipment,
19including replacement parts and equipment, and including
20equipment purchased for lease, but excluding motor vehicles
21required to be registered under the Illinois Vehicle Code. The
22changes made to this Section by Public Act 97-767 apply on and
23after July 1, 2003, but no claim for credit or refund is
24allowed on or after August 16, 2013 (the effective date of
25Public Act 98-456) for such taxes paid during the period
26beginning July 1, 2003 and ending on August 16, 2013 (the

 

 

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1effective date of Public Act 98-456).
2    (13) Semen used for artificial insemination of livestock
3for direct agricultural production.
4    (14) Horses, or interests in horses, registered with and
5meeting the requirements of any of the Arabian Horse Club
6Registry of America, Appaloosa Horse Club, American Quarter
7Horse Association, United States Trotting Association, or
8Jockey Club, as appropriate, used for purposes of breeding or
9racing for prizes. This item (14) is exempt from the provisions
10of Section 3-75, and the exemption provided for under this item
11(14) applies for all periods beginning May 30, 1995, but no
12claim for credit or refund is allowed on or after the effective
13date of this amendatory Act of the 95th General Assembly for
14such taxes paid during the period beginning May 30, 2000 and
15ending on the effective date of this amendatory Act of the 95th
16General Assembly.
17    (15) Computers and communications equipment utilized for
18any hospital purpose and equipment used in the diagnosis,
19analysis, or treatment of hospital patients purchased by a
20lessor who leases the equipment, under a lease of one year or
21longer executed or in effect at the time the lessor would
22otherwise be subject to the tax imposed by this Act, to a
23hospital that has been issued an active tax exemption
24identification number by the Department under Section 1g of the
25Retailers' Occupation Tax Act. If the equipment is leased in a
26manner that does not qualify for this exemption or is used in

 

 

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1any other non-exempt manner, the lessor shall be liable for the
2tax imposed under this Act or the Use Tax Act, as the case may
3be, based on the fair market value of the property at the time
4the non-qualifying use occurs. No lessor shall collect or
5attempt to collect an amount (however designated) that purports
6to reimburse that lessor for the tax imposed by this Act or the
7Use Tax Act, as the case may be, if the tax has not been paid by
8the lessor. If a lessor improperly collects any such amount
9from the lessee, the lessee shall have a legal right to claim a
10refund of that amount from the lessor. If, however, that amount
11is not refunded to the lessee for any reason, the lessor is
12liable to pay that amount to the Department.
13    (16) Personal property purchased by a lessor who leases the
14property, under a lease of one year or longer executed or in
15effect at the time the lessor would otherwise be subject to the
16tax imposed by this Act, to a governmental body that has been
17issued an active tax exemption identification number by the
18Department under Section 1g of the Retailers' Occupation Tax
19Act. If the property is leased in a manner that does not
20qualify for this exemption or is used in any other non-exempt
21manner, the lessor shall be liable for the tax imposed under
22this Act or the Use Tax Act, as the case may be, based on the
23fair market value of the property at the time the
24non-qualifying use occurs. No lessor shall collect or attempt
25to collect an amount (however designated) that purports to
26reimburse that lessor for the tax imposed by this Act or the

 

 

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1Use Tax Act, as the case may be, if the tax has not been paid by
2the lessor. If a lessor improperly collects any such amount
3from the lessee, the lessee shall have a legal right to claim a
4refund of that amount from the lessor. If, however, that amount
5is not refunded to the lessee for any reason, the lessor is
6liable to pay that amount to the Department.
7    (17) Beginning with taxable years ending on or after
8December 31, 1995 and ending with taxable years ending on or
9before December 31, 2004, personal property that is donated for
10disaster relief to be used in a State or federally declared
11disaster area in Illinois or bordering Illinois by a
12manufacturer or retailer that is registered in this State to a
13corporation, society, association, foundation, or institution
14that has been issued a sales tax exemption identification
15number by the Department that assists victims of the disaster
16who reside within the declared disaster area.
17    (18) Beginning with taxable years ending on or after
18December 31, 1995 and ending with taxable years ending on or
19before December 31, 2004, personal property that is used in the
20performance of infrastructure repairs in this State, including
21but not limited to municipal roads and streets, access roads,
22bridges, sidewalks, waste disposal systems, water and sewer
23line extensions, water distribution and purification
24facilities, storm water drainage and retention facilities, and
25sewage treatment facilities, resulting from a State or
26federally declared disaster in Illinois or bordering Illinois

 

 

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1when such repairs are initiated on facilities located in the
2declared disaster area within 6 months after the disaster.
3    (19) Beginning July 1, 1999, game or game birds purchased
4at a "game breeding and hunting preserve area" as that term is
5used in the Wildlife Code. This paragraph is exempt from the
6provisions of Section 3-75.
7    (20) A motor vehicle, as that term is defined in Section
81-146 of the Illinois Vehicle Code, that is donated to a
9corporation, limited liability company, society, association,
10foundation, or institution that is determined by the Department
11to be organized and operated exclusively for educational
12purposes. For purposes of this exemption, "a corporation,
13limited liability company, society, association, foundation,
14or institution organized and operated exclusively for
15educational purposes" means all tax-supported public schools,
16private schools that offer systematic instruction in useful
17branches of learning by methods common to public schools and
18that compare favorably in their scope and intensity with the
19course of study presented in tax-supported schools, and
20vocational or technical schools or institutes organized and
21operated exclusively to provide a course of study of not less
22than 6 weeks duration and designed to prepare individuals to
23follow a trade or to pursue a manual, technical, mechanical,
24industrial, business, or commercial occupation.
25    (21) Beginning January 1, 2000, personal property,
26including food, purchased through fundraising events for the

 

 

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1benefit of a public or private elementary or secondary school,
2a group of those schools, or one or more school districts if
3the events are sponsored by an entity recognized by the school
4district that consists primarily of volunteers and includes
5parents and teachers of the school children. This paragraph
6does not apply to fundraising events (i) for the benefit of
7private home instruction or (ii) for which the fundraising
8entity purchases the personal property sold at the events from
9another individual or entity that sold the property for the
10purpose of resale by the fundraising entity and that profits
11from the sale to the fundraising entity. This paragraph is
12exempt from the provisions of Section 3-75.
13    (22) Beginning January 1, 2000 and through December 31,
142001, new or used automatic vending machines that prepare and
15serve hot food and beverages, including coffee, soup, and other
16items, and replacement parts for these machines. Beginning
17January 1, 2002 and through June 30, 2003, machines and parts
18for machines used in commercial, coin-operated amusement and
19vending business if a use or occupation tax is paid on the
20gross receipts derived from the use of the commercial,
21coin-operated amusement and vending machines. This paragraph
22is exempt from the provisions of Section 3-75.
23    (23) Beginning August 23, 2001 and through June 30, 2016,
24food for human consumption that is to be consumed off the
25premises where it is sold (other than alcoholic beverages, soft
26drinks, and food that has been prepared for immediate

 

 

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1consumption) and prescription and nonprescription medicines,
2drugs, medical appliances, and insulin, urine testing
3materials, syringes, and needles used by diabetics, for human
4use, when purchased for use by a person receiving medical
5assistance under Article V of the Illinois Public Aid Code who
6resides in a licensed long-term care facility, as defined in
7the Nursing Home Care Act, or in a licensed facility as defined
8in the ID/DD Community Care Act, the MC/DD Act, or the
9Specialized Mental Health Rehabilitation Act of 2013.
10    (24) Beginning on the effective date of this amendatory Act
11of the 92nd General Assembly, computers and communications
12equipment utilized for any hospital purpose and equipment used
13in the diagnosis, analysis, or treatment of hospital patients
14purchased by a lessor who leases the equipment, under a lease
15of one year or longer executed or in effect at the time the
16lessor would otherwise be subject to the tax imposed by this
17Act, to a hospital that has been issued an active tax exemption
18identification number by the Department under Section 1g of the
19Retailers' Occupation Tax Act. If the equipment is leased in a
20manner that does not qualify for this exemption or is used in
21any other nonexempt manner, the lessor shall be liable for the
22tax imposed under this Act or the Use Tax Act, as the case may
23be, based on the fair market value of the property at the time
24the nonqualifying use occurs. No lessor shall collect or
25attempt to collect an amount (however designated) that purports
26to reimburse that lessor for the tax imposed by this Act or the

 

 

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1Use Tax Act, as the case may be, if the tax has not been paid by
2the lessor. If a lessor improperly collects any such amount
3from the lessee, the lessee shall have a legal right to claim a
4refund of that amount from the lessor. If, however, that amount
5is not refunded to the lessee for any reason, the lessor is
6liable to pay that amount to the Department. This paragraph is
7exempt from the provisions of Section 3-75.
8    (25) Beginning on the effective date of this amendatory Act
9of the 92nd General Assembly, personal property purchased by a
10lessor who leases the property, under a lease of one year or
11longer executed or in effect at the time the lessor would
12otherwise be subject to the tax imposed by this Act, to a
13governmental body that has been issued an active tax exemption
14identification number by the Department under Section 1g of the
15Retailers' Occupation Tax Act. If the property is leased in a
16manner that does not qualify for this exemption or is used in
17any other nonexempt manner, the lessor shall be liable for the
18tax imposed under this Act or the Use Tax Act, as the case may
19be, based on the fair market value of the property at the time
20the nonqualifying use occurs. No lessor shall collect or
21attempt to collect an amount (however designated) that purports
22to reimburse that lessor for the tax imposed by this Act or the
23Use Tax Act, as the case may be, if the tax has not been paid by
24the lessor. If a lessor improperly collects any such amount
25from the lessee, the lessee shall have a legal right to claim a
26refund of that amount from the lessor. If, however, that amount

 

 

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1is not refunded to the lessee for any reason, the lessor is
2liable to pay that amount to the Department. This paragraph is
3exempt from the provisions of Section 3-75.
4    (26) Beginning January 1, 2008, tangible personal property
5used in the construction or maintenance of a community water
6supply, as defined under Section 3.145 of the Environmental
7Protection Act, that is operated by a not-for-profit
8corporation that holds a valid water supply permit issued under
9Title IV of the Environmental Protection Act. This paragraph is
10exempt from the provisions of Section 3-75.
11    (27) Beginning January 1, 2010, materials, parts,
12equipment, components, and furnishings incorporated into or
13upon an aircraft as part of the modification, refurbishment,
14completion, replacement, repair, or maintenance of the
15aircraft. This exemption includes consumable supplies used in
16the modification, refurbishment, completion, replacement,
17repair, and maintenance of aircraft, but excludes any
18materials, parts, equipment, components, and consumable
19supplies used in the modification, replacement, repair, and
20maintenance of aircraft engines or power plants, whether such
21engines or power plants are installed or uninstalled upon any
22such aircraft. "Consumable supplies" include, but are not
23limited to, adhesive, tape, sandpaper, general purpose
24lubricants, cleaning solution, latex gloves, and protective
25films. This exemption applies only to the use of qualifying
26tangible personal property transferred incident to the

 

 

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1modification, refurbishment, completion, replacement, repair,
2or maintenance of aircraft by persons who (i) hold an Air
3Agency Certificate and are empowered to operate an approved
4repair station by the Federal Aviation Administration, (ii)
5have a Class IV Rating, and (iii) conduct operations in
6accordance with Part 145 of the Federal Aviation Regulations.
7The exemption does not include aircraft operated by a
8commercial air carrier providing scheduled passenger air
9service pursuant to authority issued under Part 121 or Part 129
10of the Federal Aviation Regulations. The changes made to this
11paragraph (27) by Public Act 98-534 are declarative of existing
12law.
13    (28) Tangible personal property purchased by a
14public-facilities corporation, as described in Section
1511-65-10 of the Illinois Municipal Code, for purposes of
16constructing or furnishing a municipal convention hall, but
17only if the legal title to the municipal convention hall is
18transferred to the municipality without any further
19consideration by or on behalf of the municipality at the time
20of the completion of the municipal convention hall or upon the
21retirement or redemption of any bonds or other debt instruments
22issued by the public-facilities corporation in connection with
23the development of the municipal convention hall. This
24exemption includes existing public-facilities corporations as
25provided in Section 11-65-25 of the Illinois Municipal Code.
26This paragraph is exempt from the provisions of Section 3-75.

 

 

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1    (29) Beginning January 1, 2017, menstrual pads, tampons,
2and menstrual cups.
3(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
498-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
57-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
610000SB0009ham003.)
 
7    Section 35-15. If and only if Senate Bill 9 of the 100th
8General Assembly becomes law in the form in which it was
9amended by House Amendment No. 3, then the Service Occupation
10Tax Act is amended by changing Sections 2 and 3-5 as follows:
 
11    (35 ILCS 115/2)  (from Ch. 120, par. 439.102)
12    Sec. 2. "Transfer" means any transfer of the title to
13property or of the ownership of property whether or not the
14transferor retains title as security for the payment of amounts
15due him from the transferee.
16    "Cost Price" means the consideration paid by the serviceman
17for a purchase valued in money, whether paid in money or
18otherwise, including cash, credits and services, and shall be
19determined without any deduction on account of the supplier's
20cost of the property sold or on account of any other expense
21incurred by the supplier. When a serviceman contracts out part
22or all of the services required in his sale of service, it
23shall be presumed that the cost price to the serviceman of the
24property transferred to him by his or her subcontractor is

 

 

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1equal to 50% of the subcontractor's charges to the serviceman
2in the absence of proof of the consideration paid by the
3subcontractor for the purchase of such property.
4    "Department" means the Department of Revenue.
5    "Person" means any natural individual, firm, partnership,
6association, joint stock company, joint venture, public or
7private corporation, limited liability company, and any
8receiver, executor, trustee, guardian or other representative
9appointed by order of any court.
10    "Sale of Service" means any transaction except:
11    (a) A retail sale of tangible personal property taxable
12under the Retailers' Occupation Tax Act or under the Use Tax
13Act.
14    (b) A sale of tangible personal property for the purpose of
15resale made in compliance with Section 2c of the Retailers'
16Occupation Tax Act.
17    (c) Except as hereinafter provided, a sale or transfer of
18tangible personal property as an incident to the rendering of
19service for or by any governmental body or for or by any
20corporation, society, association, foundation or institution
21organized and operated exclusively for charitable, religious
22or educational purposes or any not-for-profit corporation,
23society, association, foundation, institution or organization
24which has no compensated officers or employees and which is
25organized and operated primarily for the recreation of persons
2655 years of age or older. A limited liability company may

 

 

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1qualify for the exemption under this paragraph only if the
2limited liability company is organized and operated
3exclusively for educational purposes.
4    (d) A sale or transfer of tangible personal property as an
5incident to the rendering of service for interstate carriers
6for hire for use as rolling stock moving in interstate commerce
7or lessors under leases of one year or longer, executed or in
8effect at the time of purchase, to interstate carriers for hire
9for use as rolling stock moving in interstate commerce, and
10equipment operated by a telecommunications provider, licensed
11as a common carrier by the Federal Communications Commission,
12which is permanently installed in or affixed to aircraft moving
13in interstate commerce.
14    (d-1) A sale or transfer of tangible personal property as
15an incident to the rendering of service for owners, lessors or
16shippers of tangible personal property which is utilized by
17interstate carriers for hire for use as rolling stock moving in
18interstate commerce, and equipment operated by a
19telecommunications provider, licensed as a common carrier by
20the Federal Communications Commission, which is permanently
21installed in or affixed to aircraft moving in interstate
22commerce.
23    (d-1.1) On and after July 1, 2003 and through June 30,
242004, a sale or transfer of a motor vehicle of the second
25division with a gross vehicle weight in excess of 8,000 pounds
26as an incident to the rendering of service if that motor

 

 

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1vehicle is subject to the commercial distribution fee imposed
2under Section 3-815.1 of the Illinois Vehicle Code. Beginning
3on July 1, 2004 and through June 30, 2005, the use in this
4State of motor vehicles of the second division: (i) with a
5gross vehicle weight rating in excess of 8,000 pounds; (ii)
6that are subject to the commercial distribution fee imposed
7under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
8that are primarily used for commercial purposes. Through June
930, 2005, this exemption applies to repair and replacement
10parts added after the initial purchase of such a motor vehicle
11if that motor vehicle is used in a manner that would qualify
12for the rolling stock exemption otherwise provided for in this
13Act. For purposes of this paragraph, "used for commercial
14purposes" means the transportation of persons or property in
15furtherance of any commercial or industrial enterprise whether
16for-hire or not.
17    (d-2) The repairing, reconditioning or remodeling, for a
18common carrier by rail, of tangible personal property which
19belongs to such carrier for hire, and as to which such carrier
20receives the physical possession of the repaired,
21reconditioned or remodeled item of tangible personal property
22in Illinois, and which such carrier transports, or shares with
23another common carrier in the transportation of such property,
24out of Illinois on a standard uniform bill of lading showing
25the person who repaired, reconditioned or remodeled the
26property as the shipper or consignor of such property to a

 

 

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1destination outside Illinois, for use outside Illinois.
2    (d-3) A sale or transfer of tangible personal property
3which is produced by the seller thereof on special order in
4such a way as to have made the applicable tax the Service
5Occupation Tax or the Service Use Tax, rather than the
6Retailers' Occupation Tax or the Use Tax, for an interstate
7carrier by rail which receives the physical possession of such
8property in Illinois, and which transports such property, or
9shares with another common carrier in the transportation of
10such property, out of Illinois on a standard uniform bill of
11lading showing the seller of the property as the shipper or
12consignor of such property to a destination outside Illinois,
13for use outside Illinois.
14    (d-4) Until January 1, 1997, a sale, by a registered
15serviceman paying tax under this Act to the Department, of
16special order printed materials delivered outside Illinois and
17which are not returned to this State, if delivery is made by
18the seller or agent of the seller, including an agent who
19causes the product to be delivered outside Illinois by a common
20carrier or the U.S. postal service.
21    (e) A sale or transfer of machinery and equipment used
22primarily in the process of the manufacturing or assembling,
23either in an existing, an expanded or a new manufacturing
24facility, of tangible personal property for wholesale or retail
25sale or lease, whether such sale or lease is made directly by
26the manufacturer or by some other person, whether the materials

 

 

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1used in the process are owned by the manufacturer or some other
2person, or whether such sale or lease is made apart from or as
3an incident to the seller's engaging in a service occupation
4and the applicable tax is a Service Occupation Tax or Service
5Use Tax, rather than Retailers' Occupation Tax or Use Tax. The
6exemption provided by this paragraph (e) does not include
7machinery and equipment used in (i) the generation of
8electricity for wholesale or retail sale; (ii) the generation
9or treatment of natural or artificial gas for wholesale or
10retail sale that is delivered to customers through pipes,
11pipelines, or mains; or (iii) the treatment of water for
12wholesale or retail sale that is delivered to customers through
13pipes, pipelines, or mains. The provisions of this amendatory
14Act of the 98th General Assembly are declaratory of existing
15law as to the meaning and scope of this exemption. The
16exemption under this subsection (e) is exempt from the
17provisions of Section 3-75.
18    (f) Until July 1, 2003, the sale or transfer of
19distillation machinery and equipment, sold as a unit or kit and
20assembled or installed by the retailer, which machinery and
21equipment is certified by the user to be used only for the
22production of ethyl alcohol that will be used for consumption
23as motor fuel or as a component of motor fuel for the personal
24use of such user and not subject to sale or resale.
25    (g) At the election of any serviceman not required to be
26otherwise registered as a retailer under Section 2a of the

 

 

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1Retailers' Occupation Tax Act, made for each fiscal year sales
2of service in which the aggregate annual cost price of tangible
3personal property transferred as an incident to the sales of
4service is less than 35% (75% in the case of servicemen
5transferring prescription drugs or servicemen engaged in
6graphic arts production) of the aggregate annual total gross
7receipts from all sales of service. The purchase of such
8tangible personal property by the serviceman shall be subject
9to tax under the Retailers' Occupation Tax Act and the Use Tax
10Act. However, if a primary serviceman who has made the election
11described in this paragraph subcontracts service work to a
12secondary serviceman who has also made the election described
13in this paragraph, the primary serviceman does not incur a Use
14Tax liability if the secondary serviceman (i) has paid or will
15pay Use Tax on his or her cost price of any tangible personal
16property transferred to the primary serviceman and (ii)
17certifies that fact in writing to the primary serviceman.
18    Tangible personal property transferred incident to the
19completion of a maintenance agreement is exempt from the tax
20imposed pursuant to this Act.
21    Exemption (e) also includes machinery and equipment used in
22the general maintenance or repair of such exempt machinery and
23equipment or for in-house manufacture of exempt machinery and
24equipment. On and after July 1, 2017, exemption (e) also
25includes graphic arts machinery and equipment, as defined in
26paragraph (5) of Section 3-5. The machinery and equipment

 

 

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1exemption does not include machinery and equipment used in (i)
2the generation of electricity for wholesale or retail sale;
3(ii) the generation or treatment of natural or artificial gas
4for wholesale or retail sale that is delivered to customers
5through pipes, pipelines, or mains; or (iii) the treatment of
6water for wholesale or retail sale that is delivered to
7customers through pipes, pipelines, or mains. The provisions of
8this amendatory Act of the 98th General Assembly are
9declaratory of existing law as to the meaning and scope of this
10exemption. For the purposes of exemption (e), each of these
11terms shall have the following meanings: (1) "manufacturing
12process" shall mean the production of any article of tangible
13personal property, whether such article is a finished product
14or an article for use in the process of manufacturing or
15assembling a different article of tangible personal property,
16by procedures commonly regarded as manufacturing, processing,
17fabricating, or refining which changes some existing material
18or materials into a material with a different form, use or
19name. In relation to a recognized integrated business composed
20of a series of operations which collectively constitute
21manufacturing, or individually constitute manufacturing
22operations, the manufacturing process shall be deemed to
23commence with the first operation or stage of production in the
24series, and shall not be deemed to end until the completion of
25the final product in the last operation or stage of production
26in the series; and further for purposes of exemption (e),

 

 

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1photoprocessing is deemed to be a manufacturing process of
2tangible personal property for wholesale or retail sale; (2)
3"assembling process" shall mean the production of any article
4of tangible personal property, whether such article is a
5finished product or an article for use in the process of
6manufacturing or assembling a different article of tangible
7personal property, by the combination of existing materials in
8a manner commonly regarded as assembling which results in a
9material of a different form, use or name; (3) "machinery"
10shall mean major mechanical machines or major components of
11such machines contributing to a manufacturing or assembling
12process; and (4) "equipment" shall include any independent
13device or tool separate from any machinery but essential to an
14integrated manufacturing or assembly process; including
15computers used primarily in a manufacturer's computer assisted
16design, computer assisted manufacturing (CAD/CAM) system; or
17any subunit or assembly comprising a component of any machinery
18or auxiliary, adjunct or attachment parts of machinery, such as
19tools, dies, jigs, fixtures, patterns and molds; or any parts
20which require periodic replacement in the course of normal
21operation; but shall not include hand tools. Equipment includes
22chemicals or chemicals acting as catalysts but only if the
23chemicals or chemicals acting as catalysts effect a direct and
24immediate change upon a product being manufactured or assembled
25for wholesale or retail sale or lease. The purchaser of such
26machinery and equipment who has an active resale registration

 

 

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1number shall furnish such number to the seller at the time of
2purchase. The purchaser of such machinery and equipment and
3tools without an active resale registration number shall
4furnish to the seller a certificate of exemption for each
5transaction stating facts establishing the exemption for that
6transaction, which certificate shall be available to the
7Department for inspection or audit.
8    Except as provided in Section 2d of this Act, the rolling
9stock exemption applies to rolling stock used by an interstate
10carrier for hire, even just between points in Illinois, if such
11rolling stock transports, for hire, persons whose journeys or
12property whose shipments originate or terminate outside
13Illinois.
14    Any informal rulings, opinions or letters issued by the
15Department in response to an inquiry or request for any opinion
16from any person regarding the coverage and applicability of
17exemption (e) to specific devices shall be published,
18maintained as a public record, and made available for public
19inspection and copying. If the informal ruling, opinion or
20letter contains trade secrets or other confidential
21information, where possible the Department shall delete such
22information prior to publication. Whenever such informal
23rulings, opinions, or letters contain any policy of general
24applicability, the Department shall formulate and adopt such
25policy as a rule in accordance with the provisions of the
26Illinois Administrative Procedure Act.

 

 

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1    On and after July 1, 1987, no entity otherwise eligible
2under exemption (c) of this Section shall make tax free
3purchases unless it has an active exemption identification
4number issued by the Department.
5    "Serviceman" means any person who is engaged in the
6occupation of making sales of service.
7    "Sale at Retail" means "sale at retail" as defined in the
8Retailers' Occupation Tax Act.
9    "Supplier" means any person who makes sales of tangible
10personal property to servicemen for the purpose of resale as an
11incident to a sale of service.
12(Source: P.A. 98-583, eff. 1-1-14; 10000SB0009ham003.)
 
13    (35 ILCS 115/3-5)
14    Sec. 3-5. Exemptions. The following tangible personal
15property is exempt from the tax imposed by this Act:
16    (1) Personal property sold by a corporation, society,
17association, foundation, institution, or organization, other
18than a limited liability company, that is organized and
19operated as a not-for-profit service enterprise for the benefit
20of persons 65 years of age or older if the personal property
21was not purchased by the enterprise for the purpose of resale
22by the enterprise.
23    (2) Personal property purchased by a not-for-profit
24Illinois county fair association for use in conducting,
25operating, or promoting the county fair.

 

 

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1    (3) Personal property purchased by any not-for-profit arts
2or cultural organization that establishes, by proof required by
3the Department by rule, that it has received an exemption under
4Section 501(c)(3) of the Internal Revenue Code and that is
5organized and operated primarily for the presentation or
6support of arts or cultural programming, activities, or
7services. These organizations include, but are not limited to,
8music and dramatic arts organizations such as symphony
9orchestras and theatrical groups, arts and cultural service
10organizations, local arts councils, visual arts organizations,
11and media arts organizations. On and after the effective date
12of this amendatory Act of the 92nd General Assembly, however,
13an entity otherwise eligible for this exemption shall not make
14tax-free purchases unless it has an active identification
15number issued by the Department.
16    (4) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20    (5) Until July 1, 2003 and beginning again on September 1,
212004 through August 30, 2014, graphic arts machinery and
22equipment, including repair and replacement parts, both new and
23used, and including that manufactured on special order or
24purchased for lease, certified by the purchaser to be used
25primarily for graphic arts production. Equipment includes
26chemicals or chemicals acting as catalysts but only if the

 

 

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1chemicals or chemicals acting as catalysts effect a direct and
2immediate change upon a graphic arts product. Beginning on July
31, 2017, graphic arts machinery and equipment is included in
4the manufacturing and assembling machinery and equipment
5exemption under Section 2 of this Act.
6    (6) Personal property sold by a teacher-sponsored student
7organization affiliated with an elementary or secondary school
8located in Illinois.
9    (7) Farm machinery and equipment, both new and used,
10including that manufactured on special order, certified by the
11purchaser to be used primarily for production agriculture or
12State or federal agricultural programs, including individual
13replacement parts for the machinery and equipment, including
14machinery and equipment purchased for lease, and including
15implements of husbandry defined in Section 1-130 of the
16Illinois Vehicle Code, farm machinery and agricultural
17chemical and fertilizer spreaders, and nurse wagons required to
18be registered under Section 3-809 of the Illinois Vehicle Code,
19but excluding other motor vehicles required to be registered
20under the Illinois Vehicle Code. Horticultural polyhouses or
21hoop houses used for propagating, growing, or overwintering
22plants shall be considered farm machinery and equipment under
23this item (7). Agricultural chemical tender tanks and dry boxes
24shall include units sold separately from a motor vehicle
25required to be licensed and units sold mounted on a motor
26vehicle required to be licensed if the selling price of the

 

 

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1tender is separately stated.
2    Farm machinery and equipment shall include precision
3farming equipment that is installed or purchased to be
4installed on farm machinery and equipment including, but not
5limited to, tractors, harvesters, sprayers, planters, seeders,
6or spreaders. Precision farming equipment includes, but is not
7limited to, soil testing sensors, computers, monitors,
8software, global positioning and mapping systems, and other
9such equipment.
10    Farm machinery and equipment also includes computers,
11sensors, software, and related equipment used primarily in the
12computer-assisted operation of production agriculture
13facilities, equipment, and activities such as, but not limited
14to, the collection, monitoring, and correlation of animal and
15crop data for the purpose of formulating animal diets and
16agricultural chemicals. This item (7) is exempt from the
17provisions of Section 3-55.
18    (8) Until June 30, 2013, fuel and petroleum products sold
19to or used by an air common carrier, certified by the carrier
20to be used for consumption, shipment, or storage in the conduct
21of its business as an air common carrier, for a flight destined
22for or returning from a location or locations outside the
23United States without regard to previous or subsequent domestic
24stopovers.
25    Beginning July 1, 2013, fuel and petroleum products sold to
26or used by an air carrier, certified by the carrier to be used

 

 

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1for consumption, shipment, or storage in the conduct of its
2business as an air common carrier, for a flight that (i) is
3engaged in foreign trade or is engaged in trade between the
4United States and any of its possessions and (ii) transports at
5least one individual or package for hire from the city of
6origination to the city of final destination on the same
7aircraft, without regard to a change in the flight number of
8that aircraft.
9    (9) Proceeds of mandatory service charges separately
10stated on customers' bills for the purchase and consumption of
11food and beverages, to the extent that the proceeds of the
12service charge are in fact turned over as tips or as a
13substitute for tips to the employees who participate directly
14in preparing, serving, hosting or cleaning up the food or
15beverage function with respect to which the service charge is
16imposed.
17    (10) Until July 1, 2003, oil field exploration, drilling,
18and production equipment, including (i) rigs and parts of rigs,
19rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
20tubular goods, including casing and drill strings, (iii) pumps
21and pump-jack units, (iv) storage tanks and flow lines, (v) any
22individual replacement part for oil field exploration,
23drilling, and production equipment, and (vi) machinery and
24equipment purchased for lease; but excluding motor vehicles
25required to be registered under the Illinois Vehicle Code.
26    (11) Photoprocessing machinery and equipment, including

 

 

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1repair and replacement parts, both new and used, including that
2manufactured on special order, certified by the purchaser to be
3used primarily for photoprocessing, and including
4photoprocessing machinery and equipment purchased for lease.
5    (12) Coal and aggregate exploration, mining, off-highway
6hauling, processing, maintenance, and reclamation equipment,
7including replacement parts and equipment, and including
8equipment purchased for lease, but excluding motor vehicles
9required to be registered under the Illinois Vehicle Code. The
10changes made to this Section by Public Act 97-767 apply on and
11after July 1, 2003, but no claim for credit or refund is
12allowed on or after August 16, 2013 (the effective date of
13Public Act 98-456) for such taxes paid during the period
14beginning July 1, 2003 and ending on August 16, 2013 (the
15effective date of Public Act 98-456).
16    (13) Beginning January 1, 1992 and through June 30, 2016,
17food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages, soft
19drinks and food that has been prepared for immediate
20consumption) and prescription and non-prescription medicines,
21drugs, medical appliances, and insulin, urine testing
22materials, syringes, and needles used by diabetics, for human
23use, when purchased for use by a person receiving medical
24assistance under Article V of the Illinois Public Aid Code who
25resides in a licensed long-term care facility, as defined in
26the Nursing Home Care Act, or in a licensed facility as defined

 

 

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1in the ID/DD Community Care Act, the MC/DD Act, or the
2Specialized Mental Health Rehabilitation Act of 2013.
3    (14) Semen used for artificial insemination of livestock
4for direct agricultural production.
5    (15) Horses, or interests in horses, registered with and
6meeting the requirements of any of the Arabian Horse Club
7Registry of America, Appaloosa Horse Club, American Quarter
8Horse Association, United States Trotting Association, or
9Jockey Club, as appropriate, used for purposes of breeding or
10racing for prizes. This item (15) is exempt from the provisions
11of Section 3-55, and the exemption provided for under this item
12(15) applies for all periods beginning May 30, 1995, but no
13claim for credit or refund is allowed on or after January 1,
142008 (the effective date of Public Act 95-88) for such taxes
15paid during the period beginning May 30, 2000 and ending on
16January 1, 2008 (the effective date of Public Act 95-88).
17    (16) Computers and communications equipment utilized for
18any hospital purpose and equipment used in the diagnosis,
19analysis, or treatment of hospital patients sold to a lessor
20who leases the equipment, under a lease of one year or longer
21executed or in effect at the time of the purchase, to a
22hospital that has been issued an active tax exemption
23identification number by the Department under Section 1g of the
24Retailers' Occupation Tax Act.
25    (17) Personal property sold to a lessor who leases the
26property, under a lease of one year or longer executed or in

 

 

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1effect at the time of the purchase, to a governmental body that
2has been issued an active tax exemption identification number
3by the Department under Section 1g of the Retailers' Occupation
4Tax Act.
5    (18) Beginning with taxable years ending on or after
6December 31, 1995 and ending with taxable years ending on or
7before December 31, 2004, personal property that is donated for
8disaster relief to be used in a State or federally declared
9disaster area in Illinois or bordering Illinois by a
10manufacturer or retailer that is registered in this State to a
11corporation, society, association, foundation, or institution
12that has been issued a sales tax exemption identification
13number by the Department that assists victims of the disaster
14who reside within the declared disaster area.
15    (19) Beginning with taxable years ending on or after
16December 31, 1995 and ending with taxable years ending on or
17before December 31, 2004, personal property that is used in the
18performance of infrastructure repairs in this State, including
19but not limited to municipal roads and streets, access roads,
20bridges, sidewalks, waste disposal systems, water and sewer
21line extensions, water distribution and purification
22facilities, storm water drainage and retention facilities, and
23sewage treatment facilities, resulting from a State or
24federally declared disaster in Illinois or bordering Illinois
25when such repairs are initiated on facilities located in the
26declared disaster area within 6 months after the disaster.

 

 

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1    (20) Beginning July 1, 1999, game or game birds sold at a
2"game breeding and hunting preserve area" as that term is used
3in the Wildlife Code. This paragraph is exempt from the
4provisions of Section 3-55.
5    (21) A motor vehicle, as that term is defined in Section
61-146 of the Illinois Vehicle Code, that is donated to a
7corporation, limited liability company, society, association,
8foundation, or institution that is determined by the Department
9to be organized and operated exclusively for educational
10purposes. For purposes of this exemption, "a corporation,
11limited liability company, society, association, foundation,
12or institution organized and operated exclusively for
13educational purposes" means all tax-supported public schools,
14private schools that offer systematic instruction in useful
15branches of learning by methods common to public schools and
16that compare favorably in their scope and intensity with the
17course of study presented in tax-supported schools, and
18vocational or technical schools or institutes organized and
19operated exclusively to provide a course of study of not less
20than 6 weeks duration and designed to prepare individuals to
21follow a trade or to pursue a manual, technical, mechanical,
22industrial, business, or commercial occupation.
23    (22) Beginning January 1, 2000, personal property,
24including food, purchased through fundraising events for the
25benefit of a public or private elementary or secondary school,
26a group of those schools, or one or more school districts if

 

 

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1the events are sponsored by an entity recognized by the school
2district that consists primarily of volunteers and includes
3parents and teachers of the school children. This paragraph
4does not apply to fundraising events (i) for the benefit of
5private home instruction or (ii) for which the fundraising
6entity purchases the personal property sold at the events from
7another individual or entity that sold the property for the
8purpose of resale by the fundraising entity and that profits
9from the sale to the fundraising entity. This paragraph is
10exempt from the provisions of Section 3-55.
11    (23) Beginning January 1, 2000 and through December 31,
122001, new or used automatic vending machines that prepare and
13serve hot food and beverages, including coffee, soup, and other
14items, and replacement parts for these machines. Beginning
15January 1, 2002 and through June 30, 2003, machines and parts
16for machines used in commercial, coin-operated amusement and
17vending business if a use or occupation tax is paid on the
18gross receipts derived from the use of the commercial,
19coin-operated amusement and vending machines. This paragraph
20is exempt from the provisions of Section 3-55.
21    (24) Beginning on the effective date of this amendatory Act
22of the 92nd General Assembly, computers and communications
23equipment utilized for any hospital purpose and equipment used
24in the diagnosis, analysis, or treatment of hospital patients
25sold to a lessor who leases the equipment, under a lease of one
26year or longer executed or in effect at the time of the

 

 

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1purchase, to a hospital that has been issued an active tax
2exemption identification number by the Department under
3Section 1g of the Retailers' Occupation Tax Act. This paragraph
4is exempt from the provisions of Section 3-55.
5    (25) Beginning on the effective date of this amendatory Act
6of the 92nd General Assembly, personal property sold to a
7lessor who leases the property, under a lease of one year or
8longer executed or in effect at the time of the purchase, to a
9governmental body that has been issued an active tax exemption
10identification number by the Department under Section 1g of the
11Retailers' Occupation Tax Act. This paragraph is exempt from
12the provisions of Section 3-55.
13    (26) Beginning on January 1, 2002 and through June 30,
142016, tangible personal property purchased from an Illinois
15retailer by a taxpayer engaged in centralized purchasing
16activities in Illinois who will, upon receipt of the property
17in Illinois, temporarily store the property in Illinois (i) for
18the purpose of subsequently transporting it outside this State
19for use or consumption thereafter solely outside this State or
20(ii) for the purpose of being processed, fabricated, or
21manufactured into, attached to, or incorporated into other
22tangible personal property to be transported outside this State
23and thereafter used or consumed solely outside this State. The
24Director of Revenue shall, pursuant to rules adopted in
25accordance with the Illinois Administrative Procedure Act,
26issue a permit to any taxpayer in good standing with the

 

 

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1Department who is eligible for the exemption under this
2paragraph (26). The permit issued under this paragraph (26)
3shall authorize the holder, to the extent and in the manner
4specified in the rules adopted under this Act, to purchase
5tangible personal property from a retailer exempt from the
6taxes imposed by this Act. Taxpayers shall maintain all
7necessary books and records to substantiate the use and
8consumption of all such tangible personal property outside of
9the State of Illinois.
10    (27) Beginning January 1, 2008, tangible personal property
11used in the construction or maintenance of a community water
12supply, as defined under Section 3.145 of the Environmental
13Protection Act, that is operated by a not-for-profit
14corporation that holds a valid water supply permit issued under
15Title IV of the Environmental Protection Act. This paragraph is
16exempt from the provisions of Section 3-55.
17    (28) Tangible personal property sold to a
18public-facilities corporation, as described in Section
1911-65-10 of the Illinois Municipal Code, for purposes of
20constructing or furnishing a municipal convention hall, but
21only if the legal title to the municipal convention hall is
22transferred to the municipality without any further
23consideration by or on behalf of the municipality at the time
24of the completion of the municipal convention hall or upon the
25retirement or redemption of any bonds or other debt instruments
26issued by the public-facilities corporation in connection with

 

 

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1the development of the municipal convention hall. This
2exemption includes existing public-facilities corporations as
3provided in Section 11-65-25 of the Illinois Municipal Code.
4This paragraph is exempt from the provisions of Section 3-55.
5    (29) Beginning January 1, 2010, materials, parts,
6equipment, components, and furnishings incorporated into or
7upon an aircraft as part of the modification, refurbishment,
8completion, replacement, repair, or maintenance of the
9aircraft. This exemption includes consumable supplies used in
10the modification, refurbishment, completion, replacement,
11repair, and maintenance of aircraft, but excludes any
12materials, parts, equipment, components, and consumable
13supplies used in the modification, replacement, repair, and
14maintenance of aircraft engines or power plants, whether such
15engines or power plants are installed or uninstalled upon any
16such aircraft. "Consumable supplies" include, but are not
17limited to, adhesive, tape, sandpaper, general purpose
18lubricants, cleaning solution, latex gloves, and protective
19films. This exemption applies only to the transfer of
20qualifying tangible personal property incident to the
21modification, refurbishment, completion, replacement, repair,
22or maintenance of an aircraft by persons who (i) hold an Air
23Agency Certificate and are empowered to operate an approved
24repair station by the Federal Aviation Administration, (ii)
25have a Class IV Rating, and (iii) conduct operations in
26accordance with Part 145 of the Federal Aviation Regulations.

 

 

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1The exemption does not include aircraft operated by a
2commercial air carrier providing scheduled passenger air
3service pursuant to authority issued under Part 121 or Part 129
4of the Federal Aviation Regulations. The changes made to this
5paragraph (29) by Public Act 98-534 are declarative of existing
6law.
7    (30) Beginning January 1, 2017, menstrual pads, tampons,
8and menstrual cups.
9(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1098-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
117-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
1210000SB0009ham003.)
 
13    Section 35-20. If and only if Senate Bill 9 of the 100th
14General Assembly becomes law in the form in which it was
15amended by House Amendment No. 3, then the Retailers'
16Occupation Tax Act is amended by changing Sections 2-5 and 2-45
17as follows:
 
18    (35 ILCS 120/2-5)
19    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
20sale of the following tangible personal property are exempt
21from the tax imposed by this Act:
22    (1) Farm chemicals.
23    (2) Farm machinery and equipment, both new and used,
24including that manufactured on special order, certified by the

 

 

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1purchaser to be used primarily for production agriculture or
2State or federal agricultural programs, including individual
3replacement parts for the machinery and equipment, including
4machinery and equipment purchased for lease, and including
5implements of husbandry defined in Section 1-130 of the
6Illinois Vehicle Code, farm machinery and agricultural
7chemical and fertilizer spreaders, and nurse wagons required to
8be registered under Section 3-809 of the Illinois Vehicle Code,
9but excluding other motor vehicles required to be registered
10under the Illinois Vehicle Code. Horticultural polyhouses or
11hoop houses used for propagating, growing, or overwintering
12plants shall be considered farm machinery and equipment under
13this item (2). Agricultural chemical tender tanks and dry boxes
14shall include units sold separately from a motor vehicle
15required to be licensed and units sold mounted on a motor
16vehicle required to be licensed, if the selling price of the
17tender is separately stated.
18    Farm machinery and equipment shall include precision
19farming equipment that is installed or purchased to be
20installed on farm machinery and equipment including, but not
21limited to, tractors, harvesters, sprayers, planters, seeders,
22or spreaders. Precision farming equipment includes, but is not
23limited to, soil testing sensors, computers, monitors,
24software, global positioning and mapping systems, and other
25such equipment.
26    Farm machinery and equipment also includes computers,

 

 

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1sensors, software, and related equipment used primarily in the
2computer-assisted operation of production agriculture
3facilities, equipment, and activities such as, but not limited
4to, the collection, monitoring, and correlation of animal and
5crop data for the purpose of formulating animal diets and
6agricultural chemicals. This item (2) is exempt from the
7provisions of Section 2-70.
8    (3) Until July 1, 2003, distillation machinery and
9equipment, sold as a unit or kit, assembled or installed by the
10retailer, certified by the user to be used only for the
11production of ethyl alcohol that will be used for consumption
12as motor fuel or as a component of motor fuel for the personal
13use of the user, and not subject to sale or resale.
14    (4) Until July 1, 2003 and beginning again September 1,
152004 through August 30, 2014, graphic arts machinery and
16equipment, including repair and replacement parts, both new and
17used, and including that manufactured on special order or
18purchased for lease, certified by the purchaser to be used
19primarily for graphic arts production. Equipment includes
20chemicals or chemicals acting as catalysts but only if the
21chemicals or chemicals acting as catalysts effect a direct and
22immediate change upon a graphic arts product. Beginning on July
231, 2017, graphic arts machinery and equipment is included in
24the manufacturing and assembling machinery and equipment
25exemption under paragraph (14).
26    (5) A motor vehicle that is used for automobile renting, as

 

 

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1defined in the Automobile Renting Occupation and Use Tax Act.
2This paragraph is exempt from the provisions of Section 2-70.
3    (6) Personal property sold by a teacher-sponsored student
4organization affiliated with an elementary or secondary school
5located in Illinois.
6    (7) Until July 1, 2003, proceeds of that portion of the
7selling price of a passenger car the sale of which is subject
8to the Replacement Vehicle Tax.
9    (8) Personal property sold to an Illinois county fair
10association for use in conducting, operating, or promoting the
11county fair.
12    (9) Personal property sold to a not-for-profit arts or
13cultural organization that establishes, by proof required by
14the Department by rule, that it has received an exemption under
15Section 501(c)(3) of the Internal Revenue Code and that is
16organized and operated primarily for the presentation or
17support of arts or cultural programming, activities, or
18services. These organizations include, but are not limited to,
19music and dramatic arts organizations such as symphony
20orchestras and theatrical groups, arts and cultural service
21organizations, local arts councils, visual arts organizations,
22and media arts organizations. On and after the effective date
23of this amendatory Act of the 92nd General Assembly, however,
24an entity otherwise eligible for this exemption shall not make
25tax-free purchases unless it has an active identification
26number issued by the Department.

 

 

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1    (10) Personal property sold by a corporation, society,
2association, foundation, institution, or organization, other
3than a limited liability company, that is organized and
4operated as a not-for-profit service enterprise for the benefit
5of persons 65 years of age or older if the personal property
6was not purchased by the enterprise for the purpose of resale
7by the enterprise.
8    (11) Personal property sold to a governmental body, to a
9corporation, society, association, foundation, or institution
10organized and operated exclusively for charitable, religious,
11or educational purposes, or to a not-for-profit corporation,
12society, association, foundation, institution, or organization
13that has no compensated officers or employees and that is
14organized and operated primarily for the recreation of persons
1555 years of age or older. A limited liability company may
16qualify for the exemption under this paragraph only if the
17limited liability company is organized and operated
18exclusively for educational purposes. On and after July 1,
191987, however, no entity otherwise eligible for this exemption
20shall make tax-free purchases unless it has an active
21identification number issued by the Department.
22    (12) Tangible personal property sold to interstate
23carriers for hire for use as rolling stock moving in interstate
24commerce or to lessors under leases of one year or longer
25executed or in effect at the time of purchase by interstate
26carriers for hire for use as rolling stock moving in interstate

 

 

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1commerce and equipment operated by a telecommunications
2provider, licensed as a common carrier by the Federal
3Communications Commission, which is permanently installed in
4or affixed to aircraft moving in interstate commerce.
5    (12-5) On and after July 1, 2003 and through June 30, 2004,
6motor vehicles of the second division with a gross vehicle
7weight in excess of 8,000 pounds that are subject to the
8commercial distribution fee imposed under Section 3-815.1 of
9the Illinois Vehicle Code. Beginning on July 1, 2004 and
10through June 30, 2005, the use in this State of motor vehicles
11of the second division: (i) with a gross vehicle weight rating
12in excess of 8,000 pounds; (ii) that are subject to the
13commercial distribution fee imposed under Section 3-815.1 of
14the Illinois Vehicle Code; and (iii) that are primarily used
15for commercial purposes. Through June 30, 2005, this exemption
16applies to repair and replacement parts added after the initial
17purchase of such a motor vehicle if that motor vehicle is used
18in a manner that would qualify for the rolling stock exemption
19otherwise provided for in this Act. For purposes of this
20paragraph, "used for commercial purposes" means the
21transportation of persons or property in furtherance of any
22commercial or industrial enterprise whether for-hire or not.
23    (13) Proceeds from sales to owners, lessors, or shippers of
24tangible personal property that is utilized by interstate
25carriers for hire for use as rolling stock moving in interstate
26commerce and equipment operated by a telecommunications

 

 

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1provider, licensed as a common carrier by the Federal
2Communications Commission, which is permanently installed in
3or affixed to aircraft moving in interstate commerce.
4    (14) Machinery and equipment that will be used by the
5purchaser, or a lessee of the purchaser, primarily in the
6process of manufacturing or assembling tangible personal
7property for wholesale or retail sale or lease, whether the
8sale or lease is made directly by the manufacturer or by some
9other person, whether the materials used in the process are
10owned by the manufacturer or some other person, or whether the
11sale or lease is made apart from or as an incident to the
12seller's engaging in the service occupation of producing
13machines, tools, dies, jigs, patterns, gauges, or other similar
14items of no commercial value on special order for a particular
15purchaser. The exemption provided by this paragraph (14) does
16not include machinery and equipment used in (i) the generation
17of electricity for wholesale or retail sale; (ii) the
18generation or treatment of natural or artificial gas for
19wholesale or retail sale that is delivered to customers through
20pipes, pipelines, or mains; or (iii) the treatment of water for
21wholesale or retail sale that is delivered to customers through
22pipes, pipelines, or mains. The provisions of Public Act 98-583
23are declaratory of existing law as to the meaning and scope of
24this exemption. Beginning on July 1, 2017, the exemption
25provided by this paragraph (14) includes, but is not limited
26to, graphic arts machinery and equipment, as defined in

 

 

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1paragraph (4) of this Section.
2    (15) Proceeds of mandatory service charges separately
3stated on customers' bills for purchase and consumption of food
4and beverages, to the extent that the proceeds of the service
5charge are in fact turned over as tips or as a substitute for
6tips to the employees who participate directly in preparing,
7serving, hosting or cleaning up the food or beverage function
8with respect to which the service charge is imposed.
9    (16) Petroleum products sold to a purchaser if the seller
10is prohibited by federal law from charging tax to the
11purchaser.
12    (17) Tangible personal property sold to a common carrier by
13rail or motor that receives the physical possession of the
14property in Illinois and that transports the property, or
15shares with another common carrier in the transportation of the
16property, out of Illinois on a standard uniform bill of lading
17showing the seller of the property as the shipper or consignor
18of the property to a destination outside Illinois, for use
19outside Illinois.
20    (18) Legal tender, currency, medallions, or gold or silver
21coinage issued by the State of Illinois, the government of the
22United States of America, or the government of any foreign
23country, and bullion.
24    (19) Until July 1 2003, oil field exploration, drilling,
25and production equipment, including (i) rigs and parts of rigs,
26rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

 

 

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1tubular goods, including casing and drill strings, (iii) pumps
2and pump-jack units, (iv) storage tanks and flow lines, (v) any
3individual replacement part for oil field exploration,
4drilling, and production equipment, and (vi) machinery and
5equipment purchased for lease; but excluding motor vehicles
6required to be registered under the Illinois Vehicle Code.
7    (20) Photoprocessing machinery and equipment, including
8repair and replacement parts, both new and used, including that
9manufactured on special order, certified by the purchaser to be
10used primarily for photoprocessing, and including
11photoprocessing machinery and equipment purchased for lease.
12    (21) Coal and aggregate exploration, mining, off-highway
13hauling, processing, maintenance, and reclamation equipment,
14including replacement parts and equipment, and including
15equipment purchased for lease, but excluding motor vehicles
16required to be registered under the Illinois Vehicle Code. The
17changes made to this Section by Public Act 97-767 apply on and
18after July 1, 2003, but no claim for credit or refund is
19allowed on or after August 16, 2013 (the effective date of
20Public Act 98-456) for such taxes paid during the period
21beginning July 1, 2003 and ending on August 16, 2013 (the
22effective date of Public Act 98-456).
23    (22) Until June 30, 2013, fuel and petroleum products sold
24to or used by an air carrier, certified by the carrier to be
25used for consumption, shipment, or storage in the conduct of
26its business as an air common carrier, for a flight destined

 

 

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1for or returning from a location or locations outside the
2United States without regard to previous or subsequent domestic
3stopovers.
4    Beginning July 1, 2013, fuel and petroleum products sold to
5or used by an air carrier, certified by the carrier to be used
6for consumption, shipment, or storage in the conduct of its
7business as an air common carrier, for a flight that (i) is
8engaged in foreign trade or is engaged in trade between the
9United States and any of its possessions and (ii) transports at
10least one individual or package for hire from the city of
11origination to the city of final destination on the same
12aircraft, without regard to a change in the flight number of
13that aircraft.
14    (23) A transaction in which the purchase order is received
15by a florist who is located outside Illinois, but who has a
16florist located in Illinois deliver the property to the
17purchaser or the purchaser's donee in Illinois.
18    (24) Fuel consumed or used in the operation of ships,
19barges, or vessels that are used primarily in or for the
20transportation of property or the conveyance of persons for
21hire on rivers bordering on this State if the fuel is delivered
22by the seller to the purchaser's barge, ship, or vessel while
23it is afloat upon that bordering river.
24    (25) Except as provided in item (25-5) of this Section, a
25motor vehicle sold in this State to a nonresident even though
26the motor vehicle is delivered to the nonresident in this

 

 

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1State, if the motor vehicle is not to be titled in this State,
2and if a drive-away permit is issued to the motor vehicle as
3provided in Section 3-603 of the Illinois Vehicle Code or if
4the nonresident purchaser has vehicle registration plates to
5transfer to the motor vehicle upon returning to his or her home
6state. The issuance of the drive-away permit or having the
7out-of-state registration plates to be transferred is prima
8facie evidence that the motor vehicle will not be titled in
9this State.
10    (25-5) The exemption under item (25) does not apply if the
11state in which the motor vehicle will be titled does not allow
12a reciprocal exemption for a motor vehicle sold and delivered
13in that state to an Illinois resident but titled in Illinois.
14The tax collected under this Act on the sale of a motor vehicle
15in this State to a resident of another state that does not
16allow a reciprocal exemption shall be imposed at a rate equal
17to the state's rate of tax on taxable property in the state in
18which the purchaser is a resident, except that the tax shall
19not exceed the tax that would otherwise be imposed under this
20Act. At the time of the sale, the purchaser shall execute a
21statement, signed under penalty of perjury, of his or her
22intent to title the vehicle in the state in which the purchaser
23is a resident within 30 days after the sale and of the fact of
24the payment to the State of Illinois of tax in an amount
25equivalent to the state's rate of tax on taxable property in
26his or her state of residence and shall submit the statement to

 

 

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1the appropriate tax collection agency in his or her state of
2residence. In addition, the retailer must retain a signed copy
3of the statement in his or her records. Nothing in this item
4shall be construed to require the removal of the vehicle from
5this state following the filing of an intent to title the
6vehicle in the purchaser's state of residence if the purchaser
7titles the vehicle in his or her state of residence within 30
8days after the date of sale. The tax collected under this Act
9in accordance with this item (25-5) shall be proportionately
10distributed as if the tax were collected at the 6.25% general
11rate imposed under this Act.
12    (25-7) Beginning on July 1, 2007, no tax is imposed under
13this Act on the sale of an aircraft, as defined in Section 3 of
14the Illinois Aeronautics Act, if all of the following
15conditions are met:
16        (1) the aircraft leaves this State within 15 days after
17    the later of either the issuance of the final billing for
18    the sale of the aircraft, or the authorized approval for
19    return to service, completion of the maintenance record
20    entry, and completion of the test flight and ground test
21    for inspection, as required by 14 C.F.R. 91.407;
22        (2) the aircraft is not based or registered in this
23    State after the sale of the aircraft; and
24        (3) the seller retains in his or her books and records
25    and provides to the Department a signed and dated
26    certification from the purchaser, on a form prescribed by

 

 

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1    the Department, certifying that the requirements of this
2    item (25-7) are met. The certificate must also include the
3    name and address of the purchaser, the address of the
4    location where the aircraft is to be titled or registered,
5    the address of the primary physical location of the
6    aircraft, and other information that the Department may
7    reasonably require.
8    For purposes of this item (25-7):
9    "Based in this State" means hangared, stored, or otherwise
10used, excluding post-sale customizations as defined in this
11Section, for 10 or more days in each 12-month period
12immediately following the date of the sale of the aircraft.
13    "Registered in this State" means an aircraft registered
14with the Department of Transportation, Aeronautics Division,
15or titled or registered with the Federal Aviation
16Administration to an address located in this State.
17    This paragraph (25-7) is exempt from the provisions of
18Section 2-70.
19    (26) Semen used for artificial insemination of livestock
20for direct agricultural production.
21    (27) Horses, or interests in horses, registered with and
22meeting the requirements of any of the Arabian Horse Club
23Registry of America, Appaloosa Horse Club, American Quarter
24Horse Association, United States Trotting Association, or
25Jockey Club, as appropriate, used for purposes of breeding or
26racing for prizes. This item (27) is exempt from the provisions

 

 

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1of Section 2-70, and the exemption provided for under this item
2(27) applies for all periods beginning May 30, 1995, but no
3claim for credit or refund is allowed on or after January 1,
42008 (the effective date of Public Act 95-88) for such taxes
5paid during the period beginning May 30, 2000 and ending on
6January 1, 2008 (the effective date of Public Act 95-88).
7    (28) Computers and communications equipment utilized for
8any hospital purpose and equipment used in the diagnosis,
9analysis, or treatment of hospital patients sold to a lessor
10who leases the equipment, under a lease of one year or longer
11executed or in effect at the time of the purchase, to a
12hospital that has been issued an active tax exemption
13identification number by the Department under Section 1g of
14this Act.
15    (29) Personal property sold to a lessor who leases the
16property, under a lease of one year or longer executed or in
17effect at the time of the purchase, to a governmental body that
18has been issued an active tax exemption identification number
19by the Department under Section 1g of this Act.
20    (30) Beginning with taxable years ending on or after
21December 31, 1995 and ending with taxable years ending on or
22before December 31, 2004, personal property that is donated for
23disaster relief to be used in a State or federally declared
24disaster area in Illinois or bordering Illinois by a
25manufacturer or retailer that is registered in this State to a
26corporation, society, association, foundation, or institution

 

 

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1that has been issued a sales tax exemption identification
2number by the Department that assists victims of the disaster
3who reside within the declared disaster area.
4    (31) Beginning with taxable years ending on or after
5December 31, 1995 and ending with taxable years ending on or
6before December 31, 2004, personal property that is used in the
7performance of infrastructure repairs in this State, including
8but not limited to municipal roads and streets, access roads,
9bridges, sidewalks, waste disposal systems, water and sewer
10line extensions, water distribution and purification
11facilities, storm water drainage and retention facilities, and
12sewage treatment facilities, resulting from a State or
13federally declared disaster in Illinois or bordering Illinois
14when such repairs are initiated on facilities located in the
15declared disaster area within 6 months after the disaster.
16    (32) Beginning July 1, 1999, game or game birds sold at a
17"game breeding and hunting preserve area" as that term is used
18in the Wildlife Code. This paragraph is exempt from the
19provisions of Section 2-70.
20    (33) A motor vehicle, as that term is defined in Section
211-146 of the Illinois Vehicle Code, that is donated to a
22corporation, limited liability company, society, association,
23foundation, or institution that is determined by the Department
24to be organized and operated exclusively for educational
25purposes. For purposes of this exemption, "a corporation,
26limited liability company, society, association, foundation,

 

 

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1or institution organized and operated exclusively for
2educational purposes" means all tax-supported public schools,
3private schools that offer systematic instruction in useful
4branches of learning by methods common to public schools and
5that compare favorably in their scope and intensity with the
6course of study presented in tax-supported schools, and
7vocational or technical schools or institutes organized and
8operated exclusively to provide a course of study of not less
9than 6 weeks duration and designed to prepare individuals to
10follow a trade or to pursue a manual, technical, mechanical,
11industrial, business, or commercial occupation.
12    (34) Beginning January 1, 2000, personal property,
13including food, purchased through fundraising events for the
14benefit of a public or private elementary or secondary school,
15a group of those schools, or one or more school districts if
16the events are sponsored by an entity recognized by the school
17district that consists primarily of volunteers and includes
18parents and teachers of the school children. This paragraph
19does not apply to fundraising events (i) for the benefit of
20private home instruction or (ii) for which the fundraising
21entity purchases the personal property sold at the events from
22another individual or entity that sold the property for the
23purpose of resale by the fundraising entity and that profits
24from the sale to the fundraising entity. This paragraph is
25exempt from the provisions of Section 2-70.
26    (35) Beginning January 1, 2000 and through December 31,

 

 

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12001, new or used automatic vending machines that prepare and
2serve hot food and beverages, including coffee, soup, and other
3items, and replacement parts for these machines. Beginning
4January 1, 2002 and through June 30, 2003, machines and parts
5for machines used in commercial, coin-operated amusement and
6vending business if a use or occupation tax is paid on the
7gross receipts derived from the use of the commercial,
8coin-operated amusement and vending machines. This paragraph
9is exempt from the provisions of Section 2-70.
10    (35-5) Beginning August 23, 2001 and through June 30, 2016,
11food for human consumption that is to be consumed off the
12premises where it is sold (other than alcoholic beverages, soft
13drinks, and food that has been prepared for immediate
14consumption) and prescription and nonprescription medicines,
15drugs, medical appliances, and insulin, urine testing
16materials, syringes, and needles used by diabetics, for human
17use, when purchased for use by a person receiving medical
18assistance under Article V of the Illinois Public Aid Code who
19resides in a licensed long-term care facility, as defined in
20the Nursing Home Care Act, or a licensed facility as defined in
21the ID/DD Community Care Act, the MC/DD Act, or the Specialized
22Mental Health Rehabilitation Act of 2013.
23    (36) Beginning August 2, 2001, computers and
24communications equipment utilized for any hospital purpose and
25equipment used in the diagnosis, analysis, or treatment of
26hospital patients sold to a lessor who leases the equipment,

 

 

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1under a lease of one year or longer executed or in effect at
2the time of the purchase, to a hospital that has been issued an
3active tax exemption identification number by the Department
4under Section 1g of this Act. This paragraph is exempt from the
5provisions of Section 2-70.
6    (37) Beginning August 2, 2001, personal property sold to a
7lessor who leases the property, under a lease of one year or
8longer executed or in effect at the time of the purchase, to a
9governmental body that has been issued an active tax exemption
10identification number by the Department under Section 1g of
11this Act. This paragraph is exempt from the provisions of
12Section 2-70.
13    (38) Beginning on January 1, 2002 and through June 30,
142016, tangible personal property purchased from an Illinois
15retailer by a taxpayer engaged in centralized purchasing
16activities in Illinois who will, upon receipt of the property
17in Illinois, temporarily store the property in Illinois (i) for
18the purpose of subsequently transporting it outside this State
19for use or consumption thereafter solely outside this State or
20(ii) for the purpose of being processed, fabricated, or
21manufactured into, attached to, or incorporated into other
22tangible personal property to be transported outside this State
23and thereafter used or consumed solely outside this State. The
24Director of Revenue shall, pursuant to rules adopted in
25accordance with the Illinois Administrative Procedure Act,
26issue a permit to any taxpayer in good standing with the

 

 

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1Department who is eligible for the exemption under this
2paragraph (38). The permit issued under this paragraph (38)
3shall authorize the holder, to the extent and in the manner
4specified in the rules adopted under this Act, to purchase
5tangible personal property from a retailer exempt from the
6taxes imposed by this Act. Taxpayers shall maintain all
7necessary books and records to substantiate the use and
8consumption of all such tangible personal property outside of
9the State of Illinois.
10    (39) Beginning January 1, 2008, tangible personal property
11used in the construction or maintenance of a community water
12supply, as defined under Section 3.145 of the Environmental
13Protection Act, that is operated by a not-for-profit
14corporation that holds a valid water supply permit issued under
15Title IV of the Environmental Protection Act. This paragraph is
16exempt from the provisions of Section 2-70.
17    (40) Beginning January 1, 2010, materials, parts,
18equipment, components, and furnishings incorporated into or
19upon an aircraft as part of the modification, refurbishment,
20completion, replacement, repair, or maintenance of the
21aircraft. This exemption includes consumable supplies used in
22the modification, refurbishment, completion, replacement,
23repair, and maintenance of aircraft, but excludes any
24materials, parts, equipment, components, and consumable
25supplies used in the modification, replacement, repair, and
26maintenance of aircraft engines or power plants, whether such

 

 

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1engines or power plants are installed or uninstalled upon any
2such aircraft. "Consumable supplies" include, but are not
3limited to, adhesive, tape, sandpaper, general purpose
4lubricants, cleaning solution, latex gloves, and protective
5films. This exemption applies only to the sale of qualifying
6tangible personal property to persons who modify, refurbish,
7complete, replace, or maintain an aircraft and who (i) hold an
8Air Agency Certificate and are empowered to operate an approved
9repair station by the Federal Aviation Administration, (ii)
10have a Class IV Rating, and (iii) conduct operations in
11accordance with Part 145 of the Federal Aviation Regulations.
12The exemption does not include aircraft operated by a
13commercial air carrier providing scheduled passenger air
14service pursuant to authority issued under Part 121 or Part 129
15of the Federal Aviation Regulations. The changes made to this
16paragraph (40) by Public Act 98-534 are declarative of existing
17law.
18    (41) Tangible personal property sold to a
19public-facilities corporation, as described in Section
2011-65-10 of the Illinois Municipal Code, for purposes of
21constructing or furnishing a municipal convention hall, but
22only if the legal title to the municipal convention hall is
23transferred to the municipality without any further
24consideration by or on behalf of the municipality at the time
25of the completion of the municipal convention hall or upon the
26retirement or redemption of any bonds or other debt instruments

 

 

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1issued by the public-facilities corporation in connection with
2the development of the municipal convention hall. This
3exemption includes existing public-facilities corporations as
4provided in Section 11-65-25 of the Illinois Municipal Code.
5This paragraph is exempt from the provisions of Section 2-70.
6    (42) Beginning January 1, 2017, menstrual pads, tampons,
7and menstrual cups.
8(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
998-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
101-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
117-29-15; 99-855, eff. 8-19-16; 10000SB0009ham003.)
 
12    (35 ILCS 120/2-45)  (from Ch. 120, par. 441-45)
13    Sec. 2-45. Manufacturing and assembly exemption. The
14manufacturing and assembly machinery and equipment exemption
15includes machinery and equipment that replaces machinery and
16equipment in an existing manufacturing facility as well as
17machinery and equipment that are for use in an expanded or new
18manufacturing facility.
19    The machinery and equipment exemption also includes
20machinery and equipment used in the general maintenance or
21repair of exempt machinery and equipment or for in-house
22manufacture of exempt machinery and equipment. Beginning on
23July 1, 2017, the manufacturing and assembling machinery and
24equipment exemption also includes graphic arts machinery and
25equipment, as defined in paragraph (4) of Section 2-5. The

 

 

SB2224- 475 -LRB100 13364 AXK 27964 b

1machinery and equipment exemption does not include machinery
2and equipment used in (i) the generation of electricity for
3wholesale or retail sale; (ii) the generation or treatment of
4natural or artificial gas for wholesale or retail sale that is
5delivered to customers through pipes, pipelines, or mains; or
6(iii) the treatment of water for wholesale or retail sale that
7is delivered to customers through pipes, pipelines, or mains.
8The provisions of this amendatory Act of the 98th General
9Assembly are declaratory of existing law as to the meaning and
10scope of this exemption. For the purposes of this exemption,
11terms have the following meanings:
12        (1) "Manufacturing process" means the production of an
13    article of tangible personal property, whether the article
14    is a finished product or an article for use in the process
15    of manufacturing or assembling a different article of
16    tangible personal property, by a procedure commonly
17    regarded as manufacturing, processing, fabricating, or
18    refining that changes some existing material or materials
19    into a material with a different form, use, or name. In
20    relation to a recognized integrated business composed of a
21    series of operations that collectively constitute
22    manufacturing, or individually constitute manufacturing
23    operations, the manufacturing process commences with the
24    first operation or stage of production in the series and
25    does not end until the completion of the final product in
26    the last operation or stage of production in the series.

 

 

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1    For purposes of this exemption, photoprocessing is a
2    manufacturing process of tangible personal property for
3    wholesale or retail sale.
4        (2) "Assembling process" means the production of an
5    article of tangible personal property, whether the article
6    is a finished product or an article for use in the process
7    of manufacturing or assembling a different article of
8    tangible personal property, by the combination of existing
9    materials in a manner commonly regarded as assembling that
10    results in a material of a different form, use, or name.
11        (3) "Machinery" means major mechanical machines or
12    major components of those machines contributing to a
13    manufacturing or assembling process.
14        (4) "Equipment" includes an independent device or tool
15    separate from machinery but essential to an integrated
16    manufacturing or assembly process; including computers
17    used primarily in a manufacturer's computer assisted
18    design, computer assisted manufacturing (CAD/CAM) system;
19    any subunit or assembly comprising a component of any
20    machinery or auxiliary, adjunct, or attachment parts of
21    machinery, such as tools, dies, jigs, fixtures, patterns,
22    and molds; and any parts that require periodic replacement
23    in the course of normal operation; but does not include
24    hand tools. Equipment includes chemicals or chemicals
25    acting as catalysts but only if the chemicals or chemicals
26    acting as catalysts effect a direct and immediate change

 

 

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1    upon a product being manufactured or assembled for
2    wholesale or retail sale or lease.
3        (5) "Production related tangible personal property"
4    means all tangible personal property that is used or
5    consumed by the purchaser in a manufacturing facility in
6    which a manufacturing process takes place and includes,
7    without limitation, tangible personal property that is
8    purchased for incorporation into real estate within a
9    manufacturing facility and tangible personal property that
10    is used or consumed in activities such as research and
11    development, preproduction material handling, receiving,
12    quality control, inventory control, storage, staging, and
13    packaging for shipping and transportation purposes.
14    "Production related tangible personal property" does not
15    include (i) tangible personal property that is used, within
16    or without a manufacturing facility, in sales, purchasing,
17    accounting, fiscal management, marketing, personnel
18    recruitment or selection, or landscaping or (ii) tangible
19    personal property that is required to be titled or
20    registered with a department, agency, or unit of federal,
21    State, or local government.
22    The manufacturing and assembling machinery and equipment
23exemption includes production related tangible personal
24property that is purchased on or after July 1, 2007 and on or
25before June 30, 2008. The exemption for production related
26tangible personal property is subject to both of the following

 

 

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1limitations:
2        (1) The maximum amount of the exemption for any one
3    taxpayer may not exceed 5% of the purchase price of
4    production related tangible personal property that is
5    purchased on or after July 1, 2007 and on or before June
6    30, 2008. A credit under Section 3-85 of this Act may not
7    be earned by the purchase of production related tangible
8    personal property for which an exemption is received under
9    this Section.
10        (2) The maximum aggregate amount of the exemptions for
11    production related tangible personal property awarded
12    under this Act and the Use Tax Act to all taxpayers may not
13    exceed $10,000,000. If the claims for the exemption exceed
14    $10,000,000, then the Department shall reduce the amount of
15    the exemption to each taxpayer on a pro rata basis.
16The Department may adopt rules to implement and administer the
17exemption for production related tangible personal property.
18    The manufacturing and assembling machinery and equipment
19exemption includes the sale of materials to a purchaser who
20produces exempted types of machinery, equipment, or tools and
21who rents or leases that machinery, equipment, or tools to a
22manufacturer of tangible personal property. This exemption
23also includes the sale of materials to a purchaser who
24manufactures those materials into an exempted type of
25machinery, equipment, or tools that the purchaser uses himself
26or herself in the manufacturing of tangible personal property.

 

 

SB2224- 479 -LRB100 13364 AXK 27964 b

1The purchaser of the machinery and equipment who has an active
2resale registration number shall furnish that number to the
3seller at the time of purchase. A purchaser of the machinery,
4equipment, and tools without an active resale registration
5number shall furnish to the seller a certificate of exemption
6for each transaction stating facts establishing the exemption
7for that transaction, and that certificate shall be available
8to the Department for inspection or audit. Informal rulings,
9opinions, or letters issued by the Department in response to an
10inquiry or request for an opinion from any person regarding the
11coverage and applicability of this exemption to specific
12devices shall be published, maintained as a public record, and
13made available for public inspection and copying. If the
14informal ruling, opinion, or letter contains trade secrets or
15other confidential information, where possible, the Department
16shall delete that information before publication. Whenever
17informal rulings, opinions, or letters contain a policy of
18general applicability, the Department shall formulate and
19adopt that policy as a rule in accordance with the Illinois
20Administrative Procedure Act.
21    The manufacturing and assembling machinery and equipment
22exemption is exempt from the provisions of Section 2-70.
23(Source: P.A. 98-583, eff. 1-1-14; 10000SB0009ham003.)
 
24    Section 99-999. Effective date. This Act takes effect upon
25becoming law.

 

 

SB2224- 480 -LRB100 13364 AXK 27964 b

1 INDEX
2 Statutes amended in order of appearance
3    10000SB0009ham003,
4    Sections 1-1 through 1-40
5    rep.
6    10000SB0009ham003,
7    Sections 15-101 through
8    15-1504 rep.
9    10000SB0009ham003, Section
10    17-5 rep.
11    35 ILCS 5/225 rep.
12    5 ILCS 100/1-5from Ch. 127, par. 1001-5
13    5 ILCS 140/7.5
14    15 ILCS 405/9from Ch. 15, par. 209
15    15 ILCS 505/0.02
16    15 ILCS 505/0.03
17    15 ILCS 505/0.04
18    15 ILCS 505/0.05
19    15 ILCS 505/0.06
20    20 ILCS 1205/7from Ch. 17, par. 108
21    20 ILCS 1205/18.1
22    30 ILCS 105/6b-1from Ch. 127, par. 142b1
23    30 ILCS 105/8.12from Ch. 127, par. 144.12
24    30 ILCS 230/2from Ch. 127, par. 171
25    55 ILCS 5/3-3034from Ch. 34, par. 3-3034

 

 

SB2224- 481 -LRB100 13364 AXK 27964 b

1    205 ILCS 5/48
2    205 ILCS 5/48.1from Ch. 17, par. 360
3    205 ILCS 5/48.3from Ch. 17, par. 360.2
4    205 ILCS 5/65from Ch. 17, par. 377
5    205 ILCS 205/4013from Ch. 17, par. 7304-13
6    205 ILCS 205/9012from Ch. 17, par. 7309-12
7    205 ILCS 205/10090
8    205 ILCS 305/10from Ch. 17, par. 4411
9    205 ILCS 305/62from Ch. 17, par. 4463
10    205 ILCS 405/15.1bfrom Ch. 17, par. 4827
11    205 ILCS 405/19.3from Ch. 17, par. 4838
12    205 ILCS 620/6-14from Ch. 17, par. 1556-14
13    205 ILCS 657/30
14    205 ILCS 700/10
15    215 ILCS 5/210from Ch. 73, par. 822
16    215 ILCS 185/5
17    215 ILCS 185/15
18    215 ILCS 185/20
19    225 ILCS 454/20-20
20    725 ILCS 5/110-17from Ch. 38, par. 110-17
21    755 ILCS 5/2-1from Ch. 110 1/2, par. 2-1
22    755 ILCS 5/2-2from Ch. 110 1/2, par. 2-2
23    770 ILCS 90/3from Ch. 141, par. 3
24    805 ILCS 5/12.70from Ch. 32, par. 12.70
25    805 ILCS 105/112.70from Ch. 32, par. 112.70
26    35 ILCS 5/201from Ch. 120, par. 2-201

 

 

SB2224- 482 -LRB100 13364 AXK 27964 b

1    35 ILCS 5/202.5
2    35 ILCS 5/203from Ch. 120, par. 2-203
3    35 ILCS 5/204from Ch. 120, par. 2-204
4    35 ILCS 5/208from Ch. 120, par. 2-208
5    35 ILCS 5/212
6    35 ILCS 5/901from Ch. 120, par. 9-901
7    35 ILCS 5/1501from Ch. 120, par. 15-1501
8    35 ILCS 5/1102from Ch. 120, par. 11-1102
9    35 ILCS 5/1103from Ch. 120, par. 11-1103
10    35 ILCS 5/1105from Ch. 120, par. 11-1105
11    35 ILCS 120/5afrom Ch. 120, par. 444a
12    35 ILCS 120/5bfrom Ch. 120, par. 444b
13    35 ILCS 120/5cfrom Ch. 120, par. 444c
14    35 ILCS 520/16from Ch. 120, par. 2166
15    35 ILCS 520/17from Ch. 120, par. 2167
16    35 ILCS 520/19from Ch. 120, par. 2169
17    65 ILCS 5/8-3-15from Ch. 24, par. 8-3-15
18    215 ILCS 155/22from Ch. 73, par. 1422
19    35 ILCS 105/3-10
20    35 ILCS 110/3-10from Ch. 120, par. 439.33-10
21    35 ILCS 115/3-10from Ch. 120, par. 439.103-10
22    35 ILCS 120/2-10
23    35 ILCS 105/3-5
24    35 ILCS 105/3-50from Ch. 120, par. 439.3-50
25    35 ILCS 110/2from Ch. 120, par. 439.32
26    35 ILCS 110/3-5

 

 

SB2224- 483 -LRB100 13364 AXK 27964 b

1    35 ILCS 115/2from Ch. 120, par. 439.102
2    35 ILCS 115/3-5
3    35 ILCS 120/2-5
4    35 ILCS 120/2-45from Ch. 120, par. 441-45