100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2901

 

Introduced 2/14/2018, by Sen. Pamela J. Althoff

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Revised Uniform Unclaimed Property Act. Provides that certain property is presumed abandoned after 5 (instead of 3) years. Provides that any property due or owed by a business association to or for the benefit of another business association resulting from a transaction occurring in the normal and ordinary course of business is exempt from the Act. Provides that an action or proceeding may not be maintained by the State Treasurer ("administrator") to enforce the Act in regard to the reporting, delivery, or payment of property more than 5 years after the holder filed a non-fraudulent report with the administrator (instead of 10 after the holder specifically identified the property in a report filed with the administrator or gave express notice to the administrator of a dispute regarding the property). Deletes language providing that in the absence of a report or other express notice, the period of limitation is tolled, and that the period of limitation is also tolled by the filing of a report that is fraudulent. Provides instead that the parties may agree to extend the limitation period. Provides that the administrator may not commence an action, proceeding, or examination with respect to a duty of a holder under the Act more than 10 years after the duty arose. Provides that in the absence of certain records the administrator may use specified estimation techniques. Provides that within 60 business days of the receipt of a final examination report, a holder may request a hearing to contest the use or validity of estimation techniques. Deletes provisions concerning the administrator's authority to contract with another to conduct an examination. Provides instead that the administrator may not enter into a contract with a person to conduct an examination of a holder under which the administrator agrees to pay the person a fee based upon a percentage of the property recovered for this State. Deletes language providing that an initial report filed under the Act for property that was not required to be reported before the effective date of the Act, but that is required to be reported under the Act, must include all items of property that would have been presumed abandoned during the 5-year period preceding the effective date of the Act as if the Act had been in effect during that period. Effective immediately.


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A BILL FOR

 

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1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Revised Uniform Unclaimed Property Act is
5amended by changing Sections 15-201, 15-610, 15-1006, 15-1009,
6and 15-1503 as follows:
 
7    (765 ILCS 1026/15-201)
8    Sec. 15-201. When property presumed abandoned.
9    (a) Subject to Section 15-210, the following property is
10presumed abandoned if it is unclaimed by the apparent owner
11during the period specified below:
12        (1) a traveler's check, 15 years after issuance;
13        (2) a money order, 7 years after issuance;
14        (3) any instrument on which a financial organization or
15    business association is directly liable, 5 3 years after
16    issuance;
17        (4) a state or municipal bond, bearer bond, or
18    original-issue-discount bond, 5 3 years after the earliest
19    of the date the bond matures or is called or the obligation
20    to pay the principal of the bond arises;
21        (5) a debt of a business association, 5 3 years after
22    the obligation to pay arises;
23        (6) a demand, savings, or time deposit, 5 3 years after

 

 

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1    the later of maturity or the date of the last indication of
2    interest in the property by the apparent owner, except for
3    a deposit that is automatically renewable, 5 3 years after
4    its initial date of maturity unless the apparent owner
5    consented in a record on file with the holder to renewal at
6    or about the time of the renewal;
7        (7) money or a credit owed to a customer as a result of
8    a retail business transaction, other than in-store credit
9    for returned merchandise, 5 3 years after the obligation
10    arose;
11        (8) an amount owed by an insurance company on a life or
12    endowment insurance policy or an annuity contract that has
13    matured or terminated, 5 3 years after the obligation to
14    pay arose under the terms of the policy or contract or, if
15    a policy or contract for which an amount is owed on proof
16    of death has not matured by proof of the death of the
17    insured or annuitant, as follows:
18            (A) with respect to an amount owed on a life or
19        endowment insurance policy, the earlier of:
20                (i) 5 3 years after the death of the insured;
21            or
22                (ii) 2 years after the insured has attained, or
23            would have attained if living, the limiting age
24            under the mortality table on which the reserve for
25            the policy is based; and
26            (B) with respect to an amount owed on an annuity

 

 

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1        contract, 5 3 years after the death of the annuitant.
2        (9) funds on deposit or held in trust pursuant to the
3    Illinois Funeral or Burial Funds Act, the earliest of:
4            (A) 2 years after the date of death of the
5        beneficiary;
6            (B) one year after the date the beneficiary has
7        attained, or would have attained if living, the age of
8        105 where the holder does not know whether the
9        beneficiary is deceased;
10            (C) 40 years after the contract for prepayment was
11        executed;
12        (10) property distributable by a business association
13    in the course of dissolution or distributions from the
14    termination of a retirement plan, one year after the
15    property becomes distributable;
16        (11) property held by a court, including property
17    received as proceeds of a class action, 5 3 years after the
18    property becomes distributable;
19        (12) property held by a government or governmental
20    subdivision, agency, or instrumentality, including
21    municipal bond interest and unredeemed principal under the
22    administration of a paying agent or indenture trustee, 5 3
23    years after the property becomes distributable;
24        (13) wages, commissions, bonuses, or reimbursements to
25    which an employee is entitled, or other compensation for
26    personal services, including amounts held on a payroll

 

 

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1    card, one year after the amount becomes payable;
2        (14) a deposit or refund owed to a subscriber by a
3    utility, one year after the deposit or refund becomes
4    payable, except that any capital credits or patronage
5    capital retired, returned, refunded or tendered to a member
6    of an electric cooperative, as defined in Section 3.4 of
7    the Electric Supplier Act, or a telephone or
8    telecommunications cooperative, as defined in Section
9    13-212 of the Public Utilities Act, that has remained
10    unclaimed by the person appearing on the records of the
11    entitled cooperative for more than 2 years, shall not be
12    subject to, or governed by, any other provisions of this
13    Act, but rather shall be used by the cooperative for the
14    benefit of the general membership of the cooperative; and
15        (15) property not specified in this Section or Sections
16    15-202 through 15-208, the earlier of 5 3 years after the
17    owner first has a right to demand the property or the
18    obligation to pay or distribute the property arises.
19    (b) Notwithstanding anything to the contrary in this
20Section 15-201, and subject to Section 15-210, a deceased owner
21cannot indicate interest in his or her property. If the owner
22is deceased and the abandonment period for the owner's property
23specified in this Section 15-201 is greater than 2 years, then
24the property, other than an amount owed by an insurance company
25on a life or endowment insurance policy or an annuity contract
26that has matured or terminated, shall instead be presumed

 

 

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1abandoned 2 years from the date of the owner's last indication
2of interest in the property.
3    (c) Notwithstanding anything to the contrary in this
4Section, any property due or owed by a business association to
5or for the benefit of another business association resulting
6from a transaction occurring in the normal and ordinary course
7of business is exempt from this Act.
8(Source: P.A. 100-22, eff. 1-1-18; 100-566, eff. 1-1-18.)
 
9    (765 ILCS 1026/15-610)
10    Sec. 15-610. Periods of limitation and repose.
11    (a) Expiration, before, on, or after the effective date of
12this Act, of a period of limitation on an owner's right to
13receive or recover property, whether specified by contract,
14statute, or court order, does not prevent the property from
15being presumed abandoned or affect the duty of a holder under
16this Act to file a report or pay or deliver property to the
17administrator.
18    (b) An action or proceeding may not be maintained by the
19administrator to enforce this Act in regard to the reporting,
20delivery, or payment of property more than 5 10 years after the
21holder filed a non-fraudulent report with the administrator.
22The parties may agree to extend the limitation period in this
23subsection specifically identified the property in a report
24filed with the administrator or gave express notice to the
25administrator of a dispute regarding the property. In the

 

 

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1absence of such a report or other express notice, the period of
2limitation is tolled. The period of limitation is also tolled
3by the filing of a report that is fraudulent.
4    (c) The administrator may not commence an action,
5proceeding, or examination with respect to a duty of a holder
6under this Act more than 10 years after the duty arose.
7(Source: P.A. 100-22, eff. 1-1-18.)
 
8    (765 ILCS 1026/15-1006)
9    Sec. 15-1006. Failure of person examined to retain records.
10    (a) If a person subject to examination under Section
1115-1002 has failed to does not retain the records required by
12Section 15-404, the administrator may use estimation
13techniques that conform to either generally accepted auditing
14standards or generally accepted accounting principles to
15determine the amount of unclaimed property. In the conduct of
16an examination, the State shall not request of a holder any
17records that relate to property that is not subject to this
18Act. Estimation techniques used shall incorporate a "net"
19method to extrapolation, meaning the numerator shall consist of
20only property located in Illinois or Illinois-sourced property
21and the denominator shall be a reasonable surrogate, such as
22sales or payroll determine the value of property due using a
23reasonable method of estimation based on all information
24available to the administrator, including extrapolation and
25use of statistical sampling when appropriate and necessary,

 

 

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1consistent with examination procedures and standards adopted
2under Section 15-1003. A payment made based on estimation under
3this Section is a penalty for failure to maintain the records
4required by Section 15-404 and does not relieve a person from
5an obligation to report and deliver property to a State in
6which the holder is domiciled.
7    (b) Within 60 business days of the receipt of a final
8examination report, a holder may request a hearing to contest
9the use or validity of estimation techniques. The examination
10shall become final upon the failure of the holder to request a
11hearing as provided in this Section. If a hearing is held, the
12State Treasurer shall issue an order approving or disapproving
13the use or validity of the estimation techniques. The order
14shall be a final order under the Administrative Review Law.
15(Source: P.A. 100-22, eff. 1-1-18.)
 
16    (765 ILCS 1026/15-1009)
17    Sec. 15-1009. Administrator's contract with another to
18conduct examination. The administrator may not enter into a
19contract with a person to conduct an examination of a holder
20under which the administrator agrees to pay the person a fee
21based upon a percentage of the property recovered for this
22State.
23    (a) The administrator may contract with a person to conduct
24an examination under this Article. The contract shall be
25awarded pursuant to a request for proposals issued in

 

 

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1compliance with the procurement rules of the administrator.
2    (b) If the administrator contracts with a person under
3subsection (a):
4        (1) the contract may provide for compensation of the
5    person based on a fixed fee, hourly fee, or contingent fee;
6        (2) a contingent fee arrangement may not provide for a
7    payment that exceeds 15% of the amount or value of property
8    paid or delivered as a result of the examination; and
9        (3) as authorized in the State Officers and Employees
10    Money Disposition Act, the administrator may permit the
11    deduction of fees from property recovered during an
12    examination under this Article prior to depositing funds
13    received under this Act into the Unclaimed Property Trust
14    Fund.
15    (c) A contract under subsection (a) is a public record
16under the Freedom of Information Act.
17(Source: P.A. 100-22, eff. 1-1-18.)
 
18    (765 ILCS 1026/15-1503)
19    Sec. 15-1503. Transitional provision.
20    (a) An initial report filed under this Act for property
21that was not required to be reported before the effective date
22of this Act, but that is required to be reported under this
23Act, must include all items of property that would have been
24presumed abandoned during the 5-year period preceding the
25effective date of this Act as if this Act had been in effect

 

 

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1during that period.
2    (b) This Act does not relieve a holder of a duty that arose
3before the effective date of this Act to report, pay, or
4deliver property. A Subject to subsection (b) of Section
515-610, a holder that did not comply with the law governing
6unclaimed property before the effective date of this Act is
7subject to applicable provisions for enforcement and penalties
8in effect before the effective date of this Act.
9(Source: P.A. 100-22, eff. 1-1-18.)
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    765 ILCS 1026/15-201
4    765 ILCS 1026/15-610
5    765 ILCS 1026/15-1006
6    765 ILCS 1026/15-1009
7    765 ILCS 1026/15-1503