Full Text of SB2779 94th General Assembly
SB2779 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 SB2779
Introduced 1/20/2006, by Sen. Dale A. Righter SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/Art. XXXI.5 heading |
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215 ILCS 5/512-1 |
from Ch. 73, par. 1065.59-1 |
215 ILCS 5/512-2 |
from Ch. 73, par. 1065.59-2 |
215 ILCS 5/512-3 |
from Ch. 73, par. 1065.59-3 |
215 ILCS 5/512-4 |
from Ch. 73, par. 1065.59-4 |
215 ILCS 5/512-5 |
from Ch. 73, par. 1065.59-5 |
215 ILCS 5/512-6 |
from Ch. 73, par. 1065.59-6 |
215 ILCS 5/512-7 |
from Ch. 73, par. 1065.59-7 |
215 ILCS 5/512-8 |
from Ch. 73, par. 1065.59-8 |
215 ILCS 5/512-9 |
from Ch. 73, par. 1065.59-9 |
215 ILCS 5/512-10 |
from Ch. 73, par. 1065.59-10 |
215 ILCS 5/512-11 new |
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215 ILCS 5/512-12 new |
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Amends the Third Party Prescription Programs Article of the Insurance Code to change the name of the Article to the Pharmaceutical Benefits Management Programs Law. Changes references from third party prescription programs to pharmaceutical benefits management programs and from third party program administrator to pharmaceutical benefits manager or PBM throughout the Article. Provides for the registration of all pharmaceutical benefits management programs and pharmaceutical benefits managers (PBMs) doing business in the State with the Director of the Division of Insurance of the Department of Financial and Professional Regulation. Makes changes concerning fiduciary and bonding, notice, and contractual requirements, cancellation procedures, denial of payment, and failure to register. Sets forth provisions concerning failure to comply. Grants rulemaking authority to the Director of the Division of Insurance. Effective immediately.
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A BILL FOR
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SB2779 |
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LRB094 19050 RAS 54546 b |
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| AN ACT concerning regulation.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing the heading of Article XXXI 1/2 and Sections 512-1, | 6 |
| 512-2, 512-3, 512-4, 512-5, 512-6, 512-7, 512-8, 512-9, and | 7 |
| 512-10 and by adding Sections 512-11 and 512-12 as follows: | 8 |
| (215 ILCS 5/Art. XXXI.5 heading) | 9 |
| ARTICLE XXXI 1/2.
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| PHARMACEUTICAL BENEFITS MANAGEMENT
THIRD PARTY PRESCRIPTION
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| PROGRAMS
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| (215 ILCS 5/512-1) (from Ch. 73, par. 1065.59-1)
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| Sec. 512-1. Short Title. This Article shall be known and | 14 |
| may be cited
as the " Pharmaceutical Benefits Management | 15 |
| Programs Law
Third Party Prescription Program Act ".
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-2) (from Ch. 73, par. 1065.59-2)
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| Sec. 512-2. Purpose. It is hereby determined and declared | 19 |
| that the
purpose of this Article is to regulate pharmaceutical | 20 |
| benefits management programs
certain practices engaged in by | 21 |
| third-party
prescription
program administrators .
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3)
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| Sec. 512-3. Definitions. For the purposes of this Article, | 25 |
| unless the
context otherwise requires, the terms defined in | 26 |
| this Article have the meanings
ascribed
to them herein:
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| "Director" means the Director of the Division of Insurance | 28 |
| of the Department of Financial and Professional Regulation.
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| "Division" means the Division of Insurance of the |
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SB2779 |
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LRB094 19050 RAS 54546 b |
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| Department of Financial and Professional Regulation.
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| (a) " Pharmaceutical benefits management
Third party | 3 |
| prescription program" or "program" means any system of
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| providing for the administration of or reimbursement for
of
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| pharmaceutical services and prescription
drug products offered | 6 |
| or operated in this State by a pharmaceutical benefits manager
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| under a contractual arrangement
or agreement between a provider | 8 |
| of such services and another party who is
not the consumer of | 9 |
| those services and products. Such programs may include, but | 10 |
| need not be limited to, employee benefit
plans whereby a | 11 |
| consumer receives prescription drugs or other pharmaceutical
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| services and those services are paid for by
an agent of the | 13 |
| employer or others .
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| (b) " Pharmaceutical benefits manager
Third party program | 15 |
| administrator " or " PBM
administrator " means any person,
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| partnership or corporation who issues or causes to be issued | 17 |
| any payment
or reimbursement to a provider for services | 18 |
| rendered pursuant to a pharmaceutical benefits management
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| third
party prescription program . "Pharmaceutical benefits | 20 |
| manager" or "PBM" , but does not include the Director of | 21 |
| Healthcare and Family Services
Public
Aid or any agent | 22 |
| authorized by
the Director to reimburse a provider of services | 23 |
| rendered pursuant to a
program of which the Department of | 24 |
| Healthcare and Family Services
Public Aid is the third party.
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| (Source: P.A. 90-372, eff. 7-1-98; revised 12-15-05.)
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| (215 ILCS 5/512-4) (from Ch. 73, par. 1065.59-4)
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| Sec. 512-4. Registration. All pharmaceutical benefits | 28 |
| management
third party prescription programs and
PBMs
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| administrators doing business in the State shall register with | 30 |
| the Director
of Insurance . The Director may
shall promulgate | 31 |
| regulations establishing criteria
for registration in | 32 |
| accordance with the terms of this Article. The Director
may by | 33 |
| rule establish an annual registration fee for each | 34 |
| pharmaceutical benefits management program
third party | 35 |
| administrator .
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SB2779 |
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LRB094 19050 RAS 54546 b |
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-5) (from Ch. 73, par. 1065.59-5)
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| Sec. 512-5. Fiduciary and Bonding Requirements.
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| (a) A PBM
third party prescription program administrator
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| shall (1) establish and
maintain a fiduciary account, separate | 6 |
| and apart from any and all other
accounts, for the receipt and | 7 |
| disbursement of funds for reimbursement of
providers of | 8 |
| services under the program, or (2) post,
or cause to be posted, | 9 |
| a bond of indemnity in an amount equal to not less
than 10% of | 10 |
| the total estimated annual reimbursements under the program.
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| (b) The establishment of such fiduciary accounts and bonds | 12 |
| shall be consistent
with applicable State law.
If a bond of | 13 |
| indemnity is posted, it shall be held by the Director of | 14 |
| Insurance
for the benefit and indemnification of the providers | 15 |
| of services under the
pharmaceutical benefits management
third | 16 |
| party prescription program.
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| (c) Any PBM
An administrator who operates more than one | 18 |
| pharmaceutical benefits management
third party prescription
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| program
may establish and maintain a separate fiduciary account | 20 |
| or bond of indemnity
for each such program, or may operate and | 21 |
| maintain a consolidated fiduciary
account or bond of indemnity | 22 |
| for all such programs.
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| (d) The requirements of this Section do not apply to any | 24 |
| pharmaceutical benefits management
third party prescription
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| program administered by or on behalf of any insurance company, | 26 |
| Health Maintenance Organization, Limited Health Service | 27 |
| Organization, or Voluntary Health Services Plan
Care
Service | 28 |
| Plan Corporation or Pharmaceutical Service Plan Corporation
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| authorized
to do business in the State of Illinois.
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-6) (from Ch. 73, par. 1065.59-6)
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| Sec. 512-6. Notice. Notice of any change in the terms of a | 33 |
| pharmaceutical benefits management
third party prescription
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| program,
including but not limited to drugs covered, |
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LRB094 19050 RAS 54546 b |
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| reimbursement rates, co-payments,
and dosage quantity, shall | 2 |
| be given to each enrolled pharmacy at least 30
days prior to | 3 |
| the time it becomes effective.
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-7) (from Ch. 73, par. 1065.59-7)
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| Sec. 512-7. Contractual provisions.
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| (a) Any agreement or contract entered into in this State
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| between a PBM
the
administrator of a program and a pharmacy | 9 |
| under a pharmaceutical benefits management program shall | 10 |
| include a statement of the
method and amount of reimbursement | 11 |
| to the pharmacy for services rendered to
persons enrolled in | 12 |
| the program, the frequency of payment by the PBM
program
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| administrator to the pharmacy for those services, and a method | 14 |
| for the
adjudication of complaints and the settlement of | 15 |
| disputes between the
contracting parties.
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| (b)(1) A program shall provide an annual period of at least | 17 |
| 30 days
during which any pharmacy licensed under the | 18 |
| Pharmacy Practice Act of 1987
may elect to participate in | 19 |
| the program under the program terms for at
least one year.
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| (2) If compliance with the requirements of this | 21 |
| subsection (b) would
impair any provision of a contract | 22 |
| between a program and any other person,
and if the contract | 23 |
| provision was in existence before January 1, 2006
1990 ,
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| then immediately after the expiration of those contract | 25 |
| provisions the
program shall comply with the requirements | 26 |
| of this subsection (b).
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| (3) This subsection (b) does not apply if:
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| (A) the PBM
program administrator is a licensed | 29 |
| health maintenance
organization , limited health | 30 |
| service organization, or voluntary health services | 31 |
| plan that owns or controls a pharmacy and that enters | 32 |
| into an
agreement or contract with that pharmacy in | 33 |
| accordance with subsection (a); or
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| (B) (blank).
the program administrator is a | 35 |
| licensed health maintenance
organization that is owned |
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LRB094 19050 RAS 54546 b |
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| or controlled by another entity that also owns
or | 2 |
| controls a pharmacy, and the administrator enters into | 3 |
| an agreement or
contract with that pharmacy in | 4 |
| accordance with subsection (a).
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| (4) (Blank).
This subsection (b) shall be | 6 |
| inoperative after October 31,
1992.
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| (c) The PBM
program administrator shall cause to be issued | 8 |
| an identification
card to each person enrolled in the program. | 9 |
| The identification card
shall comply with the Uniform | 10 |
| Prescription Drug Information Card Act.
include:
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| (1) the name of the individual enrolled in the program; | 12 |
| and
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| (2) an expiration date if required under the | 14 |
| contractual arrangement or
agreement between a provider of | 15 |
| pharmaceutical services and prescription
drug products and | 16 |
| the third party prescription program administrator.
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| (Source: P.A. 86-473; 87-254.)
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| (215 ILCS 5/512-8) (from Ch. 73, par. 1065.59-8)
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| Sec. 512-8. Cancellation procedures. | 20 |
| (a) The pharmaceutical benefits manager
administrator of a | 21 |
| program
shall notify all pharmacies enrolled in the program of | 22 |
| any cancellation
of the coverage of benefits of any group | 23 |
| enrolled in the program at least
30 days prior to the effective | 24 |
| date of such cancellation.
However, if the PBM
administrator of | 25 |
| a program is not notified at least 45
days prior to the | 26 |
| effective date of such cancellation, the PBM
administrator
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| shall notify all pharmacies enrolled in the program of the | 28 |
| cancellation
as soon as practicable after having received | 29 |
| notice.
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| (b) When a program is terminated, all persons enrolled | 31 |
| therein shall be
so notified, and the employer shall make every | 32 |
| reasonable effort to gain
possession of any plan identification | 33 |
| cards in such persons' possession.
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| (c) Any person who intentionally uses a program | 35 |
| identification card to
obtain services from a pharmacy after |
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LRB094 19050 RAS 54546 b |
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| having received notice of the cancellation
of his benefits | 2 |
| shall be guilty of a Class C misdemeanor. Persons shall
be | 3 |
| liable to the PBM
program administrator for all monies paid by | 4 |
| the PBM
program
administrator for any services received | 5 |
| pursuant to such misuse
any improper use of
the identification | 6 |
| card.
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-9) (from Ch. 73, par. 1065.59-9)
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| Sec. 512-9. Denial of Payment. | 10 |
| (a) No PBM
administrator shall deny payment
to any pharmacy | 11 |
| for covered pharmaceutical services or prescription drug
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| products rendered as a result of the misuse, fraudulent or | 13 |
| illegal use of
an identification card unless such | 14 |
| identification card had expired, been
noticeably altered, or | 15 |
| the pharmacy was notified of the cancellation of
such card. In | 16 |
| lieu of notifying pharmacies which have a common ownership,
the | 17 |
| PBM
administrator may notify a party designated by the pharmacy | 18 |
| to receive
such notice, in which case, notification shall not | 19 |
| become effective until
5 calendar days after the designee | 20 |
| receives notification.
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| (b) No PBM
program administrator may withhold any payment | 22 |
| to any pharmacy
for covered pharmaceutical services or | 23 |
| prescription drug products beyond
the time period specified in | 24 |
| the payment schedule provisions of the agreement,
except for | 25 |
| individual claims for payment which have been returned to the | 26 |
| pharmacy
as incomplete or illegible. Such returned claims shall | 27 |
| be paid if resubmitted
by the pharmacy to the PBM
program | 28 |
| administrator with the appropriate corrections made.
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-10) (from Ch. 73, par. 1065.59-10)
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| Sec. 512-10. Failure to Register. Any pharmaceutical | 32 |
| benefits management
third party prescription program
or PBM | 33 |
| that
administrator which operates without a certificate of | 34 |
| registration or
fails to register with the Director and pay the |
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LRB094 19050 RAS 54546 b |
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| fee prescribed by this Article
shall be construed to be an | 2 |
| unauthorized insurer as defined in Article VII
of this Code and | 3 |
| shall be subject to all penalties contained therein.
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| The provisions of this
the Article shall apply to all new | 5 |
| programs established
on or after January 1, 2006
1983 . Programs | 6 |
| existing on the effective date of this amendatory Act of the | 7 |
| 94th General Assembly
Existing programs shall comply with the | 8 |
| provisions
of this Article as they existed before the effective | 9 |
| date of this amendatory Act of the 94th General Assembly until
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| on the anniversary date of the programs that occurs on or
after | 11 |
| January 1, 2006, at which time the programs shall comply with | 12 |
| the provisions of this Article as they exist beginning on the | 13 |
| effective date of this amendatory Act of the 94th General | 14 |
| Assembly
1983 .
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| (Source: P.A. 82-1005.)
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| (215 ILCS 5/512-11 new) | 17 |
| Sec. 512-11. Failure to Comply. In order to enforce the | 18 |
| provisions of this Article, the Director may issue a cease and | 19 |
| desist order or require a PBM to pay a civil penalty or both. | 20 |
| Subject to the provisions of the Illinois Administrative | 21 |
| Procedure Act, the Director may, pursuant to Section 403A of | 22 |
| the Illinois Insurance Code, impose upon a pharmaceutical | 23 |
| benefits management program an administrative fine of $5,000 | 24 |
| for violations of this Article. | 25 |
| (215 ILCS 5/512-12 new) | 26 |
| Sec. 512-12. Rulemaking. The Director shall have the | 27 |
| authority to adopt any rules necessary for the implementation | 28 |
| and administration of this Article.
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| Section 99. Effective date. This Act takes effect upon | 30 |
| becoming law. |
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