Bill Text: IL HB4078 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: 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 Repeals provisions of Senate Bill 9 of the 100th General Assembly that would have repealed the Uniform Disposition of Unclaimed Property Act on January 1, 2018.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.

Spectrum: Partisan Bill (Republican 21-0)

Status: (Failed) 2019-01-08 - Session Sine Die [HB4078 Detail]

Download: Illinois-2017-HB4078-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB4078 Introduced , by Rep. David McSweeney - Jeanne M Ives - David A. Welter - Peter Breen - Nick Sauer 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 Repeals provisions of Senate Bill 9 of the 100th General Assembly that would have repealed the Uniform Disposition of Unclaimed Property Act on January 1, 2018.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
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
(10000SB0009ham003, Sections 1-1 through 1-40 rep.)
Section 1-1. 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, then the State Tax Lien
Registration Act (Sections 1-1 through 1-40 of Article 1 of
Senate Bill 9 of the 100th General Assembly) is repealed.
(10000SB0009ham003, Sections 15-101 through 15-1504 rep.)
Section 1-2. 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, then the Revised Uniform
Unclaimed Property Act (Sections 15-101 through 15-1504 of
Article 15 of Senate Bill 9 of the 100th General Assembly) is
repealed.
(10000SB0009ham003, Section 17-5 rep.)
Section 1-3. 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, then Section 17-5 of Senate
Bill 9 of the 100th General Assembly is repealed.

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(35 ILCS 5/225 rep.)
Section 1-4. 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, then the Illinois Income Tax
Act is amended by repealing Section 225.
Section 17-10. 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, then the Illinois
Administrative Procedure Act is amended by changing Section 1-5
as follows:
(5 ILCS 100/1-5) (from Ch. 127, par. 1001-5)
Sec. 1-5. Applicability.
(a) This Act applies to every agency as defined in this
Act. Beginning January 1, 1978, in case of conflict between the
provisions of this Act and the Act creating or conferring power
on an agency, this Act shall control. If, however, an agency
(or its predecessor in the case of an agency that has been
consolidated or reorganized) has existing procedures on July 1,
1977, specifically for contested cases or licensing, those
existing provisions control, except that this exception
respecting contested cases and licensing does not apply if the
Act creating or conferring power on the agency adopts by
express reference the provisions of this Act. Where the Act
creating or conferring power on an agency establishes

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

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

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Code shall be amended or repealed pursuant to the process set
forth in Section 5-50 within 30 days after it becomes necessary
to do so due to a conflict between the rates and the terms of a
collective bargaining agreement covering the compensation of
an employee subject to that Code.
(e) Section 10-45 of this Act shall not apply to any
hearing, proceeding, or investigation conducted under Section
13-515 of the Public Utilities Act.
(f) Article 10 of this Act does not apply to any hearing,
proceeding, or investigation conducted by the State Council for
the State of Illinois created under Section 3-3-11.05 of the
Unified Code of Corrections or by the Interstate Commission for
Adult Offender Supervision created under the Interstate
Compact for Adult Offender Supervision or by the Interstate
Commission for Juveniles created under the Interstate Compact
for Juveniles.
(g) This Act is subject to the provisions of Article XXI of
the Public Utilities Act. To the extent that any provision of
this Act conflicts with the provisions of that Article XXI, the
provisions of that Article XXI control.
(Source: P.A. 98-463, eff. 8-16-13; 99-937, eff. 2-24-17;
10000SB0009ham003.)
Section 17-15. 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, then the Freedom of

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

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

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

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

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

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Officer-Worn Body Camera Act, except to the extent
authorized under that Act.
(dd) Information that is prohibited from being
disclosed under Section 45 of the Condominium and Common
Interest Community Ombudsperson Act.
(ee) Information that is exempted from disclosure
under Section 30.1 of the Pharmacy Practice Act.
(ff) Information that is exempted from disclosure
under the Revised Uniform Unclaimed Property Act.
(Source: P.A. 98-49, eff. 7-1-13; 98-63, eff. 7-9-13; 98-756,
eff. 7-16-14; 98-1039, eff. 8-25-14; 98-1045, eff. 8-25-14;
99-78, eff. 7-20-15; 99-298, eff. 8-6-15; 99-352, eff. 1-1-16;
99-642, eff. 7-28-16; 99-776, eff. 8-12-16; 99-863, eff.
8-19-16; revised 9-1-16; 10000SB0009ham003.)
Section 17-20. 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, then the State Comptroller
Act is amended by changing Section 9 as follows:
(15 ILCS 405/9) (from Ch. 15, par. 209)
Sec. 9. Warrants; vouchers; preaudit.
(a) No payment may be made from public funds held by the
State Treasurer in or outside of the State treasury, except by
warrant drawn by the Comptroller and presented by him to the
treasurer to be countersigned except for payments made pursuant

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

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other documentation required to accompany the voucher, and
shall ascertain whether the voucher and documentation meet all
requirements established by or pursuant to law. If the
Comptroller determines that the voucher and documentation do
not meet applicable requirements established by or pursuant to
law, he shall refuse to draw a warrant. As used in this
Section, "requirements established by or pursuant to law"
includes statutory enactments and requirements established by
rules and regulations adopted pursuant to this Act.
(e) Prior to drawing a warrant, the Comptroller may review
the voucher, any documentation accompanying the voucher, and
any other documentation related to the transaction on file with
him, and determine if the transaction is in accordance with the
law. If based on his review the Comptroller has reason to
believe that such transaction is not in accordance with the
law, he shall refuse to draw a warrant.
(f) Where the Comptroller refuses to draw a warrant
pursuant to this Section, he shall maintain separate records of
such transactions.
(g) State agencies shall have the principal responsibility
for the preaudit of their encumbrances, expenditures, and other
transactions as otherwise required by law.
(Source: P.A. 97-969, eff. 8-16-12; 97-1142, eff. 12-28-12;
98-421, eff. 8-16-13; 10000SB0009ham003.)
Section 17-25. If and only if Senate Bill 9 of the 100th

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

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(15 ILCS 505/0.03)
Sec. 0.03. Transfer of personnel.
(a) Except as provided in subsection (b), personnel
employed by the Department of Financial Institutions on June
30, 1999 to perform duties pertaining to the administration of
the Uniform Disposition of Unclaimed Property Act (superseded
by the Revised Uniform Unclaimed Property Act) are transferred
to the State Treasurer on July 1, 1999.
(b) In the case of a person employed by the Department of
Financial Institutions to perform both duties pertaining to the
administration of the Uniform Disposition of Unclaimed
Property Act (superseded by the Revised Uniform Unclaimed
Property Act) and duties pertaining to a function retained by
the Department of Financial Institutions, the State Treasurer,
in consultation with the Director of Financial Institutions,
shall determine whether to transfer the employee to the Office
of the State Treasurer; until this determination has been made,
the transfer shall not take effect.
(c) The rights of State employees, the State, and its
agencies under the Personnel Code and applicable collective
bargaining agreements and retirement plans are not affected by
this amendatory Act of 1999, except that all positions
transferred to the State Treasurer shall be subject to the
State Treasurer Employment Code effective July 1, 2000.
All transferred employees who are members of collective

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bargaining units shall retain their seniority, continuous
service, salary, and accrued benefits. During the pendency of
the existing collective bargaining agreement, the rights
provided for under that agreement and memoranda and supplements
to that agreement, including but not limited to, the rights of
employees performing duties pertaining to the administration
of the Uniform Disposition of Unclaimed Property Act
(superseded by the Revised Uniform Unclaimed Property Act) to
positions in other State agencies and the right of employees in
other State agencies covered by the agreement to positions
performing duties pertaining to the administration of the
Uniform Disposition of Unclaimed Property Act (superseded by
the Revised Uniform Unclaimed Property Act), shall not be
abridged.
The State Treasurer shall continue to honor during their
pendency all bargaining agreements in effect at the time of the
transfer and to recognize all collective bargaining
representatives for the employees who perform or will perform
functions transferred by this amendatory Act of 1999. For all
purposes with respect to the management of the existing
agreement and the negotiation and management of any successor
agreements, the State Treasurer shall be deemed to be the
employer of employees who perform or will perform functions
transferred to the Office of the State Treasurer by this
amendatory Act of 1999; provided that the Illinois Department
of Central Management Services shall be a party to any

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

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

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the Revised Uniform Unclaimed Property Act) that have been
proposed by the Department of Financial Institutions but have
not taken effect or been finally adopted by June 30, 1999 shall
become proposed rules of the State Treasurer on July 1, 1999,
and any rulemaking procedures that have already been completed
by the Department of Financial Institutions need not be
repeated.
(c) As soon as practical after July 1, 1999, the State
Treasurer shall revise and clarify the rules transferred to it
under this amendatory Act of 1999 to reflect the reorganization
of rights, powers, duties, and functions effected by this
amendatory Act of 1999 using the procedures for recodification
of rules available under the Illinois Administrative Procedure
Act, except that existing title, part, and section numbering
for the affected rules may be retained.
(d) As soon as practical after July 1, 1999, the Office of
Banks and Real Estate and the Office of the State Treasurer
shall jointly promulgate rules to reflect the transfer of
examination functions to the Office of Banks and Real Estate
under this amendatory Act of 1999 using the procedures
available under the Illinois Administrative Procedure Act.
(e) As soon as practical after July 1, 1999, the Department
of Financial Institutions and the Office of the State Treasurer
shall jointly promulgate rules to reflect the retention of
examination functions by the Department of Financial
Institutions under this amendatory Act of 1999 using the

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

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

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to or upon the Department of Financial Institutions or any
of its officers, employees, or agents under the Uniform
Disposition of Unclaimed Property Act (superseded by the
Revised Uniform Unclaimed Property Act) or rules
promulgated pursuant to that Act shall be furnished or
served in the same manner to or upon the State Treasurer or
his or her appropriate officer, employee, or agent.
(e) This amendatory Act of 1999 does not affect any act
done, ratified, or canceled, any right occurring or
established, or any action or proceeding had or commenced in an
administrative, civil, or criminal cause before July 1, 1999.
Any such action or proceeding that pertains to the Uniform
Disposition of Unclaimed Property Act (superseded by the
Revised Uniform Unclaimed Property Act) or rules promulgated
pursuant to that Act and that is pending on that date may be
prosecuted, defended, or continued by the State Treasurer.
(Source: P.A. 91-16, eff. 6-4-99; 10000SB0009ham003.)
Section 17-30. 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, then the Financial
Institutions Code is amended by changing Sections 7 and 18.1 as
follows:
(20 ILCS 1205/7) (from Ch. 17, par. 108)
Sec. 7. The provisions of "The Illinois Administrative

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

HB4078 - 24 - LRB100 13340 AXK 27924 b
however, that the rights, powers, duties, and functions
involving the examination of the records of any person that the
State Treasurer has reason to believe has failed to report
properly under this Act shall be transferred to the Office of
Banks and Real Estate if the person is regulated by the Office
of Banks and Real Estate under the Illinois Banking Act, the
Corporate Fiduciary Act, the Foreign Banking Office Act, the
Illinois Savings and Loan Act of 1985, or the Savings Bank Act
and shall be retained by the Department of Financial
Institutions if the person is doing business in the State under
the supervision of the Department of Financial Institutions,
the National Credit Union Administration, the Office of Thrift
Supervision, or the Comptroller of the Currency.
(Source: P.A. 91-16, eff. 6-4-99; 10000SB0009ham003.)
Section 17-35. 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, then the State Finance Act is
amended by changing Sections 6b-1 and 8.12 as follows:
(30 ILCS 105/6b-1) (from Ch. 127, par. 142b1)
Sec. 6b-1. There shall be paid into the State Pensions Fund
the funds and proceeds from the sale of abandoned property as
provided in Section 18 of the Revised Uniform "Uniform
Disposition of Unclaimed Property Act", enacted by the
Seventy-second General Assembly.

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

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Each month, the Commissioner of the Office of Banks and
Real Estate shall certify to the State Treasurer the actual
expenditures that the Office of Banks and Real Estate incurred
conducting unclaimed property examinations under the Uniform
Disposition of Unclaimed Property Act during the immediately
preceding month. Within a reasonable time following the
acceptance of such certification by the State Treasurer, the
State Treasurer shall pay from its appropriation from the State
Pensions Fund to the Bank and Trust Company Fund, the Savings
Bank Regulatory Fund, and the Residential Finance Regulatory
Fund an amount equal to the expenditures incurred by each Fund
for that month.
Each month, the Director of Financial Institutions shall
certify to the State Treasurer the actual expenditures that the
Department of Financial Institutions incurred conducting
unclaimed property examinations under the Uniform Disposition
of Unclaimed Property Act during the immediately preceding
month. Within a reasonable time following the acceptance of
such certification by the State Treasurer, the State Treasurer
shall pay from its appropriation from the State Pensions Fund
to the Financial Institution Fund and the Credit Union Fund an
amount equal to the expenditures incurred by each Fund for that
month.
(c) As soon as possible after the effective date of this
amendatory Act of the 93rd General Assembly, the General
Assembly shall appropriate from the State Pensions Fund (1) to

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

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

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become available, a sum equal to the amounts that would have
been paid from the State Pensions Fund to the Teachers'
Retirement System of the State of Illinois, the State
Universities Retirement System, the Judges Retirement System
of Illinois, the General Assembly Retirement System, and the
State Employees' Retirement System of Illinois after the
effective date of this amendatory Act during the remainder of
fiscal year 2004 to the designated retirement systems from the
appropriations provided for in this Section if the transfers
provided in Section 6z-61 had not occurred. The transfers
described in this subsection (d-1) are to partially repay the
General Revenue Fund for the costs associated with the bonds
used to fund the moneys transferred to the designated
retirement systems under Section 6z-61.
(e) The changes to this Section made by this amendatory Act
of 1994 shall first apply to distributions from the Fund for
State fiscal year 1996.
(Source: P.A. 98-24, eff. 6-19-13; 98-463, eff. 8-16-13;
98-674, eff. 6-30-14; 98-1081, eff. 1-1-15; 99-8, eff. 7-9-15;
99-78, eff. 7-20-15; 99-523, eff. 6-30-16; 10000SB0009ham003.)
Section 17-40. 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, then the State Officers and
Employees Money Disposition Act is amended by changing Section
2 as follows:

HB4078 - 30 - LRB100 13340 AXK 27924 b
(30 ILCS 230/2) (from Ch. 127, par. 171)
Sec. 2. Accounts of money received; payment into State
treasury.
(a) Every officer, board, commission, commissioner,
department, institution, arm or agency brought within the
provisions of this Act by Section 1 shall keep in proper books
a detailed itemized account of all moneys received for or on
behalf of the State of Illinois, showing the date of receipt,
the payor, and purpose and amount, and the date and manner of
disbursement as hereinafter provided, and, unless a different
time of payment is expressly provided by law or by rules or
regulations promulgated under subsection (b) of this Section,
shall pay into the State treasury the gross amount of money so
received on the day of actual physical receipt with respect to
any single item of receipt exceeding $10,000, within 24 hours
of actual physical receipt with respect to an accumulation of
receipts of $10,000 or more, or within 48 hours of actual
physical receipt with respect to an accumulation of receipts
exceeding $500 but less than $10,000, disregarding holidays,
Saturdays and Sundays, after the receipt of same, without any
deduction on account of salaries, fees, costs, charges,
expenses or claims of any description whatever; provided that:
(1) the provisions of (i) Section 2505-475 of the
Department of Revenue Law (20 ILCS 2505/2505-475), (ii) any
specific taxing statute authorizing a claim for credit

HB4078 - 31 - LRB100 13340 AXK 27924 b
procedure instead of the actual making of refunds, (iii)
Section 505 of the Illinois Controlled Substances Act, (iv)
Section 85 of the Methamphetamine Control and Community
Protection Act, authorizing the Director of State Police to
dispose of forfeited property, which includes the sale and
disposition of the proceeds of the sale of forfeited
property, and the Department of Central Management
Services to be reimbursed for costs incurred with the sales
of forfeited vehicles, boats or aircraft and to pay to bona
fide or innocent purchasers, conditional sales vendors or
mortgagees of such vehicles, boats or aircraft their
interest in such vehicles, boats or aircraft, and (v)
Section 6b-2 of the State Finance Act, establishing
procedures for handling cash receipts from the sale of
pari-mutuel wagering tickets, shall not be deemed to be in
conflict with the requirements of this Section;
(2) any fees received by the State Registrar of Vital
Records pursuant to the Vital Records Act which are
insufficient in amount may be returned by the Registrar as
provided in that Act;
(3) any fees received by the Department of Public
Health under the Food Handling Regulation Enforcement Act
that are submitted for renewal of an expired food service
sanitation manager certificate may be returned by the
Director as provided in that Act;
(3.5) the State Treasurer may permit the deduction of

HB4078 - 32 - LRB100 13340 AXK 27924 b
fees by third-party unclaimed property examiners from the
property recovered by the examiners for the State of
Illinois during examinations of holders located outside
the State under which the Office of the Treasurer has
agreed to pay for the examinations based upon a percentage,
set by rule by the State Treasurer in accordance with the
Revised Uniform Unclaimed Property Illinois Administrative
Procedure Act, of the property recovered during the
examination; and
(4) if the amount of money received does not exceed
$500, such money may be retained and need not be paid into
the State treasury until the total amount of money so
received exceeds $500, or until the next succeeding 1st or
15th day of each month (or until the next business day if
these days fall on Sunday or a holiday), whichever is
earlier, at which earlier time such money shall be paid
into the State treasury, except that if a local bank or
savings and loan association account has been authorized by
law, any balances shall be paid into the State treasury on
Monday of each week if more than $500 is to be deposited in
any fund.
Single items of receipt exceeding $10,000 received after 2 p.m.
on a working day may be deemed to have been received on the
next working day for purposes of fulfilling the requirement
that the item be deposited on the day of actual physical
receipt.

HB4078 - 33 - LRB100 13340 AXK 27924 b
No money belonging to or left for the use of the State
shall be expended or applied except in consequence of an
appropriation made by law and upon the warrant of the State
Comptroller. However, payments made by the Comptroller to
persons by direct deposit need not be made upon the warrant of
the Comptroller, but if not made upon a warrant, shall be made
in accordance with Section 9.02 of the State Comptroller Act.
All moneys so paid into the State treasury shall, unless
required by some statute to be held in the State treasury in a
separate or special fund, be covered into the General Revenue
Fund in the State treasury. Moneys received in the form of
checks, drafts or similar instruments shall be properly
endorsed, if necessary, and delivered to the State Treasurer
for collection. The State Treasurer shall remit such collected
funds to the depositing officer, board, commission,
commissioner, department, institution, arm or agency by
Treasurers Draft or through electronic funds transfer. The
draft or notification of the electronic funds transfer shall be
provided to the State Comptroller to allow deposit into the
appropriate fund.
(b) Different time periods for the payment of public funds
into the State treasury or to the State Treasurer, in excess of
the periods established in subsection (a) of this Section, but
not in excess of 30 days after receipt of such funds, may be
established and revised from time to time by rules or
regulations promulgated jointly by the State Treasurer and the

HB4078 - 34 - LRB100 13340 AXK 27924 b
State Comptroller in accordance with the Illinois
Administrative Procedure Act. The different time periods
established by rule or regulation under this subsection may
vary according to the nature and amounts of the funds received,
the locations at which the funds are received, whether
compliance with the deposit requirements specified in
subsection (a) of this Section would be cost effective, and
such other circumstances and conditions as the promulgating
authorities consider to be appropriate. The Treasurer and the
Comptroller shall review all such different time periods
established pursuant to this subsection every 2 years from the
establishment thereof and upon such review, unless it is
determined that it is economically unfeasible for the agency to
comply with the provisions of subsection (a), shall repeal such
different time period.
(Source: P.A. 94-556, eff. 9-11-05; 10000SB0009ham003.)
Section 17-45. 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, then the Counties Code is
amended by changing Section 3-3034 as follows:
(55 ILCS 5/3-3034) (from Ch. 34, par. 3-3034)
Sec. 3-3034. Disposition of body. After the inquest the
coroner may deliver the body or human remains of the deceased
to the family of the deceased or, if there are no family

HB4078 - 35 - LRB100 13340 AXK 27924 b
members to accept the body or the remains, then to friends of
the deceased, if there be any, but if not, the coroner shall
cause the body or the remains to be decently buried, cremated,
or donated for medical science purposes, the expenses to be
paid from the property of the deceased, if there is sufficient,
if not, by the county. The coroner may not approve the
cremation or donation of the body if it is necessary to
preserve the body for law enforcement purposes. If the State
Treasurer, pursuant to the Revised Uniform Disposition of
Unclaimed Property Act, delivers human remains to the coroner,
the coroner shall cause the human remains to be disposed of as
provided in this Section. If the police department of any
municipality or county investigates abandoned cremated
remains, determines that they are human remains, and cannot
locate the owner of the remains, then the police shall deliver
the remains to the coroner, and the coroner shall cause the
remains to be disposed of as provided in this Section.
(Source: P.A. 96-1339, eff. 7-27-10; 97-679, eff. 2-6-12;
10000SB0009ham003.)
Section 17-50. 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, then the Illinois Banking Act
is amended by changing Sections 48, 48.1, 48.3, and 65 as
follows:

HB4078 - 36 - LRB100 13340 AXK 27924 b
(205 ILCS 5/48)
Sec. 48. Secretary's powers; duties. The Secretary shall
have the powers and authority, and is charged with the duties
and responsibilities designated in this Act, and a State bank
shall not be subject to any other visitorial power other than
as authorized by this Act, except those vested in the courts,
or upon prior consultation with the Secretary, a foreign bank
regulator with an appropriate supervisory interest in the
parent or affiliate of a state bank. In the performance of the
Secretary's duties:
(1) The Commissioner shall call for statements from all
State banks as provided in Section 47 at least one time
during each calendar quarter.
(2) (a) The Commissioner, as often as the Commissioner
shall deem necessary or proper, and no less frequently than
18 months following the preceding examination, shall
appoint a suitable person or persons to make an examination
of the affairs of every State bank, except that for every
eligible State bank, as defined by regulation, the
Commissioner in lieu of the examination may accept on an
alternating basis the examination made by the eligible
State bank's appropriate federal banking agency pursuant
to Section 111 of the Federal Deposit Insurance Corporation
Improvement Act of 1991, provided the appropriate federal
banking agency has made such an examination. A person so
appointed shall not be a stockholder or officer or employee

HB4078 - 37 - LRB100 13340 AXK 27924 b
of any bank which that person may be directed to examine,
and shall have powers to make a thorough examination into
all the affairs of the bank and in so doing to examine any
of the officers or agents or employees thereof on oath and
shall make a full and detailed report of the condition of
the bank to the Commissioner. In making the examination the
examiners shall include an examination of the affairs of
all the affiliates of the bank, as defined in subsection
(b) of Section 35.2 of this Act, or subsidiaries of the
bank as shall be necessary to disclose fully the conditions
of the subsidiaries or affiliates, the relations between
the bank and the subsidiaries or affiliates and the effect
of those relations upon the affairs of the bank, and in
connection therewith shall have power to examine any of the
officers, directors, agents, or employees of the
subsidiaries or affiliates on oath. After May 31, 1997, the
Commissioner may enter into cooperative agreements with
state regulatory authorities of other states to provide for
examination of State bank branches in those states, and the
Commissioner may accept reports of examinations of State
bank branches from those state regulatory authorities.
These cooperative agreements may set forth the manner in
which the other state regulatory authorities may be
compensated for examinations prepared for and submitted to
the Commissioner.
(b) After May 31, 1997, the Commissioner is authorized

HB4078 - 38 - LRB100 13340 AXK 27924 b
to examine, as often as the Commissioner shall deem
necessary or proper, branches of out-of-state banks. The
Commissioner may establish and may assess fees to be paid
to the Commissioner for examinations under this subsection
(b). The fees shall be borne by the out-of-state bank,
unless the fees are borne by the state regulatory authority
that chartered the out-of-state bank, as determined by a
cooperative agreement between the Commissioner and the
state regulatory authority that chartered the out-of-state
bank.
(2.1) Pursuant to paragraph (a) of subsection (6) of
this Section, the Secretary shall adopt rules that ensure
consistency and due process in the examination process. The
Secretary may also establish guidelines that (i) define the
scope of the examination process and (ii) clarify
examination items to be resolved. The rules, formal
guidance, interpretive letters, or opinions furnished to
State banks by the Secretary may be relied upon by the
State banks.
(2.5) Whenever any State bank, any subsidiary or
affiliate of a State bank, or after May 31, 1997, any
branch of an out-of-state bank causes to be performed, by
contract or otherwise, any bank services for itself,
whether on or off its premises:
(a) that performance shall be subject to
examination by the Commissioner to the same extent as

HB4078 - 39 - LRB100 13340 AXK 27924 b
if services were being performed by the bank or, after
May 31, 1997, branch of the out-of-state bank itself on
its own premises; and
(b) the bank or, after May 31, 1997, branch of the
out-of-state bank shall notify the Commissioner of the
existence of a service relationship. The notification
shall be submitted with the first statement of
condition (as required by Section 47 of this Act) due
after the making of the service contract or the
performance of the service, whichever occurs first.
The Commissioner shall be notified of each subsequent
contract in the same manner.
For purposes of this subsection (2.5), the term "bank
services" means services such as sorting and posting of
checks and deposits, computation and posting of interest
and other credits and charges, preparation and mailing of
checks, statements, notices, and similar items, or any
other clerical, bookkeeping, accounting, statistical, or
similar functions performed for a State bank, including but
not limited to electronic data processing related to those
bank services.
(3) The expense of administering this Act, including
the expense of the examinations of State banks as provided
in this Act, shall to the extent of the amounts resulting
from the fees provided for in paragraphs (a), (a-2), and
(b) of this subsection (3) be assessed against and borne by

HB4078 - 40 - LRB100 13340 AXK 27924 b
the State banks:
(a) Each bank shall pay to the Secretary a Call
Report Fee which shall be paid in quarterly
installments equal to one-fourth of the sum of the
annual fixed fee of $800, plus a variable fee based on
the assets shown on the quarterly statement of
condition delivered to the Secretary in accordance
with Section 47 for the preceding quarter according to
the following schedule: 16¢ per $1,000 of the first
$5,000,000 of total assets, 15¢ per $1,000 of the next
$20,000,000 of total assets, 13¢ per $1,000 of the next
$75,000,000 of total assets, 9¢ per $1,000 of the next
$400,000,000 of total assets, 7¢ per $1,000 of the next
$500,000,000 of total assets, and 5¢ per $1,000 of all
assets in excess of $1,000,000,000, of the State bank.
The Call Report Fee shall be calculated by the
Secretary and billed to the banks for remittance at the
time of the quarterly statements of condition provided
for in Section 47. The Secretary may require payment of
the fees provided in this Section by an electronic
transfer of funds or an automatic debit of an account
of each of the State banks. In case more than one
examination of any bank is deemed by the Secretary to
be necessary in any examination frequency cycle
specified in subsection 2(a) of this Section, and is
performed at his direction, the Secretary may assess a

HB4078 - 41 - LRB100 13340 AXK 27924 b
reasonable additional fee to recover the cost of the
additional examination; provided, however, that an
examination conducted at the request of the State
Treasurer pursuant to the Uniform Disposition of
Unclaimed Property Act shall not be deemed to be an
additional examination under this Section. In lieu of
the method and amounts set forth in this paragraph (a)
for the calculation of the Call Report Fee, the
Secretary may specify by rule that the Call Report Fees
provided by this Section may be assessed semiannually
or some other period and may provide in the rule the
formula to be used for calculating and assessing the
periodic Call Report Fees to be paid by State banks.
(a-1) If in the opinion of the Commissioner an
emergency exists or appears likely, the Commissioner
may assign an examiner or examiners to monitor the
affairs of a State bank with whatever frequency he
deems appropriate, including but not limited to a daily
basis. The reasonable and necessary expenses of the
Commissioner during the period of the monitoring shall
be borne by the subject bank. The Commissioner shall
furnish the State bank a statement of time and expenses
if requested to do so within 30 days of the conclusion
of the monitoring period.
(a-2) On and after January 1, 1990, the reasonable
and necessary expenses of the Commissioner during

HB4078 - 42 - LRB100 13340 AXK 27924 b
examination of the performance of electronic data
processing services under subsection (2.5) shall be
borne by the banks for which the services are provided.
An amount, based upon a fee structure prescribed by the
Commissioner, shall be paid by the banks or, after May
31, 1997, branches of out-of-state banks receiving the
electronic data processing services along with the
Call Report Fee assessed under paragraph (a) of this
subsection (3).
(a-3) After May 31, 1997, the reasonable and
necessary expenses of the Commissioner during
examination of the performance of electronic data
processing services under subsection (2.5) at or on
behalf of branches of out-of-state banks shall be borne
by the out-of-state banks, unless those expenses are
borne by the state regulatory authorities that
chartered the out-of-state banks, as determined by
cooperative agreements between the Commissioner and
the state regulatory authorities that chartered the
out-of-state banks.
(b) "Fiscal year" for purposes of this Section 48
is defined as a period beginning July 1 of any year and
ending June 30 of the next year. The Commissioner shall
receive for each fiscal year, commencing with the
fiscal year ending June 30, 1987, a contingent fee
equal to the lesser of the aggregate of the fees paid

HB4078 - 43 - LRB100 13340 AXK 27924 b
by all State banks under paragraph (a) of subsection
(3) for that year, or the amount, if any, whereby the
aggregate of the administration expenses, as defined
in paragraph (c), for that fiscal year exceeds the sum
of the aggregate of the fees payable by all State banks
for that year under paragraph (a) of subsection (3),
plus any amounts transferred into the Bank and Trust
Company Fund from the State Pensions Fund for that
year, plus all other amounts collected by the
Commissioner for that year under any other provision of
this Act, plus the aggregate of all fees collected for
that year by the Commissioner under the Corporate
Fiduciary Act, excluding the receivership fees
provided for in Section 5-10 of the Corporate Fiduciary
Act, and the Foreign Banking Office Act. The aggregate
amount of the contingent fee thus arrived at for any
fiscal year shall be apportioned amongst, assessed
upon, and paid by the State banks and foreign banking
corporations, respectively, in the same proportion
that the fee of each under paragraph (a) of subsection
(3), respectively, for that year bears to the aggregate
for that year of the fees collected under paragraph (a)
of subsection (3). The aggregate amount of the
contingent fee, and the portion thereof to be assessed
upon each State bank and foreign banking corporation,
respectively, shall be determined by the Commissioner

HB4078 - 44 - LRB100 13340 AXK 27924 b
and shall be paid by each, respectively, within 120
days of the close of the period for which the
contingent fee is computed and is payable, and the
Commissioner shall give 20 days' days advance notice of
the amount of the contingent fee payable by the State
bank and of the date fixed by the Commissioner for
payment of the fee.
(c) The "administration expenses" for any fiscal
year shall mean the ordinary and contingent expenses
for that year incident to making the examinations
provided for by, and for otherwise administering, this
Act, the Corporate Fiduciary Act, excluding the
expenses paid from the Corporate Fiduciary
Receivership account in the Bank and Trust Company
Fund, the Foreign Banking Office Act, the Electronic
Fund Transfer Act, and the Illinois Bank Examiners'
Education Foundation Act, including all salaries and
other compensation paid for personal services rendered
for the State by officers or employees of the State,
including the Commissioner and the Deputy
Commissioners, communication equipment and services,
office furnishings, surety bond premiums, and travel
expenses of those officers and employees, employees,
expenditures or charges for the acquisition,
enlargement or improvement of, or for the use of, any
office space, building, or structure, or expenditures

HB4078 - 45 - LRB100 13340 AXK 27924 b
for the maintenance thereof or for furnishing heat,
light, or power with respect thereto, all to the extent
that those expenditures are directly incidental to
such examinations or administration. The Commissioner
shall not be required by paragraphs (c) or (d-1) of
this subsection (3) to maintain in any fiscal year's
budget appropriated reserves for accrued vacation and
accrued sick leave that is required to be paid to
employees of the Commissioner upon termination of
their service with the Commissioner in an amount that
is more than is reasonably anticipated to be necessary
for any anticipated turnover in employees, whether due
to normal attrition or due to layoffs, terminations, or
resignations.
(d) The aggregate of all fees collected by the
Secretary under this Act, the Corporate Fiduciary Act,
or the Foreign Banking Office Act on and after July 1,
1979, shall be paid promptly after receipt of the same,
accompanied by a detailed statement thereof, into the
State treasury and shall be set apart in a special fund
to be known as the "Bank and Trust Company Fund",
except as provided in paragraph (c) of subsection (11)
of this Section. All earnings received from
investments of funds in the Bank and Trust Company Fund
shall be deposited in the Bank and Trust Company Fund
and may be used for the same purposes as fees deposited

HB4078 - 46 - LRB100 13340 AXK 27924 b
in that Fund. The amount from time to time deposited
into the Bank and Trust Company Fund shall be used: (i)
to offset the ordinary administrative expenses of the
Secretary as defined in this Section or (ii) as a
credit against fees under paragraph (d-1) of this
subsection (3). Nothing in this amendatory Act of 1979
shall prevent continuing the practice of paying
expenses involving salaries, retirement, social
security, and State-paid insurance premiums of State
officers by appropriations from the General Revenue
Fund. However, the General Revenue Fund shall be
reimbursed for those payments made on and after July 1,
1979, by an annual transfer of funds from the Bank and
Trust Company Fund. Moneys in the Bank and Trust
Company Fund may be transferred to the Professions
Indirect Cost Fund, as authorized under Section
2105-300 of the Department of Professional Regulation
Law of the Civil Administrative Code of Illinois.
Notwithstanding provisions in the State Finance
Act, as now or hereafter amended, or any other law to
the contrary, the sum of $18,788,847 shall be
transferred from the Bank and Trust Company Fund to the
Financial Institutions Settlement of 2008 Fund on the
effective date of this amendatory Act of the 95th
General Assembly, or as soon thereafter as practical.
Notwithstanding provisions in the State Finance

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

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

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

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

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

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director, officer, employee, or agent of a State bank or
any subsidiary or bank holding company of the bank or,
after May 31, 1997, of any branch of an out-of-state bank
or any subsidiary or bank holding company of the bank shall
have violated any law, rule, or order relating to that bank
or any subsidiary or bank holding company of the bank,
shall have obstructed or impeded any examination or
investigation by the Secretary, shall have engaged in an
unsafe or unsound practice in conducting the business of
that bank or any subsidiary or bank holding company of the
bank, or shall have violated any law or engaged or
participated in any unsafe or unsound practice in
connection with any financial institution or other
business entity such that the character and fitness of the
director, officer, employee, or agent does not assure
reasonable promise of safe and sound operation of the State
bank, the Secretary may issue an order of removal. If, in
the opinion of the Secretary, any former director, officer,
employee, or agent of a State bank or any subsidiary or
bank holding company of the bank, prior to the termination
of his or her service with that bank or any subsidiary or
bank holding company of the bank, violated any law, rule,
or order relating to that State bank or any subsidiary or
bank holding company of the bank, obstructed or impeded any
examination or investigation by the Secretary, engaged in
an unsafe or unsound practice in conducting the business of

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

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

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

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

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Foreign Banking Office Act, or any other Act that requires
payments into the Non-insured Institutions Receivership
account. The Secretary may establish by rule a reasonable
manner of assessing fees under this subsection (14).
(Source: P.A. 98-784, eff. 7-24-14; 99-39, eff. 1-1-16;
10000SB0009ham003.)
(205 ILCS 5/48.1) (from Ch. 17, par. 360)
Sec. 48.1. Customer financial records; confidentiality.
(a) For the purpose of this Section, the term "financial
records" means any original, any copy, or any summary of:
(1) a document granting signature authority over a
deposit or account;
(2) a statement, ledger card or other record on any
deposit or account, which shows each transaction in or with
respect to that account;
(3) a check, draft or money order drawn on a bank or
issued and payable by a bank; or
(4) any other item containing information pertaining
to any relationship established in the ordinary course of a
bank's business between a bank and its customer, including
financial statements or other financial information
provided by the customer.
(b) This Section does not prohibit:
(1) The preparation, examination, handling or
maintenance of any financial records by any officer,

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

HB4078 - 59 - LRB100 13340 AXK 27924 b
between a bank and other banks or financial institutions or
commercial enterprises for the purpose of conducting due
diligence pursuant to a purchase or sale involving the bank
or assets or liabilities of the bank.
(7) The furnishing of information to the appropriate
law enforcement authorities where the bank reasonably
believes it has been the victim of a crime.
(8) The furnishing of information under the Revised
Uniform Disposition of Unclaimed Property Act.
(9) The furnishing of information under the Illinois
Income Tax Act and the Illinois Estate and
Generation-Skipping Transfer Tax Act.
(10) The furnishing of information under the federal
Currency and Foreign Transactions Reporting Act Title 31,
United States Code, Section 1051 et seq.
(11) The furnishing of information under any other
statute that by its terms or by regulations promulgated
thereunder requires the disclosure of financial records
other than by subpoena, summons, warrant, or court order.
(12) The furnishing of information about the existence
of an account of a person to a judgment creditor of that
person who has made a written request for that information.
(13) The exchange in the regular course of business of
information between commonly owned banks in connection
with a transaction authorized under paragraph (23) of
Section 5 and conducted at an affiliate facility.

HB4078 - 60 - LRB100 13340 AXK 27924 b
(14) The furnishing of information in accordance with
the federal Personal Responsibility and Work Opportunity
Reconciliation Act of 1996. Any bank governed by this Act
shall enter into an agreement for data exchanges with a
State agency provided the State agency pays to the bank a
reasonable fee not to exceed its actual cost incurred. A
bank providing information in accordance with this item
shall not be liable to any account holder or other person
for any disclosure of information to a State agency, for
encumbering or surrendering any assets held by the bank in
response to a lien or order to withhold and deliver issued
by a State agency, or for any other action taken pursuant
to this item, including individual or mechanical errors,
provided the action does not constitute gross negligence or
willful misconduct. A bank shall have no obligation to
hold, encumber, or surrender assets until it has been
served with a subpoena, summons, warrant, court or
administrative order, lien, or levy.
(15) The exchange in the regular course of business of
information between a bank and any commonly owned affiliate
of the bank, subject to the provisions of the Financial
Institutions Insurance Sales Law.
(16) The furnishing of information to law enforcement
authorities, the Illinois Department on Aging and its
regional administrative and provider agencies, the
Department of Human Services Office of Inspector General,

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or public guardians: (i) upon subpoena by the investigatory
entity or the guardian, or (ii) if there is suspicion by
the bank that a customer who is an elderly person or person
with a disability has been or may become the victim of
financial exploitation. For the purposes of this item (16),
the term: (i) "elderly person" means a person who is 60 or
more years of age, (ii) "disabled person" means a person
who has or reasonably appears to the bank to have a
physical or mental disability that impairs his or her
ability to seek or obtain protection from or prevent
financial exploitation, and (iii) "financial exploitation"
means tortious or illegal use of the assets or resources of
an elderly or disabled person, and includes, without
limitation, misappropriation of the elderly or disabled
person's assets or resources by undue influence, breach of
fiduciary relationship, intimidation, fraud, deception,
extortion, or the use of assets or resources in any manner
contrary to law. A bank or person furnishing information
pursuant to this item (16) shall be entitled to the same
rights and protections as a person furnishing information
under the Adult Protective Services Act and the Illinois
Domestic Violence Act of 1986.
(17) The disclosure of financial records or
information as necessary to effect, administer, or enforce
a transaction requested or authorized by the customer, or
in connection with:

HB4078 - 62 - LRB100 13340 AXK 27924 b
(A) servicing or processing a financial product or
service requested or authorized by the customer;
(B) maintaining or servicing a customer's account
with the bank; or
(C) a proposed or actual securitization or
secondary market sale (including sales of servicing
rights) related to a transaction of a customer.
Nothing in this item (17), however, authorizes the sale
of the financial records or information of a customer
without the consent of the customer.
(18) The disclosure of financial records or
information as necessary to protect against actual or
potential fraud, unauthorized transactions, claims, or
other liability.
(19)(a) The disclosure of financial records or
information related to a private label credit program
between a financial institution and a private label party
in connection with that private label credit program. Such
information is limited to outstanding balance, available
credit, payment and performance and account history,
product references, purchase information, and information
related to the identity of the customer.
(b)(1) For purposes of this paragraph (19) of
subsection (b) of Section 48.1, a "private label credit
program" means a credit program involving a financial
institution and a private label party that is used by a

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

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

HB4078 - 65 - LRB100 13340 AXK 27924 b
shall determine the rates and conditions under which payment
may be made.
(Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15;
10000SB0009ham003.)
(205 ILCS 5/48.3) (from Ch. 17, par. 360.2)
Sec. 48.3. Disclosure of reports of examinations and
confidential supervisory information; limitations.
(a) Any report of examination, visitation, or
investigation prepared by the Commissioner under this Act, the
Electronic Fund Transfer Act, the Corporate Fiduciary Act, the
Illinois Bank Holding Company Act of 1957, and the Foreign
Banking Office Act, any report of examination, visitation, or
investigation prepared by the state regulatory authority of
another state that examines a branch of an Illinois State bank
in that state, any document or record prepared or obtained in
connection with or relating to any examination, visitation, or
investigation, and any record prepared or obtained by the
Commissioner to the extent that the record summarizes or
contains information derived from any report, document, or
record described in this subsection shall be deemed
"confidential supervisory information". Confidential
supervisory information shall not include any information or
record routinely prepared by a bank or other financial
institution and maintained in the ordinary course of business
or any information or record that is required to be made

HB4078 - 66 - LRB100 13340 AXK 27924 b
publicly available pursuant to State or federal law or rule.
Confidential supervisory information shall be the property of
the Commissioner and shall only be disclosed under the
circumstances and for the purposes set forth in this Section.
The Commissioner may disclose confidential supervisory
information only under the following circumstances:
(1) The Commissioner may furnish confidential
supervisory information to the Board of Governors of the
Federal Reserve System, the federal reserve bank of the
federal reserve district in which the State bank is located
or in which the parent or other affiliate of the State bank
is located, any official or examiner thereof duly
accredited for the purpose, or any other state regulator,
federal regulator, or in the case of a foreign bank
possessing a certificate of authority pursuant to the
Foreign Banking Office Act or a license pursuant to the
Foreign Bank Representative Office Act, the bank regulator
in the country where the foreign bank is chartered, that
the Commissioner determines to have an appropriate
regulatory interest. Nothing contained in this Act shall be
construed to limit the obligation of any member State bank
to comply with the requirements relative to examinations
and reports of the Federal Reserve Act and of the Board of
Governors of the Federal Reserve System or the federal
reserve bank of the federal reserve district in which the
bank is located, nor to limit in any way the powers of the

HB4078 - 67 - LRB100 13340 AXK 27924 b
Commissioner with reference to examinations and reports.
(2) The Commissioner may furnish confidential
supervisory information to the United States, any agency
thereof that has insured a bank's deposits in whole or in
part, or any official or examiner thereof duly accredited
for the purpose. Nothing contained in this Act shall be
construed to limit the obligation relative to examinations
and reports of any State bank, deposits in which are to any
extent insured by the United States, any agency thereof,
nor to limit in any way the powers of the Commissioner with
reference to examination and reports of such bank.
(3) The Commissioner may furnish confidential
supervisory information to the appropriate law enforcement
authorities when the Commissioner reasonably believes a
bank, which the Commissioner has caused to be examined, has
been a victim of a crime.
(4) The Commissioner may furnish confidential
supervisory information relating to a bank or other
financial institution, which the Commissioner has caused
to be examined, to be sent to the administrator of the
Revised Uniform Disposition of Unclaimed Property Act.
(5) The Commissioner may furnish confidential
supervisory information relating to a bank or other
financial institution, which the Commissioner has caused
to be examined, relating to its performance of obligations
under the Illinois Income Tax Act and the Illinois Estate

HB4078 - 68 - LRB100 13340 AXK 27924 b
and Generation-Skipping Transfer Tax Act to the Illinois
Department of Revenue.
(6) The Commissioner may furnish confidential
supervisory information relating to a bank or other
financial institution, which the Commissioner has caused
to be examined, under the federal Currency and Foreign
Transactions Reporting Act, Title 31, United States Code,
Section 1051 et seq.
(6.5) The Commissioner may furnish confidential
supervisory information to any other agency or entity that
the Commissioner determines to have a legitimate
regulatory interest.
(7) The Commissioner may furnish confidential
supervisory information under any other statute that by its
terms or by regulations promulgated thereunder requires
the disclosure of financial records other than by subpoena,
summons, warrant, or court order.
(8) At the request of the affected bank or other
financial institution, the Commissioner may furnish
confidential supervisory information relating to a bank or
other financial institution, which the Commissioner has
caused to be examined, in connection with the obtaining of
insurance coverage or the pursuit of an insurance claim for
or on behalf of the bank or other financial institution;
provided that, when possible, the Commissioner shall
disclose only relevant information while maintaining the

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

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

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

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(2) Any request for discovery or disclosure of confidential
supervisory information, whether by subpoena, order, or other
judicial or administrative process, shall be made to the
Commissioner, and the Commissioner shall determine within 15
days whether to disclose the information pursuant to procedures
and standards that the Commissioner shall establish by rule. If
the Commissioner determines that such information will not be
disclosed, the Commissioner's decision shall be subject to
judicial review under the provisions of the Administrative
Review Law, and venue shall be in either Sangamon County or
Cook County.
(3) Any court order that compels disclosure of confidential
supervisory information may be immediately appealed by the
Commissioner, and the order shall be automatically stayed
pending the outcome of the appeal.
(d) If any officer, agent, attorney, or employee of a bank
or financial institution knowingly and willfully furnishes
confidential supervisory information in violation of this
Section, the Commissioner may impose a civil monetary penalty
up to $1,000 for the violation against the officer, agent,
attorney, or employee.
(Source: P.A. 90-301, eff. 8-1-97; 91-201, eff. 1-1-00;
10000SB0009ham003.)
(205 ILCS 5/65) (from Ch. 17, par. 377)
Sec. 65. Dividends; dissolution. From time to time during a

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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(2) to attorneys for the savings bank and to a
certified public accountant engaged by the savings bank to
perform an independent audit; provided that the attorney or
certified public accountant shall not permit the
confidential supervisory information to be further
disseminated.
(3) to any person who seeks to acquire a controlling
interest in, or who seeks to merge with, the savings bank;
provided that the person shall agree to be bound to respect
the confidentiality of the confidential supervisory
information and to not further disseminate the information
other than to attorneys, certified public accountants,
officers, agents, or employees of that person who likewise
shall agree to be bound to respect the confidentiality of
the confidential supervisory information and to not
further disseminate the information.
(4) to the savings bank's insurance company, if the
supervisory information contains information that is
otherwise unavailable and is strictly necessary to
obtaining insurance coverage or pursuing an insurance
claim for or on behalf of the savings bank; provided that,
when possible, the savings bank shall disclose only
information that is relevant to obtaining insurance
coverage or pursuing an insurance claim, while maintaining
the confidentiality of financial information pertaining to
customers; and provided further that, when appropriate,

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

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

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

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assets of the savings bank are collected in the course of
liquidation, the Secretary shall make and pay further dividends
on all claims previously proven or adjudicated. After one year
from the entry of a judgment of dissolution, all unclaimed
dividends shall be remitted to the State Treasurer in
accordance with the Revised Uniform Disposition of Unclaimed
Property Act, as now or hereafter amended, together with a list
of all unpaid claimants, their last known addresses and the
amounts unpaid.
(Source: P.A. 96-1365, eff. 7-28-10; 10000SB0009ham003.)
Section 17-60. 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, then the Illinois Credit
Union Act is amended by changing Sections 10 and 62 as follows:
(205 ILCS 305/10) (from Ch. 17, par. 4411)
Sec. 10. Credit union records; member financial records.
(1) A credit union shall establish and maintain books,
records, accounting systems and procedures which accurately
reflect its operations and which enable the Department to
readily ascertain the true financial condition of the credit
union and whether it is complying with this Act.
(2) A photostatic or photographic reproduction of any
credit union records shall be admissible as evidence of
transactions with the credit union.

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

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records relating to members where the data cannot be
identified to any particular customer of account.
(4) The making of reports or returns required under
Chapter 61 of the Internal Revenue Code of 1954.
(5) Furnishing information concerning the dishonor of
any negotiable instrument permitted to be disclosed under
the Uniform Commercial Code.
(6) The exchange in the regular course of business of
(i) credit information between a credit union and other
credit unions or financial institutions or commercial
enterprises, directly or through a consumer reporting
agency or (ii) financial records or information derived
from financial records between a credit union and other
credit unions or financial institutions or commercial
enterprises for the purpose of conducting due diligence
pursuant to a merger or a purchase or sale of assets or
liabilities of the credit union.
(7) The furnishing of information to the appropriate
law enforcement authorities where the credit union
reasonably believes it has been the victim of a crime.
(8) The furnishing of information pursuant to the
Revised Uniform Disposition of Unclaimed Property Act.
(9) The furnishing of information pursuant to the
Illinois Income Tax Act and the Illinois Estate and
Generation-Skipping Transfer Tax Act.
(10) The furnishing of information pursuant to the

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

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

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

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

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

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(f) A credit union shall be reimbursed for costs which are
reasonably necessary and which have been directly incurred in
searching for, reproducing or transporting books, papers,
records or other data of a member required or requested to be
produced pursuant to a lawful subpoena, summons, warrant,
citation to discover assets, or court order. The Secretary and
the Director may determine, by rule, the rates and conditions
under which payment shall be made. Delivery of requested
documents may be delayed until final reimbursement of all costs
is received.
(Source: P.A. 98-49, eff. 7-1-13; 99-143, eff. 7-27-15;
10000SB0009ham003.)
(205 ILCS 305/62) (from Ch. 17, par. 4463)
Sec. 62. Liquidation.
(1) A credit union may elect to dissolve voluntarily and
liquidate its affairs in the manner prescribed in this Section.
(2) The board of directors shall adopt a resolution
recommending the credit union be dissolved voluntarily, and
directing that the question of liquidating be submitted to the
members.
(3) Within 10 days after the board of directors decides to
submit the question of liquidation to the members, the chairman
or president shall notify the Secretary thereof, in writing,
setting forth the reasons for the proposed action. Within 10
days after the members act on the question of liquidation, the

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

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

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

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

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

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

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

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

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

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(ii) at least one-fourth of all community currency
exchange licensees join in a petition or, in the case
of ambulatory currency exchanges, a licensee or
licensees authorized to serve at least 100 locations
join in a petition.
(3) Any currency exchange may charge lower fees than
those of the applicable maximum fee schedule after filing
with the Secretary a schedule of fees it proposes to use.
(Source: P.A. 97-315, eff. 1-1-12; 10000SB0009ham003.)
Section 17-70. 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, then the Corporate Fiduciary
Act is amended by changing Section 6-14 as follows:
(205 ILCS 620/6-14) (from Ch. 17, par. 1556-14)
Sec. 6-14. From time to time during receivership the
Commissioner shall make and pay from monies of the corporate
fiduciary a ratable dividend on all claims as may be proved to
his or her satisfaction or adjudicated by the court. After one
year from the entry of a judgment of dissolution, all unclaimed
dividends shall be remitted to the State Treasurer in
accordance with the Revised Uniform Disposition of Unclaimed
Property Act, as now or hereafter amended, together with a list
of all unpaid claimants, their last known addresses and the
amounts unpaid.

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(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
Section 17-75. 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, then the Transmitters of
Money Act is amended by changing Section 30 as follows:
(205 ILCS 657/30)
Sec. 30. Surety bond.
(a) An applicant for a license shall post and a licensee
must maintain with the Director a bond or bonds issued by
corporations qualified to do business as surety companies in
this State.
(b) The applicant or licensee shall post a bond in the
amount of the greater of $100,000 or an amount equal to the
daily average of outstanding payment instruments for the
preceding 12 months or operational history, whichever is
shorter, up to a maximum amount of $2,000,000. When the amount
of the required bond exceeds $1,000,000, the applicant or
licensee may, in the alternative, post a bond in the amount of
$1,000,000 plus a dollar for dollar increase in the net worth
of the applicant or licensee over and above the amount required
in Section 20, up to a total amount of $2,000,000.
(c) The bond must be in a form satisfactory to the Director
and shall run to the State of Illinois for the benefit of any
claimant against the applicant or licensee with respect to the

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

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Section 17-80. 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, then the Adverse Claims to
Deposit Accounts Act is amended by changing Section 10 as
follows:
(205 ILCS 700/10)
Sec. 10. Application of Act. This Act shall not preempt:
(1) the Revised Uniform Disposition of Unclaimed Property
Act, nor shall any provision of this Act be construed to
relieve any holder, including a financial institution, from
reporting and remitting all unclaimed property, including
deposit accounts, under the Revised Uniform Disposition of
Unclaimed Property Act;
(2) the Uniform Commercial Code, nor shall any provision of
this Act be construed as affecting the rights of a person with
respect to a deposit account under the Uniform Commercial Code;
(3) the provisions of Section 2-1402 of the Code of Civil
Procedure, nor shall any provision of this Act be construed as
affecting the rights of a person with respect to a deposit
account under Section 2-1402 of the Code of Civil Procedure;
(4) the provisions of Part 7 of Article II of the Code of
Civil Procedure, nor shall any provision of this Act be
construed as affecting the rights of a person with respect to a
deposit account under the provisions of Part 7 of Article II of
the Code of Civil Procedure;

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(5) the provisions of Article XXV of the Probate Act of
1975, nor shall any provision of this Act be construed as
affecting the rights of a person with respect to a deposit
account under the provisions of Article XXV of the Probate Act
of 1975; or
(6) the Safety Deposit Box Opening Act, nor shall any
provision of this Act be construed as affecting the rights of a
person with respect to a deposit account under the Safety
Deposit Box Opening Act.
(Source: P.A. 89-601, eff. 8-2-96; 10000SB0009ham003.)
Section 17-85. 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, then the Illinois Insurance
Code is amended by changing Section 210 as follows:
(215 ILCS 5/210) (from Ch. 73, par. 822)
Sec. 210. Distribution of assets; priorities; unpaid
dividends.
(1) Any time after the last day fixed for the filing of
proofs of claims in the liquidation of a company, the court
may, upon the application of the Director authorize him to
declare out of the funds remaining in his hands, one or more
dividends upon all claims allowed in accordance with the
priorities established in Section 205.
(2) Where there has been no adjudication of insolvency, the

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

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such deposits shall be entitled to priority of payment in case
of the insolvency or voluntary or involuntary liquidation of
the depositary on an equality with any other priority given by
the banking law. Any such funds together with interest, if any,
paid or credited thereon, remaining and unclaimed in the hands
of the Director in Trust after 2 years shall be presumed
abandoned and reported and delivered to the State Treasurer and
become subject to the provisions of the Revised Uniform
Disposition of Unclaimed Property Act.
(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
Section 17-90. 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, then the Unclaimed Life
Insurance Benefits Act is amended by changing Sections 5, 15,
and 20 as follows:
(215 ILCS 185/5)
Sec. 5. Purpose. This Act shall require recognition of the
Revised Uniform Disposition of Unclaimed Property Act and
require the complete and proper disclosure, transparency, and
accountability relating to any method of payment for life
insurance, annuity, or retained asset agreement death
benefits.
(Source: P.A. 99-893, eff. 1-1-17; 10000SB0009ham003.)

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

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

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

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the Revised Uniform Disposition of Unclaimed Property Act or to
allow the imposition of additional statutory interest under
Article XIV of the Illinois Insurance Code.
(f) Failure to meet any requirement of this Section with
such frequency as to constitute a general business practice is
a violation of Section 424 of the Illinois Insurance Code.
Nothing in this Section shall be construed to create or imply a
private cause of action for a violation of this Section.
(Source: P.A. 99-893, eff. 1-1-17; 10000SB0009ham003.)
(215 ILCS 185/20)
Sec. 20. Revised Uniform Disposition of Unclaimed Property
Act. Nothing in this Act shall be construed to amend, modify,
or supersede the Revised Uniform Disposition of Unclaimed
Property Act, including the authority of the State Treasurer to
examine the records of any person if the State Treasurer has
reason to believe that such person has failed to report
property that should have been reported pursuant to the Revised
Uniform Disposition of Unclaimed Property Act.
(Source: P.A. 99-893, eff. 1-1-17; 10000SB0009ham003.)
Section 17-95. 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, then the Real Estate License
Act of 2000 is amended by changing Section 20-20 as follows:

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

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

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

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

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

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

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

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

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

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limited liability company, or corporation in disregarding
any provision of this Act or the published rules
promulgated by the Department to enforce this Act.
(41) Failing to provide the minimum services required
by Section 15-75 of this Act when acting under an exclusive
brokerage agreement.
(42) Habitual or excessive use or addiction to alcohol,
narcotics, stimulants, or any other chemical agent or drug
that results in a managing broker, broker, or leasing
agent's inability to practice with reasonable skill or
safety.
(43) Enabling, aiding, or abetting an auctioneer, as
defined in the Auction License Act, to conduct a real
estate auction in a manner that is in violation of this
Act.
(b) The Department may refuse to issue or renew or may
suspend the license of any person who fails to file a return,
pay the tax, penalty or interest shown in a filed return, or
pay any final assessment of tax, penalty, or interest, as
required by any tax Act administered by the Department of
Revenue, until such time as the requirements of that tax Act
are satisfied in accordance with subsection (g) of Section
2105-15 of the Civil Administrative Code of Illinois.
(c) The Department shall deny a license or renewal
authorized by this Act to a person who has defaulted on an
educational loan or scholarship provided or guaranteed by the

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

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

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In instances in which the Secretary immediately suspends a
person's license under this Section, a hearing on that person's
license must be convened by the Department within 30 days after
the suspension and completed without appreciable delay. The
Department and Board shall have the authority to review the
subject individual's record of treatment and counseling
regarding the impairment to the extent permitted by applicable
federal statutes and regulations safeguarding the
confidentiality of medical records.
An individual licensed under this Act and affected under
this Section shall be afforded an opportunity to demonstrate to
the Department or Board that he or she can resume practice in
compliance with acceptable and prevailing standards under the
provisions of his or her license.
(Source: P.A. 98-553, eff. 1-1-14; 98-756, eff. 7-16-14;
99-227, eff. 8-3-15; 10000SB0009ham003.)
Section 17-100. 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, then the Code of Criminal
Procedure of 1963 is amended by changing Section 110-17 as
follows:
(725 ILCS 5/110-17) (from Ch. 38, par. 110-17)
Sec. 110-17. Unclaimed Bail Deposits. Notwithstanding the
provisions of the Revised Uniform Disposition of Unclaimed

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

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

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accounts of all moneys paid into the treasury, and if any
person appears within 5 years after the deposit of moneys by
the clerk of the circuit court and claims any money paid into
the treasury, he shall file a claim therefor on the form
prescribed by the treasurer of the county who shall consider
any claim filed under this Act and who may, in his discretion,
hold a hearing and receive evidence concerning it. The
treasurer of the county shall prepare a finding and the
decision in writing on each hearing, stating the substance of
any evidence heard by him, his findings of fact in respect
thereto, and the reasons for his decision. The decision shall
be a public record.
(e) All claims which are not filed within the 5 year period
shall be forever barred.
(Source: P.A. 85-768; 10000SB0009ham003.)
Section 17-105. 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, then the Probate Act of 1975
is amended by changing Sections 2-1 and 2-2 as follows:
(755 ILCS 5/2-1) (from Ch. 110 1/2, par. 2-1)
Sec. 2-1. Rules of descent and distribution. The intestate
real and personal estate of a resident decedent and the
intestate real estate in this State of a nonresident decedent,
after all just claims against his estate are fully paid,

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descends and shall be distributed as follows:
(a) If there is a surviving spouse and also a descendant of
the decedent: 1/2 of the entire estate to the surviving spouse
and 1/2 to the decedent's descendants per stirpes.
(b) If there is no surviving spouse but a descendant of the
decedent: the entire estate to the decedent's descendants per
stirpes.
(c) If there is a surviving spouse but no descendant of the
decedent: the entire estate to the surviving spouse.
(d) If there is no surviving spouse or descendant but a
parent, brother, sister or descendant of a brother or sister of
the decedent: the entire estate to the parents, brothers and
sisters of the decedent in equal parts, allowing to the
surviving parent if one is dead a double portion and to the
descendants of a deceased brother or sister per stirpes the
portion which the deceased brother or sister would have taken
if living.
(e) If there is no surviving spouse, descendant, parent,
brother, sister or descendant of a brother or sister of the
decedent but a grandparent or descendant of a grandparent of
the decedent: (1) 1/2 of the entire estate to the decedent's
maternal grandparents in equal parts or to the survivor of
them, or if there is none surviving, to their descendants per
stirpes, and (2) 1/2 of the entire estate to the decedent's
paternal grandparents in equal parts or to the survivor of
them, or if there is none surviving, to their descendants per

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stirpes. If there is no surviving paternal grandparent or
descendant of a paternal grandparent, but a maternal
grandparent or descendant of a maternal grandparent of the
decedent: the entire estate to the decedent's maternal
grandparents in equal parts or to the survivor of them, or if
there is none surviving, to their descendants per stirpes. If
there is no surviving maternal grandparent or descendant of a
maternal grandparent, but a paternal grandparent or descendant
of a paternal grandparent of the decedent: the entire estate to
the decedent's paternal grandparents in equal parts or to the
survivor of them, or if there is none surviving, to their
descendants per stirpes.
(f) If there is no surviving spouse, descendant, parent,
brother, sister, descendant of a brother or sister or
grandparent or descendant of a grandparent of the decedent: (1)
1/2 of the entire estate to the decedent's maternal
great-grandparents in equal parts or to the survivor of them,
or if there is none surviving, to their descendants per
stirpes, and (2) 1/2 of the entire estate to the decedent's
paternal great-grandparents in equal parts or to the survivor
of them, or if there is none surviving, to their descendants
per stirpes. If there is no surviving paternal
great-grandparent or descendant of a paternal
great-grandparent, but a maternal great-grandparent or
descendant of a maternal great-grandparent of the decedent: the
entire estate to the decedent's maternal great-grandparents in

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equal parts or to the survivor of them, or if there is none
surviving, to their descendants per stirpes. If there is no
surviving maternal great-grandparent or descendant of a
maternal great-grandparent, but a paternal great-grandparent
or descendant of a paternal great-grandparent of the decedent:
the entire estate to the decedent's paternal
great-grandparents in equal parts or to the survivor of them,
or if there is none surviving, to their descendants per
stirpes.
(g) If there is no surviving spouse, descendant, parent,
brother, sister, descendant of a brother or sister,
grandparent, descendant of a grandparent, great-grandparent or
descendant of a great-grandparent of the decedent: the entire
estate in equal parts to the nearest kindred of the decedent in
equal degree (computing by the rules of the civil law) and
without representation.
(h) If there is no surviving spouse and no known kindred of
the decedent: the real estate escheats to the county in which
it is located; the personal estate physically located within
this State and the personal estate physically located or held
outside this State which is the subject of ancillary
administration of an estate being administered within this
State escheats to the county of which the decedent was a
resident, or, if the decedent was not a resident of this State,
to the county in which it is located; all other personal
property of the decedent of every class and character, wherever

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

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

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stirpes.
(c) If there is a surviving spouse but no descendant of the
decedent: the entire estate to the surviving spouse.
(d) If there is no surviving spouse or descendant but the
eligible parent or a descendant of the eligible parent of the
decedent: the entire estate to the eligible parent and the
eligible parent's descendants, allowing 1/2 to the eligible
parent and 1/2 to the eligible parent's descendants per
stirpes.
(e) If there is no surviving spouse, descendant, eligible
parent, or descendant of the eligible parent of the decedent,
but a grandparent on the eligible parent's side of the family
or descendant of such grandparent of the decedent: the entire
estate to the decedent's grandparents on the eligible parent's
side of the family in equal parts, or to the survivor of them,
or if there is none surviving, to their descendants per
stirpes.
(f) If there is no surviving spouse, descendant, eligible
parent, descendant of the eligible parent, grandparent on the
eligible parent's side of the family, or descendant of such
grandparent of the decedent: the entire estate to the
decedent's great-grandparents on the eligible parent's side of
the family in equal parts or to the survivor of them, or if
there is none surviving, to their descendants per stirpes.
(g) If there is no surviving spouse, descendant, eligible
parent, descendant of the eligible parent, grandparent on the

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

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

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inheritance, the changes made by this amendatory Act of 1997
apply to all decedents who die on or after January 1, 1998. For
the purpose of determining the property rights of any person
under any instrument, the changes made by this amendatory Act
of 1997 apply to all instruments executed on or after January
1, 1998.
(Source: P.A. 94-229, eff. 1-1-06; 10000SB0009ham003.)
Section 17-110. 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, then the Sale of Unclaimed
Property Act is amended by changing Section 3 as follows:
(770 ILCS 90/3) (from Ch. 141, par. 3)
Sec. 3. All persons other than common carriers having a
lien on personal property, by virtue of the Innkeepers Lien Act
or for more than $2,000 by virtue of the Labor and Storage Lien
Act may enforce the lien by a sale of the property, on giving
to the owner thereof, if he and his residence be known to the
person having such lien, 30 days' notice by certified mail, in
writing of the time and place of such sale, and if the owner or
his place of residence be unknown to the person having such
lien, then upon his filing his affidavit to that effect with
the clerk of the circuit court in the county where such
property is situated; notice of the sale may be given by
publishing the same once in each week for 3 successive weeks in

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some newspaper of general circulation published in the county,
and out of the proceeds of the sale all costs and charges for
advertising and making the same, and the amount of the lien
shall be paid, and the surplus, if any, shall be paid to the
owner of the property or, if not claimed by said owner, such
surplus, if any, shall be disposed under the Revised Uniform
Disposition of Unclaimed Property Act. All sales pursuant to
this Section must be public and conducted in a commercially
reasonable manner so as to maximize the net proceeds of the
sale. Conformity to the requirements of this Act shall be a
perpetual bar to any action against such lienor by any person
for the recovery of such chattels or the value thereof or any
damages growing out of the failure of such person to receive
such chattels.
(Source: P.A. 87-206; 10000SB0009ham003.)
Section 17-115. 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, then the Business Corporation
Act of 1983 is amended by changing Section 12.70 as follows:
(805 ILCS 5/12.70) (from Ch. 32, par. 12.70)
Sec. 12.70. Deposit of amount due certain shareholders.
Upon the distribution of the assets of a corporation among its
shareholders, the distributive portion to which a shareholder
would be entitled who is unknown or cannot can not be found, or

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who is under disability and there is no person legally
competent to receive such distributive portion, shall be
presumed abandoned and reported and delivered to the State
Treasurer and become subject to the provision of the Revised
Uniform Disposition of Unclaimed Property Act. In the event
such distribution is be made other than in cash, such
distributive portion of the assets shall be reduced to cash
before being so reported and delivered.
(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
Section 17-120. 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, then the General Not For
Profit Corporation Act of 1986 is amended by changing Section
112.70 as follows:
(805 ILCS 105/112.70) (from Ch. 32, par. 112.70)
Sec. 112.70. Deposit of amount due. Upon the distribution
of the assets of a corporation, the distributive portion to
which a person would be entitled who is unknown or cannot be
found, or who is under disability and there is no person
legally competent to receive such distributive portion, shall
be presumed abandoned and reported and delivered to the State
Treasurer and become subject to the Revised provision of the
Uniform Disposition of Unclaimed Property Act. In the event
such distribution is be made other than in cash, such

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distributive portion of the assets shall be reduced to cash
before being so reported and delivered.
(Source: P.A. 91-16, eff. 7-1-99; 10000SB0009ham003.)
Section 20-5. 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, then the Illinois Income Tax
Act is amended by changing Sections 201, 202.5, 203, 204, 208,
212, 901, and 1501 as follows:
(35 ILCS 5/201) (from Ch. 120, par. 2-201)
Sec. 201. Tax Imposed.
(a) In general. A tax measured by net income is hereby
imposed on every individual, corporation, trust and estate for
each taxable year ending after July 31, 1969 on the privilege
of earning or receiving income in or as a resident of this
State. Such tax shall be in addition to all other occupation or
privilege taxes imposed by this State or by any municipal
corporation or political subdivision thereof.
(b) Rates. The tax imposed by subsection (a) of this
Section shall be determined as follows, except as adjusted by
subsection (d-1):
(1) In the case of an individual, trust or estate, for
taxable years ending prior to July 1, 1989, an amount equal
to 2 1/2% of the taxpayer's net income for the taxable
year.

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(2) In the case of an individual, trust or estate, for
taxable years beginning prior to July 1, 1989 and ending
after June 30, 1989, an amount equal to the sum of (i) 2
1/2% of the taxpayer's net income for the period prior to
July 1, 1989, as calculated under Section 202.3, and (ii)
3% of the taxpayer's net income for the period after June
30, 1989, as calculated under Section 202.3.
(3) In the case of an individual, trust or estate, for
taxable years beginning after June 30, 1989, and ending
prior to January 1, 2011, an amount equal to 3% of the
taxpayer's net income for the taxable year.
(4) In the case of an individual, trust, or estate, for
taxable years beginning prior to January 1, 2011, and
ending after December 31, 2010, an amount equal to the sum
of (i) 3% of the taxpayer's net income for the period prior
to January 1, 2011, as calculated under Section 202.5, and
(ii) 5% of the taxpayer's net income for the period after
December 31, 2010, as calculated under Section 202.5.
(5) In the case of an individual, trust, or estate, for
taxable years beginning on or after January 1, 2011, and
ending prior to January 1, 2015, an amount equal to 5% of
the taxpayer's net income for the taxable year.
(5.1) In the case of an individual, trust, or estate,
for taxable years beginning prior to January 1, 2015, and
ending after December 31, 2014, an amount equal to the sum
of (i) 5% of the taxpayer's net income for the period prior

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to January 1, 2015, as calculated under Section 202.5, and
(ii) 3.75% of the taxpayer's net income for the period
after December 31, 2014, as calculated under Section 202.5.
(5.2) In the case of an individual, trust, or estate,
for taxable years beginning on or after January 1, 2015,
and ending prior to July 1, 2017 January 1, 2025, an amount
equal to 3.75% of the taxpayer's net income for the taxable
year.
(5.3) In the case of an individual, trust, or estate,
for taxable years beginning prior to July 1, 2017 January
1, 2025, and ending after June 30, 2017 December 31, 2024,
an amount equal to the sum of (i) 3.75% of the taxpayer's
net income for the period prior to July 1, 2017 January 1,
2025, as calculated under Section 202.5, and (ii) 4.95%
3.25% of the taxpayer's net income for the period after
June 30, 2017 December 31, 2024, as calculated under
Section 202.5.
(5.4) In the case of an individual, trust, or estate,
for taxable years beginning on or after July 1, 2017
January 1, 2025, an amount equal to 4.95% 3.25% of the
taxpayer's net income for the taxable year.
(6) In the case of a corporation, for taxable years
ending prior to July 1, 1989, an amount equal to 4% of the
taxpayer's net income for the taxable year.
(7) In the case of a corporation, for taxable years
beginning prior to July 1, 1989 and ending after June 30,

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1989, an amount equal to the sum of (i) 4% of the
taxpayer's net income for the period prior to July 1, 1989,
as calculated under Section 202.3, and (ii) 4.8% of the
taxpayer's net income for the period after June 30, 1989,
as calculated under Section 202.3.
(8) In the case of a corporation, for taxable years
beginning after June 30, 1989, and ending prior to January
1, 2011, an amount equal to 4.8% of the taxpayer's net
income for the taxable year.
(9) In the case of a corporation, for taxable years
beginning prior to January 1, 2011, and ending after
December 31, 2010, an amount equal to the sum of (i) 4.8%
of the taxpayer's net income for the period prior to
January 1, 2011, as calculated under Section 202.5, and
(ii) 7% of the taxpayer's net income for the period after
December 31, 2010, as calculated under Section 202.5.
(10) In the case of a corporation, for taxable years
beginning on or after January 1, 2011, and ending prior to
January 1, 2015, an amount equal to 7% of the taxpayer's
net income for the taxable year.
(11) In the case of a corporation, for taxable years
beginning prior to January 1, 2015, and ending after
December 31, 2014, an amount equal to the sum of (i) 7% of
the taxpayer's net income for the period prior to January
1, 2015, as calculated under Section 202.5, and (ii) 5.25%
of the taxpayer's net income for the period after December

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

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

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

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

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

HB4078 - 156 - LRB100 13340 AXK 27924 b
exceeds the original liability or the liability as later
amended, such excess may be carried forward and applied to
the tax liability of the 5 taxable years following the
excess credit years if the taxpayer (i) makes investments
which cause the creation of a minimum of 2,000 full-time
equivalent jobs in Illinois, (ii) is located in an
enterprise zone established pursuant to the Illinois
Enterprise Zone Act and (iii) is certified by the
Department of Commerce and Community Affairs (now
Department of Commerce and Economic Opportunity) as
complying with the requirements specified in clause (i) and
(ii) by July 1, 1986. The Department of Commerce and
Community Affairs (now Department of Commerce and Economic
Opportunity) shall notify the Department of Revenue of all
such certifications immediately. For tax years ending
after December 31, 1988, the credit shall be allowed for
the tax year in which the property is placed in service,
or, if the amount of the credit exceeds the tax liability
for that year, whether it exceeds the original liability or
the liability as later amended, such excess may be carried
forward and applied to the tax liability of the 5 taxable
years following the excess credit years. The credit shall
be applied to the earliest year for which there is a
liability. If there is credit from more than one tax year
that is available to offset a liability, earlier credit
shall be applied first.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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2004, and ending prior to January 1, 2022 January 1, 2016, a
taxpayer shall be allowed a credit against the tax imposed by
subsections (a) and (b) of this Section for increasing research
activities in this State. The credit allowed against the tax
imposed by subsections (a) and (b) shall be equal to 6 1/2% of
the qualifying expenditures for increasing research activities
in this State. For partners, shareholders of subchapter S
corporations, and owners of limited liability companies, if the
liability company is treated as a partnership for purposes of
federal and State income taxation, there shall be allowed a
credit under this subsection to be determined in accordance
with the determination of income and distributive share of
income under Sections 702 and 704 and subchapter S of the
Internal Revenue Code.
For purposes of this subsection, "qualifying expenditures"
means the qualifying expenditures as defined for the federal
credit for increasing research activities which would be
allowable under Section 41 of the Internal Revenue Code and
which are conducted in this State, "qualifying expenditures for
increasing research activities in this State" means the excess
of qualifying expenditures for the taxable year in which
incurred over qualifying expenditures for the base period,
"qualifying expenditures for the base period" means the average
of the qualifying expenditures for each year in the base
period, and "base period" means the 3 taxable years immediately
preceding the taxable year for which the determination is being

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made.
Any credit in excess of the tax liability for the taxable
year may be carried forward. A taxpayer may elect to have the
unused credit shown on its final completed return carried over
as a credit against the tax liability for the following 5
taxable years or until it has been fully used, whichever occurs
first; provided that no credit earned in a tax year ending
prior to December 31, 2003 may be carried forward to any year
ending on or after December 31, 2003.
If an unused credit is carried forward to a given year from
2 or more earlier years, that credit arising in the earliest
year will be applied first against the tax liability for the
given year. If a tax liability for the given year still
remains, the credit from the next earliest year will then be
applied, and so on, until all credits have been used or no tax
liability for the given year remains. Any remaining unused
credit or credits then will be carried forward to the next
following year in which a tax liability is incurred, except
that no credit can be carried forward to a year which is more
than 5 years after the year in which the expense for which the
credit is given was incurred.
No inference shall be drawn from this amendatory Act of the
91st General Assembly in construing this Section for taxable
years beginning before January 1, 1999.
It is the intent of the General Assembly that the research
and development credit under this subsection (k) shall apply

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continuously for all tax years ending on or after December 31,
2004 and ending prior to January 1, 2022, including, but not
limited to, the period beginning on January 1, 2016 and ending
on the effective date of this amendatory Act of the 100th
General Assembly. All actions taken in reliance on the
continuation of the credit under this subsection (k) by any
taxpayer are hereby validated.
(l) Environmental Remediation Tax Credit.
(i) For tax years ending after December 31, 1997 and on
or before December 31, 2001, a taxpayer shall be allowed a
credit against the tax imposed by subsections (a) and (b)
of this Section for certain amounts paid for unreimbursed
eligible remediation costs, as specified in this
subsection. For purposes of this Section, "unreimbursed
eligible remediation costs" means costs approved by the
Illinois Environmental Protection Agency ("Agency") under
Section 58.14 of the Environmental Protection Act that were
paid in performing environmental remediation at a site for
which a No Further Remediation Letter was issued by the
Agency and recorded under Section 58.10 of the
Environmental Protection Act. The credit must be claimed
for the taxable year in which Agency approval of the
eligible remediation costs is granted. The credit is not
available to any taxpayer if the taxpayer or any related
party caused or contributed to, in any material respect, a
release of regulated substances on, in, or under the site

HB4078 - 174 - LRB100 13340 AXK 27924 b
that was identified and addressed by the remedial action
pursuant to the Site Remediation Program of the
Environmental Protection Act. After the Pollution Control
Board rules are adopted pursuant to the Illinois
Administrative Procedure Act for the administration and
enforcement of Section 58.9 of the Environmental
Protection Act, determinations as to credit availability
for purposes of this Section shall be made consistent with
those rules. For purposes of this Section, "taxpayer"
includes a person whose tax attributes the taxpayer has
succeeded to under Section 381 of the Internal Revenue Code
and "related party" includes the persons disallowed a
deduction for losses by paragraphs (b), (c), and (f)(1) of
Section 267 of the Internal Revenue Code by virtue of being
a related taxpayer, as well as any of its partners. The
credit allowed against the tax imposed by subsections (a)
and (b) shall be equal to 25% of the unreimbursed eligible
remediation costs in excess of $100,000 per site, except
that the $100,000 threshold shall not apply to any site
contained in an enterprise zone as determined by the
Department of Commerce and Community Affairs (now
Department of Commerce and Economic Opportunity). The
total credit allowed shall not exceed $40,000 per year with
a maximum total of $150,000 per site. For partners and
shareholders of subchapter S corporations, there shall be
allowed a credit under this subsection to be determined in

HB4078 - 175 - LRB100 13340 AXK 27924 b
accordance with the determination of income and
distributive share of income under Sections 702 and 704 and
subchapter S of the Internal Revenue Code.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used. The
term "unused credit" does not include any amounts of
unreimbursed eligible remediation costs in excess of the
maximum credit per site authorized under paragraph (i).
This credit shall be applied first to the earliest year for
which there is a liability. If there is a credit under this
subsection from more than one tax year that is available to
offset a liability, the earliest credit arising under this
subsection shall be applied first. A credit allowed under
this subsection may be sold to a buyer as part of a sale of
all or part of the remediation site for which the credit
was granted. The purchaser of a remediation site and the
tax credit shall succeed to the unused credit and remaining
carry-forward period of the seller. To perfect the
transfer, the assignor shall record the transfer in the
chain of title for the site and provide written notice to
the Director of the Illinois Department of Revenue of the
assignor's intent to sell the remediation site and the
amount of the tax credit to be transferred as a portion of
the sale. In no event may a credit be transferred to any

HB4078 - 176 - LRB100 13340 AXK 27924 b
taxpayer if the taxpayer or a related party would not be
eligible under the provisions of subsection (i).
(iii) For purposes of this Section, the term "site"
shall have the same meaning as under Section 58.2 of the
Environmental Protection Act.
(m) Education expense credit. Beginning with tax years
ending after December 31, 1999, a taxpayer who is the custodian
of one or more qualifying pupils shall be allowed a credit
against the tax imposed by subsections (a) and (b) of this
Section for qualified education expenses incurred on behalf of
the qualifying pupils. The credit shall be equal to 25% of
qualified education expenses, but in no event may the total
credit under this subsection claimed by a family that is the
custodian of qualifying pupils exceed (i) $500 for tax years
ending prior to December 31, 2017, and (ii) $750 for tax years
ending on or after December 31, 2017. In no event shall a
credit under this subsection reduce the taxpayer's liability
under this Act to less than zero. Notwithstanding any other
provision of law, for taxable years beginning on or after
January 1, 2017, no taxpayer may claim a credit under this
subsection (m) if the taxpayer's adjusted gross income for the
taxable year exceeds (i) $500,000, in the case of spouses
filing a joint federal tax return or (ii) $250,000, in the case
of all other taxpayers. This subsection is exempt from the
provisions of Section 250 of this Act.
For purposes of this subsection:

HB4078 - 177 - LRB100 13340 AXK 27924 b
"Qualifying pupils" means individuals who (i) are
residents of the State of Illinois, (ii) are under the age of
21 at the close of the school year for which a credit is
sought, and (iii) during the school year for which a credit is
sought were full-time pupils enrolled in a kindergarten through
twelfth grade education program at any school, as defined in
this subsection.
"Qualified education expense" means the amount incurred on
behalf of a qualifying pupil in excess of $250 for tuition,
book fees, and lab fees at the school in which the pupil is
enrolled during the regular school year.
"School" means any public or nonpublic elementary or
secondary school in Illinois that is in compliance with Title
VI of the Civil Rights Act of 1964 and attendance at which
satisfies the requirements of Section 26-1 of the School Code,
except that nothing shall be construed to require a child to
attend any particular public or nonpublic school to qualify for
the credit under this Section.
"Custodian" means, with respect to qualifying pupils, an
Illinois resident who is a parent, the parents, a legal
guardian, or the legal guardians of the qualifying pupils.
(n) River Edge Redevelopment Zone site remediation tax
credit.
(i) For tax years ending on or after December 31, 2006,
a taxpayer shall be allowed a credit against the tax
imposed by subsections (a) and (b) of this Section for

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

HB4078 - 179 - LRB100 13340 AXK 27924 b
persons disallowed a deduction for losses by paragraphs
(b), (c), and (f)(1) of Section 267 of the Internal Revenue
Code by virtue of being a related taxpayer, as well as any
of its partners. The credit allowed against the tax imposed
by subsections (a) and (b) shall be equal to 25% of the
unreimbursed eligible remediation costs in excess of
$100,000 per site.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used. This
credit shall be applied first to the earliest year for
which there is a liability. If there is a credit under this
subsection from more than one tax year that is available to
offset a liability, the earliest credit arising under this
subsection shall be applied first. A credit allowed under
this subsection may be sold to a buyer as part of a sale of
all or part of the remediation site for which the credit
was granted. The purchaser of a remediation site and the
tax credit shall succeed to the unused credit and remaining
carry-forward period of the seller. To perfect the
transfer, the assignor shall record the transfer in the
chain of title for the site and provide written notice to
the Director of the Illinois Department of Revenue of the
assignor's intent to sell the remediation site and the
amount of the tax credit to be transferred as a portion of

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

HB4078 - 181 - LRB100 13340 AXK 27924 b
Health;
(C) a determination by the Illinois Department of
Public Health that transfer of the registration is in
the best interests of Illinois qualifying patients as
defined by the Compassionate Use of Medical Cannabis
Pilot Program Act;
(D) the death of an owner of the equity interest in
a registrant;
(E) the acquisition of a controlling interest in
the stock or substantially all of the assets of a
publicly traded company;
(F) a transfer by a parent company to a wholly
owned subsidiary; or
(G) the transfer or sale to or by one person to
another person where both persons were initial owners
of the registration when the registration was issued;
or
(2) the cannabis cultivation center registration,
medical cannabis dispensary registration, or the
controlling interest in a registrant's property is
transferred in a transaction to lineal descendants in which
no gain or loss is recognized or as a result of a
transaction in accordance with Section 351 of the Internal
Revenue Code in which no gain or loss is recognized.
(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,

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eff. 7-16-14; 10000SB0009ham003.)
(35 ILCS 5/202.5)
Sec. 202.5. Net income attributable to the period beginning
prior to the first day of a month and ending after the last day
of the preceding month January 1 of any year and ending after
December 31 of the preceding year.
(a) In general. With respect to the taxable year of a
taxpayer beginning prior to the first day of a month and ending
after the last day of the preceding month January 1 of any year
and ending after December 31 of the preceding year, net income
for the period after the last day of the preceding month
December 31 of the preceding year, is that amount that bears
the same ratio to the taxpayer's net income for the entire
taxable year as the number of days in that taxable year after
the last day of the preceding month December 31 bears to the
total number of days in that taxable year, and the net income
for the period prior to the first day of the month January 1 is
that amount that bears the same ratio to the taxpayer's net
income for the entire taxable year as the number of days in
that taxable year prior to the first day of the month January 1
bears to the total number of days in that taxable year.
(b) Election to attribute income and deduction items
specifically to the respective portions of a taxable year prior
to the first day of a month and ending after the last day of the
preceding month January 1 of any year and after December 31 of

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

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

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

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subparagraph (L) of this paragraph (2) prior to July 1,
1991, the retrospective application date of Article 4
of Public Act 87-17. In the case of multi-unit or
multi-use structures and farm dwellings, the taxes on
the taxpayer's principal residence shall be that
portion of the total taxes for the entire property
which is attributable to such principal residence;
(D) An amount equal to the amount of the capital
gain deduction allowable under the Internal Revenue
Code, to the extent deducted from gross income in the
computation of adjusted gross income;
(D-5) An amount, to the extent not included in
adjusted gross income, equal to the amount of money
withdrawn by the taxpayer in the taxable year from a
medical care savings account and the interest earned on
the account in the taxable year of a withdrawal
pursuant to subsection (b) of Section 20 of the Medical
Care Savings Account Act or subsection (b) of Section
20 of the Medical Care Savings Account Act of 2000;
(D-10) For taxable years ending after December 31,
1997, an amount equal to any eligible remediation costs
that the individual deducted in computing adjusted
gross income and for which the individual claims a
credit under subsection (l) of Section 201;
(D-15) For taxable years 2001 and thereafter, an
amount equal to the bonus depreciation deduction taken

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on the taxpayer's federal income tax return for the
taxable year under subsection (k) of Section 168 of the
Internal Revenue Code;
(D-16) If the taxpayer sells, transfers, abandons,
or otherwise disposes of property for which the
taxpayer was required in any taxable year to make an
addition modification under subparagraph (D-15), then
an amount equal to the aggregate amount of the
deductions taken in all taxable years under
subparagraph (Z) with respect to that property.
If the taxpayer continues to own property through
the last day of the last tax year for which the
taxpayer may claim a depreciation deduction for
federal income tax purposes and for which the taxpayer
was allowed in any taxable year to make a subtraction
modification under subparagraph (Z), then an amount
equal to that subtraction modification.
The taxpayer is required to make the addition
modification under this subparagraph only once with
respect to any one piece of property;
(D-17) An amount equal to the amount otherwise
allowed as a deduction in computing base income for
interest paid, accrued, or incurred, directly or
indirectly, (i) for taxable years ending on or after
December 31, 2004, to a foreign person who would be a
member of the same unitary business group but for the

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fact that foreign person's business activity outside
the United States is 80% or more of the foreign
person's total business activity and (ii) for taxable
years ending on or after December 31, 2008, to a person
who would be a member of the same unitary business
group but for the fact that the person is prohibited
under Section 1501(a)(27) from being included in the
unitary business group because he or she is ordinarily
required to apportion business income under different
subsections of Section 304. The addition modification
required by this subparagraph shall be reduced to the
extent that dividends were included in base income of
the unitary group for the same taxable year and
received by the taxpayer or by a member of the
taxpayer's unitary business group (including amounts
included in gross income under Sections 951 through 964
of the Internal Revenue Code and amounts included in
gross income under Section 78 of the Internal Revenue
Code) with respect to the stock of the same person to
whom the interest was paid, accrued, or incurred.
This paragraph shall not apply to the following:
(i) an item of interest paid, accrued, or
incurred, directly or indirectly, to a person who
is subject in a foreign country or state, other
than a state which requires mandatory unitary
reporting, to a tax on or measured by net income

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with respect to such interest; or
(ii) an item of interest paid, accrued, or
incurred, directly or indirectly, to a person if
the taxpayer can establish, based on a
preponderance of the evidence, both of the
following:
(a) the person, during the same taxable
year, paid, accrued, or incurred, the interest
to a person that is not a related member, and
(b) the transaction giving rise to the
interest expense between the taxpayer and the
person did not have as a principal purpose the
avoidance of Illinois income tax, and is paid
pursuant to a contract or agreement that
reflects an arm's-length interest rate and
terms; or
(iii) the taxpayer can establish, based on
clear and convincing evidence, that the interest
paid, accrued, or incurred relates to a contract or
agreement entered into at arm's-length rates and
terms and the principal purpose for the payment is
not federal or Illinois tax avoidance; or
(iv) an item of interest paid, accrued, or
incurred, directly or indirectly, to a person if
the taxpayer establishes by clear and convincing
evidence that the adjustments are unreasonable; or

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

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

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

HB4078 - 193 - LRB100 13340 AXK 27924 b
income tax, and is paid pursuant to a contract
or agreement that reflects arm's-length terms;
or
(iii) any item of intangible expense or cost
paid, accrued, or incurred, directly or
indirectly, from a transaction with a person if the
taxpayer establishes by clear and convincing
evidence, that the adjustments are unreasonable;
or if the taxpayer and the Director agree in
writing to the application or use of an alternative
method of apportionment under Section 304(f);
Nothing in this subsection shall preclude the
Director from making any other adjustment
otherwise allowed under Section 404 of this Act for
any tax year beginning after the effective date of
this amendment provided such adjustment is made
pursuant to regulation adopted by the Department
and such regulations provide methods and standards
by which the Department will utilize its authority
under Section 404 of this Act;
(D-19) For taxable years ending on or after
December 31, 2008, an amount equal to the amount of
insurance premium expenses and costs otherwise allowed
as a deduction in computing base income, and that were
paid, accrued, or incurred, directly or indirectly, to
a person who would be a member of the same unitary

HB4078 - 194 - LRB100 13340 AXK 27924 b
business group but for the fact that the person is
prohibited under Section 1501(a)(27) from being
included in the unitary business group because he or
she is ordinarily required to apportion business
income under different subsections of Section 304. The
addition modification required by this subparagraph
shall be reduced to the extent that dividends were
included in base income of the unitary group for the
same taxable year and received by the taxpayer or by a
member of the taxpayer's unitary business group
(including amounts included in gross income under
Sections 951 through 964 of the Internal Revenue Code
and amounts included in gross income under Section 78
of the Internal Revenue Code) with respect to the stock
of the same person to whom the premiums and costs were
directly or indirectly paid, incurred, or accrued. The
preceding sentence does not apply to the extent that
the same dividends caused a reduction to the addition
modification required under Section 203(a)(2)(D-17) or
Section 203(a)(2)(D-18) of this Act.
(D-20) For taxable years beginning on or after
January 1, 2002 and ending on or before December 31,
2006, in the case of a distribution from a qualified
tuition program under Section 529 of the Internal
Revenue Code, other than (i) a distribution from a
College Savings Pool created under Section 16.5 of the

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

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

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

HB4078 - 198 - LRB100 13340 AXK 27924 b
after December 31, 2007, the National Guard of any
other state. For taxable years ending on or after
December 31, 2001, any amount included in such total in
respect of any compensation (including but not limited
to any compensation paid or accrued to a serviceman
while a prisoner of war or missing in action) paid to a
resident by reason of being a member of any component
of the Armed Forces of the United States and in respect
of any compensation paid or accrued to a resident who
as a governmental employee was a prisoner of war or
missing in action, and in respect of any compensation
paid to a resident in 2001 or thereafter by reason of
being a member of the Illinois National Guard or,
beginning with taxable years ending on or after
December 31, 2007, the National Guard of any other
state. The provisions of this subparagraph (E) are
exempt from the provisions of Section 250;
(F) An amount equal to all amounts included in such
total pursuant to the provisions of Sections 402(a),
402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
Internal Revenue Code, or included in such total as
distributions under the provisions of any retirement
or disability plan for employees of any governmental
agency or unit, or retirement payments to retired
partners, which payments are excluded in computing net
earnings from self employment by Section 1402 of the

HB4078 - 199 - LRB100 13340 AXK 27924 b
Internal Revenue Code and regulations adopted pursuant
thereto;
(G) The valuation limitation amount;
(H) An amount equal to the amount of any tax
imposed by this Act which was refunded to the taxpayer
and included in such total for the taxable year;
(I) An amount equal to all amounts included in such
total pursuant to the provisions of Section 111 of the
Internal Revenue Code as a recovery of items previously
deducted from adjusted gross income in the computation
of taxable income;
(J) An amount equal to those dividends included in
such total which were paid by a corporation which
conducts business operations in a River Edge
Redevelopment Zone or zones created under the River
Edge Redevelopment Zone Act, and conducts
substantially all of its operations in a River Edge
Redevelopment Zone or zones. This subparagraph (J) is
exempt from the provisions of Section 250;
(K) An amount equal to those dividends included in
such total that were paid by a corporation that
conducts business operations in a federally designated
Foreign Trade Zone or Sub-Zone and that is designated a
High Impact Business located in Illinois; provided
that dividends eligible for the deduction provided in
subparagraph (J) of paragraph (2) of this subsection

HB4078 - 200 - LRB100 13340 AXK 27924 b
shall not be eligible for the deduction provided under
this subparagraph (K);
(L) For taxable years ending after December 31,
1983, an amount equal to all social security benefits
and railroad retirement benefits included in such
total pursuant to Sections 72(r) and 86 of the Internal
Revenue Code;
(M) With the exception of any amounts subtracted
under subparagraph (N), an amount equal to the sum of
all amounts disallowed as deductions by (i) Sections
171(a) (2), and 265(2) of the Internal Revenue Code,
and all amounts of expenses allocable to interest and
disallowed as deductions by Section 265(1) of the
Internal Revenue Code; and (ii) for taxable years
ending on or after August 13, 1999, Sections 171(a)(2),
265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
Code, plus, for taxable years ending on or after
December 31, 2011, Section 45G(e)(3) of the Internal
Revenue Code and, for taxable years ending on or after
December 31, 2008, any amount included in gross income
under Section 87 of the Internal Revenue Code; the
provisions of this subparagraph are exempt from the
provisions of Section 250;
(N) An amount equal to all amounts included in such
total which are exempt from taxation by this State
either by reason of its statutes or Constitution or by

HB4078 - 201 - LRB100 13340 AXK 27924 b
reason of the Constitution, treaties or statutes of the
United States; provided that, in the case of any
statute of this State that exempts income derived from
bonds or other obligations from the tax imposed under
this Act, the amount exempted shall be the interest net
of bond premium amortization;
(O) An amount equal to any contribution made to a
job training project established pursuant to the Tax
Increment Allocation Redevelopment Act;
(P) An amount equal to the amount of the deduction
used to compute the federal income tax credit for
restoration of substantial amounts held under claim of
right for the taxable year pursuant to Section 1341 of
the Internal Revenue Code or of any itemized deduction
taken from adjusted gross income in the computation of
taxable income for restoration of substantial amounts
held under claim of right for the taxable year;
(Q) An amount equal to any amounts included in such
total, received by the taxpayer as an acceleration in
the payment of life, endowment or annuity benefits in
advance of the time they would otherwise be payable as
an indemnity for a terminal illness;
(R) An amount equal to the amount of any federal or
State bonus paid to veterans of the Persian Gulf War;
(S) An amount, to the extent included in adjusted
gross income, equal to the amount of a contribution

HB4078 - 202 - LRB100 13340 AXK 27924 b
made in the taxable year on behalf of the taxpayer to a
medical care savings account established under the
Medical Care Savings Account Act or the Medical Care
Savings Account Act of 2000 to the extent the
contribution is accepted by the account administrator
as provided in that Act;
(T) An amount, to the extent included in adjusted
gross income, equal to the amount of interest earned in
the taxable year on a medical care savings account
established under the Medical Care Savings Account Act
or the Medical Care Savings Account Act of 2000 on
behalf of the taxpayer, other than interest added
pursuant to item (D-5) of this paragraph (2);
(U) For one taxable year beginning on or after
January 1, 1994, an amount equal to the total amount of
tax imposed and paid under subsections (a) and (b) of
Section 201 of this Act on grant amounts received by
the taxpayer under the Nursing Home Grant Assistance
Act during the taxpayer's taxable years 1992 and 1993;
(V) Beginning with tax years ending on or after
December 31, 1995 and ending with tax years ending on
or before December 31, 2004, an amount equal to the
amount paid by a taxpayer who is a self-employed
taxpayer, a partner of a partnership, or a shareholder
in a Subchapter S corporation for health insurance or
long-term care insurance for that taxpayer or that

HB4078 - 203 - LRB100 13340 AXK 27924 b
taxpayer's spouse or dependents, to the extent that the
amount paid for that health insurance or long-term care
insurance may be deducted under Section 213 of the
Internal Revenue Code, has not been deducted on the
federal income tax return of the taxpayer, and does not
exceed the taxable income attributable to that
taxpayer's income, self-employment income, or
Subchapter S corporation income; except that no
deduction shall be allowed under this item (V) if the
taxpayer is eligible to participate in any health
insurance or long-term care insurance plan of an
employer of the taxpayer or the taxpayer's spouse. The
amount of the health insurance and long-term care
insurance subtracted under this item (V) shall be
determined by multiplying total health insurance and
long-term care insurance premiums paid by the taxpayer
times a number that represents the fractional
percentage of eligible medical expenses under Section
213 of the Internal Revenue Code of 1986 not actually
deducted on the taxpayer's federal income tax return;
(W) For taxable years beginning on or after January
1, 1998, all amounts included in the taxpayer's federal
gross income in the taxable year from amounts converted
from a regular IRA to a Roth IRA. This paragraph is
exempt from the provisions of Section 250;
(X) For taxable year 1999 and thereafter, an amount

HB4078 - 204 - LRB100 13340 AXK 27924 b
equal to the amount of any (i) distributions, to the
extent includible in gross income for federal income
tax purposes, made to the taxpayer because of his or
her status as a victim of persecution for racial or
religious reasons by Nazi Germany or any other Axis
regime or as an heir of the victim and (ii) items of
income, to the extent includible in gross income for
federal income tax purposes, attributable to, derived
from or in any way related to assets stolen from,
hidden from, or otherwise lost to a victim of
persecution for racial or religious reasons by Nazi
Germany or any other Axis regime immediately prior to,
during, and immediately after World War II, including,
but not limited to, interest on the proceeds receivable
as insurance under policies issued to a victim of
persecution for racial or religious reasons by Nazi
Germany or any other Axis regime by European insurance
companies immediately prior to and during World War II;
provided, however, this subtraction from federal
adjusted gross income does not apply to assets acquired
with such assets or with the proceeds from the sale of
such assets; provided, further, this paragraph shall
only apply to a taxpayer who was the first recipient of
such assets after their recovery and who is a victim of
persecution for racial or religious reasons by Nazi
Germany or any other Axis regime or as an heir of the

HB4078 - 205 - LRB100 13340 AXK 27924 b
victim. The amount of and the eligibility for any
public assistance, benefit, or similar entitlement is
not affected by the inclusion of items (i) and (ii) of
this paragraph in gross income for federal income tax
purposes. This paragraph is exempt from the provisions
of Section 250;
(Y) For taxable years beginning on or after January
1, 2002 and ending on or before December 31, 2004,
moneys contributed in the taxable year to a College
Savings Pool account under Section 16.5 of the State
Treasurer Act, except that amounts excluded from gross
income under Section 529(c)(3)(C)(i) of the Internal
Revenue Code shall not be considered moneys
contributed under this subparagraph (Y). For taxable
years beginning on or after January 1, 2005, a maximum
of $10,000 contributed in the taxable year to (i) a
College Savings Pool account under Section 16.5 of the
State Treasurer Act or (ii) the Illinois Prepaid
Tuition Trust Fund, except that amounts excluded from
gross income under Section 529(c)(3)(C)(i) of the
Internal Revenue Code shall not be considered moneys
contributed under this subparagraph (Y). For purposes
of this subparagraph, contributions made by an
employer on behalf of an employee, or matching
contributions made by an employee, shall be treated as
made by the employee. This subparagraph (Y) is exempt

HB4078 - 206 - LRB100 13340 AXK 27924 b
from the provisions of Section 250;
(Z) For taxable years 2001 and thereafter, for the
taxable year in which the bonus depreciation deduction
is taken on the taxpayer's federal income tax return
under subsection (k) of Section 168 of the Internal
Revenue Code and for each applicable taxable year
thereafter, an amount equal to "x", where:
(1) "y" equals the amount of the depreciation
deduction taken for the taxable year on the
taxpayer's federal income tax return on property
for which the bonus depreciation deduction was
taken in any year under subsection (k) of Section
168 of the Internal Revenue Code, but not including
the bonus depreciation deduction;
(2) for taxable years ending on or before
December 31, 2005, "x" equals "y" multiplied by 30
and then divided by 70 (or "y" multiplied by
0.429); and
(3) for taxable years ending after December
31, 2005:
(i) for property on which a bonus
depreciation deduction of 30% of the adjusted
basis was taken, "x" equals "y" multiplied by
30 and then divided by 70 (or "y" multiplied by
0.429); and
(ii) for property on which a bonus

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depreciation deduction of 50% of the adjusted
basis was taken, "x" equals "y" multiplied by
1.0.
The aggregate amount deducted under this
subparagraph in all taxable years for any one piece of
property may not exceed the amount of the bonus
depreciation deduction taken on that property on the
taxpayer's federal income tax return under subsection
(k) of Section 168 of the Internal Revenue Code. This
subparagraph (Z) is exempt from the provisions of
Section 250;
(AA) If the taxpayer sells, transfers, abandons,
or otherwise disposes of property for which the
taxpayer was required in any taxable year to make an
addition modification under subparagraph (D-15), then
an amount equal to that addition modification.
If the taxpayer continues to own property through
the last day of the last tax year for which the
taxpayer may claim a depreciation deduction for
federal income tax purposes and for which the taxpayer
was required in any taxable year to make an addition
modification under subparagraph (D-15), then an amount
equal to that addition modification.
The taxpayer is allowed to take the deduction under
this subparagraph only once with respect to any one
piece of property.

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This subparagraph (AA) is exempt from the
provisions of Section 250;
(BB) Any amount included in adjusted gross income,
other than salary, received by a driver in a
ridesharing arrangement using a motor vehicle;
(CC) The amount of (i) any interest income (net of
the deductions allocable thereto) taken into account
for the taxable year with respect to a transaction with
a taxpayer that is required to make an addition
modification with respect to such transaction under
Section 203(a)(2)(D-17), 203(b)(2)(E-12),
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
the amount of that addition modification, and (ii) any
income from intangible property (net of the deductions
allocable thereto) taken into account for the taxable
year with respect to a transaction with a taxpayer that
is required to make an addition modification with
respect to such transaction under Section
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
203(d)(2)(D-8), but not to exceed the amount of that
addition modification. This subparagraph (CC) is
exempt from the provisions of Section 250;
(DD) An amount equal to the interest income taken
into account for the taxable year (net of the
deductions allocable thereto) with respect to
transactions with (i) a foreign person who would be a

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

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

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

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

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

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

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

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preponderance of the evidence, both of the
following:
(a) the person, during the same taxable
year, paid, accrued, or incurred, the interest
to a person that is not a related member, and
(b) the transaction giving rise to the
interest expense between the taxpayer and the
person did not have as a principal purpose the
avoidance of Illinois income tax, and is paid
pursuant to a contract or agreement that
reflects an arm's-length interest rate and
terms; or
(iii) the taxpayer can establish, based on
clear and convincing evidence, that the interest
paid, accrued, or incurred relates to a contract or
agreement entered into at arm's-length rates and
terms and the principal purpose for the payment is
not federal or Illinois tax avoidance; or
(iv) an item of interest paid, accrued, or
incurred, directly or indirectly, to a person if
the taxpayer establishes by clear and convincing
evidence that the adjustments are unreasonable; or
if the taxpayer and the Director agree in writing
to the application or use of an alternative method
of apportionment under Section 304(f).
Nothing in this subsection shall preclude the

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

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

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similar types of intangible assets.
This paragraph shall not apply to the following:
(i) any item of intangible expenses or costs
paid, accrued, or incurred, directly or
indirectly, from a transaction with a person who is
subject in a foreign country or state, other than a
state which requires mandatory unitary reporting,
to a tax on or measured by net income with respect
to such item; or
(ii) any item of intangible expense or cost
paid, accrued, or incurred, directly or
indirectly, if the taxpayer can establish, based
on a preponderance of the evidence, both of the
following:
(a) the person during the same taxable
year paid, accrued, or incurred, the
intangible expense or cost to a person that is
not a related member, and
(b) the transaction giving rise to the
intangible expense or cost between the
taxpayer and the person did not have as a
principal purpose the avoidance of Illinois
income tax, and is paid pursuant to a contract
or agreement that reflects arm's-length terms;
or
(iii) any item of intangible expense or cost

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

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income under different subsections of Section 304. The
addition modification required by this subparagraph
shall be reduced to the extent that dividends were
included in base income of the unitary group for the
same taxable year and received by the taxpayer or by a
member of the taxpayer's unitary business group
(including amounts included in gross income under
Sections 951 through 964 of the Internal Revenue Code
and amounts included in gross income under Section 78
of the Internal Revenue Code) with respect to the stock
of the same person to whom the premiums and costs were
directly or indirectly paid, incurred, or accrued. The
preceding sentence does not apply to the extent that
the same dividends caused a reduction to the addition
modification required under Section 203(b)(2)(E-12) or
Section 203(b)(2)(E-13) of this Act;
(E-15) For taxable years beginning after December
31, 2008, any deduction for dividends paid by a captive
real estate investment trust that is allowed to a real
estate investment trust under Section 857(b)(2)(B) of
the Internal Revenue Code for dividends paid;
(E-16) An amount equal to the credit allowable to
the taxpayer under Section 218(a) of this Act,
determined without regard to Section 218(c) of this
Act;
(E-17) For taxable years ending on or after

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December 31, 2017, an amount equal to the deduction
allowed under Section 199 of the Internal Revenue Code
for the taxable year;
and by deducting from the total so obtained the sum of the
following amounts:
(F) An amount equal to the amount of any tax
imposed by this Act which was refunded to the taxpayer
and included in such total for the taxable year;
(G) An amount equal to any amount included in such
total under Section 78 of the Internal Revenue Code;
(H) In the case of a regulated investment company,
an amount equal to the amount of exempt interest
dividends as defined in subsection (b) (5) of Section
852 of the Internal Revenue Code, paid to shareholders
for the taxable year;
(I) With the exception of any amounts subtracted
under subparagraph (J), an amount equal to the sum of
all amounts disallowed as deductions by (i) Sections
171(a) (2), and 265(a)(2) and amounts disallowed as
interest expense by Section 291(a)(3) of the Internal
Revenue Code, and all amounts of expenses allocable to
interest and disallowed as deductions by Section
265(a)(1) of the Internal Revenue Code; and (ii) for
taxable years ending on or after August 13, 1999,
Sections 171(a)(2), 265, 280C, 291(a)(3), and
832(b)(5)(B)(i) of the Internal Revenue Code, plus,

HB4078 - 223 - LRB100 13340 AXK 27924 b
for tax years ending on or after December 31, 2011,
amounts disallowed as deductions by Section 45G(e)(3)
of the Internal Revenue Code and, for taxable years
ending on or after December 31, 2008, any amount
included in gross income under Section 87 of the
Internal Revenue Code and the policyholders' share of
tax-exempt interest of a life insurance company under
Section 807(a)(2)(B) of the Internal Revenue Code (in
the case of a life insurance company with gross income
from a decrease in reserves for the tax year) or
Section 807(b)(1)(B) of the Internal Revenue Code (in
the case of a life insurance company allowed a
deduction for an increase in reserves for the tax
year); the provisions of this subparagraph are exempt
from the provisions of Section 250;
(J) An amount equal to all amounts included in such
total which are exempt from taxation by this State
either by reason of its statutes or Constitution or by
reason of the Constitution, treaties or statutes of the
United States; provided that, in the case of any
statute of this State that exempts income derived from
bonds or other obligations from the tax imposed under
this Act, the amount exempted shall be the interest net
of bond premium amortization;
(K) An amount equal to those dividends included in
such total which were paid by a corporation which

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conducts business operations in a River Edge
Redevelopment Zone or zones created under the River
Edge Redevelopment Zone Act and conducts substantially
all of its operations in a River Edge Redevelopment
Zone or zones. This subparagraph (K) is exempt from the
provisions of Section 250;
(L) An amount equal to those dividends included in
such total that were paid by a corporation that
conducts business operations in a federally designated
Foreign Trade Zone or Sub-Zone and that is designated a
High Impact Business located in Illinois; provided
that dividends eligible for the deduction provided in
subparagraph (K) of paragraph 2 of this subsection
shall not be eligible for the deduction provided under
this subparagraph (L);
(M) For any taxpayer that is a financial
organization within the meaning of Section 304(c) of
this Act, an amount included in such total as interest
income from a loan or loans made by such taxpayer to a
borrower, to the extent that such a loan is secured by
property which is eligible for the River Edge
Redevelopment Zone Investment Credit. To determine the
portion of a loan or loans that is secured by property
eligible for a Section 201(f) investment credit to the
borrower, the entire principal amount of the loan or
loans between the taxpayer and the borrower should be

HB4078 - 225 - LRB100 13340 AXK 27924 b
divided into the basis of the Section 201(f) investment
credit property which secures the loan or loans, using
for this purpose the original basis of such property on
the date that it was placed in service in the River
Edge Redevelopment Zone. The subtraction modification
available to taxpayer in any year under this subsection
shall be that portion of the total interest paid by the
borrower with respect to such loan attributable to the
eligible property as calculated under the previous
sentence. This subparagraph (M) is exempt from the
provisions of Section 250;
(M-1) For any taxpayer that is a financial
organization within the meaning of Section 304(c) of
this Act, an amount included in such total as interest
income from a loan or loans made by such taxpayer to a
borrower, to the extent that such a loan is secured by
property which is eligible for the High Impact Business
Investment Credit. To determine the portion of a loan
or loans that is secured by property eligible for a
Section 201(h) investment credit to the borrower, the
entire principal amount of the loan or loans between
the taxpayer and the borrower should be divided into
the basis of the Section 201(h) investment credit
property which secures the loan or loans, using for
this purpose the original basis of such property on the
date that it was placed in service in a federally

HB4078 - 226 - LRB100 13340 AXK 27924 b
designated Foreign Trade Zone or Sub-Zone located in
Illinois. No taxpayer that is eligible for the
deduction provided in subparagraph (M) of paragraph
(2) of this subsection shall be eligible for the
deduction provided under this subparagraph (M-1). The
subtraction modification available to taxpayers in any
year under this subsection shall be that portion of the
total interest paid by the borrower with respect to
such loan attributable to the eligible property as
calculated under the previous sentence;
(N) Two times any contribution made during the
taxable year to a designated zone organization to the
extent that the contribution (i) qualifies as a
charitable contribution under subsection (c) of
Section 170 of the Internal Revenue Code and (ii) must,
by its terms, be used for a project approved by the
Department of Commerce and Economic Opportunity under
Section 11 of the Illinois Enterprise Zone Act or under
Section 10-10 of the River Edge Redevelopment Zone Act.
This subparagraph (N) is exempt from the provisions of
Section 250;
(O) An amount equal to: (i) 85% for taxable years
ending on or before December 31, 1992, or, a percentage
equal to the percentage allowable under Section
243(a)(1) of the Internal Revenue Code of 1986 for
taxable years ending after December 31, 1992, of the

HB4078 - 227 - LRB100 13340 AXK 27924 b
amount by which dividends included in taxable income
and received from a corporation that is not created or
organized under the laws of the United States or any
state or political subdivision thereof, including, for
taxable years ending on or after December 31, 1988,
dividends received or deemed received or paid or deemed
paid under Sections 951 through 965 of the Internal
Revenue Code, exceed the amount of the modification
provided under subparagraph (G) of paragraph (2) of
this subsection (b) which is related to such dividends,
and including, for taxable years ending on or after
December 31, 2008, dividends received from a captive
real estate investment trust; plus (ii) 100% of the
amount by which dividends, included in taxable income
and received, including, for taxable years ending on or
after December 31, 1988, dividends received or deemed
received or paid or deemed paid under Sections 951
through 964 of the Internal Revenue Code and including,
for taxable years ending on or after December 31, 2008,
dividends received from a captive real estate
investment trust, from any such corporation specified
in clause (i) that would but for the provisions of
Section 1504 (b) (3) of the Internal Revenue Code be
treated as a member of the affiliated group which
includes the dividend recipient, exceed the amount of
the modification provided under subparagraph (G) of

HB4078 - 228 - LRB100 13340 AXK 27924 b
paragraph (2) of this subsection (b) which is related
to such dividends. This subparagraph (O) is exempt from
the provisions of Section 250 of this Act;
(P) An amount equal to any contribution made to a
job training project established pursuant to the Tax
Increment Allocation Redevelopment Act;
(Q) An amount equal to the amount of the deduction
used to compute the federal income tax credit for
restoration of substantial amounts held under claim of
right for the taxable year pursuant to Section 1341 of
the Internal Revenue Code;
(R) On and after July 20, 1999, in the case of an
attorney-in-fact with respect to whom an interinsurer
or a reciprocal insurer has made the election under
Section 835 of the Internal Revenue Code, 26 U.S.C.
835, an amount equal to the excess, if any, of the
amounts paid or incurred by that interinsurer or
reciprocal insurer in the taxable year to the
attorney-in-fact over the deduction allowed to that
interinsurer or reciprocal insurer with respect to the
attorney-in-fact under Section 835(b) of the Internal
Revenue Code for the taxable year; the provisions of
this subparagraph are exempt from the provisions of
Section 250;
(S) For taxable years ending on or after December
31, 1997, in the case of a Subchapter S corporation, an

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

HB4078 - 230 - LRB100 13340 AXK 27924 b
31, 2005:
(i) for property on which a bonus
depreciation deduction of 30% of the adjusted
basis was taken, "x" equals "y" multiplied by
30 and then divided by 70 (or "y" multiplied by
0.429); and
(ii) for property on which a bonus
depreciation deduction of 50% of the adjusted
basis was taken, "x" equals "y" multiplied by
1.0.
The aggregate amount deducted under this
subparagraph in all taxable years for any one piece of
property may not exceed the amount of the bonus
depreciation deduction taken on that property on the
taxpayer's federal income tax return under subsection
(k) of Section 168 of the Internal Revenue Code. This
subparagraph (T) is exempt from the provisions of
Section 250;
(U) If the taxpayer sells, transfers, abandons, or
otherwise disposes of property for which the taxpayer
was required in any taxable year to make an addition
modification under subparagraph (E-10), then an amount
equal to that addition modification.
If the taxpayer continues to own property through
the last day of the last tax year for which the
taxpayer may claim a depreciation deduction for

HB4078 - 231 - LRB100 13340 AXK 27924 b
federal income tax purposes and for which the taxpayer
was required in any taxable year to make an addition
modification under subparagraph (E-10), then an amount
equal to that addition modification.
The taxpayer is allowed to take the deduction under
this subparagraph only once with respect to any one
piece of property.
This subparagraph (U) is exempt from the
provisions of Section 250;
(V) The amount of: (i) any interest income (net of
the deductions allocable thereto) taken into account
for the taxable year with respect to a transaction with
a taxpayer that is required to make an addition
modification with respect to such transaction under
Section 203(a)(2)(D-17), 203(b)(2)(E-12),
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
the amount of such addition modification, (ii) any
income from intangible property (net of the deductions
allocable thereto) taken into account for the taxable
year with respect to a transaction with a taxpayer that
is required to make an addition modification with
respect to such transaction under Section
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
203(d)(2)(D-8), but not to exceed the amount of such
addition modification, and (iii) any insurance premium
income (net of deductions allocable thereto) taken

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

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

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

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

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operating loss carried forward from a taxable year
ending prior to December 31, 1986;
(E) For taxable years in which a net operating loss
carryback or carryforward from a taxable year ending
prior to December 31, 1986 is an element of taxable
income under paragraph (1) of subsection (e) or
subparagraph (E) of paragraph (2) of subsection (e),
the amount by which addition modifications other than
those provided by this subparagraph (E) exceeded
subtraction modifications in such taxable year, with
the following limitations applied in the order that
they are listed:
(i) the addition modification relating to the
net operating loss carried back or forward to the
taxable year from any taxable year ending prior to
December 31, 1986 shall be reduced by the amount of
addition modification under this subparagraph (E)
which related to that net operating loss and which
was taken into account in calculating the base
income of an earlier taxable year, and
(ii) the addition modification relating to the
net operating loss carried back or forward to the
taxable year from any taxable year ending prior to
December 31, 1986 shall not exceed the amount of
such carryback or carryforward;
For taxable years in which there is a net operating

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

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

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

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incurred, directly or indirectly, to a person if
the taxpayer can establish, based on a
preponderance of the evidence, both of the
following:
(a) the person, during the same taxable
year, paid, accrued, or incurred, the interest
to a person that is not a related member, and
(b) the transaction giving rise to the
interest expense between the taxpayer and the
person did not have as a principal purpose the
avoidance of Illinois income tax, and is paid
pursuant to a contract or agreement that
reflects an arm's-length interest rate and
terms; or
(iii) the taxpayer can establish, based on
clear and convincing evidence, that the interest
paid, accrued, or incurred relates to a contract or
agreement entered into at arm's-length rates and
terms and the principal purpose for the payment is
not federal or Illinois tax avoidance; or
(iv) an item of interest paid, accrued, or
incurred, directly or indirectly, to a person if
the taxpayer establishes by clear and convincing
evidence that the adjustments are unreasonable; or
if the taxpayer and the Director agree in writing
to the application or use of an alternative method

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

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

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

HB4078 - 244 - LRB100 13340 AXK 27924 b
or
(iii) any item of intangible expense or cost
paid, accrued, or incurred, directly or
indirectly, from a transaction with a person if the
taxpayer establishes by clear and convincing
evidence, that the adjustments are unreasonable;
or if the taxpayer and the Director agree in
writing to the application or use of an alternative
method of apportionment under Section 304(f);
Nothing in this subsection shall preclude the
Director from making any other adjustment
otherwise allowed under Section 404 of this Act for
any tax year beginning after the effective date of
this amendment provided such adjustment is made
pursuant to regulation adopted by the Department
and such regulations provide methods and standards
by which the Department will utilize its authority
under Section 404 of this Act;
(G-14) For taxable years ending on or after
December 31, 2008, an amount equal to the amount of
insurance premium expenses and costs otherwise allowed
as a deduction in computing base income, and that were
paid, accrued, or incurred, directly or indirectly, to
a person who would be a member of the same unitary
business group but for the fact that the person is
prohibited under Section 1501(a)(27) from being

HB4078 - 245 - LRB100 13340 AXK 27924 b
included in the unitary business group because he or
she is ordinarily required to apportion business
income under different subsections of Section 304. The
addition modification required by this subparagraph
shall be reduced to the extent that dividends were
included in base income of the unitary group for the
same taxable year and received by the taxpayer or by a
member of the taxpayer's unitary business group
(including amounts included in gross income under
Sections 951 through 964 of the Internal Revenue Code
and amounts included in gross income under Section 78
of the Internal Revenue Code) with respect to the stock
of the same person to whom the premiums and costs were
directly or indirectly paid, incurred, or accrued. The
preceding sentence does not apply to the extent that
the same dividends caused a reduction to the addition
modification required under Section 203(c)(2)(G-12) or
Section 203(c)(2)(G-13) of this Act;
(G-15) An amount equal to the credit allowable to
the taxpayer under Section 218(a) of this Act,
determined without regard to Section 218(c) of this
Act;
(G-16) For taxable years ending on or after
December 31, 2017, an amount equal to the deduction
allowed under Section 199 of the Internal Revenue Code
for the taxable year;

HB4078 - 246 - LRB100 13340 AXK 27924 b
and by deducting from the total so obtained the sum of the
following amounts:
(H) An amount equal to all amounts included in such
total pursuant to the provisions of Sections 402(a),
402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
Internal Revenue Code or included in such total as
distributions under the provisions of any retirement
or disability plan for employees of any governmental
agency or unit, or retirement payments to retired
partners, which payments are excluded in computing net
earnings from self employment by Section 1402 of the
Internal Revenue Code and regulations adopted pursuant
thereto;
(I) The valuation limitation amount;
(J) An amount equal to the amount of any tax
imposed by this Act which was refunded to the taxpayer
and included in such total for the taxable year;
(K) An amount equal to all amounts included in
taxable income as modified by subparagraphs (A), (B),
(C), (D), (E), (F) and (G) which are exempt from
taxation by this State either by reason of its statutes
or Constitution or by reason of the Constitution,
treaties or statutes of the United States; provided
that, in the case of any statute of this State that
exempts income derived from bonds or other obligations
from the tax imposed under this Act, the amount

HB4078 - 247 - LRB100 13340 AXK 27924 b
exempted shall be the interest net of bond premium
amortization;
(L) With the exception of any amounts subtracted
under subparagraph (K), an amount equal to the sum of
all amounts disallowed as deductions by (i) Sections
171(a) (2) and 265(a)(2) of the Internal Revenue Code,
and all amounts of expenses allocable to interest and
disallowed as deductions by Section 265(1) of the
Internal Revenue Code; and (ii) for taxable years
ending on or after August 13, 1999, Sections 171(a)(2),
265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
Code, plus, (iii) for taxable years ending on or after
December 31, 2011, Section 45G(e)(3) of the Internal
Revenue Code and, for taxable years ending on or after
December 31, 2008, any amount included in gross income
under Section 87 of the Internal Revenue Code; the
provisions of this subparagraph are exempt from the
provisions of Section 250;
(M) An amount equal to those dividends included in
such total which were paid by a corporation which
conducts business operations in a River Edge
Redevelopment Zone or zones created under the River
Edge Redevelopment Zone Act and conducts substantially
all of its operations in a River Edge Redevelopment
Zone or zones. This subparagraph (M) is exempt from the
provisions of Section 250;

HB4078 - 248 - LRB100 13340 AXK 27924 b
(N) An amount equal to any contribution made to a
job training project established pursuant to the Tax
Increment Allocation Redevelopment Act;
(O) An amount equal to those dividends included in
such total that were paid by a corporation that
conducts business operations in a federally designated
Foreign Trade Zone or Sub-Zone and that is designated a
High Impact Business located in Illinois; provided
that dividends eligible for the deduction provided in
subparagraph (M) of paragraph (2) of this subsection
shall not be eligible for the deduction provided under
this subparagraph (O);
(P) An amount equal to the amount of the deduction
used to compute the federal income tax credit for
restoration of substantial amounts held under claim of
right for the taxable year pursuant to Section 1341 of
the Internal Revenue Code;
(Q) For taxable year 1999 and thereafter, an amount
equal to the amount of any (i) distributions, to the
extent includible in gross income for federal income
tax purposes, made to the taxpayer because of his or
her status as a victim of persecution for racial or
religious reasons by Nazi Germany or any other Axis
regime or as an heir of the victim and (ii) items of
income, to the extent includible in gross income for
federal income tax purposes, attributable to, derived

HB4078 - 249 - LRB100 13340 AXK 27924 b
from or in any way related to assets stolen from,
hidden from, or otherwise lost to a victim of
persecution for racial or religious reasons by Nazi
Germany or any other Axis regime immediately prior to,
during, and immediately after World War II, including,
but not limited to, interest on the proceeds receivable
as insurance under policies issued to a victim of
persecution for racial or religious reasons by Nazi
Germany or any other Axis regime by European insurance
companies immediately prior to and during World War II;
provided, however, this subtraction from federal
adjusted gross income does not apply to assets acquired
with such assets or with the proceeds from the sale of
such assets; provided, further, this paragraph shall
only apply to a taxpayer who was the first recipient of
such assets after their recovery and who is a victim of
persecution for racial or religious reasons by Nazi
Germany or any other Axis regime or as an heir of the
victim. The amount of and the eligibility for any
public assistance, benefit, or similar entitlement is
not affected by the inclusion of items (i) and (ii) of
this paragraph in gross income for federal income tax
purposes. This paragraph is exempt from the provisions
of Section 250;
(R) For taxable years 2001 and thereafter, for the
taxable year in which the bonus depreciation deduction

HB4078 - 250 - LRB100 13340 AXK 27924 b
is taken on the taxpayer's federal income tax return
under subsection (k) of Section 168 of the Internal
Revenue Code and for each applicable taxable year
thereafter, an amount equal to "x", where:
(1) "y" equals the amount of the depreciation
deduction taken for the taxable year on the
taxpayer's federal income tax return on property
for which the bonus depreciation deduction was
taken in any year under subsection (k) of Section
168 of the Internal Revenue Code, but not including
the bonus depreciation deduction;
(2) for taxable years ending on or before
December 31, 2005, "x" equals "y" multiplied by 30
and then divided by 70 (or "y" multiplied by
0.429); and
(3) for taxable years ending after December
31, 2005:
(i) for property on which a bonus
depreciation deduction of 30% of the adjusted
basis was taken, "x" equals "y" multiplied by
30 and then divided by 70 (or "y" multiplied by
0.429); and
(ii) for property on which a bonus
depreciation deduction of 50% of the adjusted
basis was taken, "x" equals "y" multiplied by
1.0.

HB4078 - 251 - LRB100 13340 AXK 27924 b
The aggregate amount deducted under this
subparagraph in all taxable years for any one piece of
property may not exceed the amount of the bonus
depreciation deduction taken on that property on the
taxpayer's federal income tax return under subsection
(k) of Section 168 of the Internal Revenue Code. This
subparagraph (R) is exempt from the provisions of
Section 250;
(S) If the taxpayer sells, transfers, abandons, or
otherwise disposes of property for which the taxpayer
was required in any taxable year to make an addition
modification under subparagraph (G-10), then an amount
equal to that addition modification.
If the taxpayer continues to own property through
the last day of the last tax year for which the
taxpayer may claim a depreciation deduction for
federal income tax purposes and for which the taxpayer
was required in any taxable year to make an addition
modification under subparagraph (G-10), then an amount
equal to that addition modification.
The taxpayer is allowed to take the deduction under
this subparagraph only once with respect to any one
piece of property.
This subparagraph (S) is exempt from the
provisions of Section 250;
(T) The amount of (i) any interest income (net of

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

HB4078 - 253 - LRB100 13340 AXK 27924 b
group but for the fact that the person is prohibited
under Section 1501(a)(27) from being included in the
unitary business group because he or she is ordinarily
required to apportion business income under different
subsections of Section 304, but not to exceed the
addition modification required to be made for the same
taxable year under Section 203(c)(2)(G-12) for
interest paid, accrued, or incurred, directly or
indirectly, to the same person. This subparagraph (U)
is exempt from the provisions of Section 250;
(V) An amount equal to the income from intangible
property taken into account for the taxable year (net
of the deductions allocable thereto) with respect to
transactions with (i) a foreign person who would be a
member of the taxpayer's unitary business group but for
the fact that the foreign person's business activity
outside the United States is 80% or more of that
person's total business activity and (ii) for taxable
years ending on or after December 31, 2008, to a person
who would be a member of the same unitary business
group but for the fact that the person is prohibited
under Section 1501(a)(27) from being included in the
unitary business group because he or she is ordinarily
required to apportion business income under different
subsections of Section 304, but not to exceed the
addition modification required to be made for the same

HB4078 - 254 - LRB100 13340 AXK 27924 b
taxable year under Section 203(c)(2)(G-13) for
intangible expenses and costs paid, accrued, or
incurred, directly or indirectly, to the same foreign
person. This subparagraph (V) is exempt from the
provisions of Section 250;
(W) in the case of an estate, an amount equal to
all amounts included in such total pursuant to the
provisions of Section 111 of the Internal Revenue Code
as a recovery of items previously deducted by the
decedent from adjusted gross income in the computation
of taxable income. This subparagraph (W) is exempt from
Section 250;
(X) an amount equal to the refund included in such
total of any tax deducted for federal income tax
purposes, to the extent that deduction was added back
under subparagraph (F). This subparagraph (X) is
exempt from the provisions of Section 250; and
(Y) For taxable years ending on or after December
31, 2011, in the case of a taxpayer who was required to
add back any insurance premiums under Section
203(c)(2)(G-14), such taxpayer may elect to subtract
that part of a reimbursement received from the
insurance company equal to the amount of the expense or
loss (including expenses incurred by the insurance
company) that would have been taken into account as a
deduction for federal income tax purposes if the

HB4078 - 255 - LRB100 13340 AXK 27924 b
expense or loss had been uninsured. If a taxpayer makes
the election provided for by this subparagraph (Y), the
insurer to which the premiums were paid must add back
to income the amount subtracted by the taxpayer
pursuant to this subparagraph (Y). This subparagraph
(Y) is exempt from the provisions of Section 250.
(3) Limitation. The amount of any modification
otherwise required under this subsection shall, under
regulations prescribed by the Department, be adjusted by
any amounts included therein which were properly paid,
credited, or required to be distributed, or permanently set
aside for charitable purposes pursuant to Internal Revenue
Code Section 642(c) during the taxable year.
(d) Partnerships.
(1) In general. In the case of a partnership, base
income means an amount equal to the taxpayer's taxable
income for the taxable year as modified by paragraph (2).
(2) Modifications. The taxable income referred to in
paragraph (1) shall be modified by adding thereto the sum
of the following amounts:
(A) An amount equal to all amounts paid or accrued
to the taxpayer as interest or dividends during the
taxable year to the extent excluded from gross income
in the computation of taxable income;
(B) An amount equal to the amount of tax imposed by

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this Act to the extent deducted from gross income for
the taxable year;
(C) The amount of deductions allowed to the
partnership pursuant to Section 707 (c) of the Internal
Revenue Code in calculating its taxable income;
(D) An amount equal to the amount of the capital
gain deduction allowable under the Internal Revenue
Code, to the extent deducted from gross income in the
computation of taxable income;
(D-5) For taxable years 2001 and thereafter, an
amount equal to the bonus depreciation deduction taken
on the taxpayer's federal income tax return for the
taxable year under subsection (k) of Section 168 of the
Internal Revenue Code;
(D-6) If the taxpayer sells, transfers, abandons,
or otherwise disposes of property for which the
taxpayer was required in any taxable year to make an
addition modification under subparagraph (D-5), then
an amount equal to the aggregate amount of the
deductions taken in all taxable years under
subparagraph (O) with respect to that property.
If the taxpayer continues to own property through
the last day of the last tax year for which the
taxpayer may claim a depreciation deduction for
federal income tax purposes and for which the taxpayer
was allowed in any taxable year to make a subtraction

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

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included in gross income pursuant to Sections 951
through 964 of the Internal Revenue Code and amounts
included in gross income under Section 78 of the
Internal Revenue Code) with respect to the stock of the
same person to whom the interest was paid, accrued, or
incurred.
This paragraph shall not apply to the following:
(i) an item of interest paid, accrued, or
incurred, directly or indirectly, to a person who
is subject in a foreign country or state, other
than a state which requires mandatory unitary
reporting, to a tax on or measured by net income
with respect to such interest; or
(ii) an item of interest paid, accrued, or
incurred, directly or indirectly, to a person if
the taxpayer can establish, based on a
preponderance of the evidence, both of the
following:
(a) the person, during the same taxable
year, paid, accrued, or incurred, the interest
to a person that is not a related member, and
(b) the transaction giving rise to the
interest expense between the taxpayer and the
person did not have as a principal purpose the
avoidance of Illinois income tax, and is paid
pursuant to a contract or agreement that

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

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

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

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paid, accrued, or incurred, directly or
indirectly, if the taxpayer can establish, based
on a preponderance of the evidence, both of the
following:
(a) the person during the same taxable
year paid, accrued, or incurred, the
intangible expense or cost to a person that is
not a related member, and
(b) the transaction giving rise to the
intangible expense or cost between the
taxpayer and the person did not have as a
principal purpose the avoidance of Illinois
income tax, and is paid pursuant to a contract
or agreement that reflects arm's-length terms;
or
(iii) any item of intangible expense or cost
paid, accrued, or incurred, directly or
indirectly, from a transaction with a person if the
taxpayer establishes by clear and convincing
evidence, that the adjustments are unreasonable;
or if the taxpayer and the Director agree in
writing to the application or use of an alternative
method of apportionment under Section 304(f);
Nothing in this subsection shall preclude the
Director from making any other adjustment
otherwise allowed under Section 404 of this Act for

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

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

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

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

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that dividends eligible for the deduction provided in
subparagraph (K) of paragraph (2) of this subsection
shall not be eligible for the deduction provided under
this subparagraph (M);
(N) An amount equal to the amount of the deduction
used to compute the federal income tax credit for
restoration of substantial amounts held under claim of
right for the taxable year pursuant to Section 1341 of
the Internal Revenue Code;
(O) For taxable years 2001 and thereafter, for the
taxable year in which the bonus depreciation deduction
is taken on the taxpayer's federal income tax return
under subsection (k) of Section 168 of the Internal
Revenue Code and for each applicable taxable year
thereafter, an amount equal to "x", where:
(1) "y" equals the amount of the depreciation
deduction taken for the taxable year on the
taxpayer's federal income tax return on property
for which the bonus depreciation deduction was
taken in any year under subsection (k) of Section
168 of the Internal Revenue Code, but not including
the bonus depreciation deduction;
(2) for taxable years ending on or before
December 31, 2005, "x" equals "y" multiplied by 30
and then divided by 70 (or "y" multiplied by
0.429); and

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

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

HB4078 - 270 - LRB100 13340 AXK 27924 b
from Section 250;
(R) An amount equal to the interest income taken
into account for the taxable year (net of the
deductions allocable thereto) with respect to
transactions with (i) a foreign person who would be a
member of the taxpayer's unitary business group but for
the fact that the foreign person's business activity
outside the United States is 80% or more of that
person's total business activity and (ii) for taxable
years ending on or after December 31, 2008, to a person
who would be a member of the same unitary business
group but for the fact that the person is prohibited
under Section 1501(a)(27) from being included in the
unitary business group because he or she is ordinarily
required to apportion business income under different
subsections of Section 304, but not to exceed the
addition modification required to be made for the same
taxable year under Section 203(d)(2)(D-7) for interest
paid, accrued, or incurred, directly or indirectly, to
the same person. This subparagraph (R) is exempt from
Section 250;
(S) An amount equal to the income from intangible
property taken into account for the taxable year (net
of the deductions allocable thereto) with respect to
transactions with (i) a foreign person who would be a
member of the taxpayer's unitary business group but for

HB4078 - 271 - LRB100 13340 AXK 27924 b
the fact that the foreign person's business activity
outside the United States is 80% or more of that
person's total business activity and (ii) for taxable
years ending on or after December 31, 2008, to a person
who would be a member of the same unitary business
group but for the fact that the person is prohibited
under Section 1501(a)(27) from being included in the
unitary business group because he or she is ordinarily
required to apportion business income under different
subsections of Section 304, but not to exceed the
addition modification required to be made for the same
taxable year under Section 203(d)(2)(D-8) for
intangible expenses and costs paid, accrued, or
incurred, directly or indirectly, to the same person.
This subparagraph (S) is exempt from Section 250; and
(T) For taxable years ending on or after December
31, 2011, in the case of a taxpayer who was required to
add back any insurance premiums under Section
203(d)(2)(D-9), such taxpayer may elect to subtract
that part of a reimbursement received from the
insurance company equal to the amount of the expense or
loss (including expenses incurred by the insurance
company) that would have been taken into account as a
deduction for federal income tax purposes if the
expense or loss had been uninsured. If a taxpayer makes
the election provided for by this subparagraph (T), the

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

HB4078 - 273 - LRB100 13340 AXK 27924 b
trust, or estate is less than zero and addition
modifications, other than those provided by subparagraph
(E) of paragraph (2) of subsection (b) for corporations or
subparagraph (E) of paragraph (2) of subsection (c) for
trusts and estates, exceed subtraction modifications, an
addition modification must be made under those
subparagraphs for any other taxable year to which the
taxable income less than zero (net operating loss) is
applied under Section 172 of the Internal Revenue Code or
under subparagraph (E) of paragraph (2) of this subsection
(e) applied in conjunction with Section 172 of the Internal
Revenue Code.
(2) Special rule. For purposes of paragraph (1) of this
subsection, the taxable income properly reportable for
federal income tax purposes shall mean:
(A) Certain life insurance companies. In the case
of a life insurance company subject to the tax imposed
by Section 801 of the Internal Revenue Code, life
insurance company taxable income, plus the amount of
distribution from pre-1984 policyholder surplus
accounts as calculated under Section 815a of the
Internal Revenue Code;
(B) Certain other insurance companies. In the case
of mutual insurance companies subject to the tax
imposed by Section 831 of the Internal Revenue Code,
insurance company taxable income;

HB4078 - 274 - LRB100 13340 AXK 27924 b
(C) Regulated investment companies. In the case of
a regulated investment company subject to the tax
imposed by Section 852 of the Internal Revenue Code,
investment company taxable income;
(D) Real estate investment trusts. In the case of a
real estate investment trust subject to the tax imposed
by Section 857 of the Internal Revenue Code, real
estate investment trust taxable income;
(E) Consolidated corporations. In the case of a
corporation which is a member of an affiliated group of
corporations filing a consolidated income tax return
for the taxable year for federal income tax purposes,
taxable income determined as if such corporation had
filed a separate return for federal income tax purposes
for the taxable year and each preceding taxable year
for which it was a member of an affiliated group. For
purposes of this subparagraph, the taxpayer's separate
taxable income shall be determined as if the election
provided by Section 243(b) (2) of the Internal Revenue
Code had been in effect for all such years;
(F) Cooperatives. In the case of a cooperative
corporation or association, the taxable income of such
organization determined in accordance with the
provisions of Section 1381 through 1388 of the Internal
Revenue Code, but without regard to the prohibition
against offsetting losses from patronage activities

HB4078 - 275 - LRB100 13340 AXK 27924 b
against income from nonpatronage activities; except
that a cooperative corporation or association may make
an election to follow its federal income tax treatment
of patronage losses and nonpatronage losses. In the
event such election is made, such losses shall be
computed and carried over in a manner consistent with
subsection (a) of Section 207 of this Act and
apportioned by the apportionment factor reported by
the cooperative on its Illinois income tax return filed
for the taxable year in which the losses are incurred.
The election shall be effective for all taxable years
with original returns due on or after the date of the
election. In addition, the cooperative may file an
amended return or returns, as allowed under this Act,
to provide that the election shall be effective for
losses incurred or carried forward for taxable years
occurring prior to the date of the election. Once made,
the election may only be revoked upon approval of the
Director. The Department shall adopt rules setting
forth requirements for documenting the elections and
any resulting Illinois net loss and the standards to be
used by the Director in evaluating requests to revoke
elections. Public Act 96-932 is declaratory of
existing law;
(G) Subchapter S corporations. In the case of: (i)
a Subchapter S corporation for which there is in effect

HB4078 - 276 - LRB100 13340 AXK 27924 b
an election for the taxable year under Section 1362 of
the Internal Revenue Code, the taxable income of such
corporation determined in accordance with Section
1363(b) of the Internal Revenue Code, except that
taxable income shall take into account those items
which are required by Section 1363(b)(1) of the
Internal Revenue Code to be separately stated; and (ii)
a Subchapter S corporation for which there is in effect
a federal election to opt out of the provisions of the
Subchapter S Revision Act of 1982 and have applied
instead the prior federal Subchapter S rules as in
effect on July 1, 1982, the taxable income of such
corporation determined in accordance with the federal
Subchapter S rules as in effect on July 1, 1982; and
(H) Partnerships. In the case of a partnership,
taxable income determined in accordance with Section
703 of the Internal Revenue Code, except that taxable
income shall take into account those items which are
required by Section 703(a)(1) to be separately stated
but which would be taken into account by an individual
in calculating his taxable income.
(3) Recapture of business expenses on disposition of
asset or business. Notwithstanding any other law to the
contrary, if in prior years income from an asset or
business has been classified as business income and in a
later year is demonstrated to be non-business income, then

HB4078 - 277 - LRB100 13340 AXK 27924 b
all expenses, without limitation, deducted in such later
year and in the 2 immediately preceding taxable years
related to that asset or business that generated the
non-business income shall be added back and recaptured as
business income in the year of the disposition of the asset
or business. Such amount shall be apportioned to Illinois
using the greater of the apportionment fraction computed
for the business under Section 304 of this Act for the
taxable year or the average of the apportionment fractions
computed for the business under Section 304 of this Act for
the taxable year and for the 2 immediately preceding
taxable years.
(f) Valuation limitation amount.
(1) In general. The valuation limitation amount
referred to in subsections (a) (2) (G), (c) (2) (I) and
(d)(2) (E) is an amount equal to:
(A) The sum of the pre-August 1, 1969 appreciation
amounts (to the extent consisting of gain reportable
under the provisions of Section 1245 or 1250 of the
Internal Revenue Code) for all property in respect of
which such gain was reported for the taxable year; plus
(B) The lesser of (i) the sum of the pre-August 1,
1969 appreciation amounts (to the extent consisting of
capital gain) for all property in respect of which such
gain was reported for federal income tax purposes for

HB4078 - 278 - LRB100 13340 AXK 27924 b
the taxable year, or (ii) the net capital gain for the
taxable year, reduced in either case by any amount of
such gain included in the amount determined under
subsection (a) (2) (F) or (c) (2) (H).
(2) Pre-August 1, 1969 appreciation amount.
(A) If the fair market value of property referred
to in paragraph (1) was readily ascertainable on August
1, 1969, the pre-August 1, 1969 appreciation amount for
such property is the lesser of (i) the excess of such
fair market value over the taxpayer's basis (for
determining gain) for such property on that date
(determined under the Internal Revenue Code as in
effect on that date), or (ii) the total gain realized
and reportable for federal income tax purposes in
respect of the sale, exchange or other disposition of
such property.
(B) If the fair market value of property referred
to in paragraph (1) was not readily ascertainable on
August 1, 1969, the pre-August 1, 1969 appreciation
amount for such property is that amount which bears the
same ratio to the total gain reported in respect of the
property for federal income tax purposes for the
taxable year, as the number of full calendar months in
that part of the taxpayer's holding period for the
property ending July 31, 1969 bears to the number of
full calendar months in the taxpayer's entire holding

HB4078 - 279 - LRB100 13340 AXK 27924 b
period for the property.
(C) The Department shall prescribe such
regulations as may be necessary to carry out the
purposes of this paragraph.
(g) Double deductions. Unless specifically provided
otherwise, nothing in this Section shall permit the same item
to be deducted more than once.
(h) Legislative intention. Except as expressly provided by
this Section there shall be no modifications or limitations on
the amounts of income, gain, loss or deduction taken into
account in determining gross income, adjusted gross income or
taxable income for federal income tax purposes for the taxable
year, or in the amount of such items entering into the
computation of base income and net income under this Act for
such taxable year, whether in respect of property values as of
August 1, 1969 or otherwise.
(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
96-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
6-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
eff. 8-23-11; 97-905, eff. 8-7-12; 10000SB0009ham003.)
(35 ILCS 5/204) (from Ch. 120, par. 2-204)
Sec. 204. Standard Exemption.

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(a) Allowance of exemption. In computing net income under
this Act, there shall be allowed as an exemption the sum of the
amounts determined under subsections (b), (c) and (d),
multiplied by a fraction the numerator of which is the amount
of the taxpayer's base income allocable to this State for the
taxable year and the denominator of which is the taxpayer's
total base income for the taxable year.
(b) Basic amount. For the purpose of subsection (a) of this
Section, except as provided by subsection (a) of Section 205
and in this subsection, each taxpayer shall be allowed a basic
amount of $1000, except that for corporations the basic amount
shall be zero for tax years ending on or after December 31,
2003, and for individuals the basic amount shall be:
(1) for taxable years ending on or after December 31,
1998 and prior to December 31, 1999, $1,300;
(2) for taxable years ending on or after December 31,
1999 and prior to December 31, 2000, $1,650;
(3) for taxable years ending on or after December 31,
2000 and prior to December 31, 2012, $2,000;
(4) for taxable years ending on or after December 31,
2012 and prior to December 31, 2013, $2,050;
(5) for taxable years ending on or after December 31,
2013, $2,050 plus the cost-of-living adjustment under
subsection (d-5).
For taxable years ending on or after December 31, 1992, a
taxpayer whose Illinois base income exceeds the basic amount

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and who is claimed as a dependent on another person's tax
return under the Internal Revenue Code shall not be allowed any
basic amount under this subsection.
(c) Additional amount for individuals. In the case of an
individual taxpayer, there shall be allowed for the purpose of
subsection (a), in addition to the basic amount provided by
subsection (b), an additional exemption equal to the basic
amount for each exemption in excess of one allowable to such
individual taxpayer for the taxable year under Section 151 of
the Internal Revenue Code.
(d) Additional exemptions for an individual taxpayer and
his or her spouse. In the case of an individual taxpayer and
his or her spouse, he or she shall each be allowed additional
exemptions as follows:
(1) Additional exemption for taxpayer or spouse 65
years of age or older.
(A) For taxpayer. An additional exemption of
$1,000 for the taxpayer if he or she has attained the
age of 65 before the end of the taxable year.
(B) For spouse when a joint return is not filed. An
additional exemption of $1,000 for the spouse of the
taxpayer if a joint return is not made by the taxpayer
and his spouse, and if the spouse has attained the age
of 65 before the end of such taxable year, and, for the
calendar year in which the taxable year of the taxpayer
begins, has no gross income and is not the dependent of

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

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

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

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allowed for the taxable year under Section 32 of the federal
Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
is entitled to a credit against the tax imposed by subsections
(a) and (b) of Section 201 in an amount equal to (i) 5% of the
federal tax credit for each taxable year beginning on or after
January 1, 2000 and ending prior to December 31, 2012, (ii)
7.5% of the federal tax credit for each taxable year beginning
on or after January 1, 2012 and ending prior to December 31,
2013, and (iii) 10% of the federal tax credit for each taxable
year beginning on or after January 1, 2013 and beginning prior
to January 1, 2017, (iv) 14% of the federal tax credit for each
taxable year beginning on or after January 1, 2017 and
beginning prior to January 1, 2018, and (v) 18% of the federal
tax credit for each taxable year beginning on or after January
1, 2018.
For a non-resident or part-year resident, the amount of the
credit under this Section shall be in proportion to the amount
of income attributable to this State.
(b) For taxable years beginning before January 1, 2003, in
no event shall a credit under this Section reduce the
taxpayer's liability to less than zero. For each taxable year
beginning on or after January 1, 2003, if the amount of the
credit exceeds the income tax liability for the applicable tax
year, then the excess credit shall be refunded to the taxpayer.
The amount of a refund shall not be included in the taxpayer's
income or resources for the purposes of determining eligibility

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or benefit level in any means-tested benefit program
administered by a governmental entity unless required by
federal law.
(c) This Section is exempt from the provisions of Section
250.
(Source: P.A. 97-652, eff. 6-1-12; 10000SB0009ham003.)
(35 ILCS 5/901) (from Ch. 120, par. 9-901)
Sec. 901. Collection authority.
(a) In general.
The Department shall collect the taxes imposed by this Act.
The Department shall collect certified past due child support
amounts under Section 2505-650 of the Department of Revenue Law
(20 ILCS 2505/2505-650). Except as provided in subsections (c),
(e), (f), (g), and (h) of this Section, money collected
pursuant to subsections (a) and (b) of Section 201 of this Act
shall be paid into the General Revenue Fund in the State
treasury; money collected pursuant to subsections (c) and (d)
of Section 201 of this Act shall be paid into the Personal
Property Tax Replacement Fund, a special fund in the State
Treasury; and money collected under Section 2505-650 of the
Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
into the Child Support Enforcement Trust Fund, a special fund
outside the State Treasury, or to the State Disbursement Unit
established under Section 10-26 of the Illinois Public Aid
Code, as directed by the Department of Healthcare and Family

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

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

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3.25% individual income tax rate after July 1, 2017 2024) of
the net revenue realized from the tax imposed by subsections
(a) and (b) of Section 201 of this Act upon individuals,
trusts, and estates during the preceding month and (ii) 6.85%
(10% of the ratio of the 4.8% corporate income tax rate prior
to 2011 to the 7% corporate income tax rate after July 1, 2017)
10% of the net revenue realized from the tax imposed by
subsections (a) and (b) of Section 201 of this Act upon
corporations during the preceding month. Net revenue realized
for a month shall be defined as the revenue from the tax
imposed by subsections (a) and (b) of Section 201 of this Act
which is deposited in the General Revenue Fund, the Education
Assistance Fund, the Income Tax Surcharge Local Government
Distributive Fund, the Fund for the Advancement of Education,
and the Commitment to Human Services Fund during the month
minus the amount paid out of the General Revenue Fund in State
warrants during that same month as refunds to taxpayers for
overpayment of liability under the tax imposed by subsections
(a) and (b) of Section 201 of this Act.
Beginning on August 26, 2014 (the effective date of Public
Act 98-1052), the Comptroller shall perform the transfers
required by this subsection (b) no later than 60 days after he
or she receives the certification from the Treasurer as
provided in Section 1 of the State Revenue Sharing Act.
(c) Deposits Into Income Tax Refund Fund.
(1) Beginning on January 1, 1989 and thereafter, the

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

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

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

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

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this Act and transfers pursuant to this subsection (d) and
item (3) of subsection (c) have been deposited and retained
in the Fund.
(3) As soon as possible after the end of each fiscal
year, the Director shall order transferred and the State
Treasurer and State Comptroller shall transfer from the
Income Tax Refund Fund to the Personal Property Tax
Replacement Fund an amount, certified by the Director to
the Comptroller, equal to the excess of the amount
collected pursuant to subsections (c) and (d) of Section
201 of this Act deposited into the Income Tax Refund Fund
during the fiscal year over the amount of refunds resulting
from overpayment of tax liability under subsections (c) and
(d) of Section 201 of this Act paid from the Income Tax
Refund Fund during the fiscal year.
(4) As soon as possible after the end of each fiscal
year, the Director shall order transferred and the State
Treasurer and State Comptroller shall transfer from the
Personal Property Tax Replacement Fund to the Income Tax
Refund Fund an amount, certified by the Director to the
Comptroller, equal to the excess of the amount of refunds
resulting from overpayment of tax liability under
subsections (c) and (d) of Section 201 of this Act paid
from the Income Tax Refund Fund during the fiscal year over
the amount collected pursuant to subsections (c) and (d) of
Section 201 of this Act deposited into the Income Tax

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

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

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

HB4078 - 298 - LRB100 13340 AXK 27924 b
98-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
7-20-15; 10000SB0009ham003.)
(35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
Sec. 1501. Definitions.
(a) In general. When used in this Act, where not otherwise
distinctly expressed or manifestly incompatible with the
intent thereof:
(1) Business income. The term "business income" means
all income that may be treated as apportionable business
income under the Constitution of the United States.
Business income is net of the deductions allocable thereto.
Such term does not include compensation or the deductions
allocable thereto. For each taxable year beginning on or
after January 1, 2003, a taxpayer may elect to treat all
income other than compensation as business income. This
election shall be made in accordance with rules adopted by
the Department and, once made, shall be irrevocable.
(1.5) Captive real estate investment trust:
(A) The term "captive real estate investment
trust" means a corporation, trust, or association:
(i) that is considered a real estate
investment trust for the taxable year under
Section 856 of the Internal Revenue Code;
(ii) the certificates of beneficial interest
or shares of which are not regularly traded on an

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established securities market; and
(iii) of which more than 50% of the voting
power or value of the beneficial interest or
shares, at any time during the last half of the
taxable year, is owned or controlled, directly,
indirectly, or constructively, by a single
corporation.
(B) The term "captive real estate investment
trust" does not include:
(i) a real estate investment trust of which
more than 50% of the voting power or value of the
beneficial interest or shares is owned or
controlled, directly, indirectly, or
constructively, by:
(a) a real estate investment trust, other
than a captive real estate investment trust;
(b) a person who is exempt from taxation
under Section 501 of the Internal Revenue Code,
and who is not required to treat income
received from the real estate investment trust
as unrelated business taxable income under
Section 512 of the Internal Revenue Code;
(c) a listed Australian property trust, if
no more than 50% of the voting power or value
of the beneficial interest or shares of that
trust, at any time during the last half of the

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

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

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

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

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

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retail charge agreement within the meaning of
the Sales Finance Agency Act, the Retail
Installment Sales Act, or the Motor Vehicle
Retail Installment Sales Act;
(b) an installment, charge, credit, or
similar contract or agreement arising from the
sale of tangible personal property or services
in a transaction involving a deferred payment
price payable in one or more installments
subsequent to the sale; or
(c) the outstanding balance of a contract
or agreement described in provisions (a) or (b)
of this item (i).
A customer receivable need not provide for
payment of interest on deferred payments. A sales
finance company may purchase a customer receivable
from, or make a loan secured by a customer
receivable to, the seller in the original
transaction or to a person who purchased the
customer receivable directly or indirectly from
that seller.
(ii) A corporation meeting each of the
following criteria:
(a) the corporation must be a member of an
"affiliated group" within the meaning of
Section 1504(a) of the Internal Revenue Code,

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determined without regard to Section 1504(b)
of the Internal Revenue Code;
(b) more than 50% of the gross income of
the corporation for the taxable year must be
interest income derived from qualifying loans.
A "qualifying loan" is a loan made to a member
of the corporation's affiliated group that
originates customer receivables (within the
meaning of item (i)) or to whom customer
receivables originated by a member of the
affiliated group have been transferred, to the
extent the average outstanding balance of
loans from that corporation to members of its
affiliated group during the taxable year do not
exceed the limitation amount for that
corporation. The "limitation amount" for a
corporation is the average outstanding
balances during the taxable year of customer
receivables (within the meaning of item (i))
originated by all members of the affiliated
group. If the average outstanding balances of
the loans made by a corporation to members of
its affiliated group exceed the limitation
amount, the interest income of that
corporation from qualifying loans shall be
equal to its interest income from loans to

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

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

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

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

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securities convertible into common stock, and
preferred stock;
(ii) bonds, debentures, and other debt
securities;
(iii) foreign and domestic currency deposits
secured by federal, state, or local governmental
agencies;
(iv) mortgage or asset-backed securities
secured by federal, state, or local governmental
agencies;
(v) repurchase agreements and loan
participations;
(vi) foreign currency exchange contracts and
forward and futures contracts on foreign
currencies;
(vii) stock and bond index securities and
futures contracts and other similar financial
securities and futures contracts on those
securities;
(viii) options for the purchase or sale of any
of the securities, currencies, contracts, or
financial instruments described in items (i) to
(vii), inclusive;
(ix) regulated futures contracts;
(x) commodities (not described in Section
1221(a)(1) of the Internal Revenue Code) or

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

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

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

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

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

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

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

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

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

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

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the acquisition and holding of interests in
controlled taxpayers and in the provision of
services to controlled taxpayers or in the leasing
or licensing of property to controlled taxpayers.
(ii) The income of a holding company which is a
member of more than one unitary business group
shall be included in each unitary business group of
which it is a member on a pro rata basis, by
including in each unitary business group that
portion of the base income of the holding company
that bears the same proportion to the total base
income of the holding company as the gross receipts
of the unitary business group bears to the combined
gross receipts of all unitary business groups (in
both cases without regard to the holding company)
or on any other reasonable basis, consistently
applied.
(iii) A holding company shall apportion its
business income under the subsection of Section
304 used by the other members of its unitary
business group. The apportionment factors of a
holding company which would be a member of more
than one unitary business group shall be included
with the apportionment factors of each unitary
business group of which it is a member on a pro
rata basis using the same method used in clause

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(ii).
(iv) The provisions of this subparagraph (C)
are intended to clarify existing law.
(D) If including the base income and factors of a
holding company in more than one unitary business group
under subparagraph (C) does not fairly reflect the
degree of integration between the holding company and
one or more of the unitary business groups, the
dependence of the holding company and one or more of
the unitary business groups upon each other, or the
contributions between the holding company and one or
more of the unitary business groups, the holding
company may petition the Director, under the
procedures provided under Section 304(f), for
permission to include all base income and factors of
the holding company only with members of a unitary
business group apportioning their business income
under one subsection of subsections (a), (b), (c), or
(d) of Section 304. If the petition is granted, the
holding company shall be included in a unitary business
group only with persons apportioning their business
income under the selected subsection of Section 304
until the Director grants a petition of the holding
company either to be included in more than one unitary
business group under subparagraph (C) or to include its
base income and factors only with members of a unitary

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

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

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Section 25-5. 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, then the Illinois Income Tax
Act is amended by changing Sections 1102, 1103, and 1105 as
follows:
(35 ILCS 5/1102) (from Ch. 120, par. 11-1102)
Sec. 1102. Jeopardy Assessments.
(a) Jeopardy assessment and lien.
(1) Assessment. If the Department finds that a taxpayer
is about to depart from the State, or to conceal himself or
his property, or to do any other act tending to prejudice
or to render wholly or partly ineffectual proceedings to
collect any amount of tax or penalties imposed under this
Act unless court proceedings are brought without delay, or
if the Department finds that the collection of such amount
will be jeopardized by delay, the Department shall give the
taxpayer notice of such findings and shall make demand for
immediate return and payment of such amount, whereupon such
amount shall be deemed assessed and shall become
immediately due and payable.
(2) Filing of lien. If the taxpayer, within 5 days
after such notice (or within such extension of time as the
Department may grant), does not comply with such notice or
show to the Department that the findings in such notice are

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

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

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special taxes heretofore or hereafter levied by any political
subdivision of this State.
(b) Filing in the State Tax Lien Registry with Registrar.
In case title to land to be affected by the notice of lien or
notice of jeopardy assessment lien is registered under the
provisions of "An Act concerning land titles," approved May 1,
1897, as amended, such notice shall also be filed in the State
Tax Lien Registry office of the Registrar of Titles of the
county within which the property subject to the lien is
situated and shall be entered upon the register of titles as a
memorial of charge upon each folium of the register of titles
affected by such notice, and the Department shall not have a
preference over the rights of any bona fide purchaser,
mortgagee, judgment creditor or other lien holder arising prior
to the registration of such notice.
(c) Index. The Department of Revenue shall maintain a State
Tax Lien Index of all tax liens filed in the State Tax Lien
Registry as provided for by the State Tax Lien Registration
Act. The recorder of each county shall procure a file labeled
"State Tax Lien Notices" and an index book labeled "State Tax
Lien Index." When notice of any lien or jeopardy assessment
lien is presented to him for filing, he shall file it in
numerical order in the file and shall enter it alphabetically
in the index. The entry shall show the name and last known
address of the person named in the notice, the serial number of
the notice, the date and hour of filing, whether it is a

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

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

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

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

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register of titles affected thereby a memorial of the
certificate of release which memorial when so entered shall
act as a release pro tanto of any memorial of such notice
of lien or notice of jeopardy assessment lien previously
filed and registered.
(Source: P.A. 92-826, eff. 1-1-03; 10000SB0009ham003.)
Section 25-10. 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, then the Retailers'
Occupation Tax Act is amended by changing Sections 5a, 5b, and
5c as follows:
(35 ILCS 120/5a) (from Ch. 120, par. 444a)
Sec. 5a. The Department shall have a lien for the tax
herein imposed or any portion thereof, or for any penalty
provided for in this Act, or for any amount of interest which
may be due as provided for in Section 5 of this Act, upon all
the real and personal property of any person to whom a final
assessment or revised final assessment has been issued as
provided in this Act, or whenever a return is filed without
payment of the tax or penalty shown therein to be due,
including all such property of such persons acquired after
receipt of such assessment or filing of such return. The
taxpayer is liable for the filing fee imposed incurred by the
Department for filing the lien and the filing fee imposed

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

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

HB4078 - 337 - LRB100 13340 AXK 27924 b
notice are erroneous, the Department may file a notice of
jeopardy assessment lien in the State Tax Lien Registry office
of the recorder of the county in which any property of the
taxpayer may be located and shall notify the taxpayer of such
filing. Such jeopardy assessment lien shall have the same scope
and effect as the statutory lien hereinbefore provided for in
this Section.
If the taxpayer believes that he does not owe some or all
of the tax for which the jeopardy assessment lien against him
has been filed, or that no jeopardy to the revenue in fact
exists, he may protest within 20 days after being notified by
the Department of the filing of such jeopardy assessment lien
and request a hearing, whereupon the Department shall hold a
hearing in conformity with the provisions of this Act and,
pursuant thereto, shall notify the taxpayer of its findings as
to whether or not such jeopardy assessment lien will be
released. If not, and if the taxpayer is aggrieved by this
decision, he may file an action for judicial review of such
final determination of the Department in accordance with
Section 12 of this Act and the Administrative Review Law.
On and after July 1, 2013, protests concerning matters that
are subject to the jurisdiction of the Illinois Independent Tax
Tribunal shall be filed with the Tribunal, and hearings on
those matters shall be held before the Tribunal in accordance
with the Illinois Independent Tax Tribunal Act of 2012. The
Tribunal shall notify the taxpayer of its findings as to

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

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

HB4078 - 340 - LRB100 13340 AXK 27924 b
or notice of jeopardy assessment lien is registered under the
provisions of "An Act concerning land titles", approved May 1,
1897, as amended, such notice shall also be filed in the State
Tax Lien Registry office of the Registrar of Titles of the
county within which the property subject to the lien is
situated and shall be entered upon the register of titles as a
memorial or charge upon each folium of the register of titles
affected by such notice, and the Department shall not have a
preference over the rights of any bona fide purchaser,
mortgagee, judgment creditor or other lien holder arising prior
to the registration of such notice: Provided, however, that the
word "bona fide" shall not include any mortgage of real or
personal property or any other credit transaction that results
in the mortgagee or the holder of the security acting as
trustee for unsecured creditors of the taxpayer mentioned in
the notice of lien who executed such chattel or real property
mortgage or the document evidencing such credit transaction.
Such regular lien or jeopardy assessment lien shall not be
effective against any purchaser with respect to any item in a
retailer's stock in trade purchased from the retailer in the
usual course of such retailer's business.
(Source: P.A. 97-1129, eff. 8-28-12; 98-446, eff. 8-16-13;
10000SB0009ham003.)
(35 ILCS 120/5b) (from Ch. 120, par. 444b)
Sec. 5b. State Tax Lien Index. The Department of Revenue

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

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

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

HB4078 - 344 - LRB100 13340 AXK 27924 b
(d) to the extent that there is furnished to the
Department on a form to be approved and with a surety or
sureties satisfactory to the Department a bond that is
conditioned upon the payment of the amount of such lien,
together with any interest which may become due under
Section 5 of this Act after the notice of lien is filed,
but before the amount thereof is fully paid;
(e) to the extent and under the circumstances specified
in Section 5a of this Act in the case of jeopardy
assessment liens;
(f) to the extent to which an assessment is reduced
pursuant to a rehearing or departmental review under
Section 4 or Section 5 of this Act.
A certificate of complete or partial release of any lien
shall be held conclusive that the lien upon the property
covered by the certificate is extinguished to the extent
indicated by such certificate.
(Source: P.A. 92-826, eff. 1-1-03; 10000SB0009ham003.)
Section 25-15. 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, then the Cannabis and
Controlled Substances Tax Act is amended by changing Sections
16, 17, and 19 as follows:
(35 ILCS 520/16) (from Ch. 120, par. 2166)

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

HB4078 - 346 - LRB100 13340 AXK 27924 b
after being notified by the Department of the filing of such
jeopardy assessment lien and request a hearing, whereupon the
Department shall hold a hearing in conformity with the
provisions of Section 908 of the Illinois Income Tax Act and,
pursuant thereto, shall notify the taxpayer of its decision as
to whether or not such jeopardy assessment lien will be
released.
After the expiration of the period within which the person
assessed may file an action for judicial review without such
action being filed, a certified copy of the final assessment or
revised final assessment of the Department may be filed with
the Circuit Court of the county in which the dealer resides, or
of Cook County in the case of a dealer who does not reside in
this State, or in the county where the violation of this Act
took place. The certified copy of the final assessment or
revised final assessment shall be accompanied by a
certification which recites facts that are sufficient to show
that the Department complied with the jurisdictional
requirements of the Act in arriving at its final assessment or
its revised final assessment and that the dealer had this
opportunity for an administrative hearing and for judicial
review, whether he availed himself or herself of either or both
of these opportunities or not. If the court is satisfied that
the Department complied with the jurisdictional requirements
of the Act in arriving at its final assessment or its revised
final assessment and that the taxpayer had his opportunity for

HB4078 - 347 - LRB100 13340 AXK 27924 b
an administrative hearing and for judicial review, whether he
availed himself of either or both of these opportunities or
not, the court shall render judgment in favor of the Department
and against the taxpayer for the amount shown to be due by the
final assessment or the revised final assessment, plus any
interest which may be due, and such judgment shall be entered
in the judgment docket of the court. Such judgment shall bear
the same rate of interest and shall have the same effect as
other judgments. The judgment may be enforced, and all laws
applicable to sales for the enforcement of a judgment shall be
applicable to sales made under such judgments. The Department
shall file the certified copy of its assessment, as herein
provided, with the Circuit Court within 2 years after such
assessment becomes final except when the taxpayer consents in
writing to an extension of such filing period, and except that
the time limitation period on the Department's right to file
the certified copy of its assessment with the Circuit Court
shall not run during any period of time in which the order of
any court has the effect of enjoining or restraining the
Department from filing such certified copy of its assessment
with the Circuit Court.
If, when the cause of action for a proceeding in court
accrues against a person, he or she is out of the State, the
action may be commenced within the times herein limited, after
his or her coming into or returning to the State; and if, after
the cause of action accrues, he or she departs from and remains

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out of the State, the time of his or her absence from the
State, the time of his or her absence is no part of the time
limited for the commencement of the action; but the foregoing
provisions concerning absence from the State shall not apply to
any case in which, at the time the cause of action accrues, the
party against whom the cause of action accrues is not a
resident of this State. The time within which a court action is
to be commenced by the Department hereunder shall not run from
the date the taxpayer files a petition in bankruptcy under the
Federal Bankruptcy Act until 30 days after notice of
termination or expiration of the automatic stay imposed by the
Federal Bankruptcy Act.
No claim shall be filed against the estate of any deceased
person or any person under legal disability for any tax or
penalty or part of either, or interest, except in the manner
prescribed and within the time limited by the Probate Act of
1975, as amended.
The collection of tax or penalty or interest by any means
provided for herein shall not be a bar to any prosecution under
this Act.
In addition to any penalty provided for in this Act, any
amount of tax which is not paid when due shall bear interest at
the rate determined in accordance with the Uniform Penalty and
Interest Act, per month or fraction thereof from the date when
such tax becomes past due until such tax is paid or a judgment
therefor is obtained by the Department. If the time for making

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

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

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

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

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property, shall permanently attach the certificate of
release to the notice of lien or notice of jeopardy
assessment lien and shall enter the certificate of release
and the date in the "State Tax Lien Index" on the line
where the notice of lien or notice of jeopardy assessment
lien is entered. ; and
(2) In the case of registered property, the Registrar
of Titles shall file and enter upon each folium of the
register of titles affected thereby a memorial of the
certificate of release which memorial when so entered shall
act as a release pro tanto of any memorial of such notice
of lien or notice of jeopardy assessment lien previously
filed and registered.
(Source: P.A. 97-1150, eff. 1-25-13; 10000SB0009ham003.)
Section 25-20. 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, then the Illinois Municipal
Code is amended by changing Section 8-3-15 as follows:
(65 ILCS 5/8-3-15) (from Ch. 24, par. 8-3-15)
Sec. 8-3-15. The corporate authorities of each
municipality shall have all powers necessary to enforce the
collection of any tax imposed and collected by such
municipality, whether such tax was imposed pursuant to its home
rule powers or statutory authorization, including but not

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limited to subpoena power and the power to create and enforce
liens. No such lien shall affect the rights of bona fide
purchasers, mortgagees, judgment creditors or other
lienholders who acquire their interests in such property prior
to the time a notice of such lien is placed on record in the
office of the recorder or the registrar of titles of the county
in which the property is located. However, nothing in this
Section shall permit a municipality to place a lien upon
property not located or found within its corporate boundaries.
A municipality creating a lien may provide that the procedures
for its notice and enforcement shall be the same as that
provided in the Retailers' Occupation Tax Act, as that Act
existed prior to the adoption of the State Tax Lien
Registration Act now or hereafter amended, for State tax liens,
and any recorder or registrar of titles with whom a notice of
such lien is filed shall treat such lien as a State tax lien
for recording purposes.
(Source: P.A. 86-680; 10000SB0009ham003.)
Section 25-25. 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, then the Title Insurance Act
is amended by changing Section 22 as follows:
(215 ILCS 155/22) (from Ch. 73, par. 1422)
Sec. 22. Tax indemnity; notice. A corporation authorized to

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do business under this Act shall notify the Director of Revenue
of the State of Illinois, by notice directed to his office in
the City of Chicago, of each trust account or similar account
established which relates to title exceptions due to a judgment
lien or any other lien arising under any tax Act administered
by the Illinois Department of Revenue, when notice of such lien
has been filed with the registrar of titles or recorder or in
the State Tax Lien Registry, as the case may be, in the manner
prescribed by law. Such notice shall contain the name, address,
and tax identification number of the debtor, the permanent real
estate index numbers, if any, and the address and legal
description of the property, the type of lien claimed by the
Department and identification of any trust fund or similar
account held by such corporation or any agent thereof relating
to such lien. Any trust fund or similar account established by
such corporation or agent relating to any such lien shall
include provisions requiring such corporation or agent to apply
such fund in satisfaction or release of such lien upon written
demand therefor by the Department of Revenue.
(Source: P.A. 94-893, eff. 6-20-06; 10000SB0009ham003.)
Section 30-5. 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, then the Use Tax Act is
amended by changing Section 3-10 as follows:

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

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Beginning on August 6, 2010 through August 15, 2010, with
respect to sales tax holiday items as defined in Section 3-6 of
this Act, the tax is imposed at the rate of 1.25%.
With respect to gasohol, the tax imposed by this Act
applies to (i) 70% of the proceeds of sales made on or after
January 1, 1990, and before July 1, 2003, (ii) 80% of the
proceeds of sales made on or after July 1, 2003 and on or
before July 1, 2017 December 31, 2018, and (iii) 100% of the
proceeds of sales made thereafter. If, at any time, however,
the tax under this Act on sales of gasohol is imposed at the
rate of 1.25%, then the tax imposed by this Act applies to 100%
of the proceeds of sales of gasohol made during that time.
With respect to majority blended ethanol fuel, the tax
imposed by this Act does not apply to the proceeds of sales
made on or after July 1, 2003 and on or before December 31,
2023 December 31, 2018 but applies to 100% of the proceeds of
sales made thereafter.
With respect to biodiesel blends with no less than 1% and
no more than 10% biodiesel, the tax imposed by this Act applies
to (i) 80% of the proceeds of sales made on or after July 1,
2003 and on or before December 31, 2018 and (ii) 100% of the
proceeds of sales made thereafter. If, at any time, however,
the tax under this Act on sales of biodiesel blends with no
less than 1% and no more than 10% biodiesel is imposed at the
rate of 1.25%, then the tax imposed by this Act applies to 100%
of the proceeds of sales of biodiesel blends with no less than

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

HB4078 - 359 - LRB100 13340 AXK 27924 b
bottle, can, carton, or container, regardless of size; but
"soft drinks" does not include coffee, tea, non-carbonated
water, infant formula, milk or milk products as defined in the
Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" do not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not

HB4078 - 360 - LRB100 13340 AXK 27924 b
include candy. For purposes of this Section, "candy" means a
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or other
ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
label includes:
(A) A "Drug Facts" panel; or
(B) A statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on the effective date of this amendatory Act of
the 98th General Assembly, "prescription and nonprescription
medicines and drugs" includes medical cannabis purchased from a

HB4078 - 361 - LRB100 13340 AXK 27924 b
registered dispensing organization under the Compassionate Use
of Medical Cannabis Pilot Program Act.
If the property that is purchased at retail from a retailer
is acquired outside Illinois and used outside Illinois before
being brought to Illinois for use here and is taxable under
this Act, the "selling price" on which the tax is computed
shall be reduced by an amount that represents a reasonable
allowance for depreciation for the period of prior out-of-state
use.
(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
99-858, eff. 8-19-16; 10000SB0009ham003.)
Section 30-10. 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, then the Service Use Tax Act
is amended by changing Section 3-10 as follows:
(35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in this
Section, the tax imposed by this Act is at the rate of 6.25% of
the selling price of tangible personal property transferred as
an incident to the sale of service, but, for the purpose of
computing this tax, in no event shall the selling price be less
than the cost price of the property to the serviceman.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the

HB4078 - 362 - LRB100 13340 AXK 27924 b
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
the Use Tax Act, the tax is imposed at the rate of 1.25%.
With respect to gasohol, as defined in the Use Tax Act, the
tax imposed by this Act applies to (i) 70% of the selling price
of property transferred as an incident to the sale of service
on or after January 1, 1990, and before July 1, 2003, (ii) 80%
of the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
July 1, 2017 December 31, 2018, and (iii) 100% of the selling
price thereafter. If, at any time, however, the tax under this
Act on sales of gasohol, as defined in the Use Tax Act, is
imposed at the rate of 1.25%, then the tax imposed by this Act
applies to 100% of the proceeds of sales of gasohol made during
that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply
to the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
December 31, 2023 December 31, 2018 but applies to 100% of the
selling price thereafter.
With respect to biodiesel blends, as defined in the Use Tax
Act, with no less than 1% and no more than 10% biodiesel, the
tax imposed by this Act applies to (i) 80% of the selling price
of property transferred as an incident to the sale of service
on or after July 1, 2003 and on or before December 31, 2018 and
(ii) 100% of the proceeds of the selling price thereafter. If,

HB4078 - 363 - LRB100 13340 AXK 27924 b
at any time, however, the tax under this Act on sales of
biodiesel blends, as defined in the Use Tax Act, with no less
than 1% and no more than 10% biodiesel is imposed at the rate
of 1.25%, then the tax imposed by this Act applies to 100% of
the proceeds of sales of biodiesel blends with no less than 1%
and no more than 10% biodiesel made during that time.
With respect to 100% biodiesel, as defined in the Use Tax
Act, and biodiesel blends, as defined in the Use Tax Act, with
more than 10% but no more than 99% biodiesel, the tax imposed
by this Act does not apply to the proceeds of the selling price
of property transferred as an incident to the sale of service
on or after July 1, 2003 and on or before December 31, 2023
December 31, 2018 but applies to 100% of the selling price
thereafter.
At the election of any registered serviceman made for each
fiscal year, sales of service in which the aggregate annual
cost price of tangible personal property transferred as an
incident to the sales of service is less than 35%, or 75% in
the case of servicemen transferring prescription drugs or
servicemen engaged in graphic arts production, of the aggregate
annual total gross receipts from all sales of service, the tax
imposed by this Act shall be based on the serviceman's cost
price of the tangible personal property transferred as an
incident to the sale of those services.
The tax shall be imposed at the rate of 1% on food prepared
for immediate consumption and transferred incident to a sale of

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

HB4078 - 365 - LRB100 13340 AXK 27924 b
tea, non-carbonated water, infant formula, milk or milk
products as defined in the Grade A Pasteurized Milk and Milk
Products Act, or drinks containing 50% or more natural fruit or
vegetable juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" do not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not
include candy. For purposes of this Section, "candy" means a

HB4078 - 366 - LRB100 13340 AXK 27924 b
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or other
ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
label includes:
(A) A "Drug Facts" panel; or
(B) A statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on January 1, 2014 (the effective date of Public
Act 98-122), "prescription and nonprescription medicines and
drugs" includes medical cannabis purchased from a registered
dispensing organization under the Compassionate Use of Medical

HB4078 - 367 - LRB100 13340 AXK 27924 b
Cannabis Pilot Program Act.
If the property that is acquired from a serviceman is
acquired outside Illinois and used outside Illinois before
being brought to Illinois for use here and is taxable under
this Act, the "selling price" on which the tax is computed
shall be reduced by an amount that represents a reasonable
allowance for depreciation for the period of prior out-of-state
use.
(Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;
98-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.
7-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16;
10000SB0009ham003.)
Section 30-15. 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, then the Service Occupation
Tax Act is amended by changing Section 3-10 as follows:
(35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in this
Section, the tax imposed by this Act is at the rate of 6.25% of
the "selling price", as defined in Section 2 of the Service Use
Tax Act, of the tangible personal property. For the purpose of
computing this tax, in no event shall the "selling price" be
less than the cost price to the serviceman of the tangible
personal property transferred. The selling price of each item

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

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that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply
to the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
December 31, 2023 December 31, 2018 but applies to 100% of the
selling price thereafter.
With respect to biodiesel blends, as defined in the Use Tax
Act, with no less than 1% and no more than 10% biodiesel, the
tax imposed by this Act applies to (i) 80% of the selling price
of property transferred as an incident to the sale of service
on or after July 1, 2003 and on or before December 31, 2018 and
(ii) 100% of the proceeds of the selling price thereafter. If,
at any time, however, the tax under this Act on sales of
biodiesel blends, as defined in the Use Tax Act, with no less
than 1% and no more than 10% biodiesel is imposed at the rate
of 1.25%, then the tax imposed by this Act applies to 100% of
the proceeds of sales of biodiesel blends with no less than 1%
and no more than 10% biodiesel made during that time.
With respect to 100% biodiesel, as defined in the Use Tax
Act, and biodiesel blends, as defined in the Use Tax Act, with
more than 10% but no more than 99% biodiesel material, the tax
imposed by this Act does not apply to the proceeds of the
selling price of property transferred as an incident to the
sale of service on or after July 1, 2003 and on or before
December 31, 2023 December 31, 2018 but applies to 100% of the

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

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

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

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definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
label includes:
(A) A "Drug Facts" panel; or
(B) A statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on January 1, 2014 (the effective date of Public
Act 98-122), "prescription and nonprescription medicines and
drugs" includes medical cannabis purchased from a registered
dispensing organization under the Compassionate Use of Medical
Cannabis Pilot Program Act.
(Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;
98-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.
7-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16;
10000SB0009ham003.)
Section 30-20. 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, then the Retailers'
Occupation Tax Act is amended by changing Section 2-10 as
follows:
(35 ILCS 120/2-10)

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

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With respect to gasohol, as defined in the Use Tax Act, the
tax imposed by this Act applies to (i) 70% of the proceeds of
sales made on or after January 1, 1990, and before July 1,
2003, (ii) 80% of the proceeds of sales made on or after July
1, 2003 and on or before July 1, 2017 December 31, 2018, and
(iii) 100% of the proceeds of sales made thereafter. If, at any
time, however, the tax under this Act on sales of gasohol, as
defined in the Use Tax Act, is imposed at the rate of 1.25%,
then the tax imposed by this Act applies to 100% of the
proceeds of sales of gasohol made during that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply
to the proceeds of sales made on or after July 1, 2003 and on or
before December 31, 2023 December 31, 2018 but applies to 100%
of the proceeds of sales made thereafter.
With respect to biodiesel blends, as defined in the Use Tax
Act, with no less than 1% and no more than 10% biodiesel, the
tax imposed by this Act applies to (i) 80% of the proceeds of
sales made on or after July 1, 2003 and on or before December
31, 2018 and (ii) 100% of the proceeds of sales made
thereafter. If, at any time, however, the tax under this Act on
sales of biodiesel blends, as defined in the Use Tax Act, with
no less than 1% and no more than 10% biodiesel is imposed at
the rate of 1.25%, then the tax imposed by this Act applies to
100% of the proceeds of sales of biodiesel blends with no less
than 1% and no more than 10% biodiesel made during that time.

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

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

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

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registered dispensing organization under the Compassionate Use
of Medical Cannabis Pilot Program Act.
(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
99-858, eff. 8-19-16; 10000SB0009ham003.)
Section 35-5. 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, then the Use Tax Act is
amended by changing Sections 3-5 and 3-50 as follows:
(35 ILCS 105/3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by a not-for-profit arts or
cultural organization that establishes, by proof required by
the Department by rule, that it has received an exemption under

HB4078 - 380 - LRB100 13340 AXK 27924 b
Section 501(c)(3) of the Internal Revenue Code and that is
organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after the effective date
of this amendatory Act of the 92nd General Assembly, however,
an entity otherwise eligible for this exemption shall not make
tax-free purchases unless it has an active identification
number issued by the Department.
(4) Personal property purchased by a governmental body, by
a corporation, society, association, foundation, or
institution organized and operated exclusively for charitable,
religious, or educational purposes, or by a not-for-profit
corporation, society, association, foundation, institution, or
organization that has no compensated officers or employees and
that is organized and operated primarily for the recreation of
persons 55 years of age or older. A limited liability company
may qualify for the exemption under this paragraph only if the
limited liability company is organized and operated
exclusively for educational purposes. On and after July 1,
1987, however, no entity otherwise eligible for this exemption
shall make tax-free purchases unless it has an active exemption
identification number issued by the Department.

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(5) Until July 1, 2003, a passenger car that is a
replacement vehicle to the extent that the purchase price of
the car is subject to the Replacement Vehicle Tax.
(6) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new and
used, and including that manufactured on special order,
certified by the purchaser to be used primarily for graphic
arts production, and including machinery and equipment
purchased for lease. Equipment includes chemicals or chemicals
acting as catalysts but only if the chemicals or chemicals
acting as catalysts effect a direct and immediate change upon a
graphic arts product. Beginning on July 1, 2017, graphic arts
machinery and equipment is included in the manufacturing and
assembling machinery and equipment exemption under paragraph
(18).
(7) Farm chemicals.
(8) Legal tender, currency, medallions, or gold or silver
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(9) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(10) A motor vehicle that is used for automobile renting,
as defined in the Automobile Renting Occupation and Use Tax

HB4078 - 382 - LRB100 13340 AXK 27924 b
Act.
(11) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required to
be registered under Section 3-809 of the Illinois Vehicle Code,
but excluding other motor vehicles required to be registered
under the Illinois Vehicle Code. Horticultural polyhouses or
hoop houses used for propagating, growing, or overwintering
plants shall be considered farm machinery and equipment under
this item (11). Agricultural chemical tender tanks and dry
boxes shall include units sold separately from a motor vehicle
required to be licensed and units sold mounted on a motor
vehicle required to be licensed if the selling price of the
tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters, seeders,
or spreaders. Precision farming equipment includes, but is not
limited to, soil testing sensors, computers, monitors,

HB4078 - 383 - LRB100 13340 AXK 27924 b
software, global positioning and mapping systems, and other
such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals. This item (11) is exempt from the
provisions of Section 3-90.
(12) Until June 30, 2013, fuel and petroleum products sold
to or used by an air common carrier, certified by the carrier
to be used for consumption, shipment, or storage in the conduct
of its business as an air common carrier, for a flight destined
for or returning from a location or locations outside the
United States without regard to previous or subsequent domestic
stopovers.
Beginning July 1, 2013, fuel and petroleum products sold to
or used by an air carrier, certified by the carrier to be used
for consumption, shipment, or storage in the conduct of its
business as an air common carrier, for a flight that (i) is
engaged in foreign trade or is engaged in trade between the
United States and any of its possessions and (ii) transports at
least one individual or package for hire from the city of
origination to the city of final destination on the same
aircraft, without regard to a change in the flight number of

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

HB4078 - 385 - LRB100 13340 AXK 27924 b
equipment purchased for lease, but excluding motor vehicles
required to be registered under the Illinois Vehicle Code. The
changes made to this Section by Public Act 97-767 apply on and
after July 1, 2003, but no claim for credit or refund is
allowed on or after August 16, 2013 (the effective date of
Public Act 98-456) for such taxes paid during the period
beginning July 1, 2003 and ending on August 16, 2013 (the
effective date of Public Act 98-456).
(17) Until July 1, 2003, distillation machinery and
equipment, sold as a unit or kit, assembled or installed by the
retailer, certified by the user to be used only for the
production of ethyl alcohol that will be used for consumption
as motor fuel or as a component of motor fuel for the personal
use of the user, and not subject to sale or resale.
(18) Manufacturing and assembling machinery and equipment
used primarily in the process of manufacturing or assembling
tangible personal property for wholesale or retail sale or
lease, whether that sale or lease is made directly by the
manufacturer or by some other person, whether the materials
used in the process are owned by the manufacturer or some other
person, or whether that sale or lease is made apart from or as
an incident to the seller's engaging in the service occupation
of producing machines, tools, dies, jigs, patterns, gauges, or
other similar items of no commercial value on special order for
a particular purchaser. The exemption provided by this
paragraph (18) does not include machinery and equipment used in

HB4078 - 386 - LRB100 13340 AXK 27924 b
(i) the generation of electricity for wholesale or retail sale;
(ii) the generation or treatment of natural or artificial gas
for wholesale or retail sale that is delivered to customers
through pipes, pipelines, or mains; or (iii) the treatment of
water for wholesale or retail sale that is delivered to
customers through pipes, pipelines, or mains. The provisions of
Public Act 98-583 are declaratory of existing law as to the
meaning and scope of this exemption. Beginning on July 1, 2017,
the exemption provided by this paragraph (18) includes, but is
not limited to, graphic arts machinery and equipment, as
defined in paragraph (6) of this Section.
(19) Personal property delivered to a purchaser or
purchaser's donee inside Illinois when the purchase order for
that personal property was received by a florist located
outside Illinois who has a florist located inside Illinois
deliver the personal property.
(20) Semen used for artificial insemination of livestock
for direct agricultural production.
(21) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes. This item (21) is exempt from the provisions
of Section 3-90, and the exemption provided for under this item
(21) applies for all periods beginning May 30, 1995, but no

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claim for credit or refund is allowed on or after January 1,
2008 for such taxes paid during the period beginning May 30,
2000 and ending on January 1, 2008.
(22) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. If the equipment is leased in a
manner that does not qualify for this exemption or is used in
any other non-exempt manner, the lessor shall be liable for the
tax imposed under this Act or the Service Use Tax Act, as the
case may be, based on the fair market value of the property at
the time the non-qualifying use occurs. No lessor shall collect
or attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by this
Act or the Service Use Tax Act, as the case may be, if the tax
has not been paid by the lessor. If a lessor improperly
collects any such amount from the lessee, the lessee shall have
a legal right to claim a refund of that amount from the lessor.
If, however, that amount is not refunded to the lessee for any
reason, the lessor is liable to pay that amount to the
Department.

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

HB4078 - 389 - LRB100 13340 AXK 27924 b
corporation, society, association, foundation, or institution
that has been issued a sales tax exemption identification
number by the Department that assists victims of the disaster
who reside within the declared disaster area.
(25) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in the
performance of infrastructure repairs in this State, including
but not limited to municipal roads and streets, access roads,
bridges, sidewalks, waste disposal systems, water and sewer
line extensions, water distribution and purification
facilities, storm water drainage and retention facilities, and
sewage treatment facilities, resulting from a State or
federally declared disaster in Illinois or bordering Illinois
when such repairs are initiated on facilities located in the
declared disaster area within 6 months after the disaster.
(26) Beginning July 1, 1999, game or game birds purchased
at a "game breeding and hunting preserve area" as that term is
used in the Wildlife Code. This paragraph is exempt from the
provisions of Section 3-90.
(27) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the Department
to be organized and operated exclusively for educational
purposes. For purposes of this exemption, "a corporation,

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

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

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

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

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

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

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

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machinery and equipment exemption also includes graphic arts
machinery and equipment, as defined in paragraph (6) of Section
3-5. The machinery and equipment exemption does not include
machinery and equipment used in (i) the generation of
electricity for wholesale or retail sale; (ii) the generation
or treatment of natural or artificial gas for wholesale or
retail sale that is delivered to customers through pipes,
pipelines, or mains; or (iii) the treatment of water for
wholesale or retail sale that is delivered to customers through
pipes, pipelines, or mains. The provisions of this amendatory
Act of the 98th General Assembly are declaratory of existing
law as to the meaning and scope of this exemption. For the
purposes of this exemption, terms have the following meanings:
(1) "Manufacturing process" means the production of an
article of tangible personal property, whether the article
is a finished product or an article for use in the process
of manufacturing or assembling a different article of
tangible personal property, by a procedure commonly
regarded as manufacturing, processing, fabricating, or
refining that changes some existing material into a
material with a different form, use, or name. In relation
to a recognized integrated business composed of a series of
operations that collectively constitute manufacturing, or
individually constitute manufacturing operations, the
manufacturing process commences with the first operation
or stage of production in the series and does not end until

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

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

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

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

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Administrative Procedure Act.
The manufacturing and assembling machinery and equipment
exemption is exempt from the provisions of Section 3-90.
(Source: P.A. 98-583, eff. 1-1-14; 10000SB0009ham003.)
Section 35-10. 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, then the Service Use Tax Act
is amended by changing Sections 2 and 3-5 as follows:
(35 ILCS 110/2) (from Ch. 120, par. 439.32)
Sec. 2. Definitions.
"Use" means the exercise by any person of any right or
power over tangible personal property incident to the ownership
of that property, but does not include the sale or use for
demonstration by him of that property in any form as tangible
personal property in the regular course of business. "Use" does
not mean the interim use of tangible personal property nor the
physical incorporation of tangible personal property, as an
ingredient or constituent, into other tangible personal
property, (a) which is sold in the regular course of business
or (b) which the person incorporating such ingredient or
constituent therein has undertaken at the time of such purchase
to cause to be transported in interstate commerce to
destinations outside the State of Illinois.
"Purchased from a serviceman" means the acquisition of the

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

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

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only if the limited liability company is organized and
operated exclusively for educational purposes.
(4) a sale or transfer of tangible personal property as
an incident to the rendering of service for interstate
carriers for hire for use as rolling stock moving in
interstate commerce or by lessors under a lease of one year
or longer, executed or in effect at the time of purchase of
personal property, to interstate carriers for hire for use
as rolling stock moving in interstate commerce so long as
so used by such interstate carriers for hire, and equipment
operated by a telecommunications provider, licensed as a
common carrier by the Federal Communications Commission,
which is permanently installed in or affixed to aircraft
moving in interstate commerce.
(4a) a sale or transfer of tangible personal property
as an incident to the rendering of service for owners,
lessors, or shippers of tangible personal property which is
utilized by interstate carriers for hire for use as rolling
stock moving in interstate commerce so long as so used by
interstate carriers for hire, and equipment operated by a
telecommunications provider, licensed as a common carrier
by the Federal Communications Commission, which is
permanently installed in or affixed to aircraft moving in
interstate commerce.
(4a-5) on and after July 1, 2003 and through June 30,
2004, a sale or transfer of a motor vehicle of the second

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division with a gross vehicle weight in excess of 8,000
pounds as an incident to the rendering of service if that
motor vehicle is subject to the commercial distribution fee
imposed under Section 3-815.1 of the Illinois Vehicle Code.
Beginning on July 1, 2004 and through June 30, 2005, the
use in this State of motor vehicles of the second division:
(i) with a gross vehicle weight rating in excess of 8,000
pounds; (ii) that are subject to the commercial
distribution fee imposed under Section 3-815.1 of the
Illinois Vehicle Code; and (iii) that are primarily used
for commercial purposes. Through June 30, 2005, this
exemption applies to repair and replacement parts added
after the initial purchase of such a motor vehicle if that
motor vehicle is used in a manner that would qualify for
the rolling stock exemption otherwise provided for in this
Act. For purposes of this paragraph, "used for commercial
purposes" means the transportation of persons or property
in furtherance of any commercial or industrial enterprise
whether for-hire or not.
(5) a sale or transfer of machinery and equipment used
primarily in the process of the manufacturing or
assembling, either in an existing, an expanded or a new
manufacturing facility, of tangible personal property for
wholesale or retail sale or lease, whether such sale or
lease is made directly by the manufacturer or by some other
person, whether the materials used in the process are owned

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

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standard uniform bill of lading showing the person who
repaired, reconditioned or remodeled the property to a
destination outside Illinois, for use outside Illinois.
(5b) a sale or transfer of tangible personal property
which is produced by the seller thereof on special order in
such a way as to have made the applicable tax the Service
Occupation Tax or the Service Use Tax, rather than the
Retailers' Occupation Tax or the Use Tax, for an interstate
carrier by rail which receives the physical possession of
such property in Illinois, and which transports such
property, or shares with another common carrier in the
transportation of such property, out of Illinois on a
standard uniform bill of lading showing the seller of the
property as the shipper or consignor of such property to a
destination outside Illinois, for use outside Illinois.
(6) until July 1, 2003, a sale or transfer of
distillation machinery and equipment, sold as a unit or kit
and assembled or installed by the retailer, which machinery
and equipment is certified by the user to be used only for
the production of ethyl alcohol that will be used for
consumption as motor fuel or as a component of motor fuel
for the personal use of such user and not subject to sale
or resale.
(7) at the election of any serviceman not required to
be otherwise registered as a retailer under Section 2a of
the Retailers' Occupation Tax Act, made for each fiscal

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

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

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

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

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

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

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

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if the retailer benefits from any banking, financing, debt
collection, telecommunication, or marketing activities
occurring in this State or benefits from the location in
this State of authorized installation, servicing, or
repair facilities;
5. being owned or controlled by the same interests
which own or control any retailer engaging in business in
the same or similar line of business in this State;
6. having a franchisee or licensee operating under its
trade name if the franchisee or licensee is required to
collect the tax under this Section;
7. pursuant to a contract with a cable television
operator located in this State, soliciting orders for
tangible personal property by means of advertising which is
transmitted or distributed over a cable television system
in this State; or
8. engaging in activities in Illinois, which
activities in the state in which the supply business
engaging in such activities is located would constitute
maintaining a place of business in that state.
(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15;
10000SB0009ham003.)
(35 ILCS 110/3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:

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

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coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(5) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new and
used, and including that manufactured on special order or
purchased for lease, certified by the purchaser to be used
primarily for graphic arts production. Equipment includes
chemicals or chemicals acting as catalysts but only if the
chemicals or chemicals acting as catalysts effect a direct and
immediate change upon a graphic arts product. Beginning on July
1, 2017, graphic arts machinery and equipment is included in
the manufacturing and assembling machinery and equipment
exemption under Section 2 of this Act.
(6) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural

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

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

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

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

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

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

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

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

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

HB4078 - 428 - LRB100 13340 AXK 27924 b
Use Tax Act, as the case may be, if the tax has not been paid by
the lessor. If a lessor improperly collects any such amount
from the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that amount
is not refunded to the lessee for any reason, the lessor is
liable to pay that amount to the Department. This paragraph is
exempt from the provisions of Section 3-75.
(25) Beginning on the effective date of this amendatory Act
of the 92nd General Assembly, personal property purchased by a
lessor who leases the property, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
governmental body that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. If the property is leased in a
manner that does not qualify for this exemption or is used in
any other nonexempt manner, the lessor shall be liable for the
tax imposed under this Act or the Use Tax Act, as the case may
be, based on the fair market value of the property at the time
the nonqualifying use occurs. No lessor shall collect or
attempt to collect an amount (however designated) that purports
to reimburse that lessor for the tax imposed by this Act or the
Use Tax Act, as the case may be, if the tax has not been paid by
the lessor. If a lessor improperly collects any such amount
from the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that amount

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

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

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(29) Beginning January 1, 2017, menstrual pads, tampons,
and menstrual cups.
(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
7-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
10000SB0009ham003.)
Section 35-15. 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, then the Service Occupation
Tax Act is amended by changing Sections 2 and 3-5 as follows:
(35 ILCS 115/2) (from Ch. 120, par. 439.102)
Sec. 2. "Transfer" means any transfer of the title to
property or of the ownership of property whether or not the
transferor retains title as security for the payment of amounts
due him from the transferee.
"Cost Price" means the consideration paid by the serviceman
for a purchase valued in money, whether paid in money or
otherwise, including cash, credits and services, and shall be
determined without any deduction on account of the supplier's
cost of the property sold or on account of any other expense
incurred by the supplier. When a serviceman contracts out part
or all of the services required in his sale of service, it
shall be presumed that the cost price to the serviceman of the
property transferred to him by his or her subcontractor is

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

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qualify for the exemption under this paragraph only if the
limited liability company is organized and operated
exclusively for educational purposes.
(d) A sale or transfer of tangible personal property as an
incident to the rendering of service for interstate carriers
for hire for use as rolling stock moving in interstate commerce
or lessors under leases of one year or longer, executed or in
effect at the time of purchase, to interstate carriers for hire
for use as rolling stock moving in interstate commerce, and
equipment operated by a telecommunications provider, licensed
as a common carrier by the Federal Communications Commission,
which is permanently installed in or affixed to aircraft moving
in interstate commerce.
(d-1) A sale or transfer of tangible personal property as
an incident to the rendering of service for owners, lessors or
shippers of tangible personal property which is utilized by
interstate carriers for hire for use as rolling stock moving in
interstate commerce, and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(d-1.1) On and after July 1, 2003 and through June 30,
2004, a sale or transfer of a motor vehicle of the second
division with a gross vehicle weight in excess of 8,000 pounds
as an incident to the rendering of service if that motor

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

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

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

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

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

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

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

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

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(3) Personal property purchased by any not-for-profit arts
or cultural organization that establishes, by proof required by
the Department by rule, that it has received an exemption under
Section 501(c)(3) of the Internal Revenue Code and that is
organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after the effective date
of this amendatory Act of the 92nd General Assembly, however,
an entity otherwise eligible for this exemption shall not make
tax-free purchases unless it has an active identification
number issued by the Department.
(4) Legal tender, currency, medallions, or gold or silver
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(5) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new and
used, and including that manufactured on special order or
purchased for lease, certified by the purchaser to be used
primarily for graphic arts production. Equipment includes
chemicals or chemicals acting as catalysts but only if the

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

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

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

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

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

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

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

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the events are sponsored by an entity recognized by the school
district that consists primarily of volunteers and includes
parents and teachers of the school children. This paragraph
does not apply to fundraising events (i) for the benefit of
private home instruction or (ii) for which the fundraising
entity purchases the personal property sold at the events from
another individual or entity that sold the property for the
purpose of resale by the fundraising entity and that profits
from the sale to the fundraising entity. This paragraph is
exempt from the provisions of Section 3-55.
(23) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and other
items, and replacement parts for these machines. Beginning
January 1, 2002 and through June 30, 2003, machines and parts
for machines used in commercial, coin-operated amusement and
vending business if a use or occupation tax is paid on the
gross receipts derived from the use of the commercial,
coin-operated amusement and vending machines. This paragraph
is exempt from the provisions of Section 3-55.
(24) Beginning on the effective date of this amendatory Act
of the 92nd General Assembly, computers and communications
equipment utilized for any hospital purpose and equipment used
in the diagnosis, analysis, or treatment of hospital patients
sold to a lessor who leases the equipment, under a lease of one
year or longer executed or in effect at the time of the

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purchase, to a hospital that has been issued an active tax
exemption identification number by the Department under
Section 1g of the Retailers' Occupation Tax Act. This paragraph
is exempt from the provisions of Section 3-55.
(25) Beginning on the effective date of this amendatory Act
of the 92nd General Assembly, personal property sold to a
lessor who leases the property, under a lease of one year or
longer executed or in effect at the time of the purchase, to a
governmental body that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. This paragraph is exempt from
the provisions of Section 3-55.
(26) Beginning on January 1, 2002 and through June 30,
2016, tangible personal property purchased from an Illinois
retailer by a taxpayer engaged in centralized purchasing
activities in Illinois who will, upon receipt of the property
in Illinois, temporarily store the property in Illinois (i) for
the purpose of subsequently transporting it outside this State
for use or consumption thereafter solely outside this State or
(ii) for the purpose of being processed, fabricated, or
manufactured into, attached to, or incorporated into other
tangible personal property to be transported outside this State
and thereafter used or consumed solely outside this State. The
Director of Revenue shall, pursuant to rules adopted in
accordance with the Illinois Administrative Procedure Act,
issue a permit to any taxpayer in good standing with the

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

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

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The exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part 129
of the Federal Aviation Regulations. The changes made to this
paragraph (29) by Public Act 98-534 are declarative of existing
law.
(30) Beginning January 1, 2017, menstrual pads, tampons,
and menstrual cups.
(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
7-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
10000SB0009ham003.)
Section 35-20. 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, then the Retailers'
Occupation Tax Act is amended by changing Sections 2-5 and 2-45
as follows:
(35 ILCS 120/2-5)
Sec. 2-5. Exemptions. Gross receipts from proceeds from the
sale of the following tangible personal property are exempt
from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the

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

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sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals. This item (2) is exempt from the
provisions of Section 2-70.
(3) Until July 1, 2003, distillation machinery and
equipment, sold as a unit or kit, assembled or installed by the
retailer, certified by the user to be used only for the
production of ethyl alcohol that will be used for consumption
as motor fuel or as a component of motor fuel for the personal
use of the user, and not subject to sale or resale.
(4) Until July 1, 2003 and beginning again September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new and
used, and including that manufactured on special order or
purchased for lease, certified by the purchaser to be used
primarily for graphic arts production. Equipment includes
chemicals or chemicals acting as catalysts but only if the
chemicals or chemicals acting as catalysts effect a direct and
immediate change upon a graphic arts product. Beginning on July
1, 2017, graphic arts machinery and equipment is included in
the manufacturing and assembling machinery and equipment
exemption under paragraph (14).
(5) A motor vehicle that is used for automobile renting, as

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

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(10) Personal property sold by a corporation, society,
association, foundation, institution, or organization, other
than a limited liability company, that is organized and
operated as a not-for-profit service enterprise for the benefit
of persons 65 years of age or older if the personal property
was not purchased by the enterprise for the purpose of resale
by the enterprise.
(11) Personal property sold to a governmental body, to a
corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious,
or educational purposes, or to a not-for-profit corporation,
society, association, foundation, institution, or organization
that has no compensated officers or employees and that is
organized and operated primarily for the recreation of persons
55 years of age or older. A limited liability company may
qualify for the exemption under this paragraph only if the
limited liability company is organized and operated
exclusively for educational purposes. On and after July 1,
1987, however, no entity otherwise eligible for this exemption
shall make tax-free purchases unless it has an active
identification number issued by the Department.
(12) Tangible personal property sold to interstate
carriers for hire for use as rolling stock moving in interstate
commerce or to lessors under leases of one year or longer
executed or in effect at the time of purchase by interstate
carriers for hire for use as rolling stock moving in interstate

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

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

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

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

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

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

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

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

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

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

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

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

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under a lease of one year or longer executed or in effect at
the time of the purchase, to a hospital that has been issued an
active tax exemption identification number by the Department
under Section 1g of this Act. This paragraph is exempt from the
provisions of Section 2-70.
(37) Beginning August 2, 2001, personal property sold to a
lessor who leases the property, under a lease of one year or
longer executed or in effect at the time of the purchase, to a
governmental body that has been issued an active tax exemption
identification number by the Department under Section 1g of
this Act. This paragraph is exempt from the provisions of
Section 2-70.
(38) Beginning on January 1, 2002 and through June 30,
2016, tangible personal property purchased from an Illinois
retailer by a taxpayer engaged in centralized purchasing
activities in Illinois who will, upon receipt of the property
in Illinois, temporarily store the property in Illinois (i) for
the purpose of subsequently transporting it outside this State
for use or consumption thereafter solely outside this State or
(ii) for the purpose of being processed, fabricated, or
manufactured into, attached to, or incorporated into other
tangible personal property to be transported outside this State
and thereafter used or consumed solely outside this State. The
Director of Revenue shall, pursuant to rules adopted in
accordance with the Illinois Administrative Procedure Act,
issue a permit to any taxpayer in good standing with the

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

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

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

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

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

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

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

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The purchaser of the machinery and equipment who has an active
resale registration number shall furnish that number to the
seller at the time of purchase. A purchaser of the machinery,
equipment, and tools without an active resale registration
number shall furnish to the seller a certificate of exemption
for each transaction stating facts establishing the exemption
for that transaction, and that certificate shall be available
to the Department for inspection or audit. Informal rulings,
opinions, or letters issued by the Department in response to an
inquiry or request for an opinion from any person regarding the
coverage and applicability of this exemption to specific
devices shall be published, maintained as a public record, and
made available for public inspection and copying. If the
informal ruling, opinion, or letter contains trade secrets or
other confidential information, where possible, the Department
shall delete that information before publication. Whenever
informal rulings, opinions, or letters contain a policy of
general applicability, the Department shall formulate and
adopt that policy as a rule in accordance with the Illinois
Administrative Procedure Act.
The manufacturing and assembling machinery and equipment
exemption is exempt from the provisions of Section 2-70.
(Source: P.A. 98-583, eff. 1-1-14; 10000SB0009ham003.)
Section 99-999. Effective date. This Act takes effect upon
becoming law.
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INDEX
Statutes amended in order of appearance
10000SB0009ham003,
Sections 1-1 through 1-40
rep.
10000SB0009ham003,
Sections 15-101 through
15-1504 rep.
10000SB0009ham003, Section
17-5 rep.
35 ILCS 5/225 rep.
5 ILCS 100/1-5 from Ch. 127, par. 1001-5
5 ILCS 140/7.5
15 ILCS 405/9 from Ch. 15, par. 209
15 ILCS 505/0.02
15 ILCS 505/0.03
15 ILCS 505/0.04
15 ILCS 505/0.05
15 ILCS 505/0.06
20 ILCS 1205/7 from Ch. 17, par. 108
20 ILCS 1205/18.1
30 ILCS 105/6b-1 from Ch. 127, par. 142b1
30 ILCS 105/8.12 from Ch. 127, par. 144.12
30 ILCS 230/2 from Ch. 127, par. 171
55 ILCS 5/3-3034 from Ch. 34, par. 3-3034
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205 ILCS 5/48
205 ILCS 5/48.1 from Ch. 17, par. 360
205 ILCS 5/48.3 from Ch. 17, par. 360.2
205 ILCS 5/65 from Ch. 17, par. 377
205 ILCS 205/4013 from Ch. 17, par. 7304-13
205 ILCS 205/9012 from Ch. 17, par. 7309-12
205 ILCS 205/10090
205 ILCS 305/10 from Ch. 17, par. 4411
205 ILCS 305/62 from Ch. 17, par. 4463
205 ILCS 405/15.1b from Ch. 17, par. 4827
205 ILCS 405/19.3 from Ch. 17, par. 4838
205 ILCS 620/6-14 from Ch. 17, par. 1556-14
205 ILCS 657/30
205 ILCS 700/10
215 ILCS 5/210 from Ch. 73, par. 822
215 ILCS 185/5
215 ILCS 185/15
215 ILCS 185/20
225 ILCS 454/20-20
725 ILCS 5/110-17 from Ch. 38, par. 110-17
755 ILCS 5/2-1 from Ch. 110 1/2, par. 2-1
755 ILCS 5/2-2 from Ch. 110 1/2, par. 2-2
770 ILCS 90/3 from Ch. 141, par. 3
805 ILCS 5/12.70 from Ch. 32, par. 12.70
805 ILCS 105/112.70 from Ch. 32, par. 112.70
35 ILCS 5/201 from Ch. 120, par. 2-201
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35 ILCS 5/202.5
35 ILCS 5/203 from Ch. 120, par. 2-203
35 ILCS 5/204 from Ch. 120, par. 2-204
35 ILCS 5/208 from Ch. 120, par. 2-208
35 ILCS 5/212
35 ILCS 5/901 from Ch. 120, par. 9-901
35 ILCS 5/1501 from Ch. 120, par. 15-1501
35 ILCS 5/1102 from Ch. 120, par. 11-1102
35 ILCS 5/1103 from Ch. 120, par. 11-1103
35 ILCS 5/1105 from Ch. 120, par. 11-1105
35 ILCS 120/5a from Ch. 120, par. 444a
35 ILCS 120/5b from Ch. 120, par. 444b
35 ILCS 120/5c from Ch. 120, par. 444c
35 ILCS 520/16 from Ch. 120, par. 2166
35 ILCS 520/17 from Ch. 120, par. 2167
35 ILCS 520/19 from Ch. 120, par. 2169
65 ILCS 5/8-3-15 from Ch. 24, par. 8-3-15
215 ILCS 155/22 from Ch. 73, par. 1422
35 ILCS 105/3-10
35 ILCS 110/3-10 from Ch. 120, par. 439.33-10
35 ILCS 115/3-10 from Ch. 120, par. 439.103-10
35 ILCS 120/2-10
35 ILCS 105/3-5
35 ILCS 105/3-50 from Ch. 120, par. 439.3-50
35 ILCS 110/2 from Ch. 120, par. 439.32
35 ILCS 110/3-5
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