101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2573

 

Introduced , by Rep. Michael J. Zalewski

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Revised Uniform Unclaimed Property Act. Provides that property due or owed by a business association resulting from a transaction occurring in the normal and ordinary course of business is exempt from the Act. Provides that an action or proceeding may not be maintained by the administrator more than 10 years after the holder filed a non-fraudulent report with the administrator (rather than after the holder specifically identified the property in a report filed with the administrator or gave express notice to the administrator of a dispute regarding the property). Deletes language regarding the tolling of the period of limitation. Provides instead that the parties may agree to extend the period of limitation. Provides that the administrator may not commence an action, proceeding, or examination with respect to a duty of a holder more than 10 years after the duty arose. Provides that if a person subject to examination does not retain the records, the administrator may use specific estimation techniques to determine the amount of unclaimed property and shall incorporate a net method of extrapolation (rather than determine the value of property due using a reasonable method of estimation based on all information available to the administrator). Deletes language providing that a payment made based on estimation is a penalty for failure to maintain the records and does not relieve a person from an obligation to report and deliver property to a State in which the holder is domiciled. Provides that a holder may request a hearing to contest the use or validity of the estimation technique. Provides that the examination is final upon the failure of the holder to request a hearing. Provides that if a hearing is held, the State Treasurer shall issue an order approving or disapproving the use or validity of the estimation techniques. Deletes language providing that if the administrator contracts with a person, the contract may provide for compensation of the person based on a contingent fee. Deletes language providing that an initial report filed for property that was not required to be reported before the Act took effect must include all items of property that would have been presumed abandoned during the 5-year period preceding the effective date as if the Act had been in effect during that period.


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A BILL FOR

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1by the filing of a report that is fraudulent.
2    (c) The administrator may not commence an action,
3proceeding, or examination with respect to a duty of a holder
4under this Act more than 10 years after the duty arose.
5(Source: P.A. 100-22, eff. 1-1-18.)
 
6    (765 ILCS 1026/15-1006)
7    Sec. 15-1006. Failure of person examined to retain records.
8    (a) If a person subject to examination under Section
915-1002 does not retain the records required by Section 15-404,
10the administrator may use estimation techniques that conform to
11either generally accepted auditing standards or generally
12accepted accounting principles to determine the amount of
13unclaimed property. In the conduct of an examination, the State
14shall not request any records of a holder that relate to
15property that is not subject to this Act. The estimation
16techniques used shall incorporate a net method of extrapolation
17determine the value of property due using a reasonable method
18of estimation based on all information available to the
19administrator, including extrapolation and use of statistical
20sampling when appropriate and necessary, consistent with
21examination procedures and standards adopted under Section
2215-1003. For purposes of this Section, "net method" means the
23numerator is only property located in this State or
24State-sourced property and the denominator is a reasonable
25surrogate, such as sales or payroll. A payment made based on

 

 

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

 

 

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

 

 

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115-610, a holder that did not comply with the law governing
2unclaimed property before the effective date of this Act is
3subject to applicable provisions for enforcement and penalties
4in effect before the effective date of this Act.
5(Source: P.A. 100-22, eff. 1-1-18.)

 

 

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