102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2142

 

Introduced 2/26/2021, by Sen. Dan McConchie

 

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 nonfraudulent 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.


LRB102 16289 LNS 21671 b

 

 

A BILL FOR

 

SB2142LRB102 16289 LNS 21671 b

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
15    or 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
22    the 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,
22            or 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, unless the apparent owner has indicated an
11        interest in the property more than 40 years after the
12        contract for prepayment was executed, in which case, 3
13        years after the last indication of interest in the
14        property by the apparent owner;
15        (10) property distributable by a business association
16    in the course of dissolution or distributions from the
17    termination of a retirement plan, one year after the
18    property becomes distributable;
19        (11) property held by a court, including property
20    received as proceeds of a class action, 3 years after the
21    property becomes distributable;
22        (12) property held by a government or governmental
23    subdivision, agency, or instrumentality, including
24    municipal bond interest and unredeemed principal under the
25    administration of a paying agent or indenture trustee, 3
26    years after the property becomes distributable;

 

 

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

 

 

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1years, then the property, other than an amount owed by an
2insurance company on a life or endowment insurance policy or
3an annuity contract that has matured or terminated, shall
4instead be presumed abandoned 2 years from the date of the
5owner's last indication of interest in the property.
6    (c) Notwithstanding anything to the contrary in this
7Section, a property due or owed by a business association
8resulting from a transaction occurring in the normal and
9ordinary course of business is exempt from this Act.
10(Source: P.A. 100-22, eff. 1-1-18; 100-566, eff. 1-1-18;
11101-552, eff. 1-1-20.)
 
12    (765 ILCS 1026/15-610)
13    Sec. 15-610. Periods of limitation and repose.
14    (a) Expiration, before, on, or after the effective date of
15this Act, of a period of limitation on an owner's right to
16receive or recover property, whether specified by contract,
17statute, or court order, does not prevent the property from
18being presumed abandoned or affect the duty of a holder under
19this Act to file a report or pay or deliver property to the
20administrator.
21    (b) An action or proceeding may not be maintained by the
22administrator to enforce this Act in regard to the reporting,
23delivery, or payment of property more than 10 years after the
24holder filed a nonfraudulent report with the administrator.
25The parties may agree to extend the period of limitation in

 

 

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1this subsection specifically identified the property in a
2report filed with the administrator or gave express notice to
3the administrator of a dispute regarding the property. In the
4absence of such a report or other express notice, the period of
5limitation is tolled. The period of limitation is also tolled
6by the filing of a report that is fraudulent.
7    (c) The administrator may not commence an action,
8proceeding, or examination with respect to a duty of a holder
9under this Act more than 10 years after the duty arose.
10(Source: P.A. 100-22, eff. 1-1-18.)
 
11    (765 ILCS 1026/15-1006)
12    Sec. 15-1006. Failure of person examined to retain
13records.
14    (a) If a person subject to examination under Section
1515-1002 does not retain the records required by Section
1615-404, the administrator may use estimation techniques that
17conform to either generally accepted auditing standards or
18generally accepted accounting principles to determine the
19amount of unclaimed property. In the conduct of an
20examination, the State shall not request any records of a
21holder that relate to property that is not subject to this Act.
22The estimation techniques used shall incorporate a net method
23of extrapolation determine the value of property due using a
24reasonable method of estimation based on all information
25available to the administrator, including extrapolation and

 

 

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

 

 

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

 

 

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1have been presumed abandoned during the 5-year period
2preceding the effective date of this Act as if this Act had
3been in effect during that period.
4    (b) This Act does not relieve a holder of a duty that arose
5before the effective date of this Act to report, pay, or
6deliver property. A Subject to subsection (b) of Section
715-610, a holder that did not comply with the law governing
8unclaimed property before the effective date of this Act is
9subject to applicable provisions for enforcement and penalties
10in effect before the effective date of this Act.
11(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