SB3096eng 100TH GENERAL ASSEMBLY

SB3096 Engrossed LRB100 20167 JLS 35452 b

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The State Tax Lien Registration Act is amended by changing Section 1-5 as follows:

(35 ILCS 750/1-5)

Sec. 1-5. Purpose.

(a) The purpose of this Act is to provide a uniform statewide system for filing notices of tax liens that are in favor of or enforced by the Department or the Department of Employment Security. The Department shall maintain the system.

(b) The scope of this Act is limited to tax liens in real property and personal property, tangible and intangible, of taxpayers or other persons or entities against whom the Department or the Department of Employment Security has liens pursuant to law for unpaid final tax liabilities administered by the Department.

(c) Nothing in this Act shall be construed to invalidate any lien filed by the Department with a county recorder of deeds prior to January 1, 2018, or by the Department of Employment Security prior to January 1, 2020 the effective date of this Act.

(Source: P.A. 100-22, eff. 1-1-18.)

Section 10. The Unemployment Insurance Act is amended by changing Sections 2401 and 2402 and by adding Sections 1502.4 and 2401.1 as follows:

(820 ILCS 405/1502.4 new)

Sec. 1502.4. Benefit charges; gubernatorial declared disasters. Notwithstanding the provisions of Section 1502.1, no employer located in an Illinois county that has been declared a State disaster area by the Governor in accordance with Section 7 of the Illinois Emergency Management Agency Act shall be chargeable for any benefit charges that result from the payment of benefits to an individual for any weeks of unemployment during the period of the disaster, but only to the extent that the employer can show that the individual's unemployment was a direct result of the declared disaster.

(820 ILCS 405/2401) (from Ch. 48, par. 721)

Sec. 2401. Recording and release of lien.

A. The lien created by Section 2400 shall be invalid only as to any innocent purchaser for value of stock in trade of any employer in the usual course of such employer's business, and shall be invalid as to any innocent purchaser for value of any of the other assets to which such lien has attached, unless, with respect to liens created prior to January 1, 2020, notice thereof has been filed by the Director in the office of the recorder of the county within which the property subject to the lien is situated or, with respect to liens created on or after January 1, 2020, notice has been filed in the Lien Registry as provided by Section 2401.1. The Director may, in his discretion, for good cause shown, issue a certificate of withdrawal of notice of lien filed against any employer, which certificate shall be recorded in the same manner as herein provided for the recording of notice of liens. Such withdrawal of notice of lien shall invalidate such lien as against any person acquiring any of such employer's property or any interest therein, subsequent to the recordation of the withdrawal of notice of lien, but shall not otherwise affect the validity of such lien, nor shall it prevent the Director from re-recording notice of such lien. In the event notice of such lien is re-recorded, such notice shall be effective as against third persons only as of the date of such re-recordation. Recording in the Lien Registry a lien that had previously been recorded by the Director with a county recorder of deeds does not constitute a re-recordation of that lien and does not change the original filing date of such lien.

B. The recorder of each county shall procure at the expense of the county a file labeled "Unemployment Compensation Contribution Lien Notice" and an index book labeled "Unemployment Compensation Contribution Lien Index." When a notice of any such 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 employer named in the notice, the serial number of the notice, the date and hour of filing, and the amount of contribution, interest and penalty thereon due and unpaid. When a certificate of complete or partial release of such lien issued by the Director is presented for filing in the office of the recorder where a notice of lien was filed, the recorder shall permanently attach the certificate of release to the notice of lien and shall enter the certificate of release and the date in the Unemployment Compensation Contribution Lien Index on the line where the notice of lien is entered. In case title to land to be affected by the Notice of Lien is registered under the provisions of "An Act Concerning Land Titles", approved May 1, 1897, as amended, such notice shall be filed in the 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 title affected by such notice, and the Director 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. The Director shall have the power to issue a certificate of partial release of any part of the property subject to the lien if he shall find that the fair market value of that part of such property remaining subject to the lien is at least equal to the amount of all prior liens upon such property plus double the amount of the liability for contributions, interest and penalties thereon remaining unsatisfied.

D. Where the amount of or the liability for the payment of any contribution, interest or penalty is contested by any employing unit against whose property a lien has attached, and the determination of the Director with reference to such contribution has not become final, the Director may issue a certificate of release of lien upon the furnishing of bond by such employing unit in 125% the amount of the sum of such contribution, interest and penalty, for which lien is claimed, with good and sufficient surety to be approved by the Director conditioned upon the prompt payment of such contribution, together with interest and penalty thereon, by such employing unit to the Director immediately upon the decision of the Director in respect to the liability for such contribution, interest and penalty becoming final.

E. When a lien filed by the Director before January 1, 2020 obtained pursuant to this Act has been satisfied, the Department shall issue a release to the person, or his or her agent, against whom the lien was obtained and such release shall contain in legible letters a statement as follows:

FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL

BE FILED WITH THE RECORDER OR THE REGISTRAR

OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.

E-1. When a lien filed by the Director in the Lien Registry has been satisfied, the Department shall permanently attach a certificate of complete or partial release, as the case may be, in the Lien Registry, and provide notice of the release to the person, or his or her agent, against whom the lien was obtained.

F. The Director may, by rule, require, as a condition of withdrawing, releasing, or partially releasing a lien recorded pursuant to this Section, that the employer reimburse the Department for any recording fees paid with respect to the lien.

(Source: P.A. 98-107, eff. 7-1-14; 98-1133, eff. 12-23-14.)

(820 ILCS 405/2401.1 new)

Sec. 2401.1. Lien Registry.

A. As used in this Section:

"Debtor" means an employer or individual against whom there is an unpaid determination and assessment collectible by the Director.

"Lien Registry" means the public database maintained by the Department of Revenue as provided by the State Tax Lien Registration Act.

B. A notice of lien filed by the Director in the Lien Registry shall include:

1. the name and last known address of the debtor;

2. the name and address of the Department;

3. the lien number assigned to the lien by the Department;

4. the basis for the lien including, but not limited to, the amount of contribution, interest, and penalty due and unpaid as of the date of filing in the Lien Registry; and

5. the county or counties where the real property of the debtor to which the lien will attach is located.

C. When a notice of lien is filed by the Director in the Lien Registry, the lien is perfected and shall be attached to all existing and after-acquired: (1) personal property of the debtor, both tangible and intangible, that is located in any and all counties within the State of Illinois; and (2) real property of the debtor located in the county or counties as specified in the notice of lien.

D. The amount of the lien shall be a debt due the Director and shall remain a lien upon all property and rights to: (1) personal property belonging to the debtor, both tangible and intangible, that is located in any and all counties within the State of Illinois; and (2) real property of the debtor located in the county or counties as specified in the notice of lien. Interest and penalty shall accrue on the lien as provided by this Act.

E. A notice of release, partial release, or withdrawal of lien filed in the Lien Registry shall constitute a release, partial release, or withdrawal, as the case may be, of the lien within the Department, the Lien Registry, and any county in which the lien was previously filed. The information contained on the Lien Registry shall be controlling, and the Lien Registry shall supersede the records of any county.

F. Information contained in the Lien Registry shall be maintained and made accessible as provided by Section 1-30 of the State Tax Lien Registration Act.

G. Nothing in this Section shall be construed to invalidate any lien filed by the Director with a county recorder of deeds prior to the effective date of this amendatory Act of the 100th General Assembly.

H. In the event of conflict between this Section and any other law, this Section shall control.

(820 ILCS 405/2402) (from Ch. 48, par. 722)

Sec. 2402. Priority of lien. The lien created by Section 2400 shall be prior to all other liens, whether general or specific, and shall be inferior only to any claim for wages filed pursuant to "An Act to protect employees and laborers in their claims for wages" approved June 15, 1887, as amended, in an amount not exceeding $250.00 for work performed within six months from the date of filing such claim, and to such liens as shall attach prior to the filing of Notice of Lien by the Director with the recorder as provided in this Act; provided, however, that in all cases where statutory provision is made for the recordation or other public notice of a lien, the lien of the Director shall be inferior only to such liens as shall have been duly recorded, or of which public notice shall have been duly given, in the manner provided by such statute, prior to the filing of notice of lien by the Director with the recorder as in this Act provided.

(Source: P.A. 83-358.)

(820 ILCS 405/1900.2 rep.)

Section 15. The Unemployment Insurance Act is amended by repealing Section 1900.2.