Illinois General Assembly - Full Text of SB1881
Illinois General Assembly

Previous General Assemblies

Full Text of SB1881  101st General Assembly


Rep. Michael J. Zalewski

Filed: 5/28/2019





10100SB1881ham002LRB101 10946 HLH 61344 a


2    AMENDMENT NO. ______. Amend Senate Bill 1881 by replacing
3everything after the enacting clause with the following:
"Article 1. Short Title.

5    Section 1-1. Short title. This Act may be cited as the
6Local Government Revenue Recapture Act.
Article 5. Local Government Revenue Recapture.

8    Section 5-5. Definitions. As used in this Article:
9    "Department" means the Department of Revenue.
10    "Family member" means the following, whether by whole
11blood, half-blood, or adoption:
12        (1) a parent or step-parent;
13        (2) a child or step-child;
14        (3) a grandparent or step-grandparent;



10100SB1881ham002- 2 -LRB101 10946 HLH 61344 a

1        (4) an aunt, uncle, great-aunt, or great-uncle;
2        (5) a sibling;
3        (6) a spouse or domestic partner; and
4        (7) the spouse or domestic partner of any person
5    referenced in items (1) through (5).
6    "Financial information" means the information provided to
7the municipality or county by the Department under Section 11
8of the Retailers' Occupation Tax Act that is reported to the
9Department by a business located in a given municipality or
11    "Person" means an individual, sole proprietorship,
12corporation, registered limited liability partnership, limited
13liability company, partnership, professional service
14corporation, or any other form of organization.
15    "Misallocation" means tax paid by the taxpayer and
16allocated to one unit of local government that should have been
17allocated to a different unit of local government.
18"Misallocation" does not include amounts overpaid by the
19taxpayer and therefore not owed to any unit of local
20government, nor amounts underpaid by the taxpayer and therefore
21not previously allocated to any unit of local government.
22    "Monitoring disbursements" means keeping track of payments
23from the Department by a municipality, county, or third party
24for the limited purpose of tracking previous misallocations.
25    "Third party" means a person, partnership, corporation, or
26other entity or individual registered to do business in



10100SB1881ham002- 3 -LRB101 10946 HLH 61344 a

1Illinois who contracts with a municipality or county to review
2financial information related to the disbursement of local
3taxes by the Department to the municipality or county.
4    Section 5-10. Contracts with third parties. A municipality
5or county that receives a disbursement of tax proceeds from the
6Department may contract with a third party for the purpose of
7ensuring that the municipality or county receives the correct
8disbursement from the Department and monitoring disbursements.
9The third party may not contact the Department on behalf of the
10municipality or county, but instead must work directly with the
11municipality or county to acquire financial information. To be
12eligible to receive financial information from the
13municipality or county, the third party must:
14        (1) enter into a confidentiality agreement with the
15    municipality or county in the form and manner required by
16    the Department prior to receiving the financial
17    information;
18        (2) have an existing contract with the municipality or
19    county at the time the third party enters into the
20    confidentiality agreement with the municipality or county;
21    a copy of that existing contract must be on file with the
22    Department;
23        (3) abide by the same conditions as the municipality or
24    county with respect to the furnishing of financial
25    information under Section 11 of the Retailers' Occupation



10100SB1881ham002- 4 -LRB101 10946 HLH 61344 a

1    Tax Act; and
2        (4) be registered with the Department as required by
3    Section 5-35 of this Act.
4    Section 5-15. Financial information. The third party may
5use the financial information it receives from the contracting
6municipality or county only for the purpose of providing
7services to the municipality or county as specified in this Act
8and may not use the information for any other purpose.
9Electronic data submitted to third parties or by the
10contracting municipality or county must be accessible only to
11third parties who have entered into a confidentiality agreement
12with the municipality or county or who have an existing
13contract with the municipality or county.
14    Section 5-20. Retention, collection, disclosure, and
15destruction of financial information.
16    (a) A third party in possession of a taxpayer's financial
17information must permanently destroy that financial
18information pursuant to this Act. The financial information
19shall be destroyed upon the soonest of the following to occur:
20        (1) if the taxpayer is not referred to the Department,
21    within 30 days after receipt of the taxpayer's financial
22    information from either the municipality or county, unless
23    the third party is monitoring disbursements from the
24    Department on an ongoing basis for a municipality or



10100SB1881ham002- 5 -LRB101 10946 HLH 61344 a

1    county; or
2        (2) within 30 days after the Department receives a
3    taxpayer audit referral from a third party referring the
4    taxpayer to the Department for additional review.
5    (b) No third party in possession of financial information
6may sell, lease, trade, market, or otherwise utilize or profit
7from a taxpayer's financial information, except for a fee as
8negotiated by the municipality or county. The fee may be in the
9form of a contingency fee for a percentage of the amount of
10additional distributions the municipality or county receives
11for no more than 3 years following the first disbursement to
12the municipality or county as a result of the services of the
13third party under this Act.
14    (c) No third party may permanently or temporarily collect,
15capture, purchase, use, receive through trade, or otherwise
16retain a taxpayer's financial information beyond the scope of
17subsection (a) of this Section.
18    (d) No third party in possession of confidential
19information may disclose, redisclose, share, or otherwise
20disseminate a taxpayer's financial information.
21    (e) A third party must dispose of the materials containing
22financial information in a manner that renders the financial
23information unreadable, unusable, and undecipherable. Proper
24disposal methods include, but are not limited to, the
26        (1) in the case of paper documents, burning,



10100SB1881ham002- 6 -LRB101 10946 HLH 61344 a

1    pulverizing, or shredding so that the information cannot
2    practicably be read or reconstructed; and
3        (2) in the case of electronic media and other non-paper
4    media containing information, destroying or erasing so
5    that information cannot practicably be read,
6    reconstructed, or otherwise utilized by the third party or
7    others.
8    Section 5-25. Notice of intent to contract; award of
9contracts. A municipality or county that chooses to contract
10with a third party pursuant to this Act shall follow all rules
11set forth in the Illinois Municipal Code or the Counties Code,
12as applicable, concerning those contracts.
13    Section 5-30. Posting results. Annually, the third party
14shall provide the municipality or county with a final summary
15of the review for publication. It is the responsibility of the
16third party to ensure that this summary includes no personal or
17identifying information of taxpayers and that all such taxpayer
18information is kept confidential. If the summary includes any
19discussion of tax revenue, it shall include only aggregate
20amounts by tax type, and shall in no way include information
21about an individual return or an individual taxpayer, even with
22identifying information redacted. In addition, due to the
23preliminary nature of such a summary based only on unaudited
24financial information, no claim of specific tax savings or



10100SB1881ham002- 7 -LRB101 10946 HLH 61344 a

1revenue generation may be made in the summary.
2    Section 5-35. Third party registration.
3    (a) Beginning on January 1, 2020, no person shall engage in
4business as a third party pursuant to this Act in this State
5without first having registered with the Department.
6Application for registration or renewal of registration shall
7be made to the Department, by electronic means, in a form and
8at the time prescribed by the Department. Each applicant for
9registration or renewal of registration under this Section
10shall furnish to the Department, in an electronic format
11established by the Department, the following information:
12        (1) the name and address of the applicant;
13        (2) the address of the location at which the applicant
14    proposes to engage in business as a third party in this
15    State;
16        (3) valid and updated contact information;
17        (4) attestation of good standing to do business in
18    Illinois;
19        (5) a copy of each contract it has entered into with a
20    municipality or county; if an applicant has a contract with
21    a municipality or county prior to the effective date of
22    this Act, a copy of all existing contracts must be
23    provided;
24        (6) an annual certification of process letter that:
25            (A) is signed by an attorney or certified public



10100SB1881ham002- 8 -LRB101 10946 HLH 61344 a

1        accountant licensed and authorized to practice in the
2        State of Illinois;
3            (B) contains findings that, after due diligence,
4        the author is of the opinion that:
5                (i) the third party's confidentiality
6            standards for storing encrypted data at rest,
7            using a cryptographic algorithm, conform to the
8            Federal Information Processing Standard (FIPS)
9            Publication 140-2;
10                (ii) the third party uses multi-factor
11            authentication;
12                (iii) the third party uses HTTPS with at least
13            TLS 1.2 or its successor to protect the data files
14            while in transit between a browser and server;
15                (iv) the third party adheres to best practices
16            as recommended by the Open Web Application
17            Security Project (OWASP);
18                (v) the third party has a firewall which
19            protects against unauthorized use of the data; and
20                (vi) the third party shall maintain a physical
21            location in this State at all times; if, at any
22            time, the third party fails to have a physical
23            location in this State, the third party's
24            registration shall be revoked; and
25        (7) such other additional information as the
26    Department may require by rule.



10100SB1881ham002- 9 -LRB101 10946 HLH 61344 a

1    The annual registration fee payable to the Department for
2each third party shall be $15,000. The fee shall be deposited
3into the Tax Compliance and Administration Fund and shall be
4used for the cost of administering the certified audit pilot
5project under Article 10.
6    Each applicant shall pay the fee to the Department at the
7time of submitting its application or renewal to the
8Department. The Department may require an applicant under this
9Section to electronically file and pay the fee.
10    (b) The following are ineligible to register as a third
11party under this Act:
12        (1) a person who has been convicted of a felony related
13    to financial crimes under any federal or State law, if the
14    Department, after investigation and a hearing if requested
15    by the applicant, determines that the person has not been
16    sufficiently rehabilitated to warrant the public trust,
17    including an individual or any employee, officer, manager,
18    member, partner, or director of an entity that has been
19    convicted as provided in this paragraph (1);
20        (2) a person, if any employee, contractual employee,
21    officer, manager, or director thereof, or any person or
22    persons owning in the aggregate more than 5% thereof, is
23    employed by or appointed or elected to the corporate
24    authorities of any municipality or county in this State;
25        (3) a person, if any employee, contractual employee,
26    officer, manager, or director thereof, or any person or



10100SB1881ham002- 10 -LRB101 10946 HLH 61344 a

1    persons owning in the aggregate more than 5% thereof, is
2    not or would not be eligible to receive a certificate of
3    registration under this Act or a license under the Illinois
4    Public Accounting Act for any reason;
5        (4) a person who is a family member of any person who
6    is employed by or appointed or elected to the corporate
7    authorities of any municipality or county in the State;
8        (5) a person who is a qualified practitioner, as
9    defined by Section 10-15 of this Act;
10        (6) a third party owned, in whole or in part, by any
11    entity that competes directly or indirectly with any
12    taxpayer whose financial information they are seeking or
13    receiving; and
14        (7) a third party owning in whole or in part, directly
15    or indirectly, any entity that competes, directly or
16    indirectly, with any taxpayer whose financial information
17    they are seeking or receiving.
18    (c) The Department shall begin accepting applications no
19later than January 1, 2020. Upon receipt of an application and
20registration fee in proper form from a person who is eligible
21to register as a third party under this Act, the Department
22shall issue, within 60 days after receipt of an application, a
23certificate of registration to such applicant in such form as
24prescribed by the Department. That certificate of registration
25shall permit the applicant to whom it is issued to engage in
26business as a third party under this Act. All certificates of



10100SB1881ham002- 11 -LRB101 10946 HLH 61344 a

1registration issued by the Department under this Section shall
2be valid for a period not to exceed one year after issuance
3unless sooner revoked or suspended as provided in this Act. No
4certificate of registration issued under this Section is
5transferable or assignable. A person who obtains a certificate
6of registration as a third party who ceases to do business as
7specified in the certificate of registration, or who never
8commenced business, or whose certificate of registration is
9suspended or revoked, shall immediately surrender the
10certificate of registration to the Department.
11    (d) Any person aggrieved by any decision of the Department
12under this Section may, within 60 days after notice of the
13decision, protest and request a hearing. Upon receiving a
14request for a hearing, the Department shall give written notice
15to the person requesting the hearing of the time and place
16fixed for the hearing and shall hold a hearing and then issue
17its final administrative decision in the matter to that person
18within 60 days after the date of the hearing. In the absence of
19a protest and request for a hearing within 60 days, the
20Department's decision shall become final without any further
21determination being made or notice given.
22    (e) All final decisions by the Department under this
23Section are subject to judicial review under the provisions of
24the Administrative Review Law.
25    Section 5-37. Insurance policy requirement. A third party



10100SB1881ham002- 12 -LRB101 10946 HLH 61344 a

1is required to file and maintain in force an insurance policy
2issued by an insurance company authorized to transact fidelity
3and surety business in the State of Illinois. The insurance
4policy shall be for coverage of potential legal claims,
5including, by not limited to, penalties set forth under Section
65-60, embezzlement, dishonesty, fraud, omissions or errors, or
7other financial wrongdoing in the course of providing services.
8The policy shall be in the form prescribed by the Department in
9the sum of $500,000. The policy shall be continuous in form and
10run concurrently with the original and each renewal
11certification period unless terminated by the insurance
12company. An insurance company may terminate a policy and avoid
13further liability by filing a 60-day notice of termination with
14the Department and at the same time sending the same notice to
15the licensee. A license shall be canceled on the termination
16date of the policy unless a new policy is filed with the
17Department and becomes effective at the termination date of the
18prior policy. If a policy has been canceled under this Section,
19the third party must file a new application and will be
20considered a new applicant if it obtains a new policy.
21    Section 5-40. Revocation or suspension of certification.
22    (a) A contracting municipality or county shall refuse to
23provide any information, including financial information, to
24any third party who violates this Act or rules adopted pursuant
25to this Act or the Retailers' Occupation Tax Act or rules



10100SB1881ham002- 13 -LRB101 10946 HLH 61344 a

1adopted pursuant to the Retailers' Occupation Tax Act.
2    (b) The Department may, after notice and a hearing, revoke
3or suspend the certificate of registration of any third party
4for a violation of any provision of this Act, for noncompliance
5with any provision contained in this Act, or because the
6Department determines that the third party is ineligible for a
7certificate of registration for any one or more of the reasons
8provided for in Section 5-35 of this Act. The decision whether
9to suspend or revoke and, if a suspension is in order, the
10duration of the suspension shall be made by taking into account
11factors that include but are not limited to, the registrant's
12previous history of compliance with the Act as of its creation,
13the number, seriousness, and duration of the violations, and
14the registrant's cooperation in discontinuing and correcting
16    Section 5-50. Audit referrals; restrictions.
17    (a) Upon entering into a contract with a municipality or
18county, a third party shall be prohibited from communicating
19directly or indirectly in any manner with a taxpayer known or
20believed to be operating within that municipality or county
21about any matters directly or indirectly related to, or covered
22by, the contract.
23    (b) If, based on a review of the financial information
24provided by the Department to a municipality or a county, or
25provided by a municipality or county to a registered third



10100SB1881ham002- 14 -LRB101 10946 HLH 61344 a

1party, a municipality, county, or third party discovers that
2local retailers' or service occupation tax may have been
3underpaid, then it may refer the matter to the Department for a
4limited-scope audit in accordance with Article 10 of this Act.
5    (c) With respect to taxes administered by the Department,
6units of local government and third parties are not authorized
7to (i) access, review, or compel the production of taxpayers'
8actual tax returns or (ii) access, review, or compel the
9production of taxpayers' books and records.
10    (d) With respect to taxes administered by the Department,
11units of local government and third parties are prohibited from
12(i) engaging in an audit of any taxpayer, (ii) assessing tax
13against any taxpayer, (iii) engaging in collection actions
14against any taxpayer for the tax, or (iv) engaging in any other
15action related to such taxes that is assigned by law to the
17    (e) A local government shall not share any financial
18information received with another local government or another
19third party. Further, a local government may not share the
20findings of a third party with another local government or
21another third party.
22    Section 5-55. No basis for action under Illinois False
23Claims Act. No information received by a municipality, county,
24third party, or any other person or entity under this Act shall
25be the basis for filing an action by a private person under the



10100SB1881ham002- 15 -LRB101 10946 HLH 61344 a

1Illinois False Claims Act.
2    Section 5-60. Penalties.
3    (a) Any third party who violates any provision of this Act
4shall be subject to the penalties set forth in Section 11 of
5the Retailers' Occupation Tax Act.
6    (b) Any third party who violates Section 5-20 is subject to
7a civil penalty of not more than $10,000 for each taxpayer with
8respect to whom financial information is improperly disclosed,
9profited from, or disposed of in violation of that Section. The
10Attorney General may impose a civil penalty not to exceed
11$50,000 for each instance of improper disposal of materials
12containing financial information. The Attorney General may
13impose a civil penalty after notice to the person accused of
14violating Section 5-20 and an opportunity for that person to be
15heard in the matter. The Attorney General may file a civil
16action in the circuit court to recover any penalty imposed for
17a violation of Section 5-20. In addition to the authority to
18impose a civil penalty under this Section, the Attorney General
19may bring an action in the circuit court to remedy a violation
20of this Section, seeking any appropriate relief.
21    (c) Neither the State nor any municipality or county shall
22be held liable for the mishandling of information by a third
23party, including information from the Department or any other
24financial information of taxpayers.
25    (d) Any taxpayer aggrieved by a violation of this Act shall



10100SB1881ham002- 16 -LRB101 10946 HLH 61344 a

1have a right of action in a State circuit court or as a
2supplemental claim in federal district court against a third
3party. A taxpayer may recover for each violation:
4        (1) against a third party that, by gross negligence,
5    violates a provision of this Act, liquidated damages of
6    $5,000 or actual damages, whichever is greater;
7        (2) against a third party that intentionally or
8    recklessly violates a provision of this Act, liquidated
9    damages of $10,000 or actual damages, whichever is greater;
10        (3) reasonable attorney's fees and costs, including
11    expert witness fees and other litigation expenses; and
12        (4) other relief, including an injunction, as the State
13    or federal court may deem appropriate.
Article 10. Local Government Revenue Recapture Certified Audit
Pilot Program.

16    Section 10-5. Findings. The General Assembly finds that:
17        (1) Voluntary compliance is the cornerstone of an
18    effective tax system.
19        (2) Despite attempts by the General Assembly, State
20    taxes are not simple.
21        (3) Even the most diligent taxpayers, through mistake
22    or inadvertence, may not pay all taxes due.
23        (4) The Department lacks the resources to audit the
24    compliance of all taxpayers.



10100SB1881ham002- 17 -LRB101 10946 HLH 61344 a

1        (5) Illinois certified public accountants provide
2    valuable advice and assistance to Illinois taxpayers on
3    State tax issues.
4        (6) A pilot program establishing a partnership between
5    taxpayers, Illinois certified public accountants, and the
6    Department will provide guidance to taxpayers and enhance
7    voluntary compliance.
8        (7) A pilot project to establish a certified audit
9    program to address underpayment of local occupation and use
10    taxes would address concerns raised by units of local
11    government.
12    Section 10-10. Purpose. The purpose of this Article is to
13create a certified audit program under a 5-year pilot project
14that is limited in scope to specifically address concerns
15related to the proper reporting and payment of local occupation
16and use taxes that are collected and distributed to
17municipalities and counties by the Department.
18    Section 10-15. Definitions. As used in this Article:
19    "Audit" means an agreed-upon procedures engagement in
20accordance with Statements on Standards for the Attestation
21Engagements (AICPA Professional Standards, AT-C Section 315
22(Compliance Attest)).
23    "Certification program" means an instructional curriculum,
24examination, and process for certification, recertification,



10100SB1881ham002- 18 -LRB101 10946 HLH 61344 a

1and revocation of certification of certified public
2accountants that is administered by the Department with the
3assistance of the Illinois CPA Society and that is officially
4approved by the Department to ensure that a certified public
5accountant possesses the necessary skills and abilities to
6successfully perform an attestation engagement for a
7limited-scope tax compliance review in a certified audit
8project under this Act.
9    "Department" means the Department of Revenue.
10    "Family member" means the following, whether by whole
11blood, half-blood, or adoption:
12        (1) a parent or step-parent;
13        (2) a child or step-child;
14        (3) a grandparent or step-grandparent;
15        (4) an aunt, uncle, great-aunt, or great-uncle;
16        (5) a sibling;
17        (6) a spouse or domestic partner; and
18        (7) the spouse or domestic partner of any person
19    referenced in items (1) through (5).
20    "Misallocation" means tax paid by the taxpayer and
21allocated to one unit of local government that should have been
22allocated to a different unit of local government.
23"Misallocation" does not include amounts overpaid by the
24taxpayer and therefore not owed to any unit of local
25government, nor amounts underpaid by the taxpayer and therefore
26not previously allocated to any unit of local government.



10100SB1881ham002- 19 -LRB101 10946 HLH 61344 a

1    "Participating taxpayer" means any person subject to the
2revenue laws administered by the Department who is the subject
3of a tax compliance referral by a municipality, county, or
4third party, who enters into an engagement with a qualified
5practitioner for a limited-scope tax compliance review under
6this Act, and who is approved by the Department under the local
7government revenue recapture certified audit pilot project.
8    "Qualified practitioner" means a certified public
9accountant who is licensed or registered to perform accountancy
10activities in Illinois under Section 8.05 of the Illinois
11Public Accounting Act and who has met all requirements for the
12local government revenue recapture certified audit training
13course, achieved the required score on the certification test
14as approved by the Department, and been certified by the
15Department. "Qualified practitioner" does not include a third
16party, as defined by Section 5-5 of this Act, or any employee,
17contractual employee, officer, manager, or director thereof,
18any person or persons owning in the aggregate more than 5% of
19such third party, or a person who is a family member of any
20person who is employed by or is an appointed or elected member
21of any corporate authorities, as defined in the Illinois
22Municipal Code.
23    Section 10-20. Local government revenue recapture
24certified audit project.
25    (a) The Department shall initiate a certified audit pilot



10100SB1881ham002- 20 -LRB101 10946 HLH 61344 a

1project to further enhance tax compliance reviews performed by
2qualified practitioners and to encourage taxpayers to hire
3qualified practitioners at their own expense to review and
4report on certain aspects of their sales tax and use tax
5compliance in cases where the Department has notified the
6taxpayer that it has received a tax compliance referral from a
7municipality, county, or third party under this Act. The nature
8of the certified audit work performed by qualified
9practitioners shall be agreed-upon procedures of a Compliance
10Attestation in which the Department is the specified user of
11the resulting report. Qualified practitioners are prohibited
12from using information obtained from audit manuals, training
13materials, or any other materials provided by the Department
14under this Act for any purpose other than to perform the tax
15compliance reviews under the certified audit pilot program
16under this Act.
17    The tax compliance reviews shall be limited in scope and
18may include include only: (i) whether the taxpayer is reporting
19receipts in the proper jurisdiction; (ii) whether asset
20purchases by the taxpayer were taxed properly; (iii) an
21evaluation of sales reported as exempt from tax; (iv) whether
22the proper tax rate was charged; (v) whether the tax was
23properly reported as retailers' occupation tax or use tax; and
24(vi) any other factor that impacts the Department's allocation
25of sales and use tax revenues to the jurisdiction in which the
26taxpayer reports sales or use tax.



10100SB1881ham002- 21 -LRB101 10946 HLH 61344 a

1    (b) As an incentive for taxpayers to incur the costs of a
2certified audit, the Department shall abate penalties due on
3any tax liabilities revealed by a certified audit, except that
4this authority to abate penalties shall not apply to any
5liability for taxes that were collected by the participating
6taxpayer but not remitted to the Department, nor shall the
7Department have the authority to abate fraud penalties.
8    (c) The certified audit pilot project shall apply only to
9taxpayers who have been notified that an audit referral has
10been received by the Department under this Act and only to
11occupation and use taxes administered and collected by the
13    (d) The certified audit pilot project shall begin with
14audit referrals received on and after January 1, 2020. Upon
15obtaining proper certification, qualified practitioners may
16initiate certified audits beginning January 1, 2020.
17    Section 10-25. Practitioner responsibilities. Any
18practitioner responsible for planning, directing, or
19conducting a certified audit or reporting on a participating
20taxpayer's tax compliance shall be a qualified practitioner.
21For purposes of this Section, a qualified practitioner is
22responsible for:
23        (1) planning a certified audit when performing work
24    that involves determining the objectives, scope, and
25    methodology of the certified audit, when establishing



10100SB1881ham002- 22 -LRB101 10946 HLH 61344 a

1    criteria to evaluate matters subject to the review as part
2    of the certified audit, when gathering information used in
3    planning the certified audit, or when coordinating the
4    certified audit with the Department;
5        (2) directing a certified audit when the work involves
6    supervising the efforts or reviewing the work of others to
7    determine whether it is properly accomplished and
8    complete;
9        (3) conducting a certified audit when performing tests
10    and procedures or field audit work necessary to accomplish
11    the audit objectives in accordance with applicable
12    professional standards;
13        (4) reporting on a participating taxpayer's tax
14    compliance in a certified audit when determining report
15    contents and substance or reviewing reports for technical
16    content and substance prior to issuance; and
17        (5) answering questions by Department review staff,
18    answering questions raised by the Informal Conference
19    Board, and testifying in any administrative or court
20    proceeding regarding the audit or report.
21    Section 10-30. Local government revenue recapture audit
23    (a) A third party shall not refer a taxpayer to the
24Department for audit consideration unless the third party is
25registered with the Department pursuant to Section 5-35.



10100SB1881ham002- 23 -LRB101 10946 HLH 61344 a

1    (b) If, based on a review of the financial information
2provided by the Department to a municipality or county, or
3provided by a municipality or county to a registered third
4party, the municipality or county discovers that a taxpayer may
5have underpaid local retailers' or service occupation taxes,
6then it may refer the matter to the Department for audit
7consideration. The tax compliance referral may be made only by
8the municipality, county, or third party and shall be made in
9the form and manner required by the Department, including any
10requirement that the referral be submitted electronically. The
11tax compliance referral shall, at a minimum, include proof of
12registration as a third party, a copy of a contract between the
13third party and the county or municipality, the taxpayer's
14name, Department account identification number, mailing
15address, and business location, and the specific reason for the
16tax compliance referral, including as much detail as possible.
17    (c) The Department shall complete its evaluation of all
18audit referrals under this Act within 60 days after receipt of
19the referral and shall handle all audit referrals as follows:
20        (1) the Department shall evaluate the referral to
21    determine whether it is sufficient to warrant further
22    action based on the information provided in the referral,
23    any other information the Department possesses, and audit
24    selection procedures of the Department;
25        (2) if the Department determines that the referral is
26    not actionable, then the Department shall notify the local



10100SB1881ham002- 24 -LRB101 10946 HLH 61344 a

1    government that it has evaluated the referral and has
2    determined that no action is deemed necessary and provide
3    the local government with an explanation for that decision;
4        (3) if the Department determines that the referral is
5    actionable, then it shall determine whether the taxpayer is
6    currently under audit or scheduled for audit;
7            (A) if the taxpayer is not currently under audit or
8        scheduled for audit, the Department shall determine
9        whether it will schedule the taxpayer for audit; and
10            (B) if the taxpayer is not under audit by the
11        Department or scheduled for audit by the Department and
12        the Department decides to schedule the taxpayer for
13        audit, then the Department shall notify the taxpayer
14        that the Department has received an actionable audit
15        referral on the taxpayer and issue a notice to the
16        taxpayer as provided under subsection (d) of this
17        Section.
18    (d) The notice to the taxpayer required by subparagraph (B)
19of paragraph (3) of subsection (c) shall include, but not be
20limited to, the following:
21        (1) that the taxpayer must either: (A) engage a
22    qualified practitioner, at the taxpayer's expense, to
23    complete a certified audit, limited in scope to the
24    taxpayer's Retailers' Occupation Tax, Use Tax, Service
25    Occupation Tax, or Service Use Tax liability, and the
26    taxpayer's liability for any local retailers' or service



10100SB1881ham002- 25 -LRB101 10946 HLH 61344 a

1    occupation tax administered by the Department; or (B) be
2    subject to audit by the Department;
3        (2) that, as an incentive, for taxpayers who agree to
4    the limited-scope certified audit, the Department shall
5    abate penalties as provided in Section 10-20; and
6        (3) A statement that reads: "[INSERT THE NAME OF THE
8    contracted with [INSERT THIRD PARTY] to review your
9    Retailers' Occupation Tax, Use Tax, Service Occupation
10    Tax, Service Use Tax, and any local retailers' or service
11    occupation taxes reported to the Illinois Department of
12    Revenue ("Department"). [INSERT THE NAME OF THE ELECTED
14    THIRD PARTY] have selected and referred your business to
15    the Department for a certified audit of your Retailers'
16    Occupation Tax, Use Tax, Service Occupation Tax, Service
17    Use Tax, and any local retailers' or service occupation
18    taxes reported to the Department pursuant to the Local
19    Government Revenue Recapture Act. The purpose of the audit
20    is to verify that your business reported and submitted the
21    proper Retailers' Occupation Tax, Use Tax, Service
22    Occupation Tax, Service Use Tax, and any local retailers'
23    or service occupation taxes administered by the
24    Department. The Department is required to disclose your
25    confidential financial information to [INSERT THE NAME OF



10100SB1881ham002- 26 -LRB101 10946 HLH 61344 a

1    [INSERT THE THIRD PARTY]. Additional information can be
2    accessed from the Department's website and publications
3    for a basic overview of your rights as a Taxpayer. If you
4    have questions regarding your business's referral to the
5    Department for audit, please contact [CORPORATE
6    AUTHORITY'S] mayor, village president,or any other person
7    serving as [CORPORATE AUTHORITY'S] chief executive officer
8    or chief financial officer. [INSERT THIRD PARTY] is
9    prohibited from discussing this matter with you directly or
10    indirectly in any manner regardless of who initiates the
11    contact. If [INSERT THIRD PARTY] contacts you, please
12    contact the Department.".
13    (e) Within 90 days after notice by the Department, the
14taxpayer must respond by stating in writing whether it will or
15will not arrange for the performance of a certified audit under
16this Act. If the taxpayer states that it will arrange for the
17performance of a certified audit, then it must do so within 60
18days after responding to the Department or within 90 days after
19notice by the Department, whichever comes first. If the
20taxpayer states that it will not arrange for the performance of
21a certified audit or if the taxpayer does not arrange for the
22performance of a certified audit within 180 days after notice
23by the Department, then the Department may schedule the
24taxpayer for audit by the Department.
25    (f) The certified audit must not be a contingent-fee
26engagement and must be completed in accordance with this



10100SB1881ham002- 27 -LRB101 10946 HLH 61344 a

1Article 10.
2    Section 10-35. Notification by qualified practitioner.
3    (a) A qualified practitioner hired by a taxpayer who elects
4to perform a certified audit under Section 10-30 shall notify
5the Department of an engagement to perform a certified audit
6and shall provide the Department with the information the
7Department deems necessary to identify the taxpayer, to confirm
8that the taxpayer is not already under audit by the Department,
9and to establish the basic nature of the taxpayer's business
10and the taxpayer's potential exposure to Illinois occupation
11and use tax laws. The information provided in the notification
12shall be submitted in the form and manner required by the
13Department and shall include the taxpayer's name, federal
14employer identification number or social security number,
15Department account identification number, mailing address, and
16business location, and the specific occupation and use taxes
17and period proposed to be covered by the engagement for the
18certified audit. In addition, the notice shall include the
19name, address, identification number, contact person, and
20telephone number of the engaged firm. An engagement for a
21qualified practitioner to perform a certified audit under this
22Act shall not be authorized by the Department unless the
23taxpayer received notice from the Department under
24subparagraph (b) of paragraph (3) of subsection (c) of Section



10100SB1881ham002- 28 -LRB101 10946 HLH 61344 a

1    (b) If the taxpayer has received notice of an audit
2referral from the Department and has not been issued a written
3notice of intent to conduct an audit, the taxpayer shall be a
4participating taxpayer and the Department shall so advise the
5qualified practitioner in writing within 10 days after receipt
6of the engagement notice. However, the Department may exclude a
7taxpayer from a certified audit or may limit the taxes or
8periods subject to the certified audit on the basis that: (i)
9the Department has previously conducted an audit; (ii) the
10Department is in the process of conducting an investigation or
11other examination of the taxpayer's records; (iii) the taxpayer
12has already been referred to the Department pursuant to Section
1310-30 and the Department determined an audit referral is not
14actionable; (iv) the Department or a qualified practitioner has
15previously conducted an audit under Section 10-30 of this Act;
16or (v) for just cause.
17    (c) Within 30 days after receipt of the notice of
18qualification from the Department under subsection (b), the
19qualified practitioner shall contact the Department and
20submit, for review and agreement by the Department, a proposed
21audit plan and procedures. The Department may extend the time
22for submission of the plan and procedures for reasonable cause.
23The qualified practitioner shall initiate action to advise the
24Department that amendment or modification of the plan and
25procedures is necessary if the qualified practitioner's
26inspection reveals that the taxpayer's circumstances or



10100SB1881ham002- 29 -LRB101 10946 HLH 61344 a

1exposure to the revenue laws is substantially different from
2those described in the engagement notice.
3    Section 10-40. Audit performance and review.
4    (a) Upon the Department's designation of the agreed-upon
5procedures to be followed by a practitioner in a certified
6audit, the qualified practitioner shall perform the engagement
7and shall timely submit a completed report to the Department in
8the form and manner required by the Department and professional
9standards. The report shall affirm completion of the
10agreed-upon procedures and shall provide any required
12    (b) The Department shall review the report of the certified
13audit and shall accept it when it is determined to be complete
14by the qualified practitioner. Once the report is accepted by
15the Department, the Department shall issue a notice of proposed
16assessment reflecting the determination of any additional
17liability reflected in the report and shall provide the
18taxpayer with all the normal payment, protest, and appeal
19rights with respect to the liability, including the right to a
20review by the Informal Conference Board. In cases in which the
21report indicates an overpayment has been made, the taxpayer
22shall submit a properly executed claim for credit or refund to
23the Department. Otherwise, the certified audit report is a
24final and conclusive determination with respect to the tax and
25period covered. No additional assessment may be made by the



10100SB1881ham002- 30 -LRB101 10946 HLH 61344 a

1Department for the specific taxes and period referenced in the
2report, except upon a showing of fraud or material
3misrepresentation. This determination shall not prevent the
4Department from collecting liabilities not covered by the
5report or from conducting an audit or investigation and making
6an assessment for additional tax, penalty, or interest for any
7tax or period not covered by the report.
8    (c) A notice of proposed assessment issued by the
9Department under this Act is subject to the statute of
10limitations for assessments under the Retailers' Occupation
11Tax Act, the Use Tax Act, the Service Occupation Tax Act, the
12Service Use Tax Act, and any local retailers' or service
13occupation tax, as appropriate, and local taxes collected on
14assessments issued shall be allocated to units of local
15government for the full period of the statute of limitations in
16accordance with those Acts and any applicable local retailers'
17or service occupation tax Act. The Department shall provide
18notice in writing to the municipality or county and the third
19party, if applicable, of any audit findings, determinations, or
20collections once finalized.
21    Claims for credit or refund filed by taxpayers under this
22Act are subject to the statute of limitations under the
23Retailers' Occupation Tax Act, the Use Tax Act, the Service
24Occupation Tax Act, the Service Use Tax Act, and any local
25retailers' or service occupation tax Act, as appropriate, and
26any credit or refund of local taxes allowed to the taxpayer



10100SB1881ham002- 31 -LRB101 10946 HLH 61344 a

1shall be de-allocated from units of local government for the
2full period of the statute of limitations in accordance with
3those Acts and any applicable local retailers' or service
4occupation tax Act.
5    With respect to misallocations discovered under this Act,
6the Department shall increase or decrease the amount allocated
7to a unit of local government by an amount necessary to offset
8any misallocation of previous disbursements. The offset amount
9shall be the amount erroneously disbursed within the previous 6
10months from the time a misallocation is discovered.
11    (d) Under no circumstances may a person, including a
12municipality or county or third party, other than the person
13audited and his or her attorney, have any right to participate
14in an appeal or other proceeding regarding the audit,
15participate in settlement negotiations, challenge the validity
16of any settlement between the Department and any person, or
17review any materials, other than financial information as
18otherwise provided in this Act, that are subject to the
19confidentiality provisions of the underlying tax act. In
20addition, the Department's determination of whether to audit a
21taxpayer or the result of the audit creates no justiciable
22cause of action, and any adjudication related to this program
23is limited to the taxpayer's rights in an administrative
24hearing held by the Department, an administrative hearing held
25by the Illinois Independent Tax Tribunal, or related to
26payments made under protest as provided in Section 2a.1 of the



10100SB1881ham002- 32 -LRB101 10946 HLH 61344 a

1State Officers and Employees Money Disposition Act, as
3    Section 10-45. Rules. To implement the certified audit
4project, the Department shall have authority to adopt rules,
5including, but not limited to:
6        (1) rules concerning the availability of the
7    certification program required for participation in the
8    project;
9        (2) rules concerning the requirements and basis for
10    establishing just cause for approval or rejection of
11    participation by taxpayers;
12        (3) rules setting forth procedures for assessment,
13    collection, and payment of liabilities or refund of
14    overpayments and provisions for taxpayers to obtain
15    informal and formal review of certified audit results;
16        (4) rules concerning the nature, frequency, and basis
17    for the Department's review of certified audits conducted
18    by qualified practitioners, including the requirements for
19    documentation, work-paper retention and access, and
20    reporting; and
21        (5) rules setting forth requirements for conducting
22    certified audits and for review of agreed-upon procedures.
Article 900. Amendatory Provisions.




10100SB1881ham002- 33 -LRB101 10946 HLH 61344 a

1    Section 900-5. The Retailers' Occupation Tax Act is amended
2by changing Section 11 as follows:
3    (35 ILCS 120/11)  (from Ch. 120, par. 450)
4    Sec. 11. All information received by the Department from
5returns filed under this Act, or from any investigation
6conducted under this Act, shall be confidential, except for
7official purposes, and any person, including a third party as
8defined in the Local Government Revenue Recapture Act, who
9divulges any such information in any manner, except in
10accordance with a proper judicial order or as otherwise
11provided by law, including the Local Government Revenue
12Recapture Act, shall be guilty of a Class B misdemeanor with a
13fine not to exceed $7,500.
14    Nothing in this Act prevents the Director of Revenue from
15publishing or making available to the public the names and
16addresses of persons filing returns under this Act, or
17reasonable statistics concerning the operation of the tax by
18grouping the contents of returns so the information in any
19individual return is not disclosed.
20    Nothing in this Act prevents the Director of Revenue from
21divulging to the United States Government or the government of
22any other state, or any officer or agency thereof, for
23exclusively official purposes, information received by the
24Department in administering this Act, provided that such other
25governmental agency agrees to divulge requested tax



10100SB1881ham002- 34 -LRB101 10946 HLH 61344 a

1information to the Department.
2    The Department's furnishing of information derived from a
3taxpayer's return or from an investigation conducted under this
4Act to the surety on a taxpayer's bond that has been furnished
5to the Department under this Act, either to provide notice to
6such surety of its potential liability under the bond or, in
7order to support the Department's demand for payment from such
8surety under the bond, is an official purpose within the
9meaning of this Section.
10    The furnishing upon request of information obtained by the
11Department from returns filed under this Act or investigations
12conducted under this Act to the Illinois Liquor Control
13Commission for official use is deemed to be an official purpose
14within the meaning of this Section.
15    Notice to a surety of potential liability shall not be
16given unless the taxpayer has first been notified, not less
17than 10 days prior thereto, of the Department's intent to so
18notify the surety.
19    The furnishing upon request of the Auditor General, or his
20authorized agents, for official use, of returns filed and
21information related thereto under this Act is deemed to be an
22official purpose within the meaning of this Section.
23    Where an appeal or a protest has been filed on behalf of a
24taxpayer, the furnishing upon request of the attorney for the
25taxpayer of returns filed by the taxpayer and information
26related thereto under this Act is deemed to be an official



10100SB1881ham002- 35 -LRB101 10946 HLH 61344 a

1purpose within the meaning of this Section.
2    The furnishing of financial information to a municipality
3or county, upon request of the chief executive officer thereof,
4is an official purpose within the meaning of this Section,
5provided the municipality or county agrees in writing to the
6requirements of this Section. Information provided to
7municipalities and counties under this paragraph shall be
8limited to: (1) the business name; (2) the business address;
9(3) the standard classification number assigned to the
10business; (4) net revenue distributed to the requesting
11municipality or county that is directly related to the
12requesting municipality's or county's local share of the
13proceeds under the Use Tax Act, the Service Use Tax Act, the
14Service Occupation Tax Act, and the Retailers' Occupation Tax
15Act distributed from the Local Government Tax Fund, and, if
16applicable, any locally imposed retailers' occupation tax or
17service occupation tax; and (5) a listing of all businesses
18within the requesting municipality or county by account
19identification number and address. On and after July 1, 2015,
20the furnishing of financial information to municipalities and
21counties under this paragraph may be by electronic means. If
22the Department may furnish financial information to a
23municipality or county under this paragraph, then the chief
24executive officer of the municipality or county may, in turn,
25provide that financial information to a third party pursuant to
26the Local Government Revenue Recapture Act. However, the third



10100SB1881ham002- 36 -LRB101 10946 HLH 61344 a

1party shall agree in writing to the requirements of this
2Section and meet the requirements of the Local Government
3Revenue Recapture Act.
4    Information so provided shall be subject to all
5confidentiality provisions of this Section. The written
6agreement shall provide for reciprocity, limitations on
7access, disclosure, and procedures for requesting information.
8For the purposes of furnishing financial information to a
9municipality or county under this Section, "chief executive
10officer" means the mayor of a city, the village board president
11of a village, the mayor or president of an incorporated town,
12the county executive of a county that has adopted the county
13executive form of government, the president of the board of
14commissioners of Cook County, or the chairperson of the county
15board or board of county commissioners of any other county.
16    The Department may make available to the Board of Trustees
17of any Metro East Mass Transit District information contained
18on transaction reporting returns required to be filed under
19Section 3 of this Act that report sales made within the
20boundary of the taxing authority of that Metro East Mass
21Transit District, as provided in Section 5.01 of the Local Mass
22Transit District Act. The disclosure shall be made pursuant to
23a written agreement between the Department and the Board of
24Trustees of a Metro East Mass Transit District, which is an
25official purpose within the meaning of this Section. The
26written agreement between the Department and the Board of



10100SB1881ham002- 37 -LRB101 10946 HLH 61344 a

1Trustees of a Metro East Mass Transit District shall provide
2for reciprocity, limitations on access, disclosure, and
3procedures for requesting information. Information so provided
4shall be subject to all confidentiality provisions of this
6    The Director may make available to any State agency,
7including the Illinois Supreme Court, which licenses persons to
8engage in any occupation, information that a person licensed by
9such agency has failed to file returns under this Act or pay
10the tax, penalty and interest shown therein, or has failed to
11pay any final assessment of tax, penalty or interest due under
12this Act. The Director may make available to any State agency,
13including the Illinois Supreme Court, information regarding
14whether a bidder, contractor, or an affiliate of a bidder or
15contractor has failed to collect and remit Illinois Use tax on
16sales into Illinois, or any tax under this Act or pay the tax,
17penalty, and interest shown therein, or has failed to pay any
18final assessment of tax, penalty, or interest due under this
19Act, for the limited purpose of enforcing bidder and contractor
20certifications. The Director may make available to units of
21local government and school districts that require bidder and
22contractor certifications, as set forth in Sections 50-11 and
2350-12 of the Illinois Procurement Code, information regarding
24whether a bidder, contractor, or an affiliate of a bidder or
25contractor has failed to collect and remit Illinois Use tax on
26sales into Illinois, file returns under this Act, or pay the



10100SB1881ham002- 38 -LRB101 10946 HLH 61344 a

1tax, penalty, and interest shown therein, or has failed to pay
2any final assessment of tax, penalty, or interest due under
3this Act, for the limited purpose of enforcing bidder and
4contractor certifications. For purposes of this Section, the
5term "affiliate" means any entity that (1) directly,
6indirectly, or constructively controls another entity, (2) is
7directly, indirectly, or constructively controlled by another
8entity, or (3) is subject to the control of a common entity.
9For purposes of this Section, an entity controls another entity
10if it owns, directly or individually, more than 10% of the
11voting securities of that entity. As used in this Section, the
12term "voting security" means a security that (1) confers upon
13the holder the right to vote for the election of members of the
14board of directors or similar governing body of the business or
15(2) is convertible into, or entitles the holder to receive upon
16its exercise, a security that confers such a right to vote. A
17general partnership interest is a voting security.
18    The Director may make available to any State agency,
19including the Illinois Supreme Court, units of local
20government, and school districts, information regarding
21whether a bidder or contractor is an affiliate of a person who
22is not collecting and remitting Illinois Use taxes for the
23limited purpose of enforcing bidder and contractor
25    The Director may also make available to the Secretary of
26State information that a limited liability company, which has



10100SB1881ham002- 39 -LRB101 10946 HLH 61344 a

1filed articles of organization with the Secretary of State, or
2corporation which has been issued a certificate of
3incorporation by the Secretary of State has failed to file
4returns under this Act or pay the tax, penalty and interest
5shown therein, or has failed to pay any final assessment of
6tax, penalty or interest due under this Act. An assessment is
7final when all proceedings in court for review of such
8assessment have terminated or the time for the taking thereof
9has expired without such proceedings being instituted.
10    The Director shall make available for public inspection in
11the Department's principal office and for publication, at cost,
12administrative decisions issued on or after January 1, 1995.
13These decisions are to be made available in a manner so that
14the following taxpayer information is not disclosed:
15        (1) The names, addresses, and identification numbers
16    of the taxpayer, related entities, and employees.
17        (2) At the sole discretion of the Director, trade
18    secrets or other confidential information identified as
19    such by the taxpayer, no later than 30 days after receipt
20    of an administrative decision, by such means as the
21    Department shall provide by rule.
22    The Director shall determine the appropriate extent of the
23deletions allowed in paragraph (2). In the event the taxpayer
24does not submit deletions, the Director shall make only the
25deletions specified in paragraph (1).
26    The Director shall make available for public inspection and



10100SB1881ham002- 40 -LRB101 10946 HLH 61344 a

1publication an administrative decision within 180 days after
2the issuance of the administrative decision. The term
3"administrative decision" has the same meaning as defined in
4Section 3-101 of Article III of the Code of Civil Procedure.
5Costs collected under this Section shall be paid into the Tax
6Compliance and Administration Fund.
7    Nothing contained in this Act shall prevent the Director
8from divulging information to any person pursuant to a request
9or authorization made by the taxpayer or by an authorized
10representative of the taxpayer.
11(Source: P.A. 98-1058, eff. 1-1-15; 99-517, eff. 6-30-16.)
12    Section 900-10. The Illinois False Claims Act is amended by
13changing Section 3 as follows:
14    (740 ILCS 175/3)  (from Ch. 127, par. 4103)
15    Sec. 3. False claims.
16    (a) Liability for certain acts.
17        (1) In general, any person who:
18            (A) knowingly presents, or causes to be presented,
19        a false or fraudulent claim for payment or approval;
20            (B) knowingly makes, uses, or causes to be made or
21        used, a false record or statement material to a false
22        or fraudulent claim;
23            (C) conspires to commit a violation of
24        subparagraph (A), (B), (D), (E), (F), or (G);



10100SB1881ham002- 41 -LRB101 10946 HLH 61344 a

1            (D) has possession, custody, or control of
2        property or money used, or to be used, by the State and
3        knowingly delivers, or causes to be delivered, less
4        than all the money or property;
5            (E) is authorized to make or deliver a document
6        certifying receipt of property used, or to be used, by
7        the State and, intending to defraud the State, makes or
8        delivers the receipt without completely knowing that
9        the information on the receipt is true;
10            (F) knowingly buys, or receives as a pledge of an
11        obligation or debt, public property from an officer or
12        employee of the State, or a member of the Guard, who
13        lawfully may not sell or pledge property; or
14            (G) knowingly makes, uses, or causes to be made or
15        used, a false record or statement material to an
16        obligation to pay or transmit money or property to the
17        State, or knowingly conceals or knowingly and
18        improperly avoids or decreases an obligation to pay or
19        transmit money or property to the State,
20    is liable to the State for a civil penalty of not less than
21    the minimum amount and not more than the maximum amount
22    allowed for a civil penalty for a violation of the federal
23    False Claims Act (31 U.S.C. 3729 et seq.) as adjusted by
24    the Federal Civil Penalties Inflation Adjustment Act of
25    1990 (28 U.S.C. 2461), plus 3 times the amount of damages
26    which the State sustains because of the act of that person.



10100SB1881ham002- 42 -LRB101 10946 HLH 61344 a

1    Notwithstanding any other provision, a person is liable to
2    the State for a civil penalty of not less than $5,500 and
3    not more than $11,000, plus 3 times the amount of damages
4    which the State sustains because of the act of that person,
5    when: (i) the civil action was brought by a private person
6    pursuant to paragraph (1) of subsection (b) of Section 4;
7    (ii) the State did not elect to intervene pursuant to
8    paragraph (2) of subsection (b) of Section 4; (iii) the
9    actual amount of the tax owed to the State is equal to or
10    less than $50,000, which does not include interest,
11    penalties, attorney's fees, costs, or any other amounts
12    owed or paid pursuant to this Act; and (iv) the violation
13    of this Act relates to or involves a false claim regarding
14    a tax administered by the Department of Revenue, excluding
15    claims, records, or statements made under the Property Tax
16    Code. The penalties in this Section are intended to be
17    remedial rather than punitive, and shall not preclude, nor
18    be precluded by, a criminal prosecution for the same
19    conduct.
20        (2) A person violating this subsection shall also be
21    liable to the State for the costs of a civil action brought
22    to recover any such penalty or damages.
23    (b) Definitions. For purposes of this Section:
24        (1) The terms "knowing" and "knowingly":
25            (A) mean that a person, with respect to
26        information:



10100SB1881ham002- 43 -LRB101 10946 HLH 61344 a

1                (i) has actual knowledge of the information;
2                (ii) acts in deliberate ignorance of the truth
3            or falsity of the information; or
4                (iii) acts in reckless disregard of the truth
5            or falsity of the information, and
6            (B) require no proof of specific intent to defraud.
7        (2) The term "claim":
8            (A) means any request or demand, whether under a
9        contract or otherwise, for money or property and
10        whether or not the State has title to the money or
11        property, that
12                (i) is presented to an officer, employee, or
13            agent of the State; or
14                (ii) is made to a contractor, grantee, or other
15            recipient, if the money or property is to be spent
16            or used on the State's behalf or to advance a State
17            program or interest, and if the State:
18                    (I) provides or has provided any portion
19                of the money or property requested or demanded;
20                or
21                    (II) will reimburse such contractor,
22                grantee, or other recipient for any portion of
23                the money or property which is requested or
24                demanded; and
25            (B) does not include requests or demands for money
26        or property that the State has paid to an individual as



10100SB1881ham002- 44 -LRB101 10946 HLH 61344 a

1        compensation for State employment or as an income
2        subsidy with no restrictions on that individual's use
3        of the money or property.
4        (3) The term "obligation" means an established duty,
5    whether or not fixed, arising from an express or implied
6    contractual, grantor-grantee, or licensor-licensee
7    relationship, from a fee-based or similar relationship,
8    from statute or regulation, or from the retention of any
9    overpayment.
10        (4) The term "material" means having a natural tendency
11    to influence, or be capable of influencing, the payment or
12    receipt of money or property.
13    (c) Exclusion. This Section does not apply to any taxes
14imposed, collected, or administered by the State of Illinois
15claims, records, or statements made under the Illinois Income
16Tax Act.
17(Source: P.A. 100-452, eff. 8-25-17.)
Article 999. Effective Date.

19    Section 999-999. Effective date. This Act takes effect upon
20becoming law.".