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Public Act 101-0567 |
SB1813 Enrolled | LRB101 10992 HEP 56176 b |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Credit Union Act is amended by |
changing Sections 15, 23, 57.1, 59, and 63 and by adding |
Sections 10.2 and 44.1 as follows: |
(205 ILCS 305/10.2 new) |
Sec. 10.2. Electronic records. |
(a) As used in this Section, "electronic" and "electronic |
record" have the meanings given to those terms in the |
Electronic Commerce Security Act. |
(b) If a provision of this Act requires information to be |
written or delivered in writing, or provides for certain |
consequences if it is not, an electronic record or electronic |
delivery satisfies that rule of law. |
(c) If a provision of this Act requires a policy, record, |
notice or other document or information to be mailed or |
otherwise furnished, posted, or disclosed by a credit union, |
electronic delivery or distribution satisfies that rule of law. |
Policies and notifications of general interest to or impact on |
the membership may be posted on a credit union's website or |
disclosed in membership newsletters or account statements, in |
addition to, or in lieu of, any other methods of notification |
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or distribution specified in this Act. |
(205 ILCS 305/15) (from Ch. 17, par. 4416)
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Sec. 15. Membership defined.
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(1) The membership of a credit union shall
be limited to |
and consist of the subscribers to the articles of incorporation
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and such other persons within the common bond, as defined in |
this Act and
as set forth in the credit union's articles of |
incorporation, as have been
duly admitted members, have paid |
the required entrance fee or membership
fee, or both, if any, |
have subscribed for one or more shares, and have paid
the |
initial installment thereon, and have complied with such other |
requirements
as the articles of incorporation or bylaws |
specify. Two or more persons
within the common bond who have |
jointly subscribed for one or more shares under
a joint account |
and have complied with all membership requirements may each be
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admitted to membership. The surviving spouse
of a credit union |
member may, within 6 months of the member's death, become
a |
member of the credit union by paying the required entrance fee |
or membership
fee or both, if any, by subscribing for one or |
more shares
and paying the initial installment thereon, and by |
complying with such other
requirements as the articles of |
incorporation or bylaws specify.
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(2) Any member may withdraw from a credit union at any time |
upon giving
notice of withdrawal as required by the bylaws.
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(3) Any member may be expelled
by a 2/3 vote of the members |
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present at any regular or special
meeting
called to consider |
the matter, but only after an opportunity has been given
to the |
member to be heard.
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(4) A member who has caused a loss to the credit union,
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failed
to maintain one or more shares at the credit union, or |
violated board policy
applicable to members may be expelled by
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a majority vote of a quorum of directors if the board has |
adopted a policy
providing for expulsion for any of the |
following acts committed by the member: under those |
circumstances. |
(i) causing a loss to the credit union; |
(ii) failing to maintain one or more shares at the |
credit union; |
(iii) committing fraud or any similar misdeed against |
the credit union; |
(iv) engaging in inappropriate behavior involving |
another person, such as physical or verbal abuse of another |
member or an employee of the credit union, while |
transacting business with the credit union; or |
(v) otherwise violating board policy applicable to |
members. |
In maintaining and
enforcing a policy based on loss, the
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board may consider, without limitation, a member's failure to |
pay amounts due
under a loan, failure to provide collected |
funds to cover withdrawals or
personal share drafts or credit |
union drafts where the member is a remitter, or
failure to pay |
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fees or charges due the credit union. |
The policy may delegate the expulsion authority to the |
senior management officials of the credit union. If a member is |
expelled by a senior management official of the credit union, |
the member may, within 30 days after the expulsion, seek |
reinstatement by appealing the action in writing to the board |
of directors of the credit union. The board may affirm, |
disaffirm, or modify the action, and the board's decision is |
final. As used in this subsection (4), "senior management |
official" includes the chief management officer of the credit |
union (including the person holding the title of President or |
Chief Executive Officer, or both, or Treasurer/Manager) and |
other management officers of the credit union (including the |
persons holding the title of Chief Operating Officer, Chief |
Financial Officer, Chief Administrative Officer, Chief |
Information Officer, Chief Security Officer, Executive Vice |
President, Senior Vice President, or Vice President). |
If a policy
is
adopted by the board pursuant to this |
subsection (4), written notice of the
policy shall be |
distributed not fewer than 30 days before the effective date of |
the policy by: (i) mailing it and the effective date of the |
policy
shall be mailed to each member of the credit union at |
the member's current
address appearing on the records of the |
credit union ; (ii) electronically delivering it to all members |
by posting it on the credit union's website; or (iii) |
disclosing it to all members in membership newsletters or |
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account statements . The policy shall be
mailed to members not |
fewer than 30 days prior to the effective date of the
policy. |
In addition, new members shall be provided written notice of |
the
policy prior to or upon applying for membership by using |
one of the distribution methods described in this subsection |
(4) .
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(5) All or any part of the amount paid on shares
of a |
withdrawing member
or expelled member with any declared |
dividends or interest on the date of
withdrawal or expulsion |
must, after deducting all amounts due from the member
to the |
credit union, be paid to him. The credit union may require not |
more
than 60 days' written notice of intention to withdraw |
shares, but a notice
of withdrawal does not entitle the member |
to any preferred or prior claim
in the event of liquidation. |
Withdrawing or expelled members have no further
rights in the |
credit union, but are not, by withdrawal or expulsion, released
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from any obligation they owe to the credit union.
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(6) A member who has caused a loss to the credit union or |
has violated board
policy applicable to members may be denied |
any
or all credit union services in accordance with board |
policy, however, members
who are denied services shall be |
allowed to maintain a share account and to
vote on all issues
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put to a vote of the membership.
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(7) If a member fails to maintain one fully paid share, the |
credit union, at its option, may permit the member to |
re-subscribe and pay for one or more shares within 30 days |
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after the date the member failed to maintain one fully paid |
share, without affecting the member's status or rights as a |
member during that period. A member that fails to re-subscribe |
for at least one fully paid share within the 30-day period |
shall be automatically expelled from the credit union and |
treated as an expelled member under subsection (5) of this |
Section 15.
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(Source: P.A. 97-133, eff. 1-1-12; 97-855, eff. 7-27-12.)
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(205 ILCS 305/23) (from Ch. 17, par. 4424)
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Sec. 23. Compensation of officials.
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(1) Directors and committee members No director or |
committee member may
receive reasonable compensation for their |
his service as such , the amount of which shall be set by the |
board of directors. The Department shall, by rule, establish |
maximum rates of reasonable compensation that are generally |
applicable to credit unions considering factors the Department |
may establish from time to time, including, but not limited to, |
total assets, nonprofit cooperative structure, and the best |
interests of members .
"Compensation" as used in this subsection |
(1) refers to remuneration expense
to the credit union for |
services provided by a director or committee member in
his or |
her capacity as director or committee member. The remuneration |
expense shall be disclosed on an annual basis to the membership |
in the financial statement that is part of the annual |
membership meeting materials. The disclosure shall contain: |
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(i) the amount paid to each director and (ii) the amount paid |
to the directors as a group. "Compensation" as used in
this |
subsection (1) does not include |
(2) The credit union may incur the expense of providing
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reasonable life, health,
accident, and similar insurance |
protection benefits for directors and a director or committee |
members member .
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(3) (2) Directors, committee members and
employees, while |
on official business of the credit union, may be reimbursed
for |
reasonable and necessary expenses. Alternatively, the credit |
union may make direct payment to a third party for such |
business expenses. Reasonable and necessary expenses may |
include the payment of travel costs for the foregoing officials |
and one guest per official. All payment of costs shall be made |
in accordance with written policies and procedures established |
by the board of directors.
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(4) (3) The board of directors may establish
compensation |
for officers of the credit union.
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(Source: P.A. 97-133, eff. 1-1-12.)
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(205 ILCS 305/44.1 new) |
Sec. 44.1. Unclaimed property; dormancy or escheat fee. A |
credit union may deduct a dormancy charge or an escheat fee |
from property required to be paid or delivered to the |
administrator under the Revised Uniform Unclaimed Property |
Act, provided the amount of the deduction is consistent with |
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the standards set forth in subsection (b) of Section 15-602 of |
that Act. In making the deduction, a credit union may allocate, |
classify, and record all or a portion of the deduction, as |
applicable, as the minimum share amount required to preserve |
the member's status as a member of the credit union. |
(205 ILCS 305/57.1) |
Sec. 57.1. Services to other credit unions. A credit union |
may act as a representative of and enter into an agreement with |
credit unions or other organizations for the purposes of: |
(1) sharing, utilizing, renting, leasing, purchasing, |
selling, and joint ownership of fixed assets or engaging in |
activities and services that relate to the daily operations |
of credit unions; and |
(2) providing correspondent services to other credit |
unions or other organizations that the service provider |
credit union is authorized to perform for its own members |
or as part of its operations, including, but not limited |
to, loan processing, loan servicing, member check cashing |
services, disbursing share withdrawals and loan proceeds, |
cashing and selling money orders, ACH and wire transfer |
services, implementation and
administrative support |
services related to the use of debit cards, payroll debit
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cards, and other prepaid debit cards and
credit cards, coin |
and currency services, performing internal audits, and |
automated teller machine deposit services.
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(Source: P.A. 99-78, eff. 7-20-15; 99-149, eff. 1-1-16; |
100-201, eff. 8-18-17.) |
(205 ILCS 305/59) (from Ch. 17, par. 4460)
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Sec. 59. Investment of funds.
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(a) Funds not used in loans to members may be
invested, |
pursuant to subsection (7) of Section 30 of this Act, and
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subject to Departmental rules and
regulations:
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(1) In securities, obligations or other instruments of |
or issued by or
fully guaranteed as to principal and |
interest by the United States of America
or any agency |
thereof or in any trust or trusts established for investing
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directly or collectively in the same;
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(2) In obligations of any state of the United States, |
the District of
Columbia, the Commonwealth of Puerto Rico, |
and the several
territories organized
by Congress, or any |
political subdivision thereof; however, a credit union
may
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not invest more than 10% of its unimpaired capital and |
surplus in the
obligations of one issuer, exclusive of |
general obligations of the issuer, and
investments in |
municipal securities must be limited to securities rated in |
one
of the 4
highest rating categories by a nationally |
recognized statistical rating
organization;
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(3) In certificates of deposit or passbook type |
accounts issued by a state
or national bank, mutual savings |
bank or savings and loan association; provided
that such |
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institutions have their accounts insured by the Federal |
Deposit
Insurance Corporation or the Federal Savings and |
Loan Insurance Corporation;
but provided, further, that a |
credit union's investment in an account in
any one |
institution may exceed the insured limit on accounts;
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(4) In shares, classes of shares or share certificates |
of other credit
unions, including, but not limited to |
corporate credit unions; provided
that such credit unions |
have their members' accounts insured by the NCUA
or other |
approved insurers, and that if the members' accounts are so |
insured,
a credit union's investment may exceed the insured |
limit on accounts;
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(5) In shares of a cooperative society organized under |
the laws of this
State or the laws of the United States in |
the total amount not exceeding
10% of the unimpaired |
capital and surplus of the credit union; provided
that such |
investment shall first be approved by the Department;
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(6) In obligations of the State of Israel, or |
obligations fully guaranteed
by the State of Israel as to |
payment of principal and interest;
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(7) In shares, stocks or obligations of other financial |
institutions in
the total amount not exceeding 5% of the |
unimpaired capital and surplus
of the credit union;
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(8) In federal funds and bankers' acceptances;
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(9) In shares or stocks of Credit Union Service |
Organizations in the
total amount not exceeding the greater |
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of 3% of the unimpaired
capital and surplus of the
credit |
union or the amount authorized for federal credit unions;
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(10) In corporate bonds identified as investment grade |
by at least one nationally recognized statistical rating |
organization, provided that: |
(i) the board of directors has established a |
written policy that addresses corporate bond |
investment procedures and how the credit union will |
manage credit risk, interest rate risk, liquidity |
risk, and concentration risk; and |
(ii) the credit union has documented in its records |
that a credit analysis of a particular investment and |
the issuing entity was conducted by the credit union, a |
third party on behalf of the credit union qualified by |
education or experience to assess the risk |
characteristics of corporate bonds, or a nationally |
recognized statistical rating agency before purchasing |
the investment and the analysis is updated at least |
annually for as long as it holds the investment; |
(11) To aid in the credit union's management of its |
assets, liabilities, and liquidity in the purchase of an |
investment interest in a pool of loans, in whole or in part |
and without regard to the membership of the borrowers, from |
other depository institutions and financial type |
institutions, including mortgage banks, finance companies, |
insurance companies, and other loan sellers, subject to |
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such safety and soundness standards, limitations, and |
qualifications as the Department may establish by rule or |
guidance from time to time; |
(12) To aid in the credit union's management of its |
assets, liabilities, and liquidity by receiving funds from |
another financial institution as evidenced by certificates |
of deposit, share certificates, or other classes of shares |
issued by the credit union to the financial institution; |
and |
(13) In the purchase and assumption of assets held by |
other financial institutions, with approval of the |
Secretary and subject to any safety and soundness |
standards, limitations, and qualifications as the |
Department may establish by rule or guidance from time to |
time. |
(b) As used in this Section: |
"Political subdivision" includes, but is not
limited to, |
counties,
townships, cities, villages, incorporated towns, |
school districts, educational
service regions, special road |
districts, public water supply districts, fire
protection |
districts, drainage districts, levee districts, sewer |
districts,
housing authorities, park districts, and any
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agency, corporation, or instrumentality of a state or its |
political
subdivisions, whether now or hereafter created and |
whether herein specifically
mentioned or not.
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"Financial institution" includes any bank, savings bank, |
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savings and loan association, or credit union established under |
the laws of the United States, this State, or any other state. |
(c) A credit union investing to fund an employee benefit |
plan obligation is not subject to the investment limitations of |
this Act and this Section and may purchase an investment that |
would otherwise be impermissible if the investment is directly |
related to the credit union's obligation under the employee |
benefit plan and the credit union holds the investment only for |
so long as it has an actual or potential obligation under the |
employee benefit plan.
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(d) If a credit union acquires loans from another financial |
institution or financial-type institution pursuant to this |
Section, the credit union shall be authorized to provide loan |
servicing and collection services in connection with those |
loans. |
(Source: P.A. 100-361, eff. 8-25-17; 100-778, eff. 8-10-18.)
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(205 ILCS 305/63) (from Ch. 17, par. 4464)
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Sec. 63. Merger and consolidation. |
(1) Any two or more credit unions,
regardless of whether or |
not they have the same common bond, may merge or
consolidate |
into a single credit union. A merger or consolidation may be
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with a credit union organized under the laws of this State or |
of another
state or of the United States and is subject to the |
approval of the Secretary. It must be made on such terms as |
have been agreed upon by a vote
of a majority of the board of |
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directors of each credit union, and approved
by an affirmative |
vote of a majority of the members of the merging credit
union |
being absorbed present at a meeting, either in person or by |
proxy,
duly called for that purpose, except as hereinafter |
specified. Notice
of the meeting stating the purpose must be |
sent by the
Secretary of each merging credit union being |
absorbed to each member by
mail at least 45 but no more than 90 |
7 days before the date of the meeting.
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(2) One of the merging credit unions may continue after the |
merger or
consolidation either as a surviving credit union |
retaining its identity
or as a new credit
union as has been |
agreed upon under the terms of the merger. At least
9 members |
of the new proposed credit union must apply to the Department
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for permission to organize the new credit union. The same |
procedure shall
be followed as provided for the organization of |
a new credit union.
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(3) After approval by the members of the credit union which |
is to be absorbed
by the merger or consolidation, the chairman |
or president and the secretary
of each credit union shall |
execute a certificate of merger or consolidation,
which shall |
set forth all of the following:
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(a) The time and place of the meeting of each board of |
directors at which
the plan was agreed upon;
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(b) The vote in favor of the adoption of the plan;
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(c) A copy of each resolution or other action by which |
the plan was agreed upon;
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(d) The time and place of the meeting of the members of |
the absorbed credit
union at which the plan agreed upon was |
approved; and,
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(e) The vote by which the plan was approved by the |
members of the absorbed
credit union.
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(4) Such certificate and a copy of the plan of merger or |
consolidation
agreed upon shall be mailed to the Secretary for |
review. If the provisions
of this Act have been complied with, |
the certificate shall be approved by
him, and returned to the |
credit unions which are parties to the merger or
consolidation |
within 30 days. When so approved by the Secretary the |
certificate
shall constitute the Department's certificate of |
approval of the merger
or consolidation.
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(5) Upon issuance of the certificate of approval, each |
merging credit
union which was absorbed shall cease operation. |
Each party to the merger shall file
the certificate of approval |
with the Recorder or County Clerk of
the county in which the |
credit union has or had its principal office.
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(6) Each credit union absorbed by the merger or |
consolidation shall return
to the Secretary the original |
statement of incorporation, certificate of
approval of |
incorporation, and the bylaws of the credit union. The |
surviving
credit union shall continue its operation under its |
existing certificate of
approval, articles of incorporation, |
and the bylaws or if a new credit
union has been formed, under |
the new certificate of
approval, articles of incorporation, and |
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bylaws.
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(7) All rights of membership in and any obligation or |
liability of any
member to any credit union which is party to a |
consolidation or merger are
continued in the surviving or new |
credit union without reservation or diminution.
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(8) A pending action or other judicial proceeding to which |
any of the
consolidating or merging credit unions is a party |
does not abate by reason
of the consolidation or merger.
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(Source: P.A. 97-133, eff. 1-1-12.)
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Section 99. Effective date. This Act takes effect upon |
becoming law.
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