Public Act 098-0158
 
SB1730 EnrolledLRB098 09833 RPM 39988 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Section 412 as follows:
 
    (215 ILCS 5/412)  (from Ch. 73, par. 1024)
    Sec. 412. Refunds; penalties; collection.
    (1) (a) Whenever it appears to the satisfaction of the
    Director that because of some mistake of fact, error in
    calculation, or erroneous interpretation of a statute of
    this or any other state, any authorized company has paid to
    him, pursuant to any provision of law, taxes, fees, or
    other charges in excess of the amount legally chargeable
    against it, during the 6 year period immediately preceding
    the discovery of such overpayment, he shall have power to
    refund to such company the amount of the excess or excesses
    by applying the amount or amounts thereof toward the
    payment of taxes, fees, or other charges already due, or
    which may thereafter become due from that company until
    such excess or excesses have been fully refunded, or upon a
    written request from the authorized company, the Director
    shall provide a cash refund within 120 days after receipt
    of the written request if all necessary information has
    been filed with the Department in order for it to perform
    an audit of the annual return for the year in which the
    overpayment occurred or within 120 days after the date the
    Department receives all the necessary information to
    perform such audit. The Director shall not provide a cash
    refund if there are insufficient funds in the Insurance
    Premium Tax Refund Fund to provide a cash refund, if the
    amount of the overpayment is less than $100, or if the
    amount of the overpayment can be fully offset against the
    taxpayer's estimated liability for the year following the
    year of the cash refund request. Any cash refund shall be
    paid from the Insurance Premium Tax Refund Fund, a special
    fund hereby created in the State treasury.
        (b) Beginning January 1, 2000 and thereafter, the
    Department shall deposit a percentage of the amounts
    collected under Sections 409, 444, and 444.1 of this Code
    into the Insurance Premium Tax Refund Fund. The percentage
    deposited into the Insurance Premium Tax Refund Fund shall
    be the annual percentage. The annual percentage shall be
    calculated as a fraction, the numerator of which shall be
    the amount of cash refunds approved by the Director for
    payment and paid during the preceding calendar year as a
    result of overpayment of tax liability under Sections 409,
    444, and 444.1 of this Code and the denominator of which
    shall be the amounts collected pursuant to Sections 409,
    444, and 444.1 of this Code during the preceding calendar
    year. However, if there were no cash refunds paid in a
    preceding calendar year, the Department shall deposit 5% of
    the amount collected in that preceding calendar year
    pursuant to Sections 409, 444, and 444.1 of this Code into
    the Insurance Premium Tax Refund Fund instead of an amount
    calculated by using the annual percentage.
        (c) Beginning July 1, 1999, moneys in the Insurance
    Premium Tax Refund Fund shall be expended exclusively for
    the purpose of paying cash refunds resulting from
    overpayment of tax liability under Sections 409, 444, and
    444.1 of this Code as determined by the Director pursuant
    to subsection 1(a) of this Section. Cash refunds made in
    accordance with this Section may be made from the Insurance
    Premium Tax Refund Fund only to the extent that amounts
    have been deposited and retained in the Insurance Premium
    Tax Refund Fund.
        (d) This Section shall constitute an irrevocable and
    continuing appropriation from the Insurance Premium Tax
    Refund Fund for the purpose of paying cash refunds pursuant
    to the provisions of this Section.
    (2) When any insurance company or any surplus line producer
fails to file any tax return required under Sections 408.1,
409, 444, 444.1 and 445 of this Code or Section 12 of the Fire
Investigation Act on the date prescribed, including any
extensions, there shall be added as a penalty $400 or 10% of
the amount of such tax, whichever is greater, for each month or
part of a month of failure to file, the entire penalty not to
exceed $2,000 or 50% of the tax due, whichever is greater.
    (3) (a) When any insurance company or any surplus line
    producer fails to pay the full amount due under the
    provisions of this Section, Sections 408.1, 409, 444, 444.1
    or 445 of this Code, or Section 12 of the Fire
    Investigation Act, there shall be added to the amount due
    as a penalty an amount equal to 10% of the deficiency.
        (b) If such failure to pay is determined by the
    Director to be wilful, after a hearing under Sections 402
    and 403, there shall be added to the tax as a penalty an
    amount equal to the greater of 50% of the deficiency or 10%
    of the amount due and unpaid for each month or part of a
    month that the deficiency remains unpaid commencing with
    the date that the amount becomes due. Such amount shall be
    in lieu of any determined under paragraph (a).
    (4) Any insurance company or any surplus line producer
which fails to pay the full amount due under this Section or
Sections 408.1, 409, 444, 444.1 or 445 of this Code, or Section
12 of the Fire Investigation Act is liable, in addition to the
tax and any penalties, for interest on such deficiency at the
rate of 12% per annum, or at such higher adjusted rates as are
or may be established under subsection (b) of Section 6621 of
the Internal Revenue Code, from the date that payment of any
such tax was due, determined without regard to any extensions,
to the date of payment of such amount.
    (5) The Director, through the Attorney General, may
institute an action in the name of the People of the State of
Illinois, in any court of competent jurisdiction, for the
recovery of the amount of such taxes, fees, and penalties due,
and prosecute the same to final judgment, and take such steps
as are necessary to collect the same.
    (6) In the event that the certificate of authority of a
foreign or alien company is revoked for any cause or the
company withdraws from this State prior to the renewal date of
the certificate of authority as provided in Section 114, the
company may recover the amount of any such tax paid in advance.
Except as provided in this subsection, no revocation or
withdrawal excuses payment of or constitutes grounds for the
recovery of any taxes or penalties imposed by this Code.
    (7) When an insurance company or domestic affiliated group
fails to pay the full amount of any fee of $200 or more due
under Section 408 of this Code, there shall be added to the
amount due as a penalty the greater of $100 or an amount equal
to 10% of the deficiency for each month or part of a month that
the deficiency remains unpaid.
    (8) The Department shall have a lien for the taxes, fees,
charges, fines, penalties, interest, other charges, or any
portion thereof, imposed or assessed pursuant to this Code,
upon all the real and personal property of any company or
person to whom the assessment or final order has been issued or
whenever a tax return is filed without payment of the tax or
penalty shown therein to be due, including all such property of
the company or person acquired after receipt of the assessment,
issuance of the order, or filing of the return. The company or
person is liable for the filing fee incurred by the Department
for filing the lien and the filing fee incurred by the
Department to file the release of that lien. The filing fees
shall be paid to the Department in addition to payment of the
tax, fee, charge, fine, penalty, interest, other charges, or
any portion thereof, included in the amount of the lien.
However, where the lien arises because of the issuance of a
final order of the Director or tax assessment by the
Department, the lien shall not attach and the notice referred
to in this Section shall not be filed until all administrative
proceedings or proceedings in court for review of the final
order or assessment have terminated or the time for the taking
thereof has expired without such proceedings being instituted.
    Upon the granting of Department review after a lien has
attached, the lien shall remain in full force except to the
extent to which the final assessment may be reduced by a
revised final assessment following the rehearing or review. The
lien created by the issuance of a final assessment shall
terminate, unless a notice of lien is filed, within 3 years
after the date all proceedings in court for the review of the
final assessment have terminated or the time for the taking
thereof has expired without such proceedings being instituted,
or (in the case of a revised final assessment issued pursuant
to a rehearing or review by the Department) within 3 years
after the date all proceedings in court for the review of such
revised final assessment have terminated or the time for the
taking thereof has expired without such proceedings being
instituted. Where the lien results from the filing of a tax
return without payment of the tax or penalty shown therein to
be due, the lien shall terminate, unless a notice of lien is
filed, within 3 years after the date when the return is filed
with the Department.
    The time limitation period on the Department's right to
file a notice of lien shall not run during any period of time
in which the order of any court has the effect of enjoining or
restraining the Department from filing such notice of lien. If
the Department finds that a company or person is about to
depart from the State, to conceal himself or his property, or
to do any other act tending to prejudice or to render wholly or
partly ineffectual proceedings to collect the amount due and
owing to the Department unless such proceedings are brought
without delay, or if the Department finds that the collection
of the amount due from any company or person will be
jeopardized by delay, the Department shall give the company or
person notice of such findings and shall make demand for
immediate return and payment of the amount, whereupon the
amount shall become immediately due and payable. If the company
or person, within 5 days after the notice (or within such
extension of time as the Department may grant), does not comply
with the notice or show to the Department that the findings in
the notice are erroneous, the Department may file a notice of
jeopardy assessment lien in the office of the recorder of the
county in which any property of the company or person may be
located and shall notify the company or person of the filing.
The jeopardy assessment lien shall have the same scope and
effect as the statutory lien provided for in this Section. If
the company or person believes that the company or person does
not owe some or all of the tax for which the jeopardy
assessment lien against the company or person has been filed,
or that no jeopardy to the revenue in fact exists, the company
or person may protest within 20 days after being notified by
the Department of the filing of the jeopardy assessment lien
and request a hearing, whereupon the Department shall hold a
hearing in conformity with the provisions of this Code and,
pursuant thereto, shall notify the company or person of its
findings as to whether or not the jeopardy assessment lien will
be released. If not, and if the company or person is aggrieved
by this decision, the company or person may file an action for
judicial review of the final determination of the Department in
accordance with the Administrative Review Law. If, pursuant to
such hearing (or after an independent determination of the
facts by the Department without a hearing), the Department
determines that some or all of the amount due covered by the
jeopardy assessment lien is not owed by the company or person,
or that no jeopardy to the revenue exists, or if on judicial
review the final judgment of the court is that the company or
person does not owe some or all of the amount due covered by
the jeopardy assessment lien against them, or that no jeopardy
to the revenue exists, the Department shall release its
jeopardy assessment lien to the extent of such finding of
nonliability for the amount, or to the extent of such finding
of no jeopardy to the revenue. The Department shall also
release its jeopardy assessment lien against the company or
person whenever the amount due and owing covered by the lien,
plus any interest which may be due, are paid and the company or
person has paid the Department in cash or by guaranteed
remittance an amount representing the filing fee for the lien
and the filing fee for the release of that lien. The Department
shall file that release of lien with the recorder of the county
where that lien was filed.
    Nothing in this Section shall be construed to give the
Department a preference over the rights of any bona fide
purchaser, holder of a security interest, mechanics
lienholder, mortgagee, or judgment lien creditor arising prior
to the filing of a regular notice of lien or a notice of
jeopardy assessment lien in the office of the recorder in the
county in which the property subject to the lien is located.
For purposes of this Section, "bona fide" shall not include any
mortgage of real or personal property or any other credit
transaction that results in the mortgagee or the holder of the
security acting as trustee for unsecured creditors of the
company or person mentioned in the notice of lien who executed
such chattel or real property mortgage or the document
evidencing such credit transaction. The lien shall be inferior
to the lien of general taxes, special assessments, and special
taxes levied by any political subdivision of this State. In
case title to land to be affected by the notice of lien or
notice of jeopardy assessment lien is registered under the
provisions of the Registered Titles (Torrens) Act, 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 titles
affected by such notice, and the Department shall not have a
preference over the rights of any bona fide purchaser,
mortgagee, judgment creditor, or other lienholder arising
prior to the registration of such notice. The regular lien or
jeopardy assessment lien shall not be effective against any
purchaser with respect to any item in a retailer's stock in
trade purchased from the retailer in the usual course of the
retailer's business.
(Source: P.A. 93-32, eff. 7-1-03.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.