Full Text of HB3477 97th General Assembly
HB3477ham001 97TH GENERAL ASSEMBLY | Rep. Kay Hatcher Filed: 3/2/2011
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| 1 | | AMENDMENT TO HOUSE BILL 3477
| 2 | | AMENDMENT NO. ______. Amend House Bill 3477 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Insurance Code is amended by | 5 | | changing Section 397.1 as follows:
| 6 | | (215 ILCS 5/397.1) (from Ch. 73, par. 1009.1)
| 7 | | Sec. 397.1.
Certificate regarding payment of taxes and | 8 | | expenses on
property sustaining loss.
| 9 | | (a) It shall be unlawful for any company transacting | 10 | | insurance business
in this State to pay a claim of an insured | 11 | | property owner for loss by fire
or explosion to a structure | 12 | | located in this State where the amount
recoverable for loss to | 13 | | the structure under a policy exceeds $25,000, until
the | 14 | | insurance company receives the certificate required by this | 15 | | Section. A
notice, to the State's Attorney of the county where | 16 | | the structure is
located, of the insurers intent to pay a claim |
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| 1 | | shall include the name of
the property owner, the address of | 2 | | the property, its legal description, the
permanent real estate | 3 | | index number that identifies the property for
purposes of | 4 | | taxation, and the amount of the claim to be paid.
| 5 | | (b) For purposes of this Section, the following definitions | 6 | | are
applicable:
| 7 | | (1) "Insured property owner" is a person named as an | 8 | | insured who is
the owner, title-holder or mortgagee of a | 9 | | structure, the holder of an
interest secured by the | 10 | | structure, the beneficiary of a land trust
owning or | 11 | | holding title to a structure, the lessee of a structure | 12 | | with a
contractual obligation for property taxes, or the | 13 | | assignee of any such person.
| 14 | | (2) "Amount recoverable" is the dollar amount payable | 15 | | under all
insurance policies for loss to the structure.
| 16 | | (3) "Proceeds" is the dollar amount payable for loss to | 17 | | the
structure under an insurance policy.
| 18 | | (4) "Delinquent property taxes" are those property | 19 | | taxes on the
property which are delinquent pursuant to | 20 | | Section 21-15, 21-20, or 21-25 of
the Property Tax Code, | 21 | | including those
delinquent taxes on property forfeited | 22 | | under Section 21-225 of the Property
Tax Code, as of the | 23 | | date of loss.
| 24 | | In determining delinquent property taxes under this | 25 | | Section, the amount of
property taxes for which a | 26 | | certificate of error has been issued pursuant to
Section |
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| 1 | | 14-10 or 14-20 of the Property Tax Code shall not be | 2 | | considered
delinquent.
| 3 | | (5) "Incurred demolition expense" is: a. the cost of | 4 | | demolishing or
removing a structure from property by or at | 5 | | the expense of a unit of
local government if the demolition | 6 | | or removal occurs on a date preceding
the later of (i) the | 7 | | acceptance by the insurance company of a Proof of
Loss for | 8 | | an agreed amount of proceeds, or (ii) the date of receipt | 9 | | by
the unit of local government of a request for execution | 10 | | of the
certificate required by this Section; or b. the | 11 | | amount estimated by the
unit of local government when it | 12 | | receives a request to execute the
certificate required by | 13 | | this Section; or c. the amount ordered to be
withheld by a | 14 | | court within 28 days after a unit of local government
| 15 | | receives a request for execution of the certificate | 16 | | required by this
Section. The unit of local government must | 17 | | be a party to such proceeding.
| 18 | | Incurred demolition expense shall be determined under | 19 | | subparagraph a.
whenever possible. In determining the | 20 | | incurred demolition expense under
subparagraph b., the | 21 | | unit of local government shall make its estimate
and | 22 | | execute the certificate within 30 days after receiving a | 23 | | request for
execution. If the unit of local government | 24 | | shall fail within 30 days to
execute the certificate, as | 25 | | required by subparagraph a., the company can
proceed to | 26 | | make payment of the claim as if the certificate had been
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| 1 | | received showing no unpaid demolition costs. The request | 2 | | for execution may
be served personally, and may be proven | 3 | | by a written receipt signed by the
local official as of the | 4 | | date the request was made or by service on the
local | 5 | | official by certified mail, return receipt requested. A | 6 | | court order
under subparagraph c. shall supersede an | 7 | | estimate under subparagraph b.
| 8 | | (6) "Property" is the lot on which the structure is | 9 | | located.
| 10 | | (7) "Structure" is a building.
| 11 | | (8) "Claim" is the demand by an insured for payment | 12 | | under an
insurance policy or policies.
| 13 | | (9) "Proof of Loss" is the document on which an insured | 14 | | formally
presents his claim to an insurance company.
| 15 | | (10) "Certificate" is the executed form prescribed by | 16 | | the Director
of Insurance.
| 17 | | (11) "Executed" means signed by the appropriate | 18 | | official or unit of
government.
| 19 | | (12) "Nuisance lien" means a lien filed by a | 20 | | municipality under Division 20 of Article 11 of the | 21 | | Illinois Municipal Code. | 22 | | (c) For any claim to which this Section is applicable, an | 23 | | insured
property owner must submit one of the following to the | 24 | | insurance
company:
| 25 | | (1) a certificate that with respect to the property | 26 | | there are:
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| 1 | | a. no delinquent property taxes ; , and
| 2 | | b. no unpaid incurred demolition expenses; and
| 3 | | c. no unpaid nuisance liens;
| 4 | | (2) a certificate setting forth with respect to the | 5 | | property:
| 6 | | a. the amount of unpaid delinquent property | 7 | | taxes ; ,
| 8 | | b. the amount of unpaid incurred demolition | 9 | | expense and the amount of unpaid nuisance liens; , and
| 10 | | c. a direction by an insured property owner to the | 11 | | insurance company
to pay the unpaid delinquent | 12 | | property taxes , unpaid nuisance liens, and unpaid | 13 | | incurred demolition
expenses.
| 14 | | (d) (1) Except as provided in paragraph (2) of this | 15 | | subsection (d),
if a certificate is submitted pursuant to | 16 | | paragraph (2) of subsection
(c) of this Section, the | 17 | | insurance company shall pay the unpaid
delinquent property | 18 | | taxes , unpaid nuisance liens, and unpaid incurred | 19 | | demolition expense from
the proceeds payable by issuing a | 20 | | draft or check payable to the
appropriate tax collector or | 21 | | unit of local government.
| 22 | | Any proceeds remaining shall be paid to the insured | 23 | | property owner.
| 24 | | (2) In the event incurred demolition expense is | 25 | | determined by
estimation under paragraph (5) of subsection | 26 | | (b) of this Section in
cities of over 2,000,000, the |
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| 1 | | insurance company shall hold the amount
estimated until an | 2 | | amended certificate executed by the appropriate local
| 3 | | government official is submitted stating (i) that no | 4 | | demolition expense
will be incurred or (ii) the actual | 5 | | unpaid incurred demolition expense.
The insurance company | 6 | | shall then issue a draft or check payable to the
unit of | 7 | | local government for the actual unpaid incurred demolition | 8 | | expense.
Any proceeds remaining shall be paid to the | 9 | | insured property owner.
| 10 | | In determining the amount of proceeds remaining under | 11 | | this paragraph,
the insured property owner shall receive | 12 | | interest on the amount withheld
from the date the | 13 | | certificate is executed as provided in Section 2 of
the | 14 | | Interest Act.
| 15 | | (e) If, under this Section, the proceeds payable are less | 16 | | than the
amount of the unpaid delinquent property taxes , unpaid | 17 | | nuisance liens, and unpaid incurred
demolition expense, unpaid | 18 | | property taxes shall be paid first.
| 19 | | (f) If incurred demolition expense or nuisance lien amounts | 20 | | withheld pursuant to
subparagraphs b. or c. of paragraph 5 of | 21 | | subsection (b) of this Section
exceeds the ultimate cost of | 22 | | demolition, the excess shall first be
applied to unpaid | 23 | | delinquent property taxes. Any amount of proceeds
remaining | 24 | | shall be paid to the insured property owner.
| 25 | | (g) Nothing in this Section shall be construed as:
| 26 | | (1) making an insurance company liable for any amount |
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| 1 | | in excess of
the proceeds payable under its insurance | 2 | | policy unless the insurance
company shall have made payment | 3 | | to the named insured without satisfying the
requirements of | 4 | | this Section;
| 5 | | (2) making a unit of local government or tax collector | 6 | | an insured
under an insurance policy; or
| 7 | | (3) creating an obligation for an insurance company to | 8 | | pay unpaid
delinquent property taxes , unpaid nuisance | 9 | | liens, or unpaid incurred demolition expense other
than as | 10 | | provided in subsection (d) of this Section.
| 11 | | (h) An insurance company making a payment of proceeds under | 12 | | this
Section for unpaid delinquent taxes or unpaid incurred | 13 | | demolition
expense shall be entitled to the full benefit of | 14 | | such payment, including
subrogation rights and other rights of | 15 | | assignment.
| 16 | | (i) Unpaid property taxes and unpaid incurred demolition | 17 | | expense for
a claim for loss to a structure occurring after the | 18 | | issuance of a tax
deed pursuant to Section 22-40 of the | 19 | | Property Tax Code shall not include any
unpaid property tax or | 20 | | unpaid demolition expense arising before the issuance of
the | 21 | | tax deed.
| 22 | | (j) The county collector shall be designated as the local
| 23 | | official who shall execute the certificate required by this | 24 | | Section regarding
delinquent property taxes. The village clerk | 25 | | or city clerk in incorporated
areas and the official in charge | 26 | | of the county building department in
unincorporated areas shall |
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| 1 | | be designated as
the local official who shall execute the | 2 | | certificate required by this Section
regarding demolition | 3 | | expenses.
| 4 | | (k) A fee not to exceed $5 may be charged by a unit of local
| 5 | | government for execution of the certificate required by this | 6 | | Section.
| 7 | | (l) This Section shall retroactively apply to any policy | 8 | | issued or renewed
on or after January 1, 1978 for which a claim | 9 | | subject to this Section remains
unpaid as of the effective date | 10 | | of this amendatory Act of 1978.
| 11 | | (Source: P.A. 87-507; 88-667, eff. 9-16-94; 88-670, eff. | 12 | | 12-2-94.)
| 13 | | Section 99. Effective date. This Act takes effect upon | 14 | | becoming law.".
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