Illinois General Assembly - Full Text of SB2758
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Full Text of SB2758  98th General Assembly




State of Illinois
2013 and 2014


Introduced 1/28/2014, by Sen. Daniel Biss


New Act
30 ILCS 105/5.855 new

     Creates the Illinois Secure Choice Savings Program Act. Establishes a retirement savings program in the form of an automatic enrollment payroll deduction IRA with the intent of promoting greater retirement savings for private-sector employees in a convenient, low-cost, and portable manner. Creates the Illinois Secure Choice Savings Program Fund consisting of moneys received from enrollees and participating employers. Sets forth the composition of the Board, the Board's duties, and provisions governing risk management, investment firms, and investment options. Provides for employee and employer information packets, as well as program implementation and enrollment. Provides that the State shall have no duty or liability to any party for the payment of any retirement savings benefits accrued by any individual under the Program. Requires annual reports and audits of the Program. Sets forth penalties. Amends the State Finance Act to create the Illinois Secure Choice Savings Program Fund. Effective immediately.

LRB098 17555 OMW 54519 b






SB2758LRB098 17555 OMW 54519 b

1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the
5Illinois Secure Choice Savings Program Act.
6    Section 5. Definitions. Unless the context requires a
7different meaning or as expressly provided in this Section, all
8terms shall have the same meaning as when used in a comparable
9context in the Internal Revenue Code. As used in this Act:
10    "Board" means the Illinois Secure Choice Savings Board
11established under this Act.
12    "Department" means the Department of Revenue.
13    "Director" means the Director of Revenue.
14    "Employee" means any individual who is employed by an
15employer and who has wages that are allocable to Illinois
16during a calendar year under the provisions of Section
17304(a)(2)(B) of the Illinois Income Tax Act.
18    "Employer" means a person or entity engaged in a business,
19industry, profession, trade, or other enterprise in Illinois,
20whether for profit or not for profit, that (i) has employed 10
21or more employees in the State throughout the previous calendar
22year, (ii) has been in business at least 2 years, and (iii) has
23not offered a qualified retirement plan, including, but not



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1limited to, a plan qualified under Section 401(a), Section
2401(k), Section 403(a), Section 403(b), Section 408(k),
3Section 408(p), or Section 457(b) of the Internal Revenue Code
4of 1986 in the preceding 2 years.
5    "Enrollee" means any employee who is enrolled in the
7    "Fund" means the Illinois Secure Choice Savings Program
9    "Internal Revenue Code" means Internal Revenue Code of
101986, or any successor law, in effect for the calendar year.
11    "IRA" means an individual retirement account under Section
12408 of the Internal Revenue Code.
13    "Participating employer" means an employer or small
14employer that provides a payroll deposit retirement savings
15arrangement as provided for by this Act for its employees who
16are enrollees in the Program.
17    "Payroll deposit retirement savings arrangement" means an
18arrangement by which a participating employer allows enrollees
19to remit payroll deduction contributions to the Program.
20    "Program" means the Illinois Secure Choice Savings
22    "Small employer" means a person or entity engaged in a
23business, industry, profession, trade, or other enterprise in
24Illinois, whether for profit or not for profit, that (i)
25employed less than 10 employees at any one time in the State
26throughout the previous calendar year, or (ii) has been in



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1business less than 2 years, or both items (i) and (ii), but
2that notifies the Department that it is interested in being a
3participating employer.
4    "Wages" means any compensation within the meaning of
5Section 219(f)(1) of the Internal Revenue Code that is received
6by an enrollee from a participating employer during the
7calendar year.
8    Section 10. Establishment of Illinois Secure Choice
9Savings Program. A retirement savings program in the form of an
10automatic enrollment payroll deduction IRA, known as the
11Illinois Secure Choice Savings Program, is hereby established
12and shall be administered by the Board for the purpose of
13promoting greater retirement savings for private-sector
14employees in a convenient, low-cost, and portable manner.
15    Section 15. Illinois Secure Choice Savings Program Fund.
16The Illinois Secure Choice Savings Program Fund is hereby
17established as a special fund in the State treasury. The Fund
18shall include the individual retirement accounts of enrollees,
19which shall be accounted for as individual accounts. Moneys in
20the Fund shall consist of moneys received from enrollees and
21participating employers pursuant to automatic payroll
22deductions and contributions to savings made under this Act,
23grants from the United States Government and its agencies and
24instrumentalities, and any other available sources of funds,



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1public or private. The Fund shall be operated in a manner
2determined by the Board, provided that the Fund is operated so
3that the accounts of enrollees established under the Program
4meet the requirements for IRAs under the Internal Revenue Code.
5    Section 20. Composition of the Board. There is created the
6Illinois Secure Choice Savings Board.
7    (a) The Board shall consist of the following 7 members:
8        (1) the State Treasurer, or his or her designee, who
9    shall serve as chair;
10        (2) the State Comptroller, or his or her designee;
11        (3) the Director of the Governor's Office of Management
12    and Budget, or his or her designee;
13        (4) two public representatives with expertise in
14    retirement savings plan administration or investment, or
15    both, appointed by the Governor;
16        (5) a representative of participating employers,
17    appointed by the Governor; and
18        (6) a representative of enrollees, appointed by the
19    Governor.
20    (b) Members of the Board shall serve without compensation
21but may be reimbursed for necessary travel expenses incurred in
22connection with their Board duties from funds appropriated for
23the purpose.
24    (c) The initial appointments for the Governor's appointees
25shall be as follows: one public representative for 4 years; one



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1public representative for 2 years; the representative of
2participating employers for 3 years; and the representative of
3enrollees for 1 year. Thereafter, all of the Governor's
4appointees shall be for terms of 4 years.
5    (d) A vacancy in the term of an appointed Board member
6shall be filled for the balance of the unexpired term in the
7same manner as the original appointment.
8    (e) Each appointment by the Governor shall be subject to
9approval by the State Treasurer, and, when so approved, the
10Governor and the State Treasurer shall certify their respective
11appointments and approvals to the Secretary of State. If the
12State Treasurer does not approve or disapprove the appointment
13by the Governor within 15 days after receipt thereof, the
14person shall be deemed to have been approved by the State
16    (f) Each Board member, prior to assuming office, shall take
17an oath that he or she will diligently and honestly administer
18the affairs of the Board and that he or she will not knowingly
19violate or willingly permit to be violated any of the
20provisions of law applicable to the Program. The oath shall be
21certified by the officer before whom it is taken and
22immediately filed in the office of the Secretary of State.
23    Section 25. Fiduciary Duty. Members of the Board and all
24persons serving as Program staff shall discharge their duties
25with respect to the Program solely in the interest of the



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1Program's enrollees and beneficiaries as follows:
2        (1) for the exclusive purposes of providing benefits to
3    enrollees and beneficiaries and defraying reasonable
4    expenses of administering the Program;
5        (2) by investing with the care, skill, prudence, and
6    diligence under the prevailing circumstances that a
7    prudent person acting in a like capacity and familiar with
8    those matters would use in the conduct of an enterprise of
9    a like character and with like aims; and
10        (3) by using any contributions paid by employees and
11    employers into the trust exclusively for the purpose of
12    paying benefits to the enrollees of the Program, for the
13    cost of administration of the program, and for investments
14    made for the benefit of the Program.
15    Section 30. Duties of the Board. In addition to the other
16duties and responsibilities stated in this Act, the Board
18    (a) Cause the Program to be designed, established and
19operated in a manner that:
20        (1) accords with best practices for retirement savings
21    vehicles;
22        (2) maximizes participation, savings, and sound
23    investment practices;
24        (3) maximizes simplicity, including ease of
25    administration for participating employers and enrollees;



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1        (4) provides an efficient product to enrollees by
2    pooling investment funds;
3        (5) ensures the portability of benefits; and
4        (6) provides for the deaccumulation of enrollee assets
5    in a manner that maximizes financial security in
6    retirement.
7    (b) Appoint a trustee to the IRA Fund in compliance with
8Section 408 of the Internal Revenue Code.
9    (c) Explore and establish investment options, subject to
10Section 45 of this Act, that offer employees returns on
11contributions and the conversion of individual retirement
12savings account balances to secure retirement income without
13incurring debt or liabilities to the State.
14    (d) Establish the process by which interest, investment
15earnings, and investment losses are allocated to individual
16program accounts on a pro rata basis and are computed at the
17interest rate on the balance of an individual's account.
18    (e) Make and enter into contracts necessary for the
19administration of the Program and Fund, including, but not
20limited to, retaining and contracting with investment
21managers, private financial institutions, other financial and
22service providers, consultants, actuaries, counsel, auditors,
23third-party administrators, and other professionals as
25    (f) Determine the number and duties of staff members needed
26to administer the Program and assemble such a staff, including,



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1as needed, employing staff, appointing a program
2administrator, and entering into contracts with the State
3Treasurer to make employees of the State Treasurer's office
4available to administer the Program.
5    (g) Cause moneys in the Fund to be held and invested as
6pooled investments described in Section 45 of this Act, with a
7view to achieving cost savings through efficiencies and
8economies of scale.
9    (h) Evaluate and establish the process by which an enrollee
10is able to contribute a portion of his or her wages to the
11Program for automatic deposit of those contributions and the
12process by which the participating employer provides a payroll
13deposit retirement savings arrangement to forward those
14contributions and related information to the Program,
15including, but not limited to, contracting with financial
16service companies and third-party administrators with the
17capability to receive and process employee information and
18contributions for payroll deposit retirement savings
19arrangements or similar arrangements.
20    (i) Design and establish the process for enrollment under
21Section 60 of this Act, including the process by which an
22employee can opt not to participate in the Program, select a
23contribution level, select an investment option, and terminate
24participation in the Program.
25    (j) Evaluate and establish the process by which an
26individual or an employee of a non-participating employer may



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1voluntarily enroll in and make contributions to the Program.
2    (k) Accept any grants, appropriations, or other moneys from
3the State, any unit of federal, State, or local government, or
4any other person, firm, partnership, or corporation solely for
5deposit into the Fund, whether for investment or administrative
7    (l) Evaluate the need for, and procure as needed, insurance
8against any and all loss in connection with the property,
9assets, or activities of the Program, and indemnify as needed
10each member of the Board from personal loss or liability
11resulting from a member's action or inaction as a member of the
13    (m) Make provisions for the payment of administrative costs
14and expenses for the creation, management, and operation of the
15Program, including the costs associated with subsection (b) of
16Section 20 of this Act, subsections (e), (f), (h), and (l) of
17this Section, subsection (b) of Section 45 of this Act,
18subsection (a) of Section 80 of this Act, and subsection (n) of
19Section 85 of this Act. Subject to appropriation, the State may
20pay administrative costs associated with the creation and
21management of the Program until sufficient assets are available
22in the Fund for that purpose. Thereafter, all administrative
23costs of the Fund, including repayment of any start-up funds
24provided by the State, shall be paid only out of moneys on
25deposit therein. The Board shall keep annual administrative
26expenses as low as possible, but in no event shall they exceed



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11% of the total trust balance.
2    (n) Allocate administrative fees to individual retirement
3accounts in the Program on a pro rata basis.
4    (o) Set minimum and maximum contribution levels in
5accordance with limits established for IRAs by the Internal
6Revenue Code.
7    (p) Facilitate education and outreach to employers and
9    (q) Facilitate compliance by the Program with all
10applicable requirements for the Program under the Internal
11Revenue Code, including tax qualification requirements or any
12other applicable law and accounting requirements.
13    (r) Carry out the duties and obligations of the Program in
14an effective, efficient, and low-cost manner.
15    (s) Exercise any and all other powers reasonably necessary
16for the effectuation of the purposes, objectives, and
17provisions of this Act pertaining to the Program.
18    Section 35. Risk Management. The Board shall annually
19prepare and adopt a written statement of investment policy that
20includes a risk management and oversight program. This
21investment policy shall prohibit the Board, Program, and Fund
22from borrowing for investment purposes. The risk management and
23oversight program shall be designed to ensure that an effective
24risk management system is in place to monitor the risk levels
25of the Program and Fund portfolio, to ensure that the risks



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1taken are prudent and properly managed, to provide an
2integrated process for overall risk management, and to assess
3investment returns as well as risk to determine if the risks
4taken are adequately compensated compared to applicable
5performance benchmarks and standards. The Board shall consider
6the statement of investment policy and any changes in the
7investment policy at a public hearing.
8    Section 40. Investment firms.
9    (a) The Board shall engage, after an open bid process, an
10investment manager or managers to invest the Fund and any other
11assets of the Program. Moneys in the Fund may be invested or
12reinvested by the State Treasurer's Office or may be invested
13in whole or in part under contract with the State Board of
14Investment, private investment managers, or both, as selected
15by the Board. In selecting the investment manager or managers,
16the Board shall take into consideration and give weight to the
17investment manager's fees and charges in order to reduce the
18Program's administrative expenses.
19    (b) The investment manager or managers shall comply with
20any and all applicable federal and state laws, rules, and
21regulations, as well as any and all rules, policies, and
22guidelines promulgated by the Board with respect to the Program
23and the investment of the Fund, including, but not limited to,
24the investment policy.
25    (c) The investment manager or managers shall provide such



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1reports as the Board deems necessary for the Board to oversee
2each investment manager's performance and the performance of
3the Fund.
4    Section 45. Investment options.
5    (a) The Board shall establish as an investment option a
6life-cycle fund with a target date based upon the age of the
7enrollee. This shall be the default investment option for
8enrollees who fail to elect an investment option unless and
9until the Board designates by rule a new investment option as
10the default as described in subsection (c) of this Section.
11    (b) The Board may also establish any or all of these three
12additional investment options:
13        (1) a conservative principal protection fund;
14        (2) a growth fund;
15        (3) a secure return fund whose primary objective is the
16    preservation of the safety of principal and the provision
17    of a stable and low-risk rate of return. If the Board
18    elects to establish a secure return fund, the Board may
19    procure any insurance, annuity, or other product to insure
20    the value of individuals' accounts and guarantee a rate of
21    return. The cost of such funding mechanism shall be paid
22    out of the Fund. Under no circumstances shall the Board,
23    Program, Fund, the State, or any participating employer
24    assume any liability for investment or actuarial risk. The
25    Board shall determine whether to establish such investment



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1    options based upon an analysis of their cost, risk profile,
2    benefit level, feasibility, and ease of implementation.
3    (c) If the Board elects to establish a secure return fund,
4the Board shall then determine whether such option shall
5replace the target date or life-cycle fund as the default
6investment option for enrollees who do not elect an investment
7option. In making such determination, the Board shall consider
8the cost, risk profile, benefit level, and ease of enrollment
9in the secure return fund. The Board may at any time thereafter
10revisit this question and, based upon an analysis of these
11criteria, establish either the secure return fund or the
12life-cycle fund as the default for enrollees who do not elect
13an investment option.
14    Section 50. Benefits. Interest, investment earnings, and
15investment losses shall be allocated to individual Program
16accounts as established by the Board under subsection (d) of
17Section 30 of this Act. An individual's retirement savings
18benefit under the program shall be an amount equal to the
19balance in the individual's program account on the date the
20retirement savings benefit becomes payable. The State shall
21have no liability for the payment of any benefit to any
22participant in the program.
23    Section 55. Employer and employee information packets and
24disclosure forms.



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1    (a) Prior to the opening of the Program for enrollment, the
2Board shall design and disseminate to all employers through the
3Department an employer information packet and an employee
4information packet, which shall include background information
5on the Program and appropriate disclosures for employees.
6    (b) The Department shall by rule provide for the contents
7of the both the employee information packet and the employer
8information packet.
9    (c) The employee information packet shall include a
10disclosure form. The disclosure form shall explain, but not be
11limited to, all of the following:
12        (1) the benefits and risks associated with making
13    contributions to the Program;
14        (2) the mechanics of how to make contributions to the
15    Program;
16        (3) how to opt out of the Program;
17        (4) how to participate in the Program with a level of
18    employee contributions other than 3%;
19        (5) the process for withdrawal of retirement savings;
20        (6) how to obtain additional information about the
21    Program;
22        (7) that employees seeking financial advice should
23    contact financial advisors, that participating employers
24    are not in a position to provide financial advice, and that
25    participating employers are not liable for decisions
26    employees make pursuant to this Act;



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1        (8) that the Program is not an employer-sponsored
2    retirement plan; and
3        (9) that the Program fund is not guaranteed by the
4    State.
5    (d) The employee information packet shall also include a
6form for an employee to note his or her decision to opt out of
7participation in the Program or elect to participate with a
8level of employee contributions other than 3%.
9    (e) Participating employers shall supply the employee
10information packet to employees upon launch of the Program.
11Participating employers shall supply the employee information
12packet to new employees at the time of hiring, and new
13employees may opt out of participation in the Program or elect
14to participate with a level of employee contributions other
15than 3% at that time.
16    Section 60. Program implementation and enrollment. The
17Program shall be implemented, and enrollment of employees shall
18begin, within 12 months after the effective date of this Act.
19The provisions of this Section shall be in force after the
20Board opens the Program for enrollment.
21    (a) Each employer shall establish a payroll deposit
22retirement savings arrangement to allow each employee to
23participate in the program at most nine months after the Board
24opens the program for enrollment.
25    (b) Employers shall automatically enroll in the Program



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1each of their employees who has not opted out of participation
2in the Program using the form described in subsection (c) of
3Section 55 of this Act and shall provide payroll deduction
4retirement saving arrangements for such employees and deposit,
5on behalf of such employees, these funds into the Program.
6Small employers may, but are not required to, provide payroll
7deduction retirement saving arrangements for each employee who
8elects to participate in the Program.
9    (c) Enrollees shall have the ability to select a
10contribution level into the Fund. This level may be expressed
11as a percentage of wages or as a dollar amount up to the
12deductible amount for the enrollee's taxable year under Section
13219(b)(1)(A) of the Internal Revenue Code. Enrollees may change
14their contribution level at any time, subject to rules
15promulgated by the Board. If an enrollee fails to select a
16contribution level using the form described in subsection (c)
17of Section 55 of this Act, then he or she shall contribute 3%
18of his or her wages to the Program, provided that such
19contributions shall not cause the enrollee's total
20contributions to IRAs for the year to exceed the deductible
21amount for the enrollee's taxable year under Section
22219(b)(1)(A) of the Internal Revenue Code.
23    (d) Enrollees may select an investment option from the
24permitted investment options listed in Section 45 of this Act.
25Enrollees may change their investment option at any time,
26subject to rules promulgated by the Board. In the event that an



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1enrollee fails to select an investment option, that enrollee
2shall be placed in the investment option selected by the Board
3as the default under subsection (c) of Section 45 of this Act.
4If the Board has not selected a default investment option under
5subsection (c) of Section 45 of this Act, then an enrollee who
6fails to select an investment option shall be placed in the
7life-cycle fund investment option.
8    (e) Following initial implementation of the program
9pursuant to this Section, at least once every year,
10participating employers shall designate an open enrollment
11period during which employees who previously opted out of the
12Program may enroll in the Program.
13    (f) An employee who opts out of the Program who
14subsequently wants to participate through the participating
15employer's payroll deposit retirement savings arrangement may
16only enroll during the participating employer's designated
17open enrollment period or if permitted by the participating
18employer at an earlier time.
19    (g) Employers shall retain the option at all times to set
20up any type of employer-sponsored retirement plan, such as a
21defined benefit plan or a 401(k), Simplified Employee Pension
22(SEP) plan, or Savings Incentive Match Plan for Employees
23(SIMPLE) plan, or to offer an automatic enrollment payroll
24deduction IRA, instead of having a payroll deposit retirement
25savings arrangement to allow employee participation in the



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1    (h) An employee may terminate his or her participation in
2the Program at any time in a manner prescribed by the Board.
3    Section 65. Payments. Employee contributions deducted by
4the participating employer through payroll deduction shall be
5paid by the participating employer to the Fund using one or
6more payroll deposit retirement savings arrangements
7established by the Board under subsection (h) of Section 30 of
8this Act, either:
9        (1) on or before the last day of the month following
10    the month in which the compensation otherwise would have
11    been payable to the employee in cash; or
12        (2) before such later deadline prescribed by the Board
13    for making such payments, but not later than the due date
14    for the deposit of tax required to be deducted and withheld
15    relating to collection of income tax at source on wages or
16    for the deposit of tax required to be paid under the
17    unemployment insurance system for the payroll period to
18    which such payments relate.
19    Section 70. Duty and liability of the State.
20    (a) The State shall have no duty or liability to any party
21for the payment of any retirement savings benefits accrued by
22any individual under the Program. Any financial liability for
23the payment of retirement savings benefits in excess of funds
24available under the Program shall be borne solely by the



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1entities with whom the Board contracts to provide insurance to
2protect the value of the Program.
3    (b) No State board, commission, or agency, or any officer,
4employee, or member thereof is liable for any loss or
5deficiency resulting from particular investments selected
6under this Act.
7    Section 75. Duty and liability of participating employers.
8    (a) Participating employers shall not have any liability
9for an employee's decision to participate in, or opt out of,
10the Program or for the investment decisions of the Board or of
11any enrollee.
12    (b) A participating employer shall not be a fiduciary, or
13considered to be a fiduciary, over the Program. A participating
14employer shall not bear responsibility for the administration,
15investment, or investment performance of the Program. A
16participating employer shall not be liable with regard to
17investment returns, Program design, and benefits paid to
18Program participants.
19    Section 80. Audit and reports.
20    (a) The Board shall annually submit:
21        (1) an audited financial report, prepared in
22    accordance with generally accepted accounting principles,
23    on the operations of the Program during each calendar year
24    by July 1 of the following year to the Governor, the



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1    Comptroller, the State Treasurer, and the General
2    Assembly; and
3        (2) a report prepared by the Board, which shall
4    include, but is not limited to, a summary of the benefits
5    provided by the Program, including the number of enrollees
6    in the Program, the percentage and amounts of investment
7    options and rates of return, and such other information
8    that is relevant to make a full, fair, and effective
9    disclosure of the operations of the Program and the Fund.
10The annual audit shall be made by an independent certified
11public accountant and shall include, but is not limited to,
12direct and indirect costs attributable to the use of outside
13consultants, independent contractors, and any other persons
14who are not State employees for the administration of the
16    (b) In addition to any other statements or reports required
17by law, the Board shall provide periodic reports at least
18annually to participating employers, reporting the names of
19each enrollee employed by the participating employer and the
20amounts of contributions made by the participating employer on
21behalf of each employee during the reporting period, as well as
22to enrollees, reporting contributions and investment income
23allocated to, withdrawals from, and balances in their Program
24accounts for the reporting period. Such reports may include any
25other information regarding the Program as the Board may



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1    Section 85. Penalties.
2    (a) An employer who fails without reasonable cause to
3enroll an employee in the Program within the time prescribed
4under Section 60 of this Act shall be subject to a penalty
5equal to:
6        (1) $250 for each employee for each calendar year or
7    portion of a calendar year during which the employee
8    neither was enrolled in the Program nor had elected out of
9    participation in the Program; or
10        (2) for each calendar year beginning after the date a
11    penalty has been assessed with respect to an employee, $500
12    for any portion of that calendar year during which such
13    employee continues to be unenrolled without electing out of
14    participation in the Program.
15    (b) After determining that an employer is subject to
16penalty under this Section for a calendar year, the Department
17shall issue a notice of proposed assessment to such employer,
18stating the number of employees for which the penalty is
19proposed under item (1) of subsection (a) of this Section and
20the number of employees for which the penalty is proposed under
21item (2) of subsection (a) of this Section for such calendar
22year, and the total amount of penalties proposed.
23    Upon the expiration of 90 days after the date on which a
24notice of proposed assessment was issued, the penalties
25specified therein shall be deemed assessed, unless the employer



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1had filed a protest with the Department under subsection (c) of
2this Section.
3    If, within 90 days after the date on which it was issued, a
4protest of a notice of proposed assessment is filed under
5subsection (c) of this Section, the penalties specified therein
6shall be deemed assessed upon the date when the decision of the
7Department with respect to the protest becomes final.
8    (c) A written protest against the proposed assessment shall
9be filed with the Department in such form as the Department may
10by rule prescribe, setting forth the grounds on which such
11protest is based. If such a protest is filed within 90 days
12after the date the notice of proposed assessment is issued, the
13Department shall reconsider the proposed assessment and shall
14grant the employer a hearing. As soon as practicable after such
15reconsideration and hearing, the Department shall issue a
16notice of decision to the employer, setting forth the
17Department's findings of fact and the basis of decision. The
18decision of the Department shall become final:
19        (1) if no action for review of the decision is
20    commenced under the Administrative Review Law, on the date
21    on which the time for commencement of such review has
22    expired; or
23        (2) if a timely action for review of the decision is
24    commenced under the Administrative Review Law, on the date
25    all proceedings in court for the review of such assessment
26    have terminated or the time for the taking thereof has



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1    expired without such proceedings being instituted.
2    (d) As soon as practicable after the penalties specified in
3a notice of proposed assessment are deemed assessed, the
4Department shall give notice to the employer liable for any
5unpaid portion of such assessment, stating the amount due and
6demanding payment. If a employer neglects or refuses to pay the
7entire liability shown on the notice and demand within 10 days
8after the notice and demand is issued, the unpaid amount of the
9liability shall be a lien in favor of the State of Illinois
10upon all property and rights to property, whether real or
11personal, belonging to the employer, and the provisions in the
12Illinois Income Tax Act regarding liens, levies and collection
13actions with regard to assessed and unpaid liabilities under
14that Act, including the periods for taking any action, shall
16    (e) An employer who has overpaid a penalty assessed under
17this Section may file a claim for refund with the Department. A
18claim shall be in writing in such form as the Department may by
19rule prescribe and shall state the specific grounds upon which
20it is founded. As soon as practicable after a claim for refund
21is filed, the Department shall examine it and either issue a
22refund or issue a notice of denial. If such a protest is filed,
23the Department shall reconsider the denial and grant the
24employer a hearing. As soon as practicable after such
25reconsideration and hearing, the Department shall issue a
26notice of decision to the employer. The notice shall set forth



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1briefly the Department's findings of fact and the basis of
2decision in each case decided in whole or in part adversely to
3the employer. A denial of a claim for refund becomes final 90
4days after the date of issuance of the notice of the denial
5except for such amounts denied as to which the employer has
6filed a protest with the Department. If a protest has been
7timely filed, the decision of the Department shall become
9        (1) if no action for review of the decision is
10    commenced under the Administrative Review Law, on the date
11    on which the time for commencement of such review has
12    expired; or
13        (2) if a timely action for review of the decision is
14    commenced under the Administrative Review Law, on the date
15    all proceedings in court for the review of such assessment
16    have terminated or the time for the taking thereof has
17    expired without such proceedings being instituted.
18    (f) No notice of proposed assessment may be issued with
19respect to a calendar year after June 30 of the fourth
20subsequent calendar year. No claim for refund may be filed more
21than 1 year after the date of payment of the amount to be
23    (g) The provisions of the Administrative Review Law and the
24rules adopted pursuant to it shall apply to and govern all
25proceedings for the judicial review of final decisions of the
26Department in response to a protest filed by the employer under



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1subsections (c) and (e) of this Section. Final decisions of the
2Department shall constitute "administrative decisions" as
3defined in Section 3-101 of the Code of Civil Procedure.
4    (h) Whenever notice is required by this Section, it may be
5given or issued by mailing it by first-class mail addressed to
6the person concerned at his or her last known address.
7    (i) All books and records and other papers and documents
8relevant to the determination of any penalty due under this
9Section shall, at all times during business hours of the day,
10be subject to inspection by the Department or its duly
11authorized agents and employees.
12    (j) The Department may require employers to report
13information relevant to their compliance with this Act on
14returns otherwise due from the employers under Section 704A of
15the Illinois Income Tax Act and failure to provide the
16requested information on a return shall cause such return to be
17treated as unprocessable.
18    (k) For purposes of any provision of State law allowing the
19Department or any other agency of this State to offset an
20amount owed to a taxpayer against a tax liability of that
21taxpayer or allowing the Department to offset an overpayment of
22tax against any liability owed to the State, a penalty assessed
23under this Section shall be deemed to be a tax liability of the
24employer and any refund due to an employer shall be deemed to
25be an overpayment of tax of the employer.
26    (l) Except as provided in this subsection, all information



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1received by the Department from returns filed by an employer or
2from any investigation conducted under the provisions of this
3Act shall be confidential, except for official purposes within
4the Department or pursuant to official procedures for
5collection of penalties assessed under this Act. Nothing
6contained in this subsection shall prevent the Director from
7publishing or making available to the public reasonable
8statistics concerning the operation of this Act wherein the
9contents of returns are grouped into aggregates in such a way
10that the specific information of any employer shall not be
11disclosed. Nothing contained in this subsection shall prevent
12the Director from divulging information to an authorized
13representative of the employer or to any person pursuant to a
14request or authorization made by the employer or by an
15authorized representative of the employer.
16    (m) Civil penalties collected under this Act and fees
17collected pursuant to subsection (n) of this Section shall be
18deposited into the Tax Compliance and Administration Fund. The
19Department may, subject to appropriation, use moneys in the
20fund to cover expenses it incurs in the performance of its
21duties under this Act. Interest attributable to moneys in the
22Tax Compliance and Administration Fund shall be credited to the
23Tax Compliance and Administration Fund.
24    (n) The Department may charge the Board a reasonable fee
25for its costs in performing its duties under this Section to
26the extent that such costs have not been recovered from



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1penalties imposed under this Section.
2    (o) This Section shall become operative 9 months after the
3Board notifies the Director that the Program has been
4implemented. Upon receipt of such notification from the Board,
5the Department shall immediately post on its Internet website a
6notice stating that this Section is operative and the date that
7it is first operative.
8    Section 90. Rules. The Board and the Department shall
9adopt, in accordance with the Illinois Administrative
10Procedure Act, any rules that may be necessary to implement
11this Act.
12    Section 500. The State Finance Act is amended by adding
13Section 5.855 as follows:
14    (30 ILCS 105/5.855 new)
15    Sec. 5.855. The Illinois Secure Choice Savings Program
17    Section 999. Effective date. This Act takes effect upon
18becoming law.