Full Text of HB5350 94th General Assembly
HB5350 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 HB5350
Introduced 01/26/06, by Rep. Frank J. Mautino SYNOPSIS AS INTRODUCED: |
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215 ILCS 125/2-8 |
from Ch. 111 1/2, par. 1407.01 |
215 ILCS 125/6-8 |
from Ch. 111 1/2, par. 1418.8 |
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Amends the Health Maintenance Organization Act. Changes references from hospital to provider in a Section concerning provider agreements. Deletes a provision providing that the Health Maintenance Organization Guaranty Association is not required to pay any provider of health care services to an enrollee if the provider has agreed by contract not to seek payment from the enrollee or if as a matter of law the provider may not seek payment from the enrollee. Effective immediately.
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A BILL FOR
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HB5350 |
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LRB094 18092 LJB 53397 b |
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| AN ACT concerning insurance.
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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 Health Maintenance Organization Act is | 5 |
| amended by changing Sections 2-8 and 6-8 as follows:
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| (215 ILCS 125/2-8) (from Ch. 111 1/2, par. 1407.01)
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| Sec. 2-8. Provider agreements. (a) All provider contracts | 8 |
| currently in
existence between any organization and any | 9 |
| provider
hospital which are renewed on
or after 180 days | 10 |
| following the effective date of this amendatory Act of
1987, | 11 |
| and all contracts between any organization and any provider
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| hospital executed
on or after 180 days after such effective | 13 |
| date, shall contain the following
"hold-harmless" clause: "The | 14 |
| provider agrees that in no event, including
but not limited to | 15 |
| nonpayment by the organization of amounts due the
hospital | 16 |
| provider under this contract, insolvency of the organization or
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| any breach of this contract by the organization, shall the | 18 |
| hospital
provider or its assignees or subcontractors have a | 19 |
| right to seek any type
of payment from, bill, charge, collect a | 20 |
| deposit from, or have any recourse
against, the enrollee, | 21 |
| persons acting on the enrollee's behalf (other than
the | 22 |
| organization), the employer or group contract holder for | 23 |
| services
provided pursuant to this contract except for the | 24 |
| payment of applicable
co-payments or deductibles for services | 25 |
| covered by the organization or fees
for services not covered by | 26 |
| the organization. The requirements of this
clause shall survive | 27 |
| any termination of this contract for services rendered
prior to | 28 |
| such termination, regardless of the cause of such termination. | 29 |
| The
organization's enrollees, the persons acting on the | 30 |
| enrollee's behalf
(other than the organization) and the | 31 |
| employer or group contract holder
shall be third party | 32 |
| beneficiaries of this clause. This clause supersedes
any oral |
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LRB094 18092 LJB 53397 b |
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| or written agreement now existing or hereafter entered into
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| between the provider and the enrollee, persons acting on the | 3 |
| enrollee's
behalf (other than the organization) and the | 4 |
| employer or group contract
holder." To the extent that any | 5 |
| hospital provider contract, which is
renewed or entered into on | 6 |
| or after 180 days following the effective date
of this | 7 |
| amendatory Act of 1987, fails to incorporate such provisions, | 8 |
| such
provisions shall be deemed incorporated into such | 9 |
| contracts by operation of
law as of the date of such renewal or | 10 |
| execution. Changes made to this Section by this amendatory Act | 11 |
| of the 94th General Assembly apply to provider agreements | 12 |
| renewed or executed on or after 180 days after the effective | 13 |
| date of this amendatory Act of the 94th General Assembly.
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| (b) All provider and subcontractor contracts must contain | 15 |
| provisions
whereby the provider or subcontractor shall | 16 |
| provide, arrange for, or
participate in the quality assurance | 17 |
| programs mandated by this Act, unless
the Illinois Department | 18 |
| of Public Health certifies that such programs will
be fully | 19 |
| implemented without any participation or action from such | 20 |
| contracting provider.
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| (c) The Director may promulgate rules requiring that | 22 |
| provider contracts
contain provisions concerning reasonable | 23 |
| notices to be given between the
parties and for the | 24 |
| organization to provide reasonable notice to its
enrollees and | 25 |
| to the Director. Notice shall be given for such events as,
but | 26 |
| not limited to, termination of insurance protection, quality | 27 |
| assurance
or availability of medical care.
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| (Source: P.A. 86-620.)
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| (215 ILCS 125/6-8) (from Ch. 111 1/2, par. 1418.8)
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| Sec. 6-8. Powers and duties of the Association. In addition | 31 |
| to
the powers and duties enumerated in other Sections of this | 32 |
| Article, the
Association shall have the powers set forth in | 33 |
| this Section.
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| (1) If a domestic organization is an impaired organization, | 35 |
| the Association
may, subject to any conditions imposed by the |
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| Association other than
those which impair the contractual | 2 |
| obligations of the impaired organization,
and approved by the | 3 |
| impaired organization and the Director:
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| (a) guarantee or reinsure, or cause to be guaranteed, | 5 |
| assumed or
reinsured, any or all of the covered health care | 6 |
| plan certificates of
covered persons of the impaired | 7 |
| organization;
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| (b) provide such monies, pledges, notes, guarantees, | 9 |
| or other means
as are proper to effectuate paragraph (a), | 10 |
| and assure payment of the
contractual obligations of the | 11 |
| impaired organization pending action under
paragraph (a); | 12 |
| and
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| (c) loan money to the impaired organization.
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| (2) If a domestic, foreign, or alien organization is an | 15 |
| insolvent
organization, the Association shall, subject to the | 16 |
| approval of the Director:
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| (a) guarantee, assume, indemnify or reinsure or cause | 18 |
| to be guaranteed,
assumed, indemnified or reinsured the | 19 |
| covered health care plan benefits
of covered persons of the | 20 |
| insolvent organization; however, in the event
that the | 21 |
| Director of Healthcare and Family Services (formerly
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| Director of the Department of Public Aid )
assigns | 23 |
| individuals that are recipients of public aid from an | 24 |
| insolvent
organization to another organization, the | 25 |
| Director of Healthcare and Family Services
the Department | 26 |
| of
Public Aid shall, before fixing the rates to be paid by | 27 |
| the Department of
Healthcare and Family Services
Public Aid
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| to the transferee organization on account of such | 29 |
| individuals,
consult with the Director of the Department of | 30 |
| Insurance as to the
reasonableness of such rates in light | 31 |
| of the health care needs of such
individuals and the costs | 32 |
| of providing health care services to such
individuals;
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| (b) assure payment of the contractual obligations of | 34 |
| the insolvent
organization to covered persons;
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| (c) make payments to providers of health care, or | 36 |
| indemnity payments
to covered persons, so as to assure the |
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| continued payment of benefits
substantially similar to | 2 |
| those provided for under covered health care plan
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| certificate issued by the insolvent organization to | 4 |
| covered persons; and
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| (d) provide such monies, pledges, notes, guaranties, | 6 |
| or other means
as are reasonably necessary to discharge | 7 |
| such duties.
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| This subsection (2) shall not apply when the
Director has | 9 |
| determined that the foreign or alien organization's
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| domiciliary jurisdiction or state of entry provides, by | 11 |
| statute, protection
substantially similar to that provided by | 12 |
| this Article for residents of
this State and such protection | 13 |
| will be provided in a timely manner.
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| (3) There shall be no liability on the part of and no cause | 15 |
| of action
shall arise against the Association or against any | 16 |
| transferee from the
Association in connection with the transfer | 17 |
| by reinsurance or otherwise of
all or any part of an impaired | 18 |
| or insolvent organization's business by
reason of any action | 19 |
| taken or any failure to take any action by the
impaired or | 20 |
| insolvent organization at any time.
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| (4) If the Association fails to act within a reasonable | 22 |
| period of
time as provided in subsection (2) of this Section | 23 |
| with respect to an
insolvent organization, the Director shall | 24 |
| have the powers and duties of
the Association under this | 25 |
| Article with regard to such insolvent organization.
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| (5) The Association or its designated representatives may | 27 |
| render
assistance and advice to the Director, upon his request, | 28 |
| concerning
rehabilitation, payment of claims, continuations of | 29 |
| coverage, or the
performance of other contractual obligations | 30 |
| of any impaired or insolvent
organization.
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| (6) The Association has standing to appear before any court | 32 |
| concerning
all matters germane to the powers and duties of
the | 33 |
| Association, including, but not limited to, proposals for | 34 |
| reinsuring
or guaranteeing the covered health care plan | 35 |
| certificates of the impaired
or insolvent organization and the | 36 |
| determination of the covered health care plan
certificates and |
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| contractual obligations.
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| (7) (a) Any person receiving benefits under this Article is | 3 |
| deemed
to have assigned the rights under the covered health | 4 |
| care plan
certificates to the Association to the extent of the | 5 |
| benefits received
because of this Article whether the benefits | 6 |
| are payments of contractual
obligations or continuation of | 7 |
| coverage. The Association may require an
assignment to it of | 8 |
| such rights by any payee, enrollee or beneficiary as a
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| condition precedent to the receipt of any rights or benefits | 10 |
| conferred by
this Article upon such person. The Association is | 11 |
| subrogated to these
rights against the assets of any insolvent | 12 |
| organization and against any
other party who may be liable to | 13 |
| such payee, enrollee or beneficiary.
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| (b) The subrogation rights of the Association under this | 15 |
| subsection
have the same priority against the assets of the | 16 |
| insolvent organization as
that possessed by the person entitled | 17 |
| to receive benefits under this
Article.
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| (8) (a) The contractual obligations of the insolvent | 19 |
| organization for
which the Association becomes or may become | 20 |
| liable are as great as but no
greater than the contractual | 21 |
| obligations of the insolvent organization would
have been in | 22 |
| the absence of an insolvency unless such obligations are
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| reduced as permitted by subsection (3), but the aggregate | 24 |
| liability of the
Association shall not exceed $300,000 with | 25 |
| respect to any one natural person.
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| (b) Furthermore, the Association shall not be required to | 27 |
| pay, and shall
have no liability to, any provider of health | 28 |
| care services to an enrollee:
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| (i) if such provider, or his or its affiliates or | 30 |
| members of his
immediate family, at any time within the one | 31 |
| year prior to the date of the
issuance of the first order, | 32 |
| by a court of competent jurisdiction, of
conservation, | 33 |
| rehabilitation or liquidation pertaining to the health
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| maintenance organization:
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| (A) was a securityholder of such organization (but | 36 |
| excluding any
securityholder holding an equity |
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| interest of 5% or less);
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| (B) exercised control over the organization by | 3 |
| means such as serving as
an officer or director, | 4 |
| through a management agreement or as a principal
member | 5 |
| of a not-for-profit organization;
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| (C) had a representative serving by virtue or his | 7 |
| or her official
position as a representative of such | 8 |
| provider on the board of any entity
which exercised | 9 |
| control over the organization;
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| (D) received provider payments made by such | 11 |
| organization pursuant to a
contract which was not a | 12 |
| product of arms-length bargaining; or
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| (E) received distributions other than for | 14 |
| physician services from a
not-for-profit organization | 15 |
| on account of such provider's status as a
member of | 16 |
| such organization.
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| For purposes of this subparagraph (i), the terms | 18 |
| "affiliate," "person,"
"control" and "securityholder" | 19 |
| shall have the meanings ascribed to such
terms in Section | 20 |
| 131.1 of the Illinois Insurance Code; or
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| (ii) (blank).
if and to the extent such a provider has | 22 |
| agreed by contract not
to seek payment from the enrollee | 23 |
| for services provided to such enrollee
or if, and to the | 24 |
| extent, as a matter of law such provider may not seek
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| payment from the enrollee for services provided to such | 26 |
| enrollee.
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| (c) In no event shall the Association be required to pay | 28 |
| any provider
participating in the insolvent organization
any | 29 |
| amount for in-plan services rendered by such provider prior to | 30 |
| the
insolvency of the organization in excess of (1) the amount
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| provided by a capitation contract between a physician provider | 32 |
| and the
insolvent organization for such services; or (2) the
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| amounts provided by contract between a hospital provider and | 34 |
| the Department of Healthcare and Family Services (formerly
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| Department of
Public Aid ) for similar services to recipients of | 36 |
| public aid; or (3) in the
event neither (1) nor (2) above is |
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| applicable, then the amounts paid under
the Medicare area | 2 |
| prevailing rate for the area where the services were
provided, | 3 |
| or if no such rate exists with respect to such services, then | 4 |
| 80%
of the usual and customary rates established by the Health | 5 |
| Insurance
Association of America. The payments required to be | 6 |
| made by the Association
under this Section shall constitute | 7 |
| full and complete payment for such
provider services to the | 8 |
| enrollee.
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| (d) The Association shall not be required to pay more than | 10 |
| an
aggregate of $300,000 for any organization which is declared | 11 |
| to be
insolvent prior to July 1, 1987, and such funds shall be | 12 |
| distributed first
to enrollees who are not public aid | 13 |
| recipients pursuant to a plan
recommended by the Association | 14 |
| and approved by the Director and the court
having jurisdiction | 15 |
| over the liquidation.
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| (9) The Association may:
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| (a) Enter into such contracts as are necessary or | 18 |
| proper to carry
out the provisions and purposes of this | 19 |
| Article.
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| (b) Sue or be sued, including taking any legal actions | 21 |
| necessary or
proper for recovery of any unpaid assessments | 22 |
| under Section 6-9. The
Association shall not be liable for | 23 |
| punitive or exemplary damages.
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| (c) Borrow money to effect the purposes of this | 25 |
| Article. Any notes
or other evidence of indebtedness of the | 26 |
| Association not in default are
legal investments for | 27 |
| domestic organizations and may be carried as admitted
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| assets.
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| (d) Employ or retain such persons as are necessary to | 30 |
| handle the
financial transactions of the Association, and | 31 |
| to perform such other
functions as become necessary or | 32 |
| proper under this Article.
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| (e) Negotiate and contract with any liquidator, | 34 |
| rehabilitator,
conservator, or ancillary receiver to carry | 35 |
| out the powers and duties of
the Association.
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| (f) Take such legal action as may be necessary to avoid |
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| payment of
improper claims.
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| (g) Exercise, for the purposes of this Article and to | 3 |
| the extent
approved by the Director, the powers of a | 4 |
| domestic
organization, but in no case may the Association | 5 |
| issue evidence of coverage
other than that issued to | 6 |
| perform the contractual
obligations of the impaired or | 7 |
| insolvent organization.
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| (h) Exercise all the rights of the Director under | 9 |
| Section 193(4) of
the Illinois Insurance Code with respect | 10 |
| to covered health care plan
certificates after the | 11 |
| association becomes obligated by statute.
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| (10) The obligations of the Association under this Article | 13 |
| shall not
relieve any reinsurer, insurer or other person of its | 14 |
| obligations to the
insolvent organization (or its conservator, | 15 |
| rehabilitator, liquidator or
similar official) or its | 16 |
| enrollees, including without limitation any
reinsurer, insurer | 17 |
| or other person liable to the insolvent insurer (or its
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| conservator, rehabilitator, liquidator or similar official) or | 19 |
| its
enrollees under any contract of reinsurance, any contract | 20 |
| providing stop
loss coverage or similar coverage or any health | 21 |
| care contract. With
respect to covered health care plan | 22 |
| certificates for which the
Association becomes obligated after | 23 |
| an entry of an order of liquidation
or rehabilitation, the | 24 |
| Association may elect to succeed to the rights of
the insolvent | 25 |
| organization arising after the date of the order of
liquidation | 26 |
| or rehabilitation under any contract of reinsurance, any
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| contract providing stop loss coverage or similar coverages or | 28 |
| any health
care service contract to which the insolvent | 29 |
| organization was a party, on
the terms set forth under such | 30 |
| contract, to the extent that such contract
provides coverage | 31 |
| for health care services provided after the date of the
order | 32 |
| of liquidation or rehabilitation. As a condition to making this
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| election, the Association must pay premiums for coverage | 34 |
| relating to
periods after the date of the order of liquidation | 35 |
| or rehabilitation.
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| (11) The Association shall be entitled to collect premiums |
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| due under or with
respect to covered health care certificates | 2 |
| for a period from the date on which
the domestic, foreign, or | 3 |
| alien organization became an insolvent organization
until the | 4 |
| Association no longer has obligations under subsection (2) of
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| this Section with respect to such certificates. The | 6 |
| Association's
obligations under subsection (2) of this Section | 7 |
| with respect to
any covered health care plan certificates shall | 8 |
| terminate in the event that
all such premiums due under or with | 9 |
| respect to such covered health care plan
certificates are not | 10 |
| paid to the Association (i) within 30 days of the
Association's | 11 |
| demand therefor, or (ii) in the event that such certificates
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| provide for a longer grace period for payment of premiums after | 13 |
| notice of
non-payment or demand therefor, within the lesser of | 14 |
| (A) the period provided
for in such certificates or (B) 60 | 15 |
| days.
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| (Source: P.A. 90-655, eff. 7-30-98; revised 12-15-05.)
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| Section 99. Effective date. This Act takes effect upon | 18 |
| becoming law.
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