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| Public Act 098-0158 | ||||
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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 Insurance Code is amended by | ||||
changing Section 412 as follows:
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(215 ILCS 5/412) (from Ch. 73, par. 1024)
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Sec. 412. Refunds; penalties; collection.
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(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
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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.
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(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
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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.
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(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
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Premium Tax Refund Fund only to the extent that amounts | ||
have been deposited and
retained in the Insurance Premium | ||
Tax Refund Fund.
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(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.
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(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.
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(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.
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(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%
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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).
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(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.
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(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.
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(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.
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(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.
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(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.)
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Section 99. Effective date. This Act takes effect upon | ||
becoming law.
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