[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Engrossed ] | [ House Amendment 003 ] |
91_HB0144
LRB9101143PTpk
1 AN ACT concerning insurance companies.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Certified Capital Company Act.
6 Section 5. Policy statement. The primary purpose of the
7 Certified Capital Company Act is to provide assistance in the
8 formation of new and expansion of existing businesses that
9 create jobs in the State by providing an incentive for
10 insurance companies to invest in certified capital companies.
11 Section 10. Definitions. For the purpose of this Act:
12 "Affiliate of a certified capital company or insurance
13 company" means:
14 (a) Any person, directly or indirectly beneficially
15 owning (whether through rights, options, convertible
16 interests, or otherwise), controlling or holding power to
17 vote 10% or more of the outstanding voting securities or
18 other ownership interests of the certified capital
19 company or insurance company, as applicable;
20 (b) Any person 10% or more of whose outstanding
21 voting securities or other ownership interest are
22 directly or indirectly beneficially owned (whether
23 through rights, options, convertible interests, or
24 otherwise), controlled or held with power to vote by the
25 certified capital company or insurance company, as
26 applicable;
27 (c) Any person directly or indirectly controlling,
28 controlled by, or under common control with the certified
29 capital company or insurance company, as applicable;
30 (d) A partnership in which the certified capital
-2- LRB9101143PTpk
1 company or insurance company, as applicable, is a general
2 partner; or
3 (e) Any person who is an officer, director,
4 employee, or agent of the certified capital company or
5 insurance company, as applicable, or an immediate family
6 member of that officer, director, employee, or agent.
7 "Certification date" means the date on which a certified
8 capital company is so designated by the Department.
9 "Certified capital" means an investment of cash by a
10 certified investor in a certified capital company that fully
11 funds the purchase price of either or both its equity
12 interest in the certified capital company or a qualified debt
13 instrument issued by the certified capital company.
14 "Certified capital company" means a partnership,
15 corporation, trust, or limited liability company, whether
16 organized on a profit or not-for-profit basis, that has as
17 its primary business activity the investment of cash in
18 qualified businesses and that is certified by the Department
19 as meeting the criteria of this Act.
20 "Certified investor" means any insurance company that (A)
21 contributes certified capital pursuant to an allocation of
22 privilege tax credits under Section 25 of this Act or (B)
23 becomes irrevocably committed to contribute certified capital
24 by preparing and executing a privilege tax credit allocation
25 claim.
26 "Department" means the Department of Commerce and
27 Community Affairs.
28 "Person" means any natural person or entity, including a
29 corporation, general or limited partnership, trust, or
30 limited liability company.
31 "Privilege tax credit allocation claim" means a claim for
32 allocation of privilege tax credits prepared and executed by
33 a certified investor on a form provided by the Department and
34 filed by a certified capital company with the Department.
-3- LRB9101143PTpk
1 The form shall include an affidavit of the certified investor
2 under which the certified investor shall become legally bound
3 and irrevocably committed to make an investment of certified
4 capital in a certified capital company in the amount
5 allocated (even if such amount is less than the amount of the
6 claim), subject only to the receipt of an allocation pursuant
7 to Section 25 of this Act.
8 "Qualified business" means a business that meets all of
9 the following conditions as of the time of a certified
10 capital company's first investment in the business:
11 (a) It is headquartered in this State, and its
12 principal business operations are located in this State;
13 (b) It is a small business concern as defined in
14 Section 121.201 of the small business size regulations of
15 the U.S. Small Business Administration, 13 CFR 121.201.
16 A business predominantly engaged in professional services
17 provided by accountants, lawyers, or physicians shall not
18 constitute a qualified business.
19 "Qualified debt instrument" means a debt instrument
20 issued by a certified capital company, at par value or a
21 privilege, with an original maturity date of at least 5 years
22 from date of issuance, a repayment schedule that is no faster
23 than a level principal amortization over 5 years, and
24 interest, distribution, or payment features that are not
25 related to the profitability of the certified capital company
26 or the performance of the certified capital company's
27 investment portfolio.
28 "Qualified Distribution" means any distribution or
29 payment to equity holders of a certified capital company in
30 connection with the following:
31 (a) Costs and expenses of forming, syndicating,
32 managing, and operating the certified capital company,
33 including reasonable and necessary fees paid for
34 professional services (such as legal and accounting
-4- LRB9101143PTpk
1 services) related to the formation and operation of the
2 certified capital company and an annual management fee in
3 an amount that does not exceed 2% of the value of the
4 assets of the certified capital company; and
5 (b) Any projected increase in federal or State
6 taxes, including penalties and interest related to State
7 and federal income taxes, of the equity owners of a
8 certified capital company resulting from the earnings or
9 other tax liability of the certified capital company to
10 the extent that the increase is related to the ownership,
11 management, or operation of a certified capital company.
12 "Qualified Investment" means the investment of cash by a
13 certified capital company in a qualified business for the
14 purchase of any debt, equity, or hybrid security, of any
15 nature and description whatsoever, including a debt
16 instrument or security that has the characteristics of debt
17 but that provides for conversion into equity or equity
18 participation instruments such as options or warrants.
19 "State privilege tax liability" means any liability
20 incurred by an insurance company under the provisions of
21 Section 409 of the Illinois Insurance Code.
22 Section 15. Certification.
23 (a) The Department shall establish by rule or regulation
24 the procedures for making an application to become a
25 certified capital company. The applicant shall pay a
26 non-refundable application fee of $7,500 at the time of
27 filing the application with the Department.
28 (b) A certified capital company's equity capitalization
29 at the time of seeking certification must be $500,000 or more
30 and must be in the form of unencumbered cash, marketable
31 securities, or other liquid assets.
32 (c) The Department shall review the organizational
33 documents of each applicant for certification and the
-5- LRB9101143PTpk
1 business history of the applicant and shall determine that
2 the applicant's cash, marketable securities, and other liquid
3 assets are at least $500,000.
4 (d) The Department shall verify that at least 2
5 principals of the certified capital company or at least 2
6 persons employed to manage the funds of the certified capital
7 company have not less than 2 years of experience in the
8 venture capital industry.
9 (e) Any offering material involving the sale of
10 securities of the certified capital company shall include the
11 following statement: "By authorizing the formation of a
12 certified capital company, the State does not necessarily
13 endorse the quality of management or the potential for
14 earnings of such company and is not liable for damages or
15 losses to a certified investor in the company. Use of the
16 word 'certified' in an offering does not constitute a
17 recommendation or endorsement of the investment by the
18 Securities Department of the Office of the Secretary of
19 State. In the event applicable provisions of this Act are
20 violated, the State may require forfeiture of unused
21 privilege tax credits and repayment of used privilege tax
22 credits."
23 (f) Within 30 days of application, the Department shall
24 issue the certification or shall refuse the certification and
25 communicate in detail to the applicant the grounds for the
26 refusal, including suggestions for the removal of those
27 grounds. The Department shall review and approve or reject
28 applications in the order submitted, and in the event more
29 than one application is received by the Department on any
30 date, all such applications shall be reviewed and approved
31 simultaneously, except in the case of incomplete applications
32 or applications for which additional information is requested
33 by the Department and is not supplied by the applicant within
34 the allowable time limits established by the Department.
-6- LRB9101143PTpk
1 (g) No insurance company or any affiliate of an
2 insurance company shall, directly or indirectly, manage a
3 certified capital company or control the direction of
4 investments for a certified capital company. This provision
5 shall not preclude an certified investor, insurance company,
6 or any other party from exercising its legal rights and
7 remedies (which may include interim management of a certified
8 capital company) in the event that a certified capital
9 company is in default of its statutory obligations or its
10 contractual obligations to such certified investor, insurance
11 company, or other party.
12 Section 20. Privilege tax credit.
13 (a) Any certified investor who makes an investment of
14 certified capital pursuant to an allocation of privilege tax
15 credits under Section 25 of this Act shall, in the year of
16 investment, earn a vested credit against State privilege tax
17 liability equal to 100% of the certified investor's
18 investment of certified capital. A certified investor shall
19 be entitled to take up to 10% of the vested privilege tax
20 credit in any taxable year of the certified investor.
21 (b) The credit to be applied against State privilege tax
22 liability in any one year may not exceed the State privilege
23 tax liability of the certified investor for that taxable
24 year. All unused credits against State privilege tax
25 liability may be carried forward indefinitely until the
26 privilege tax credits are utilized.
27 (c) A certified investor claiming a credit against State
28 privilege tax liability earned through an investment in a
29 certified capital company shall not be required to pay any
30 additional retaliatory tax levied pursuant to Section 444 of
31 the Illinois Insurance Code as a result of claiming that
32 credit.
-7- LRB9101143PTpk
1 Section 25. Aggregate limitations on credits.
2 (a) The aggregate amount of certified capital for which
3 privilege tax credits shall be allowed for all certified
4 investors under this Act shall not exceed the amount that
5 would entitle all certified investors in certified capital
6 companies to take aggregate credits of $30,000,000 per year.
7 No certified capital company may file privilege tax credit
8 allocation claims in excess of the maximum amount of
9 certified capital for which privilege tax credits may be
10 allowed as provided in this subsection.
11 (b) Certified capital for which privilege tax credits
12 are allowed will be allocated to certified investors in
13 certified capital companies in the order that privilege tax
14 credit allocation claims are filed with the Department by
15 such certified capital companies on behalf of their certified
16 investors. All filings made on the same day shall be treated
17 as having been made contemporaneously.
18 (c) In the event that 2 or more certified capital
19 companies file privilege tax credit allocation claims with
20 the Department on behalf of their respective certified
21 investors on the same day, and the amount of such privilege
22 tax credit allocation claims exceeds in the aggregate the
23 limit of available tax credits under the provisions of this
24 Section, capital for which privilege tax credits are allowed
25 shall be allocated among the certified investors on a pro
26 rata basis with respect to the amounts claimed. The pro rata
27 allocation for any one certified investor shall be the
28 product of a fraction, the numerator of which is the amount
29 of the privilege tax credit allocation claim filed on behalf
30 of such certified investor and the denominator of which is
31 the total of all privilege tax credit allocation claims filed
32 on behalf of all certified investors, multiplied by the
33 aggregate limitation as provided in subsection (a).
34 (d) Within 5 business days after the Department receives
-8- LRB9101143PTpk
1 a privilege tax credit allocation claim filed by a certified
2 capital company on behalf of one or more of its certified
3 investors, the Department shall notify the certified capital
4 company of the amount of tax credits allocated to each of the
5 certified investors in the certified capital company.
6 (e) In the event a certified capital company does not
7 receive an investment of certified capital equaling the
8 amount of privilege tax credits allocated to a certified
9 investor for which it filed a privilege tax credit allocation
10 claim within 5 business days of its receipt of notice of
11 allocation, that portion of the privilege tax credits
12 allocated to the certified investor in the certified capital
13 company will be forfeited, and the Department will reallocate
14 that certified capital among the other certified investors in
15 all certified capital companies on a pro rata basis with
16 respect to the privilege tax credit allocation claims filed
17 on behalf of such certified investors by all certified
18 capital companies.
19 (f) The maximum amount of certified capital for which
20 privileges tax credits shall be allowed to any one certified
21 investor (and its affiliates) in one or more certified
22 capital companies in any year shall not exceed 10% of the
23 aggregate limitation as provided in subsection (a).
24 Section 30. Requirements for continuance of
25 certification.
26 (a) To continue to be certified, a certified capital
27 company must make qualified investments according to the
28 following schedule:
29 (1) Within the period ending 3 years after its
30 certification date, a certified capital company must have
31 made qualified investments cumulatively equal to 30% of
32 its certified capital.
33 (2) Within the period ending 5 years after its
-9- LRB9101143PTpk
1 certification date, a certified capital company must have
2 made qualified investments cumulatively equal to 50% of
3 its certified capital.
4 (b) The aggregate cumulative amount of all qualified
5 investments made by the certified capital company from its
6 certification date will be considered in the calculation of
7 the percentage requirements under this Act. Any proceeds
8 received from a qualified investment may be invested in
9 another qualified investment and shall count toward any
10 requirement in this Act with respect to investments of
11 certified capital.
12 (c) Any business that is classified as a qualified
13 business at the time of the first investment in the business
14 by a certified capital company shall remain classified as a
15 qualified business and may receive follow-on investments from
16 any certified capital company or any of its affiliates, and
17 such follow-on investments shall be qualified investments
18 even though such business may not meet the definition of a
19 qualified business at the time of such follow-on investments.
20 (d) No qualified investment may be made at a cost to a
21 certified capital company greater than 15% of the total
22 certified capital of the certified capital company at the
23 time of investment.
24 (e) At its option, a certified capital company, prior to
25 making a proposed investment in a specific business, may
26 request from the Department a written opinion that the
27 business in which it proposes to invest should be considered
28 a qualified business. Upon receiving such a request, the
29 Department shall have 10 working days to determine whether or
30 not the business meets the definition of a qualified business
31 and notify the certified capital company of its determination
32 and an explanation thereof. If the Department fails to
33 notify the certified capital company with respect to the
34 proposed investment within the 10-working-day period, the
-10- LRB9101143PTpk
1 business in which the certified capital company proposes to
2 invest shall be deemed to be a qualified business. If the
3 Department determines that the business in which the
4 certified capital company proposes to invest does not meet
5 all of the criteria of a qualified business set forth in
6 Section 10, the Department may nevertheless consider the
7 business a qualified business and approve the investment if
8 the Department determines that the proposed investment will
9 further State economic development.
10 (f) All certified capital not currently invested in
11 qualified investments by the certified capital company must
12 be invested in cash deposited with a federally-insured
13 financial institution, certificates of deposit in a
14 federally-insured financial institution, investment
15 securities that are obligations of the United States, its
16 agencies or instrumentalities, or obligations that are
17 guaranteed fully as to principal and interest by the United
18 States, investment-grade instruments (rated in the top 4
19 rating categories by a nationally recognized rating
20 organization), obligations of this State, any municipality in
21 this State, or any political subdivision of this State; or
22 any other investments approved in advance and in writing by
23 the Department.
24 (g) Each certified capital company shall report the
25 following to the Department:
26 (1) As soon as practicable after the receipt of
27 certified capital, each certified capital company shall
28 report the following to the Department: (A) the name of
29 each certified investor from which the certified capital
30 was received, including such certified investor's
31 insurance privilege tax identification number, (B) the
32 amount of each certified investor's investment of
33 certified capital and privilege tax credits, and (C) the
34 date on which the certified capital was received.
-11- LRB9101143PTpk
1 (2) On an annual basis, on or before January 31st,
2 (A) the amount of the certified capital company's
3 certified capital at the end of the immediately preceding
4 year, (B) whether or not the certified capital company
5 has invested more than 15% of its total certified capital
6 in any one business, and (C) all qualified investments
7 that the certified capital company made during the
8 previous calendar year.
9 (3) Each certified capital company shall provide to
10 the Department annual audited financial statements, which
11 shall include the opinion of an independent certified
12 public accountant, within 90 days of the close of the
13 fiscal year. The audit shall address the methods of
14 operation and conduct of the business of the certified
15 capital company to determine if the certified capital
16 company is complying with the statutes and program rules
17 and that the funds received by the certified capital
18 company have been invested as required within the time
19 limits provided by subsection (a) of Section 30.
20 (4) On or before January 31 of each year, each
21 certified capital company shall pay an annual,
22 non-refundable certification fee of $5,000 to the
23 Department; provided, that no such fee shall be required
24 within 6 months of the initial certification date of a
25 certified capital company.
26 Section 35. Distributions. A certified capital company
27 may make qualified distributions at any time. In order to
28 make a distribution to its equity holders, other than a
29 qualified distribution, a certified capital company must have
30 made qualified investments in an amount cumulatively equal to
31 100% of its certified capital. A certified capital company
32 may, however, make repayments of principal and interest on
33 its indebtedness without any restriction whatsoever,
-12- LRB9101143PTpk
1 including repayments of indebtedness of the certified capital
2 company on which certified investors earned privilege tax
3 credits.
4 Section 40. Decertification.
5 (a) The Department shall conduct an annual review of
6 each certified capital company to determine if the certified
7 capital company is abiding by the requirements of
8 certification, to advise the certified capital company as to
9 the eligibility status of its qualified investments, and to
10 ensure that no investment has been made in violation of this
11 Act. The cost of the annual review shall be paid by each
12 certified capital company according to a reasonable fee
13 schedule adopted by the Department.
14 (b) Any material violation of Section 30 shall be
15 grounds for decertification of the certified capital company.
16 If the Department determines that a certified capital company
17 is not in compliance with the requirements of Section 30, it
18 shall, by written notice, inform the officers of the
19 certified capital company that the certified capital company
20 may be subject to decertification in 120 days from the date
21 of mailing of the notice, unless the deficiencies are
22 corrected and the certified capital company is again in
23 compliance with all requirements for certification.
24 (c) At the end of the 120-day grace period, if the
25 certified capital company is still not in compliance with
26 Section 30, the Department may send a notice of
27 decertification to the certified capital company and to all
28 other appropriate State agencies.
29 (d) Decertification of a certified capital company may
30 cause the recapture of privilege tax credits previously
31 claimed and the forfeiture of future privilege tax credits to
32 be claimed by certified investors with respect to such
33 certified capital company, as follows:
-13- LRB9101143PTpk
1 (1) Decertification of a certified capital company
2 within 3 years of its certification date shall cause the
3 recapture of all privilege tax credits previously claimed
4 and the forfeiture of all future privilege tax credits to
5 be claimed by certified investors with respect to such
6 certified capital company.
7 (2) When a certified capital company meets all
8 requirements for continued certification under paragraph
9 (1) of subsection (a) of Section 30 (and subsequently
10 fails to meet the requirements for continued
11 certification under the provisions of paragraph (2) of
12 subsection (a) of Section 30, those privilege tax credits
13 that have been or will be taken by certified investors
14 within 3 years from the certification date of the
15 certified capital company will not be subject to
16 recapture or forfeiture; however, all privilege tax
17 credits that have been or will be taken by certified
18 investors after the third anniversary of the
19 certification date of the certified capital company shall
20 be subject to recapture or forfeiture.
21 (3) Once a certified capital company has met all
22 requirements for continued certification under paragraphs
23 (1) and (2) of subsection (a) of Section 30, and is
24 subsequently decertified, those privilege tax credits
25 that have been or will be taken by certified investors
26 within 5 years from the certification date of the
27 certified capital company will not be subject to
28 recapture or forfeiture. Those privilege tax credits to
29 be taken subsequent to the fifth year of certification
30 shall be subject to forfeiture only if the certified
31 capital company is decertified within 5 years from its
32 certification date.
33 (4) Once a certified capital company has invested
34 an amount cumulatively equal to 100% of its certified
-14- LRB9101143PTpk
1 capital in qualified investments, all privilege tax
2 credits claimed or to be claimed by its certified
3 investors shall no longer be subject to recapture or
4 forfeiture.
5 (e) Once a certified capital company has invested an
6 amount cumulatively equal to 100% of its certified capital in
7 qualified investments, the certified capital company shall no
8 longer be subject to regulation by the Department.
9 (f) The Department shall send written notice to the
10 address of each certified investor whose privilege tax credit
11 has been subject to recapture or forfeiture, using the
12 address last shown on the last privilege tax filing.
13 (g) The Department shall have the authority to waive any
14 recapture or forfeiture of credits if, after considering all
15 facts and circumstances, it determines that such waiver will
16 have the effect of furthering State economic development.
17 Section 45. Transferability. The privilege tax credit
18 established by this Act may be transferred or sold. The
19 Department shall adopt rules to facilitate the transfer or
20 sale of the privilege tax credits. Any transfer or sale
21 shall not affect the time schedule for taking the privilege
22 tax credit as provided in this Act. Any privilege tax
23 credits recaptured under Section 40 shall be the liability of
24 the taxpayer that actually claimed the privilege tax credits.
25 Section 50. Rules. The Department shall adopt rules
26 necessary to carry out the provisions of this Act within 60
27 days after the effective date of this Act. The rules shall
28 provide that the Department shall begin accepting
29 applications for certification as a certified capital company
30 not later than 90 days after the effective date of this Act.
31 The rules shall further provide that any certified capital
32 company may file privilege tax credit allocation claims on
-15- LRB9101143PTpk
1 behalf of its certified investors at any time on or after its
2 certification date and that privilege tax credits shall be
3 earned by and vested in certified investors at the time of
4 such investment of certified capital, although the privilege
5 tax credits may not be claimed or utilized until 2000.
6 Section 105. The Illinois Insurance Code is amended by
7 changing Section 409 as follows:
8 (215 ILCS 5/409) (from Ch. 73, par. 1021)
9 Sec. 409. Annual privilege tax payable by companies.
10 (1) As of January 1, 1999 for all health maintenance
11 organization premiums written; as of July 1, 1998 for all
12 premiums written as accident and health business, voluntary
13 health service plan business, dental service plan business,
14 or limited health service organization business; and as of
15 January 1, 1998 for all other types of insurance premiums
16 written, every company doing any form of insurance business
17 in this State, including, but not limited to, every risk
18 retention group, and excluding all fraternal benefit
19 societies, all farm mutual companies, all religious
20 charitable risk pooling trusts, and excluding all statutory
21 residual market and special purpose entities in which
22 companies are statutorily required to participate, whether
23 incorporated or otherwise, shall pay, for the privilege of
24 doing business in this State, to the Director for the State
25 treasury a State tax equal to 0.5% of the net taxable premium
26 written, together with any amounts due under Section 444 of
27 this Code, except that the tax to be paid on any premium
28 derived from any accident and health insurance or on any
29 insurance business written by any company operating as a
30 health maintenance organization, voluntary health service
31 plan, dental service plan, or limited health service
32 organization shall be equal to 0.4% of such net taxable
-16- LRB9101143PTpk
1 premium written, together with any amounts due under Section
2 444. Upon the failure of any company to pay any such tax
3 due, the Director may, by order, revoke or suspend the
4 company's certificate of authority after giving 20 days
5 written notice to the company, or commence proceedings for
6 the suspension of business in this State under the procedures
7 set forth by Section 401.1 of this Code. The gross taxable
8 premium written shall be the gross amount of premiums
9 received on direct business during the calendar year on
10 contracts covering risks in this State, except premiums on
11 annuities, premiums on which State premium taxes are
12 prohibited by federal law, premiums paid by the State for
13 health care coverage for Medicaid eligible insureds as
14 described in Section 5-2 of the Illinois Public Aid Code,
15 premiums paid for health care services included as an element
16 of tuition charges at any university or college owned and
17 operated by the State of Illinois, premiums on group
18 insurance contracts under the State Employees Group Insurance
19 Act of 1971, and except premiums for deferred compensation
20 plans for employees of the State, units of local government,
21 or school districts. The net taxable premium shall be the
22 gross taxable premium written reduced only by the following:
23 (a) the amount of premiums returned thereon which
24 shall be limited to premiums returned during the same
25 preceding calendar year and shall not include the return
26 of cash surrender values or death benefits on life
27 policies including annuities;
28 (b) dividends on such direct business that have
29 been paid in cash, applied in reduction of premiums or
30 left to accumulate to the credit of policyholders or
31 annuitants. In the case of life insurance, no deduction
32 shall be made for the payment of deferred dividends paid
33 in cash to policyholders on maturing policies; dividends
34 left to accumulate to the credit of policyholders or
-17- LRB9101143PTpk
1 annuitants shall be included as gross taxable premium
2 written when such dividend accumulations are applied to
3 purchase paid-up insurance or to shorten the endowment or
4 premium paying period.
5 (2) The annual privilege tax payment due from a company
6 under subsection (4) of this Section may be reduced by: (a)
7 the excess amount, if any, by which the aggregate income
8 taxes paid by the company, on a cash basis, for the preceding
9 calendar year under subsections (a) through (d) of Section
10 201 of the Illinois Income Tax Act exceed 1.5% of the
11 company's net taxable premium written for that prior calendar
12 year, as determined under subsection (1) of this Section; and
13 (b) the amount of any fire department taxes paid by the
14 company during the preceding calendar year under Section
15 11-10-1 of the Illinois Municipal Code. Any deductible
16 amount or offset allowed under items (a) and (b) of this
17 subsection for any calendar year will not be allowed as a
18 deduction or offset against the company's privilege tax
19 liability for any other taxing period or calendar year. In
20 addition, there shall be deducted from the tax payment due
21 the tax credit provided for in Section 20 of the Certified
22 Capital Company Act.
23 (3) If a company survives or was formed by a merger,
24 consolidation, reorganization, or reincorporation, the
25 premiums received and amounts returned or paid by all
26 companies party to the merger, consolidation, reorganization,
27 or reincorporation shall, for purposes of determining the
28 amount of the tax imposed by this Section, be regarded as
29 received, returned, or paid by the surviving or new company.
30 (4)(a) All companies subject to the provisions of this
31 Section shall make an annual return for the preceding
32 calendar year on or before March 15 setting forth such
33 information on such forms as the Director may reasonably
34 require. Payments of quarterly installments of the
-18- LRB9101143PTpk
1 taxpayer's total estimated tax for the current calendar year
2 shall be due on or before April 15, June 15, September 15,
3 and December 15 of such year, except that all companies
4 transacting insurance in this State whose annual tax for the
5 immediately preceding calendar year was less than $5,000
6 shall make only an annual return. Failure of a company to
7 make the annual payment, or to make the quarterly payments,
8 if required, of at least 25% of either (i) the total tax paid
9 during the previous calendar year or (ii) 80% of the actual
10 tax for the current calendar year shall subject it to the
11 penalty provisions set forth in Section 412 of this Code.
12 (b) Notwithstanding the foregoing provisions, no annual
13 return shall be required or made on March 15, 1998, under
14 this subsection. For the calendar year 1998:
15 (i) each health maintenance organization shall have
16 no estimated tax installments;
17 (ii) all companies subject to the tax as of July 1,
18 1998 as set forth in subsection (1) shall have estimated
19 tax installments due on September 15 and December 15 of
20 1998 which installments shall each amount to no less than
21 one-half of 80% of the actual tax on its net taxable
22 premium written during the period July 1, 1998, through
23 December 31, 1998; and
24 (iii) all other companies shall have estimated tax
25 installments due on June 15, September 15, and December
26 15 of 1998 which installments shall each amount to no
27 less than one-third of 80% of the actual tax on its net
28 taxable premium written during the calendar year 1998.
29 In the year 1999 and thereafter all companies shall make
30 annual and quarterly installments of their estimated tax as
31 provided by paragraph (a) of this subsection.
32 (5) In addition to the authority specifically granted
33 under Article XXV of this Code, the Director shall have such
34 authority to adopt rules and establish forms as may be
-19- LRB9101143PTpk
1 reasonably necessary for purposes of determining the
2 allocation of Illinois corporate income taxes paid under
3 subsections (a) through (d) of Section 201 of the Illinois
4 Income Tax Act amongst members of a business group that files
5 an Illinois corporate income tax return on a unitary basis,
6 for purposes of regulating the amendment of tax returns, for
7 purposes of defining terms, and for purposes of enforcing the
8 provisions of Article XXV of this Code. The Director shall
9 also have authority to defer, waive, or abate the tax imposed
10 by this Section if in his opinion the company's solvency and
11 ability to meet its insured obligations would be immediately
12 threatened by payment of the tax due.
13 (Source: P.A. 90-583, eff. 5-29-98.)
14 Section 999. Effective date. This Act takes effect upon
15 becoming law.