Chapter II Comptroller

Part 200 Transition Regulations of the Comptroller

74 Ill. Adm. Code 200.5 Authority

These rules and regulations are adopted and promulgated in compliance with the "State Comptroller Act", PA 77-2807, approved September 7, 1972.

74 Ill. Adm. Code 200.10 Rules of the Auditor of Public Accounts

All rules and regulations heretofore filed by the Auditor of Public Accounts in accordance with "An Act concerning Administrative Rules", approved June 14, 1951, as amended, which by operation of law were in force and effect on January 7, 1973, shall remain in full force and effect until otherwise amended, revoked, or rescinded by subsequent rule or regulation of the Comptroller.

74 Ill. Adm. Code 200.20 State Comptroller Act

a) Pursuant to Section 22(b) of the State Comptroller Act, all systems of accounts, coding and reports maintained, required or provided by the Auditor of Public Accounts together with all warrant and payroll procedures in force and effect on January 7, 1973, shall remain in full force and effect unless otherwise revoked, rescinded, modified or expanded by subsequent rule of the Comptroller or unless otherwise specifically addressed by this Part.

b) Pursuant to Section 22(b) of the State Comptroller Act, the provisions of Section 11 of said Act requiring the filing with the Comptroller of certain state contracts or memorandums thereof for professional, technical or artistic skills in excess of $5,000 shall take effect upon implementation by subsequent rule of the Comptroller.

c) Pursuant to Section 22(b) of the State Comptroller Act, the provisions of Section 15 of said Act requiring the filing with the Comptroller of certain state contracts exceeding $5,000 shall take effect upon implementation by subsequent rule of the Comptroller.

d) Pursuant to Section 22(b) of the State Comptroller Act, the provisions of Section 17 of said Act requiring state agencies to submit and the Comptroller to maintain certain inventory control records shall take effect upon implementation by subsequent rule of the Comptroller. Nothing in this Section shall be deemed a limitation of the reporting and administrative duties imposed upon state agencies by Ill. Rev. Stat. 1987, ch. 127, par. 133b1 et seq.

e) Pursuant to Section 22(b) of the State Comptroller Act the provisions of Section 18 of said Act requiring the Comptroller to maintain certain records of bonded indebtedness shall take effect upon implementation by subsequent rule of the Comptroller.

History

• Source: Amended at 12 Ill. Reg. 22401, effective December 20, 1988

Part 230 The University Imprest System

74 Ill. Adm. Code 230.100 Statutory Authority

These rules are promulgated to implement the powers of the Comptroller under Section 21 of the State Comptroller Act (Ill. Rev. Stat., 1979, ch. 15, par. 221).

74 Ill. Adm. Code 230.101 Definition

The University Imprest System is a controlled program of transfers of state money to the various state colleges and universities as advances for the purpose of handling minor disbursements and other expenditures where economies and other benefits can be derived through prompt payment. All expenditures are made in accordance with the purposes specified in their appropriations. Disbursements from the various imprest accounts are made from time to time as needed through each university's checking account.

74 Ill. Adm. Code 230.102 Expenditures and Advances

Expenditures from imprest accounts will be posted against the various line item appropriations of the various state colleges and universities. Advances of like amounts will be transferred into the various imprest accounts by means of state warrants.

74 Ill. Adm. Code 230.103 Imprest Account Balance

The balance of imprest cash on hand plus the dollar amount reflected in supporting purchase documents at any one time must equal the total amount of imprest cash authorized for each account. The total aggregate amount for each imprest account may not exceed $200,000 for each campus of each eligible state college or university unless specifically increased by action of the Comptroller and Treasurer.

74 Ill. Adm. Code 230.104 Balance Increases

Any state university or college may request an increase in its imprest account balance by written application to the Comptroller. Such account balance may be increased to a level agreeable to the Comptroller and the Treasurer. Any such approval shall be in writing and shall be jointly signed by the Comptroller and the Treasurer. Any subsequent imprest account balance increase shall be accomplished in the same manner as the initial funding by the State Treasurer.

74 Ill. Adm. Code 230.105 System Initiation

The State Treasurer shall segregate $200,000 from the State's available cash balance for the initial funding of the imprest account of each state university or college campus. The Treasurer shall then deposit this amount in each of the banks approved by him for use in the University Imprest System.

74 Ill. Adm. Code 230.106 Custody

Each imprest account will be in the custody of a single person who shall be known as the Custodian. The Custodian may be any bonded employee other than the person(s) authorized to approve vouchers for payment. The Custodian shall be responsible at all times for the balance of the imprest account.

74 Ill. Adm. Code 230.107 Use of Funds

Imprest funds may not be used for local university purposes. Nor may such funds be commingled in any way with local funds.

74 Ill. Adm. Code 230.108 Monthly Reconciliation

A monthly reconciliation of the imprest account shall be prepared by the university or college and a copy submitted to the State Treasurer and the Comptroller as specified by the Procedures of the Comptroller.

74 Ill. Adm. Code 230.109 Individual Obligation of Expenditures

Contracts or agreements which are to be paid from the imprest account and entail expenditures of more than $5,000 in a fiscal year must be individually filed and obligated, utilizing the Contract Obligation Document (COD form). A miscellaneous blanket obligation may be used for prospective expenditures of $5,000 or less from the imprest account.

History

• Source: Amended at 12 Ill. Reg. 22404, effective December 20, 1988

74 Ill. Adm. Code 230.110 Amendment and Liquidation of Obligations

The general obligation rules of the Office of the Comptroller pertaining to amending and liquidating obligations shall apply to individual and blanket obligations established against the imprest account.

History

• Source: Amended at 6 Ill. Reg. 5941, effective April 30, 1982

74 Ill. Adm. Code 230.111 Authorization for Disbursements

Disbursements will be made by the Custodian when presented with an approved vendor's invoice or a State of Illinois Invoice-Voucher certified by the seller. A Comptroller approved "Request to Pay" requisition may be used in lieu of an invoice as authorization for the disbursement.

74 Ill. Adm. Code 230.112 Disbursement Limitations

Disbursements from the imprest account shall be limited to expenditures from specified state appropriated funds as permitted under the Procedures of the Comptroller. No disbursement shall be made by any university or college unless there has been a determination that an adequate balance exists in the appropriation line item account. No disbursements shall be made from the imprest account until the goods or services have been received or authorized except as provided in the Procedures of the Comptroller adopted pursuant to this Article.

74 Ill. Adm. Code 230.113 Transfers

Transfers of money to provide for subsequent advances will be based on disbursements from the imprest accounts. Transfers into the various imprest accounts shall be made on a periodic basis. The maximum amount of each periodic transfer shall be $200,000.

74 Ill. Adm. Code 230.114 Documentation for Transfers

A separate State of Illinois Invoice-Voucher shall be prepared by the university or college for each transfer to an appropriation line item account. The requirements for support documents as required by each line item shall be as set forth in the Procedures of the Comptroller adopted pursuant to this Article. Each State of Illinois Invoice-Voucher forwarded in support of an application for a transfer shall be prepared in accordance with the Procedures of the Comptroller for the preparation of State of Illinois Invoice-Vouchers.

74 Ill. Adm. Code 230.115 Adequate Balance Needed

No transfer will be authorized by the Office of the Comptroller unless the appropriate line item contains an adequate balance to support the transfer.

74 Ill. Adm. Code 230.116 Audits

The Comptroller and the Treasurer shall have the authority to periodically audit the various university imprest accounts.

Part 235 Warrant Escheat Fund Level

74 Ill. Adm. Code 235.200 Statutory Authority

These rules are promulgated to implement the powers of the Comptroller under Section 10.15 of the State Comptroller Act (Ill. Rev. Stat., 1979, ch. 15, par. 210.15).

74 Ill. Adm. Code 235.201 Establishment

The maximum funding level for the Warrant Escheat Fund is hereby established at $500,000.

Part 240 Payroll

74 Ill. Adm. Code 240.300 Statutory Authority

These rules are promulgated to implement the powers of the Comptroller under Section 13 of the State Comptroller Act (Ill. Rev. Stat., 1979, ch. 15, par. 213).

74 Ill. Adm. Code 240.301 Semi-Monthly Pay Period

a) The first half of each semi-monthly pay period shall be from the first of the month to the fifteenth of the month. The second half shall be from the sixteenth of the month to the last working day of the month.

b) For purposes of determining the completion of the period for which compensation is being paid, the last working day of the pay period shall be considered the completion of the period.

Part 245 Accounting Principles and Procedures

74 Ill. Adm. Code 245.400 Statutory Authority (repealed)

History

• Source: Repealed at 36 Ill. Reg. 9758, effective June 20, 2012

74 Ill. Adm. Code 245.401 Comptroller's Accounting Principles

Each State agency, as defined in the State Comptroller Act [15 ILCS 405], shall use, implement and comply with the accounting principles and procedures promulgated by the Comptroller when reporting or accounting for any transaction involving public funds. These accounting principles and procedures shall constitute an integral part of the uniform accounting system prescribed by law.

History

• Source: Amended at 36 Ill. Reg. 9758, effective June 20, 2012

74 Ill. Adm. Code 245.402 Sams Manual

a) The accounting principles and procedures promulgated by the Comptroller are provided to each State agency in the form of a Comptroller's Statewide Accounting Management System (SAMS) Manual.

b) Changes may be made in the SAMS Manual in the same manner as changes may be made to the Comptroller's Rules under Section 7 of the State Comptroller Act.

History

• Source: Amended at 36 Ill. Reg. 9758, effective June 20, 2012

74 Ill. Adm. Code 245.403 Changes (repealed)

History

• Source: Repealed at 36 Ill. Reg. 9758, effective June 20, 2012

Part 250 Uniform System of Code Numbers

74 Ill. Adm. Code 250.500 Statutory Authority

These rules are promulgated to implement the powers of the Comptroller under Section 8 of the State Comptroller Act (Ill. Rev. Stat. 1979, ch. 15, par. 208).

74 Ill. Adm. Code 250.501 Declaration

a) Under the authority of Section 8 of the State Comptroller Act, the following rules are adopted to prescribe a uniform system of code numbers, as described below.

b) This uniform system of code numbers constitutes an integral part of the Comptroller's Uniform Statewide Accounting System and shall be used by each state agency.

74 Ill. Adm. Code 250.502 Implementation

The uniform system of code numbers shall be implemented with the coding of appropriations for fiscal year 1975.

74 Ill. Adm. Code 250.503 Appropriation/Expenditure Code Structure

a) The appropriation/expenditure code consists of 16 digits, grouped and designated as follows:

Fund

Agency Group

Agency

Division/

Program

Object

Sequence

Account Type

b) In addition to the appropriation/expenditure code, there is a separate four (4) digit object of expenditure (detail object) code. Both codes are required for the reporting of expenditures.

74 Ill. Adm. Code 250.504 Receipt Code Structure

a) The receipt code consists of 12 digits, grouped and designated as follows:

Agency

Source

Location/Sub-source

Fund

b) The receipt code is required for the reporting of all receipts by state agencies.

74 Ill. Adm. Code 250.505 Publication of Code Numbers

All code numbers shall be assigned and descriptively defined by the Comptroller and distributed to all state agencies for their use. In accordance with law, the list of code numbers will be filed by the Comptroller with the Secretary of State as a public record.

74 Ill. Adm. Code 250.506 Required Use

The Comptroller will refuse to draw a warrant for any voucher which is submitted to his office without the proper code numbers indicated thereon. Such vouchers shall be returned to the transmitting agency with a statement indicating the reasons for the Comptroller's refusal.

Part 255 Contract Filing Requirements

74 Ill. Adm. Code 255.600 Statutory Authority

This Part is promulgated to implement the powers of the Comptroller under Sections 7 and 9 of the State Comptroller Act [15 ILCS 405] and Section 20-80 of the Illinois Procurement Code [30 ILCS 500].

History

• Source: Amended at 36 Ill. Reg. 9762, effective June 20, 2012

74 Ill. Adm. Code 255.601 Application

The filing requirements imposed by Section 20-80 of the Illinois Procurement Code and the Comptroller's Statewide Accounting Management System (SAMS) Manual established in accordance with Section 7 of the State Comptroller Act are applicable to all State agencies as defined in the State Comptroller Act, whether or not the State agency participates in transactions involving funds held by the State Treasurer.

History

• Source: Amended at 36 Ill. Reg. 9762, effective June 20, 2012

74 Ill. Adm. Code 255.602 Filing

Any document that is required to be filed with the Comptroller under Section 20-80 of the Illinois Procurement Code and the SAMS Manual will be considered filed when that document is physically received at the Office of the Comptroller.

History

• Source: Amended at 36 Ill. Reg. 9762, effective June 20, 2012

74 Ill. Adm. Code 255.603 Payment

Whenever Section 20-80 of the Illinois Procurement Code or the SAMS Manual requires that a contract, lease or other evidence of liability be filed with the Comptroller, and the contract, lease or other evidence has not been filed, the Comptroller will refuse to issue any warrant for payment under that contract, lease or other evidence of liability.

History

• Source: Amended at 36 Ill. Reg. 9762, effective June 20, 2012

Part 265 Warrants-Vouchers Pre-Audit

74 Ill. Adm. Code 265.800 Statutory Authority

These rules are promulgated to implement the powers of the Comptroller under Section 9 of the State Comptroller Act (Ill. Rev. Stat., 1979, ch. 15, par. 209).

74 Ill. Adm. Code 265.801 Declaration

The following rules are hereby adopted to govern pre-audit action relative to the sufficiency of vouchers and other documentation presented for the purpose of authorizing state payment for goods or services.

74 Ill. Adm. Code 265.802 Pre-Audit Action

Where the Comptroller has reason to question the legality of a transaction, either at the time a contract is filed or at the time a voucher is presented for payment, and if the documents routinely filed in support of such transaction do not in his opinion adequately resolve the question, the Comptroller may require the appropriate state agency to submit or make available such additional documentation or information as may be necessary to assist in determining the legality of the transaction.

74 Ill. Adm. Code 265.803 Warrants

In cases of the above actions, the Comptroller may refuse to issue a warrant or warrants until such time as his questions concerning the propriety and legality of the expenditure(s) have been resolved.

Part 270 Certification of Vouchers Authorizing Payment from Federal Funds

74 Ill. Adm. Code 270.900 Statutory Authority

This rule is promulgated to implement the powers of the Comptroller under Sections 9 and 14 of the State Comptroller Act (Ill. Rev. Stat., 1979, ch. 15, pars. 209 and 214).

74 Ill. Adm. Code 270.901 Certification

a) Each voucher submitted by an agency subject to the reporting requirements of Section 5.1 of "An Act to create a Bureau of the Budget and to define its powers and duties and to make an appropriation," approved April 16, 1969, as now or hereafter amended, shall contain or be accompanied by the following certification:

"If applicable, the reporting requirements of Section 5.1 of 'An Act to create the Bureau of the Budget' have been met."

b) This certification shall be made by a person authorized by Section 10 of "An Act in relation to State Finance," to certify the voucher.

c) The Comptroller shall refuse to draw a warrant on vouchers submitted by agencies subject to the reporting provisions of Section 5.1 unless the above stated certification requirement has been complied with.

d) This rule takes effect January 1, 1978.

Part 275 Transfers Between Accounts Within a Fund Held by the State Treasurer

74 Ill. Adm. Code 275.10 Transfers Between Accounts Within a Fund Held by the State Treasurer

a) For purposes of this Part, the term "transfer" is defined to be a financial transaction that results in the recording of a payment from an expenditure account and a deposit to a receipt account without the use of a warrant. "Transfers" under this Part shall not include statutorily mandated transfers between accounts within the State Treasury which are not revenues or expenditures to the receiving or disbursing accounts. The term "fund" is defined as a self balancing group of accounts against which all financial activity of the State is reported. One or more accounts may exist within a fund.

b) The Comptroller may transfer money between accounts within a fund held by the State Treasurer or may transfer money from one account in a fund held by the State Treasurer to another account in a different fund held by the State Treasurer without issuance of a warrant, if:

1. the Comptroller has received a properly completed voucher requesting payment from an account within a fund held by the State Treasurer;

2. an available balance exists in the fund from which the money is to be transferred;

3. for appropriated accounts, an unexpended balance exists in the appropriation account;

4. the transfer involves one or more State agencies exclusively;

5. the Treasurer approves the transfer; and

6. the transfer is otherwise pursuant to law and authorized.

c) In determining when to use a new application of the transfer authority the Comptroller shall consider the following criteria:

1. federal statute or regulation and state statute or regulation requiring or encouraging the use of transfers;

2. the amounts of the transfers;

3. the frequency of the transfers;

4. the ability of the one or more State agencies administering the account to which the money is credited to properly account for the transfer;

5. the fiscal savings to the State resulting from the transfer;

6. the added efficiency and security to the State's fiscal operations resulting from the transfer; and

7. reduction in paperwork and processing time.

d) Before beginning any new application of the transfer authority, the Comptroller will notify and consult with the one or more State agencies administering the account to which the money is credited and the Treasurer at least 30 days before initiating the new application.

e) The Treasurer's approval of the transfers within the State Treasury shall be deemed to be given when the Treasurer accepts and records the account activity provided by the Comptroller resulting from the transfers. The Comptroller and Treasurer shall coordinate efforts to reconcile any discrepancies made in the transfer process to mutually resolve the validity of the transfer.

f) The Comptroller shall provide information on the transfers on a timely basis to the State Treasurer, the one or more State agencies administering the account to which the money is credited and other State agencies, as requested. Such information may include the amount of the transfer, the date of the transfer, the voucher number requesting the transfer, the appropriation account code, the receipt account code and other relevant information relating to the transfer, as requested.

g) The Comptroller shall not include transfers made pursuant to this Part in the monthly report prepared by the Comptroller and sent to the Governor, the President and Minority Leader of the Senate and the Speaker and Minority Leader of the House of Representatives of all transfers made between funds in the State Treasury during the month in accordance with Section 5f of the State Finance Act [30 ILCS 105/5f], entitled Transfers-Reports.

h) The Comptroller shall retain documentation of approval of all transfers by the Comptroller and Treasurer by fulfilling its record-keeping duties under the State Comptroller Act, the State Records Act and other statutes.

i) As an internal administrative step, the Comptroller may consolidate transfers or warrants into one transfer or one warrant by use of a separate fund established solely for the purpose of consolidation. Such internal transfers may be accomplished without a written voucher.

Part 285 Claim Eligible to Be Offset

74 Ill. Adm. Code 285.1100 Foreword

This Part is adopted for the purpose of establishing procedures for making offsets of claims eligible to be offset from warrants to be issued to persons entitled to them, in accordance with Section 10.05 of the State Comptroller Act [15 ILCS 405/10.05] and the Illinois State Collection Act of 1986 [30 ILCS 210]. This Part is promulgated pursuant to the authority contained in Section 21 of the State Comptroller Act [15 ILCS 405/21].

History

• Source: Amended at 19 Ill. Reg. 227, effective December 30, 1994

74 Ill. Adm. Code 285.1101 Definitions

As used in this Part unless the context indicates otherwise, the following terms shall have the meanings specified:

"Account or claim eligible to be offset" means an amount owed to the State or to any of its agencies or instrumentalities or other amount authorized by statute to be collected through offset that represents:

an outstanding liability of a person to a fund in the State Treasury or other fund held by the State Treasurer;

an outstanding liability of a person to a fund not held by the State Treasurer, when that amount exceeds $10;

past due child support owed by a person as a result of support action being taken by the Department of Healthcare and Family Services under Article X of the Illinois Public Aid Code [305 ILCS 5], whether or not that support is owed to the State;

delinquent or defaulted amounts due and owing from a borrower, whether or not due and owing to the State, on any loan guaranteed by the Illinois State Scholarship Commission under the Higher Education Student Assistance Act [110 ILCS 947] or on any "eligible loan" as that term is defined under the Education Loan Purchase Program Law [110 ILCS 947/125 to 170];

any amounts recoverable under Section 120 of the Higher Education Student Assistance Act [110 ILCS 947], whether or not any amounts so recoverable are due and owing to the State, in a civil action from a person who received a scholarship, grant, monetary award or guaranteed loan;

an outstanding liability of a municipality or county to a pension fund in accordance with the Illinois Pension Code [40 ILCS 5].

"Act" means the "State Comptroller Act" [15 ILCS 405].

"Comptroller" means the Comptroller of the State of Illinois or any employee of the Office of the Comptroller authorized by the Comptroller to perform the functions and duties required by the Act or this Part.

"Disposable earnings" means that part of the earnings of an individual remaining after deduction of any amounts required by law to be withheld.

"Net amount of the warrant" means the amount of money a State agency has authorized the Comptroller to order the payment of, remaining after all involuntary and voluntary deductions are made and deferred compensation is deducted.

"Offset" means a contrary claim or demand by which a given person's claim to a warrant of the State Comptroller may be lessened or cancelled.

"Person" means any individual, corporation, company, association, firm, partnership, society, joint stock company, unit of local government or any other organization.

"Person subject to the offset" means the payee of any warrant from which the Comptroller has offset an account or claim eligible to be offset.

"Received a voucher" means that point in time when the Comptroller has physically received the voucher in-house and has date-stamped the voucher.

History

• Source: Amended at 43 Ill. Reg. 4534, effective March 26, 2019

74 Ill. Adm. Code 285.1102 Request for Processing a Claim Under Section 10.05 of the Act

a) All debts that exceed $250 and are more than one year past due shall be placed in the Comptroller's Offset System unless:

1. the State agency to which the debt is owed has entered into a deferred payment plan or other settlement agreement with the debtor; or

2. the State agency to which the debt is owed demonstrates to the Comptroller's satisfaction that use of the Comptroller's Offset System is not cost effective. The demonstration shall be based on efficiency to the State and maximizing the portion of the debt that will be recovered by the State.

b) The Comptroller will not process a claim under Section 10.05 of the Act until the Comptroller has received a statement of notification from the State agency that the debt has been established through notice and opportunity to be heard.

c) For purposes of Section 10.05 of the Act and this Part, "statement of notification" of an account or claim eligible to be offset shall be deemed to occur when the State agency in favor of which the account or claim has arisen has submitted to the Comptroller the following information:

1. the name and Social Security Number or Federal Employer's Identification Number of the person against whom the claim exists;

2. the amount of the claim then due and payable to the State;

3. the reason why there is an amount due to the State (i.e., income tax liability, overpayment, etc.);

4. the time period to which the claim is attributable;

5. the fund to which the debt is owed;

6. a description of the type of notification given to the person against whom the claim exists and the type of opportunity to be heard afforded that person;

7. a statement as to the outcome of any hearings or other proceedings held to establish the debt, or a statement that no hearing was requested; and

8. the date of final determination of the debt.

d) The statement required by subsections (b) and (c) shall be executed by the person or persons who are authorized to issue, certify and approve vouchers for the agency under Sections 10 and 11 of the State Finance Act [30 ILCS 105/10 and 11]. The authority to execute the statement of the claim required by this Section may be delegated to a responsible person or persons. This delegation of authority shall be made on forms provided by the Comptroller and shall contain a signature sample of the persons to whom the delegation is made.

e) A State agency that has submitted a claim for offset must notify the Comptroller as soon as possible, but in no case later than 30 days, after receiving notice of a change in the status of an offset claim. A change in status may occur due to circumstances such as payments received other than through a successful offset, the filing of a bankruptcy petition, or the death of the debtor.

History

• Source: Amended at 37 Ill. Reg. 15376, effective September 9, 2013

74 Ill. Adm. Code 285.1103 Warrants Subject to Deduction

a) Except as prohibited by federal statute, federal regulation or State statute, the Comptroller shall deduct the amount the Comptroller ascertains is due from any warrant payable to any person against whom there exists an account or claim eligible to be offset.

b) This amount due may be deducted from any warrant, whether or not the warrant originates from the same agency under which the account or claim eligible to be offset arose.

c) If, however, the account or claim eligible to be offset arises from a payroll transaction or other regular payment that is likely to be followed regularly by similar transactions, the Comptroller may deduct the account or claim eligible to be offset from the next regular transaction involving the agency under which the account or claim arose.

d) A settlement payment by the State or any of its agencies to release any pending or potential claim against the State is eligible to be offset.

e) The following are not eligible to be offset:

1. A warrant, payment or transfer in favor of the State of Illinois, or to any officer, board, commission or agency created by the Constitution, whether in the executive, legislative or judicial branch, but other than the circuit court;

2. Any officer, department, board, commission or agency of the State government created by or pursuant to statute, other than any unit of local government and its officers, school districts and boards of election commissioners;

3. Any administrative unit or corporate outgrowth of any of the entities listed in subsections (e)(1) and (2) created by executive order of the Governor.

f) The Comptroller shall not deduct from funds held by the State Treasurer under the Senior Citizens and Disabled Persons Property Tax Relief and Pharmaceutical Assistance Act [320 ILCS 25] or for payments to institutions from the Illinois Prepaid Tuition Trust Fund (unless the Trust Fund moneys are used for child support). [15 ILCS 405/10.05]

History

• Source: Amended at 37 Ill. Reg. 15376, effective September 9, 2013

74 Ill. Adm. Code 285.1104 Processing a Claim Under Section 10.05

The following provisions shall govern the processing of a claim under Section 10.05 of the Act:

a) Before making an offset, the Comptroller shall review the information provided by the State agency notifying the Comptroller of a claim and shall ascertain from that information the amount due and payable.

b) The Comptroller shall charge the State agency that submits a voucher against which an offset claim is applied for the full amount of the voucher submitted. The Comptroller shall draw a warrant on the treasury or on other funds held by the State Treasurer in the amount of the claim eligible to be offset and deposit that warrant into the State Offset Claims Fund. The State Offset Claims Fund shall be a trust fund established and administered by the Comptroller for the deposit of monies deducted from a person's warrant pursuant to an offset and the subsequent payment of monies back to either the State agency requesting the offset or the original payee. If, after 60 days have elapsed from the date the Comptroller gives notice of the offset as prescribed in Section 285.1106(a), no protest is made by the person subject to the offset, or upon notification to the Comptroller by the person subject to the offset that the person is waiving the 60 day protest period, the Comptroller shall issue a warrant on the State Offset Claims Fund for the amount of that deposit to the agency entitled to the offset. If a protest conforming to the requirements of Section 285.1106(b) is made, the Comptroller shall not issue the warrant to the State agency until the Comptroller ascertains the amount due and payable as provided in Section 285.1106(c).

c) If the Comptroller receives a proper request for a claim after he or she has drawn a warrant or warrants, the Comptroller shall, when feasible, reprocess the warrant in order that the offset may be taken, as provided for in this Section.

d) If the amount of the claim eligible to be offset is less than the amount to which the person is entitled, the Comptroller shall draw a warrant for the balance of the amount of the voucher against which the Comptroller has made the offset and shall issue that warrant to the person subject to the offset.

e) In cases in which offsets are to be made against an employee's wages or from pension annuity payments made under the Illinois Pension Code, no more than 25% of the employee's disposable earnings or annuity payments may be subject to offset. Final compensation payments paid to a person, when the person leaves the employ of a State agency, for accrued vacation or sick leave or overtime are exempt from the 25% limitation. State agencies may submit claims for offset for the entire amount owed to the State agency and the Comptroller's Offset System will compute the required 25% available for offset. In the event that the calculation of 25% of the employee's disposable earnings exceeds the net amount of the warrant (i.e., the employee's take-home pay), that employee's payroll voucher will be returned to the submitting State agency. A payroll reversal will be processed and the employee's voluntary deductions must be cancelled or reduced so that the employee's take-home pay will be sufficient to satisfy the amount calculated as available for offset. State agencies should contact their employees to determine which of the voluntary deductions are to be cancelled or reduced.

f) The limitations set forth in subsection (e) apply to:

1. wage or salary payments;

2. regular and continuing contractual payments made to an individual for personal services paid on a contractual payroll; and

3. pension annuity payments made under the Illinois Pension Code.

History

• Source: Amended at 43 Ill. Reg. 4534, effective March 26, 2019

74 Ill. Adm. Code 285.1105 Wage Deductions

Section 10.05 claims arising under this Part have priority over all wage deduction summonses. If the amount of money represented by the voucher against which the Comptroller is making an offset is subject to a wage deduction and is insufficient to satisfy the amount required to be offset, the Comptroller shall make an offset against any amounts that were deducted from that warrant.

History

• Source: Amended at 43 Ill. Reg. 4534, effective March 26, 2019

74 Ill. Adm. Code 285.1106 Ascertaining the Amount Due and Payable to the State

a) Upon processing a claim under Section 10.05 of the Act, the Comptroller shall, as soon as is practicable, give notice in writing to the person subject to the offset. The notice shall:

1. state that a request has been made pursuant to Section 10.05 of the State Comptroller Act to make an offset against any warrant on funds held by the State Treasurer that is now or that may become payable to that person;

2. identify the State agency submitting the offset request and the reason for the request; and

3. inform the person that, if he or she does not owe any or all of the amount claimed to be due and payable to the State, the person may, within 60 days after the Comptroller gives notice, make a written protest as prescribed in subsection (b). The notice to the person subject to the offset required by this subsection (a) shall be deemed to have been given if the notice is enclosed in an envelope plainly addressed to the person, United States postage fully prepaid, and deposited in the United States mail. For purposes of this Section, the date "the Comptroller gives notice" shall mean the date of withholding, as inidicated by the date on the written notice sent to the person subject to offset.

b) Persons wishing to make a protest to the Section 10.05 offset shall, within 60 days after the Comptroller gives notice as prescribed in subsection (a), notify the Comptroller in writing of:

1. the reasons for contesting the claim of the State;

2. the amount, if any, that the person acknowledges to be due and payable to the State; and

3. any other information that will enable the Comptroller to determine the amount, if any, that is due and payable to the State.

c) Upon receipt of a timely protest, the Comptroller shall determine the amount due and payable to the State. This determination shall be made in light of all information relating to the transaction in the possession of the Comptroller and any other information the Comptroller may reasonably request and obtain from the State agency and the person subject to the offset.

d) If the Comptroller requests information from the State agency relating to the offset, the State agency shall respond within 90 days after the Comptroller's request. The Comptroller may grant a State agency an additional 90 day extension of time to respond for the following reasons:

1. the State agency is actively pursuing further investigation;

2. the matter is in active settlement negotiations; or

3. other good cause shown by the State agency.

e) From the deposit into the State Offset Claim Fund made pursuant to Section 285.1104(c), the Comptroller shall issue a warrant to the appropriate fund to the credit of the entitled State agency for the amount found due and payable to the State. Any balance of that deposit shall be returned to the person subject to the offset.

History

• Source: Amended at 37 Ill. Reg. 15376, effective September 9, 2013

74 Ill. Adm. Code 285.1107 Notification of the Comptroller's Exercise of Section 10.05

Whenever the Comptroller exercises his or her offset authority granted under the Act and this Part, the person subject to the offset and the agency that originated the voucher shall be sent a copy of the voucher against which the deduction was made, or a written statement containing all relevant information from the voucher. The written statement shall include the reason for the deduction and shall indicate the amount of money deducted. The person subject to the offset and the agency originating the voucher shall receive a copy of the written statement; however, the agency may waive its right to receive the written statement and the voucher. At the request of the State agency submitting the claim for offset, the Comptroller shall notify the State agency, by letter or other means, of the offset, including the amount of money deducted.

History

• Source: Amended at 37 Ill. Reg. 15376, effective September 9, 2013

74 Ill. Adm. Code 285.1108 Record Retention

The Comptroller shall retain a copy of the reason for the deduction in accordance with the State Records Act [5 ILCS 160] and the State Comptroller Act [15 ILCS 405].

History

• Source: Amended at 37 Ill. Reg. 15376, effective September 9, 2013

74 Ill. Adm. Code 285.1109 Accounting for Recovery

Whenever the Comptroller deducts an amount from a warrant under Section 10.05 of the State Comptroller Act, the Comptroller shall charge the vouchering agency for the full amount of the voucher submitted. Recovery of the account or claim eligible to be offset will be handled in the following manner: if the account or claim eligible to be offset arose from an expenditure by a State agency and the appropriation to which the expenditure was charged has not lapsed, the amount recovered shall be credited to such appropriation as well as the fund from which the expenditure was made and shall be available for expenditure. If the appropriation to which the expenditure was charged has lapsed, or if the expenditure was not charged to an appropriation, the amount recovered shall be credited to the fund from which the expenditure was made and shall be available for expenditure unless such credit or availability is otherwise prohibited by law. If the account or claim eligible to be offset arose from an occurrence other than expenditure, the recovery shall be credited to the General Revenue Fund unless otherwise provided by law. Child support claims which are recovered will be turned over to the Department of Public Aid for distribution to those persons entitled to such claims.

History

• Source: Amended at 19 Ill. Reg. 227, effective December 30, 1994

74 Ill. Adm. Code 285.1110 Transition Period

Beginning with the effective date of this Part, for all protests currently on file with the Comptroller, the Comptroller shall notify the State agency which has submitted the claim for offset, of the mandatory 90 day response period and of the possibility of a 90 day extension of the response period. At the conclusion of the response period, the Comptroller shall make a determination of the amount due and payable to the State based on all of the information relating to the transaction in the possession of the Comptroller.

History

• Source: Added at 19 Ill. Reg. 227, effective December 30, 1994

Part 290 Contract Content

74 Ill. Adm. Code 290.1200 Statutory Authority

a) Ch. 15, par. 214

Forms of documents. The Comptroller may prescribe, and require the use by state agencies, of forms for all documents required by law in the performance of his duties or which he may reasonably require therefor. The Comptroller may prescribe by rule the general nature of information to be contained in contracts required to be filed with him under Sections 11 and 15 of this Act.

b) Ch. 15, par. 221

The Comptroller shall promulgate rules and regulations to implement the exercise of his powers and performance of his duties under this Act and to guide and assist State agencies in complying with this Act. Any rule or regulation specifically requiring the approval of the State Treasurer under this Act for adoption by the Comptroller shall require the approval of the State Treasurer for modification or repeal.

74 Ill. Adm. Code 290.1201 Application

This Article does not presently apply to agreements paid from the "award and grant" (Comptroller's Uniform Statewide Accounting System – CUSAS – Common Object 4400) line items. It is, however, recommended that agencies follow these guidelines in drafting grant agreements.

74 Ill. Adm. Code 290.1202 Classifications

For the purposes of this part contracts and agreements shall be classified as follows:

a) Contracts for professional or artistic services which are subject to Section 9.01 of the Illinois Purchasing Act (Ill. Rev. Stat. 1979, ch. 127, par. 132,9a) (hereinafter contracts for professional or artistic services, or P/A contracts).

b) Leases for real property.

c) Leases or other rental agreements for personal property.

d) Construction Contracts.

e) Contracts with other governmental agencies.

f) Purchase Orders.

g) Amendments, modifications and renewals.

h) Other Contracts.

74 Ill. Adm. Code 290.1203 Requirements for All Contracts

a) Agreements required to be filed with the Comptroller under Section 11 or Section 15 of the State Comptroller Act (Ill. Rev. Stat. 1987, ch. 15, pars. 211 and 215) must meet the criteria set forth in this Article. In general, a two party signed agreement must be filed for all expenditures exceeding $5,000 in a fiscal year, except for:

1. contracts paid from personal services, or

2. contracts between the State and its employees to defer compensation pursuant to Article 24 of the Illinois Pension Code (Ill. Rev. Stat. 1987, ch. 111½, par. 24-101 et seq.).

b) Certain exceptions are listed in CUSAS (Comptroller's Uniform Statewide Accounting System) Procedures 15.20.70 under type code 41 and Section 290.1209 of these rules. In addition, agreements where the State does not incur a financial liability are not required to be filed with the Comptroller under this Part.

c) Legibility: All documents filed must be legible.

d) Bribery Clause: Every contract executed by the State must contain a certification by the contractor that the contractor is not barred from being awarded a contract or subcontract under Section 10.1 of The Illinois Purchasing Act (Ill. Rev. Stat. 1987, ch. 127, par. 132.10-1). Suggested language for the certification is set forth below:

The vendor certifies that it is not barred from being awarded a contract or subcontract under Section 10.1 of The Illinois Purchasing Act.

e) Execution date: All contracts and leases must contain an execution date. An acceptable alternative is for the agency and the contractor to date their signature. The execution date of purchase orders and similar documents is the date on the document.

f) Filing Requirements:

1. Section 15 of the State Comptroller Act requires agencies to file contracts, leases or purchase orders within 15 days of execution. Cancellation or modifications to contracts, purchase orders, or leases are also subject to this time period.

2. The following rules will be applied in enforcing these filing requirements:

A) When the contract sets forth an execution date only, the 15 day period will be calculated from this date.

B) When the agency signature and the contractor's signature are dated, the 15 day time period will be calculated from the latest dated signature.

C) When the contract is signed by more than one person on behalf of the State, the period will be calculated from the latest dated signature.

3. Where a contract, purchase order or lease required to be filed by Section 15 of the State Comptroller Act has not been filed within 30 days of execution, the Comptroller will not honor vouchers for payment thereunder until the agency files with the Comptroller:

A) The contract, purchase order or lease; and

B) An original affidavit and one copy, signed by the chief executive officer of the agency, or his or her designee, setting forth an explanation of why such contract liability was not filed within 30 days of execution. The Comptroller will file the copy of the affidavit with the Auditor General.

C) A sample of the affidavit referenced in this Section is provided as Appendix C to this Part. Any affidavit substantially similar to that provided in Appendix C will be accepted by the Comptroller.

g) Maximum or Estimated Amount:

1. Except as is discussed below, all contracts should set forth either an estimated or maximum amount.

2. A maximum amount must be used where the amount of payment can be ascertained with reasonable certainty. The contract must be amended before more than the maximum amount may be paid pursuant to the agreement. Where it is not possible to ascertain the amount to be paid under the contract, an estimated amount should be used. In certain cases contracts are executed in order to provide for payment on an as needed basis, (for example, certain contracts for legal services). In these instances the contract need not contain a maximum or estimated amount.

h) Agencies must obtain the Federal Taxpayer Identification Number and legal status disclosure certification of the contractor for all contracts, leases and purchase orders required to be filed by this Part.

i) References in this Part to information deemed necessary by the Attorney General do not apply to universities.

j) Advance Payment:

Where a State agency wishes to make advance payment for goods or services, the contract must include a provision for such advance payment. If the State agency determines it is not possible to execute a written contract, any payment voucher must so state. (Section 9.05 of "AN ACT in relation to State finance") (Ill. Rev. Stat. 1987, ch. 127, par. 145(f)).

k) Bid-Rigging/Bid Rotating Certification: Each bid and any contract resulting from that bid for goods, services or construction between the State and a vendor other than a unit of State or local government shall contain a certification by the contractor that the contractor is not barred from contracting with any unit of State or local government as a result of a violation of either Section 33E-3 or 33E-4 of the Criminal Code of 1961 (Ill. Rev. Stat. 1988 Supp., ch. 38, pars. 33E3 or 33E4). Suggested language for the certification is set forth below:

The contractor certifies that it has not been barred from contracting with a unit of State or local government as a result of a violation of Section 33E-3 or 33E-4 of the Criminal Code of 1961 (Ill. Rev. Stat. 1988 Supp., ch. 38, pars. 33E3 or 33E4)

l) Educational Loan Certification: All contracts, leases and purchase orders required to be filed by this Part shall include a statement certifying that the contractor is not in default on an educational loan as provided in Section 30-15.2 of the School Code (Ill. Rev. Stat. 1988 Supp., ch. 122, par. 30-15.12). Suggested language for the certification is set forth below:

The contractor certifies that it is not in default on an educational loan as provided in Section 30-15.2 of the School Code (Ill. Rev. Stat. 1988 Supp., ch. 122, par. 30-15.12).

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.1204 Contracts for Professional or Artistic Services

a) Definition

1. Professional or artistic services may be defined as services rendered by an individual or firm contractually hired by an agency because of their expertise in a given field. An essential element is trust in the ability and talent of the person performing the services. Contracts for manual skills are not included.

2. Examples of professional or artistic services are set forth in CUSAS (Comptroller's Uniform Statewide Accounting System) Procedure 15.20.70 type code 21.

b) Required Contents

In addition to complying with the requirements of Section 290.1203, contracts for professional or artistic services must contain:

1. Contractor's full name and address.

2. Agency name.

3. Reasonably detailed description of services to be rendered.

4. The contract term, where applicable.

5. The maximum or estimated amount to be paid, if applicable.

6. Payment rates, where applicable.

7. Signature of contractor and authorized agency representative.

8. Execution date. (See Section 290.1203(c)).

9. Bribery clause certification. (See Section 290.1203(b)).

10. Where the contract is for consultant services, as that term is defined in Section 9.04 of the Illinois Purchasing Act (Ill. Rev. Stat. 1987, ch. 127, par. 132.9d), the contract must state whether or not the services of a subcontractor will be utilized. If a subcontractor will be used, the contract must list the names and addresses of all subcontractors and the anticipated amount they will receive pursuant to the contract.

11. Federal Taxpayer Identification Number and legal status disclosure certification (See Section 290.Appendix B (16)).

12. Educational loan certification (See Section 290.1203(1)).

13. Where a contract involving professional or artistic services has been bid, the bid-rigging/bid rotating certification (See Section 290.1203 (k)).

14. Such other provisions as may be specifically required by law.

15. Any other information deemed necessary or advisable by the agency or the Attorney General.

c) Requirement that contract be reduced to writing:

1. Section 11 of the State Comptroller Act requires the Comptroller to reject vouchers for payment of professional or artistic skills if the contract for such services involves expenditures of more than $5,000 for a fiscal year, unless;

A) the contract has been reduced to writing before the services are performed, or

B) an affidavit described in this subsection is filed.

2. "Reduced to writing" is defined as signed by the contractor and an authorized representative of the State.

3. The time at which a contract is reduced to writing is delineated below:

A) When the contract contains an execution date only, the contract will be regarded as being reduced to writing at that date.

B)

i) For contracts with dated signatures, when the contract is signed by the vendor and then by more than one authorized agency representative, it is reduced to writing at the earliest dated signature of an authorized representative of the agency.

ii) An "authorized agency representative" means a person who has the authority to execute contracts on behalf of the agency.

C) An agreement for professional or artistic services let for competitive bids will be considered reduced to writing upon the date of the notice of award. The agreed terms may be placed in a different format and later signed without violating Section 11 of the State Comptroller Act. A copy of the proposal and the notice of award shall be filed with the Comptroller.

4. In order to implement this requirement, all professional or artistic services contracts may contain a provision indicating that no payments will be made for services which are performed before the contract is signed by the contractor and an authorized representative of the State.

5. Suggested language is set forth below:

This contract takes effect on (date) or when executed by the contractor and an authorized representative of the State, whichever is later. No services will be paid which are performed prior to execution.

6. This provision may be modified at the discretion of the agency.

7. Where a contract for professional or artistic skills in excess of $5,000 was not reduced to writing before the services were performed, the Comptroller will not honor vouchers for payment for such services until the agency files with the Comptroller:

A) a written contract covering the services; and

B) An original affidavit and one copy, signed by the chief executive officer of the agency or his or her designee stating that the services for which payment is being made were agreed to prior to commencement of the services and setting forth an explanation of why the contract was not reduced to writing before the services commenced. The Comptroller will file the copy of the affidavit with the Auditor General.

8. A sample of the affidavit referenced in this subsection is provided as Appendix D to this Part. Any affidavit substantially similar to that provided in Appendix D will be accepted by the Comptroller.

d) Contracts subject to "AN ACT to provide for representation and indemnification in certain civil lawsuits," (Ill. Rev. Stat. 1987 and 1988 Supp., ch. 127, par. 1301 et seq.) must be approved by the Attorney General before being filed with the Comptroller. This requirement does not apply to universities. The 15 day filing requirement established by Section 15 of the State Comptroller Act shall run from the date of approval.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.1205 Leases for Real Property

a) Definition. This category includes all agreements for the rental of real property.

b) In addition to complying with Section 290.1203, leases for real property must contain:

1. Lessor's name and address.

2. Leasing agency's name.

3. Description and location of property (address).

4. Beginning and ending dates of lease.

5. Monthly and annual rental amount, where applicable.

6. Disclosure of identity of owners, trust beneficiaries, and shareholders entitled to receive more than 7½% of the total distributable income of any corporation having an interest in such property, where required by Section 3.1 of "AN ACT to prevent fraudulent and corrupt practices in the making or accepting of official appointments and contracts by public officers" (Ill. Rev. Stat. 1987, ch. 102, par. 3.1). Suggested language is set forth below:

AFFIDAVIT

The undersigned, being first duly sworn on oath states that he is (State Title) and that the names of all the beneficiaries of a certain title holding trust, established by a Trust Agreement dated _______, identified as Trust No. _____, known as ______________________ are:

(List beneficiaries)

The undersigned further states that the names of all shareholders entitled to receive more than 7½% of the total distributable income of any corporation having an interest in the real property are:

(List shareholders)

(Notarization)

(Signature of Trustee

However, if stock in a corporation is publicly traded and there is no individual having greater than a 7½% interest, then a statement to that effect, subscribed to under oath by an officer of the corporation or its managing agent, will satisfy the disclosure statement requirement.

7. Subject to appropriation clause when the lease is for more than one fiscal year. Suggested language is set forth below:

Obligations of the State shall cease immediately without penalty or further payment being required if, in any fiscal year, the Illinois General Assembly or federal funding source fails to appropriate or otherwise make available funds for this lease.

8. The county in which the property is located.

9. Bribery clause certification. (See Section 290.1203(b)).

10. Execution date. (See Section 290.1203(c)).

11. The maximum or estimated amount to be paid, where applicable. (See Section 290.1203(e)).

12. Signature of lessor and authorized agency representative.

13. Federal Taxpayer Identification Number and legal status disclosure certification (See Section 290.Appendix B (16)).

14. Education loan certification (See Section 290.1203 (l)).

15. Such other provisions as may be specifically required by law.

16. Any other provisions deemed necessary or advisable by the agency, the Attorney General or, where applicable, the Department of Central Management Services.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.1206 Leases for Personal Property (see Note at End of This Section)

a) Definition. Included are agreements for the rental of personal property.

b) In addition to complying with the requirements of Section 290.1203, leases for personal property must contain:

1. Lessor's name and address.

2. Leasing Agency's name.

3. Beginning and ending dates of agreement.

4. Description of personal property (where applicable, serial numbers should be included).

5. Monthly and annual payment amounts, where applicable.

6. Where the agreement is for more than one fiscal year, a subject to appropriation clause.

7. Signature of lessor and authorized agency representative.

8. Maximum or estimated amount to be paid, where applicable. (See Section 290.1203(e)).

9. Execution date. (See Section 290.1203(c)).

10. Bribery clause certification. (See Section 290.1203(b)).

11. For multi-year agreements, the Governor's approval, where required by Section 35.7b, of the Civil Administrative Code of Illinois (Ill. Rev. Stat. 1987, ch. 127, par. 35.7b).

12. The maximum or estimated annual amount, where subject to calculation.

13. Federal Taxpayer Identification Number and legal status disclosure certification (See Section 290 Appendix B (16)).

14. Bid-rigging/bid rotating certification, where applicable (See Section 290.1203 (k)).

15. Educational loan certification (See Section 290.1203 (l)).

16. Such other provisions as may be specifically required by law.

17. Any other information deemed necessary or advisable by the agency or the Attorney General.

AGENCY NOTE: These requirements also apply to multi-year lease, lease-purchase and installment purchase agreements for electronic data processing, telecommunications and duplicating equipment which are authorized by Section 5.1 of the Illinois Purchasing Act.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.1207 Construction Contracts

a) This category includes contracts for permanent improvements, highway and waterway construction, and similar construction.

b) In addition to complying with Section 290.1203, construction contracts must contain:

1. Vendor name and address.

2. Agency name.

3. Description of services.

4. Location(s) where services are to be performed, where applicable.

5. Contract time.

6. Contract sum.

7. Payment schedule.

8. Bribery clause certification. (See Section 290.1203(b)).

9. Execution date. (See Section 290.1203(c)).

10. Signatures of contractors and authorized agency representative.

11. Federal Taxpayer Identification Number and legal status disclosure certification (See Section 290.Appendix B (16)).

12. Bid-rigging/bid rotating certification, where applicable (See Section 290.1203 (k)).

13. Educational loan certification (See Section 290.1203 (l)).

14. Such other provisions as may be specifically required by law.

15. Any other information deemed necessary or advisable by the agency or the Attorney General.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.1208 Contracts with Governmental Agencies

a) Definition. This category includes contracts with other state agencies, units of local government and the federal government.

b) Contracts with governmental agencies must contain:

1. Name of governmental agency.

2. Name of contracting agency.

3. Description of services.

4. Maximum or estimated amount to be paid, where applicable. (See Section 290.1203(e)).

5. The contract term where applicable.

6. Payment rates, where applicable.

7. Execution date. (See Section 290.1203(c)).

8. Signatures of authorized agency representatives.

9. Such other provisions as may be specifically required by law.

10. Any other information deemed necessary or advisable by the agency or the Attorney General.

74 Ill. Adm. Code 290.1209 Purchase Orders and Similar Documents

a) Definition

1. This category is limited to documents involving the purchase of tangible personal property. Purchase orders as that term is here defined may be only used for payments from the electronic data processing, commodities, telecommunications, printing, equipment, operation of automotive equipment, or lump sum line items.

2. The fact that an agency labels a document a purchase order does not exempt it from meeting the criteria set forth in the applicable Sections 290.1204 through 290.1208, if the document pertains to a transaction that is generally evidenced by a contract or lease.

b) Purchase orders must contain:

1. Vendor's name and address.

2. Description of property (where applicable serial numbers should be included).

3. Amount to be paid (in some cases a specification of unit prices is acceptable).

4. Agency name.

5. Execution date.

6. Signature of authorized agency representative, where applicable.

7. Bribery clause certification.

8. Federal Taxpayer Identification Number and legal status disclosure certification (See Section 290.Appendix B (16)).

9. Bid-rigging/bid rotating certification, where applicable (See Section 290.1203 (k)).

10. Educational loan certification (See Section 290.1203 (l)).

11. Such other provisions as may be specifically required by law.

12. Any other information deemed necessary or advisable by the agency or the Attorney General.

c) Comptroller Approval. The format of purchase orders must be approved by the Comptroller.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.1210 Renewals, Amendments or Cancellations

a) Renewals, amendments or cancellations must be signed two-party agreements, unless otherwise provided in the original contract. For example, if an existing contract is to be renewed for the next fiscal year, the renewal must be in writing and signed by both parties, unless the contract gives the State the right to renew unilaterally. All renewals, amendments or cancellations must be filed with the Comptroller.

b) All individuals employed by the State who are authorized by the State to approve changes to public contracts must, before granting such approval, obtain a determination in writing by the chief executive officer or his designee, of the State agency on whose behalf the contract was signed, that the circumstances said to necessitate the change in performance were not reasonably foreseeable at the time the contract was signed, were not within the contemplation of the contract as signed or are in the best interests of the unit of State or local government and authorized by law. Such written determination shall be preserved in such contract's permanent file maintained by the State agency which shall be open to the public for inspection. This provision shall only apply to change orders which authorize or necessitate an increase or decrease in either the cost of a public contract by $10,000 or more or the time of completion by 30 days or more. For the purposes of this Section "public contract" means a contract for goods, services or construction with a vendor other than a unit of State or local government.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.1211 Other Contracts

a) Definition. This category includes contracts not listed above.

b) In addition to complying with Section 290.1203, contracts must contain:

1. Vendor name and address.

2. Agency name.

3. Description of services.

4. The contract term, where applicable.

5. Location at which services are to be performed, where applicable.

6. Maximum or estimated amount to be paid, where applicable. (See Section 290.1203(e)).

7. Payment rates, where applicable (if terms are "current rates" then the rate schedule must be attached where feasible).

8. Signature of vendor and authorized agency representative.

9. Execution date. (See Section 290.1203(c)).

10. Bribery clause certification. (See Section 290.1203(b)).

11. Federal Taxpayer Identification Number and legal status disclosure certification (See Section 290.Appendix B (16)).

12. Bid-rigging/bid rotating certification, where applicable (See Section 290.1203 (k)).

13. Educational loan certification (See Section 290.1203(l)).

14. Such other provisions as may be specifically required by law.

15. Any other information deemed necessary or advisable by the agency or the Attorney General.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.1212 Enforcement

Whenever Section 9.01 of the Illinois Purchasing Act (Ill. Rev. Stat. 1979, ch. 127, par. 132.9a), Section 15 of the State Comptroller Act, or Section 9 of the State Finance Act (Ill. Rev. Stat. 1979, ch. 127, par. 145) requires a contract or lease to be filed with the Comptroller, and such contract or lease is not in substantial compliance with Sections 290.1203 through 290.1211 of this part, the Comptroller shall refuse to issue any warrant for payment thereunder.

74 Ill. Adm. Code 290.APPENDIX A Suggested Provisions

The provisions set forth below are suggested only. It is recommended that agencies review their contractual agreements to ascertain whether inclusion of any of the below listed provisions would be beneficial.

a) Termination

1. In many cases it is advisable to provide for termination after written notice. Suggested language is set forth below:

This contract may be terminated by either party upon ______days written notice. Upon termination the Vendor shall be paid for work satisfactorily completed prior to the date of termination.

2. The following alternative termination provision should be used where the final product to be produced is the principal object of the contract and the preliminary drafts or reports would be substantially useless:

This contract may be terminated by either party upon ______days written notice. Upon termination the Vendor shall be paid for useable work completed to the satisfaction of the State prior to the date of termination.

b) Work Product

In cases where the contractor will produce a written document it is advisable to specify that the work product is the property of the State. Suggested language is set forth below:

All documents including reports and all other work products produced by the Vendor under this Contract, shall become and remain the property of the State.

c) Travel Expenses

Where applicable the following provision may be used for travel expenses:

The vendor shall be reimbursed for necessary travel expenses incurred in fulfilling his obligations under this contract. Such expenses shall be reimbursed at the rates and for the purposes applicable to employees of the Department.

d) Unlawful Discrimination

1. Suggested language for unlawful discrimination provisions is set forth below:

A) Vendor agrees not to commit unlawful discrimination in employment in Illinois as that term is used in Article 2 of the Illinois Human Rights Act (Ill. Rev. Stat. 1987, ch. 68, par. 1-101 et seq.) and further agrees to take affirmative action to ensure that no unlawful discrimination is committed.

B) Vendor agrees to comply with "An Act to prohibit discrimination and intimidation on account of race, creed, color, sex, religion, physical or mental handicap unrelated to ability, or national origin in employment under contracts for public buildings or public works", (Ill. Rev. Stat. 1987 ch. 29, par. 17 et seq.). The provisions of this Act are made a part of this contract by reference as though set forth in full herein.

2. Where the contract is wholly or partially funded with federal financial assistance, the following provision may also be included:

Vendor agrees that, if it receives funds which are wholly or partially allotted to the State of Illinois, Department (or division, office, bureau, district) of _______, from Federal financial assistance, it shall comply with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). The provisions of that Section are made a part of this contract by reference as though set forth in full herein.

e) Federal Taxpayer Identification Number (TIN): Agencies are required by the Internal Revenue Service to provide the following instructions to vendors for use in completing the certification provided in Section 290.Appendix B (16)):

Enter your taxpayer identification number in the appropriate space. For individuals and sole proprietors, this is your social security number. For other entities, it is your employer identification number. Federal Employer Identification Numbers (FEINs) must not be used for sole proprietorships.

If you do not have a TIN, apply for one immediately. To apply, get Form SS-5, Application for a Social Security Number Card (for individuals) from your local office of the Social Security Administration, or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), from your local Internal Revenue Service office.

To complete the certification if you do not have a TIN, fill out the certification indicating that a TIN has been applied for, sign and date the form, and return it to this agency. As soon as you receive your TIN, fill out another such form including your TIN, sign and date the form, and give it to this agency.

If you fail to furnish your correct TIN to this agency, you are subject to an IRS penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willfull neglect.

WILLFULLY FALSIFYING CERTIFICATIONS OR AFFIRMATIONS MAY SUBJECT YOU TO CRIMINAL PENALTIES INCLUDING FINES AND/OR IMPRISONMENT.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.APPENDIX B Contract Format

A sample contract format is set forth below. This is for purposes of illustration only.

STATE OF ILLINOIS

DEPARTMENT OF

CONTRACT

This contract, made and entered by and between the State of Illinois, Department of ______________________(Division, Office, Bureau, District), and (Vendor) of (Address) hereinafter called "Vendor".

(1) Services: The Vendor agrees to provide: (Here describe goods or services and locationat which to provided).

(2) Compensation: The State will pay the Vendor as follows:

A. For lump sum payment: $ ____________ will be paid to the Vendor upon final acceptance of the above stated goods or services by the State.

B. At the rate of $ ____________ per (hour, day, month or other unit).

(3) Expenses: (Where applicable)

The Vendor shall be reimbursed for necessary travel expenses incurred in fulfilling obligations under this contract. Such expenses shall be reimbursed at the rates and for the purposes applicable to employees of the Department. Total travel expenses shall not exceed $ ________.

(4) Contract Amount: (Where applicable)

The maximum amount payable under this contract is $ __________.

or

The estimated amount payable under this contract is $ ___________.

(5) Billing: The Vendor shall (monthly, after completion of services) submit a bill for services rendered. Bills shall include detailed information as to the services performed and any expenses billed shall be itemized in accordance with applicable State Regulations.

(6) Term: The term of this contract shall be for the period commencing ___________, 19, and shall terminate on ________________, 19.

(General Provisions)

(7) Appropriation: Obligations of the State will cease immediately without penalty of further payment being required if in any fiscal year the Illinois General Assembly or Federal funding source fails to appropriate or otherwise make available sufficient funds for this agreement.

(8) Certification: The Vendor certifies that it is not barred from being awarded a contract or subcontract under Section 10.1 of The Illinois Purchasing Act (Ill. Rev. Stat. 1987, ch. 127, par. 132.10-1).

(9) Termination: This contract may be terminated by either party upon _________ days written notice. Upon termination the Vendor shall be paid for work satisfactorily completed prior to the date of termination.

(10) Work Product: All documents, including reports and all other work products produced by the Vendor under this contract, shall become and remain the property of the State.

(11) Laws of Illinois: This contract shall be governed in all respects by the laws of the State of Illinois.

(12) Unlawful Discrimination:

A. Vendor agrees not to commit unlawful discrimination in employment in Illinois as that term is used in Article 2 of the Illinois Human Rights Act (Ill. Rev. Stat. 1987 ch. 68, par. 1-101 et seq.) and further agrees to take affirmative action to ensure that no unlawful discrimination is committed.

B. Vendor agrees to comply with "An Act to prohibit discrimination and intimidation on account of race, creed, color, sex, religion, physical or mental handicap unrelated to ability, or national origin in employment under contracts for public buildings or public works", (Ill. Rev. Stat. 1987 ch. 29, par. 17 et seq.). The provisions of this Act are made a part of this contract by reference as though set forth in full herein.

(13) Subcontractor Disclosure: (Consultant Services Only) Vendors will not utilize the services of a subcontractor to fulfill obligations under this contract, (or list of subcontractors and amount of payment to each subcontractor).

(14) Conflict of Interest: Vendor agrees to comply with the provisions of the Illinois Purchasing Act prohibiting conflict of interest (Ill. Rev. Stat. 1987, ch. 127, pars. 132.11-1 through 132.11-5) and all the terms, conditions and provisions of those Sections apply to this contract and are made a part of this contract the same as though they were incorporated and included herein.

(15) Bid-rigging/bid rotating certification: The contractor certifies that it has not been barred from contracting with a unit of State or local government as a result of a violation of Section 33E-3 or 33E-4 of the Criminal Code of 1961 (Ill. Rev. Stat. 1988 Supp., ch. 38, pars. 33E3 or 33E4).

(16) Federal Taxpayer Identification Number and legal status disclosure certification:

Under penalties of perjury, I certify that ______________ is my correct Federal Taxpayer Identification Number. I am doing business as a (please check one):

Individual

Real Estate Agent

Sole Proprietorship

Government Entity

Partnership

Tax Exempt Organization (IRC 501(a) only)

Corporation

Not-for-profit Corporation

Trust or Estate

Medical and Health Care Services Provider Corporation

Signed

Date

(17) Educational Loan Certification: The contractor certifies that it is not in default on an educational loan as provided in Section 30-15.12 of the School Code.

IN WITNESS WHEREOF, the parties hereto have caused this contract to be executed by their duly authorized representatives.

VENDOR

State of Illinois

By:

Department of

Address

By:

City

Date:

Date:

(An alternative to dating signatures is to use the clause set forth below)

IN WITNESS WHEREOF, the parties have caused this contract to be executed by their duly authorized representatives this _________day of ______________,19.

History

• Source: Amended at 14 Ill. Reg. 5757, effective April 5, 1990

74 Ill. Adm. Code 290.APPENDIX C Late Filing Affidavit

Submitting Agency:

Division:

Address:

Vendor:

Address:

Contract:

)

State of Illinois ) SS

County of )

)

I ______________, being duly sworn, solemnly (swear) (affirm) that: I am (give official title and office of affiant).

The attached contract was not filed within 30 days of execution because:

I am duly authorized to make this affidavit. This affidavit is made pursuant to and in fulfillment of the requirements of Section 15 of the State Comptroller Act. I know and understand the contents of this affidavit, and all statements herein are true and correct.

Signature of Affiant

Subscribed and sworn before me this

day of

, 19

.

(Seal)

Notary Public

My Commission Expires:

History

• Source: Added at 7 Ill. Reg. 5419, effective April 13, 1983

74 Ill. Adm. Code 290.APPENDIX D Professional or Artistic Services Affidavit

Submitting Agency:

Division:

Address:

Vendor:

Address:

Contract:

)

State of Illinois ) SS

County of )

)

I ______________________, being duly sworn, solemnly (swear) (affirm) that: I am (give official title and office of affiant). The professional or artistic services specified in the attached contract were agreed to by this agency and the vendor prior to commencement of the services and the contract was not reduced to writing before the services commended because:

The attached contract was not filed within 30 days of execution because:

I am duly authorized to make this affidavit. This affidavit is made pursuant to and in fulfillment of the requirements of Section 15 of the State Comptroller Act. I know and understand the contents of this affidavit, and all statements herein are true and correct.

Signature of Affiant

Subscribed and sworn before me this

day of

, 19

.

(Seal)

Notary Public

My Commission Expires:

History

• Source: Added at 7 Ill. Reg. 5419, effective April 13, 1983

Part 295 Payments Remitted on Behalf of a Pension Fund

74 Ill. Adm. Code 295.100 Foreward

This Part is adopted for the purpose of establishing procedures for remitting certified amounts delinquent to claimants in accordance with Articles 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 22 of the Illinois Pension Code.

74 Ill. Adm. Code 295.200 Definitions

As used in this Part, unless the context indicates otherwise, the following terms shall have the meanings specified:

"Act" means the "State Comptroller Act" [15 ILCS 405].

"Applicable Sections of the Code" means Code Sections 3-125, 4-118, 5-168, 6-165, 7-172.1, 8-173, 9-184.5, 10-107.5, 11-169, 12-149.5, 13-503.5 and 22-104.

"Certified Amount Delinquent" means the amount of delinquent payments certified by a claimant pursuant to applicable Sections of the Code and this Part.

"Chief Executive Officer" means the President of the Board of Trustees of the fund or retirement plan.

"Claimant" means a pension fund or retirement plan authorized by the Code (i.e., Chicago and downstate police, firefighters and municipal employees, Cook County employees, and various other local government employees) to certify amounts delinquent and claim remittance under applicable Sections of the Code.

"Claim Eligible to be Remitted" means an amount authorized by applicable Sections of the Code to be remitted by the Comptroller that represents fund contributions certified by a claimant as delinquent.

"Code" means the Illinois Pension Code [40 ILCS 5].

"Comptroller" means the Comptroller of the State of Illinois or any employee of the Office of the Comptroller authorized by the Comptroller to perform the functions and duties required by the Act, the Code or this Part.

"Gross Amount of the Warrant" means that amount of money for which a State agency has authorized the Comptroller to order the payment.

"Payee" means any person who will receive payment in the form of a warrant from the Comptroller, as identified by the Government Unit Code or Federal Employer's Identification Number (FEIN) within a statement of notification under Section 295.300.

"Payee Subject to the Remittance" means the payee of any warrant from which the Comptroller has reduced a claim eligible to be remitted.

"Person" means any individual, corporation, company, association, firm, partnership, society, joint stock company, unit of local government or any other organization.

"Received a Voucher" means that point in time when the Comptroller has physically received the voucher in-house and has date-stamped the voucher.

"Remittance" means a contrary claim or demand by which a given person's claim to a warrant of the Comptroller may be lessened or cancelled.

74 Ill. Adm. Code 295.300 Notification of a Fund's Claim Under Applicable Sections of the Code

a) A claimant seeking remittance under applicable Sections of the Code shall notify the Comptroller in accordance with this Section.

b) The Comptroller will not process a remittance under applicable Sections of the Code until the Comptroller has received a statement of notification from a claimant certifying that the certified amount delinquent has been established through notice and opportunity to be heard.

c) For purposes of the applicable Sections of the Code and this Part, "statement of notification" of a claim eligible to be remitted shall be deemed to occur when the claimant in favor of which the claim has arisen has certified and submitted to the Comptroller the following information:

1. the name and FEIN or Government Unit Code for the person against whom the claim exists;

2. the certified amount delinquent then due and payable to the fund;

3. the reason why there is an amount due to the fund;

4. the time period to which the claim is attributable;

5. a description of the type of notification given to the person against whom the claim exists and the type of opportunity to be heard afforded that person;

6. a statement as to the outcome of any hearings or other proceedings held to establish the claim, or a statement that no hearing was requested; and

7. the date of the final determination of the claim.

d) The statement of notification shall be certified by the claimant's Chief Executive Officer. The authority to execute the statement of claim required by this Section may be delegated to a responsible person or persons. This delegation of authority shall be made on forms provided by the Comptroller and shall contain a signature sample of the persons to whom the delegation is made.

e) A claimant that has submitted a claim to be remitted must notify the Comptroller as soon as possible, but in no case later than 30 days, after receiving notice of a change in the status of a claim. A change in status may occur when payments are received through other collection methods.

74 Ill. Adm. Code 295.400 Warrants Subject to Remittance

a) Except as prohibited by federal statute, federal regulation or State statute, the Comptroller shall remit the amount the claimant certifies as delinquent from any warrant payable to the payee subject to remittance. Warrants subject to remittance are either:

1. from proportions of payments of State funds to the payee, when the claim is made pursuant to Code Section 3-125, 4-118, 7-172.1, 9-184.5, 10-107.5, 12-149.5, 13-503.5, or 22-104; or

2. from proportions of grants of State funds to the payee, when the claim is made pursuant to Code Section 5-168, 6-165, 8-173, or 11-169.

b) A settlement payment by the State or any of its agencies to release any pending or potential claim against the State is eligible to be remitted. Settlement payments subject to remittance are either:

1. from proportions of payments of State funds to the payee, when the claim is made pursuant to Code Section 3-125, 4-118, 7-172.1, 9-184.5, 10-107.5, 12-149.5, 13-503.5, or 22-104; or

2. from proportions of grants of State funds to the payee, when the claim is made pursuant to Code Section 5-168, 6-165, 8-173, or 11-169.

74 Ill. Adm. Code 295.500 Processing a Certification Under Applicable Sections of the Code

This Section governs the processing of a certification under applicable Sections of the Code.

a) Before making a remittance, the Comptroller shall review the statement of notification provided by the claimant notifying the Comptroller of the certified amounts delinquent.

b) The Comptroller shall charge the State agency that submits a voucher against which a remittance is applied for the eligible amount of the voucher submitted. The Comptroller shall draw a warrant on the treasury or on other funds held by the State Treasurer in the amount of the claim eligible to be remitted and deposit that warrant into the State Offset Claims Fund. The State Offset Claims Fund is a trust fund established and administered by the Comptroller for the deposit of monies from a person's warrant pursuant to an offset and the subsequent payment of monies back to either the State agency requesting the offset or the original payee. The State Offset Claims Fund shall be used for the Comptroller's deposit of monies back to either the payee subject to the remittance or the claimant. If, after 60 days have elapsed from the date the Comptroller gives notice of the remittance as prescribed in Section 295.600(a), no protest is made by the payee subject to the remittance, the Comptroller shall issue a warrant on the State Offset Claims Fund for the amount of that deposit to the claimant entitled to the remittance. If a protest conforming to the requirements of Section 295.600(b) is made, the Comptroller shall not issue the warrant to the claimant until the Comptroller ascertains the amount due and payable as provided in Section 295.600(c).

c) If the Comptroller receives a proper statement of notification for a remittance after he or she has drawn a warrant, the Comptroller shall, if feasible, reprocess the warrant in order that the remittance provided for in this Part may be implemented.

d) If the amount of the claim eligible to be remitted is less than the amount to which the payee is entitled, the Comptroller shall draw a warrant for the balance of the amount of the voucher against which the Comptroller has made the remittance and shall issue that warrant to the payee subject to the remittance.

74 Ill. Adm. Code 295.600 Ascertaining the Amount Due and Payable to the Claimant

a) Upon processing a claim eligible to be remitted, the Comptroller shall, as soon as is practicable, give notice in writing to the payee subject to remittance. The notice shall:

1. state that a claimant has certified amounts delinquent and claims remittance under applicable Sections of the Code against a warrant on funds held by the State Treasurer that is now or that may become payable to the payee subject to remittance;

2. identify the claimant seeking remittance and the reason for the remittance; and

3. inform the payee that, if he or she does not owe any or all of the amount claimed to be due and payable to the claimant, the payee may, within 60 days after the Comptroller gives notice, make a written protest as prescribed in subsection (b). The notice to the payee shall be deemed to have been given if the notice is enclosed in a envelope plainly addressed to the payee, United States postage fully prepaid, and deposited in the United States mail. For purposes of this Section, the date "the Comptroller gives notice" shall mean the date of withholding, as indicated by the date on the written notice sent to the person subject to offset.

b) Persons wishing to make a protest of the claim eligible to be remitted shall, within 60 days after the Comptroller gives notice as prescribed in subsection (a), notify the Comptroller in writing of:

1. the reasons for contesting the claim;

2. the amount, if any, that the payee acknowledges to be due and payable to the claimant; and

3. any other information that will enable the Comptroller to determine the amount, if any, that is due and payable to the claimant.

c) Upon receipt of a timely protest, the Comptroller shall determine the amount due and payable to the claimant. This determination shall be made in light of all information relating to the transaction in the possession of the Comptroller and any other information the Comptroller may reasonably request and obtain from the claimant and the payee subject to remittance.

d) If the Comptroller requests information from the claimant, the claimant shall respond within 90 days after the Comptroller's request. The Comptroller may grant a claimant an additional 90 day extension of time to respond for the following reasons:

1. the claimant is actively pursuing further investigation;

2. the matter is in settlement negotiations; or

3. other good cause shown by the claimant.

e) From the deposit into the State Offset Claim Fund made pursuant to Section 295.500, the Comptroller shall issue a warrant to the claimant for the amount found due and payable to the claimant. Any balance of that deposit shall be returned to the payee subject to remittance.

74 Ill. Adm. Code 295.700 Notification of the Comptroller's Exercise of Remittance

Whenever the Comptroller exercises her or his authority under the applicable sections of the Code and this Part, the payee subject to remittance and the agency that originated the voucher shall be sent a copy of the voucher against which the remittance was made, or a written statement obtaining all relevant information from the voucher. The written statement shall include the reason for the remittance and shall indicate the amount of money deducted. The payee subject to remittance and the agency originating the voucher shall receive a copy of the written statement; however, the agency may waive its right to receive the written statement and the voucher. At the request of the claimant, the Comptroller shall notify the State agency, by letter or other means, of the remittance, including the amount of money remitted.

74 Ill. Adm. Code 295.800 Record Retention

The Comptroller shall retain a copy of the statement of notification prescribed in Section 295.600 in accordance with the State Records Act [5 ILCS 160] and the State Comptroller Act [15 ILCS 405].

Part 310 Rules of Practice in Administrative Hearings

74 Ill. Adm. Code 310.10 Applicability

This Part shall apply to hearings conducted under the jurisdiction of the Comptroller, in accordance with the Cemetery Care Act [760 ILCS 100], the Illinois Funeral or Burial Funds Act [225 ILCS 45], the Illinois Pre-Needs Sales Act [815 ILCS 390], and the Crematory Regulation Act [410 ILCS 18].

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.20 Definitions

The definitions below have the following meanings:

"Comptroller" means the Comptroller of the State of Illinois.

"Contested Case" means an adjudicatory proceeding in which the individual legal rights, duties or privileges of a party are required by law to be determined by the Office of the Comptroller only after an opportunity for a hearing. [5 ILCS 100/1-30]

"Department" means any Department within the Office of the Comptroller.

"Director" means the Director of the Department or duly appointed Acting Director, or, in the Director's absence from the State or in any event of the Director's incapacity to act, the Director's next immediate subordinate officer within the Department.

"Hearing" means any hearing of a contested case authorized to be held by the Comptroller.

"Hearing Officer" means the presiding officer at the initial hearing and each continuation of that hearing.

"Licensee" means any holder of a license issued by the Comptroller or any applicant for a license.

"Licensing" includes the Office of the Comptroller process respecting the grant, denial, renewal, revocation, suspension, annulment, withdrawal, or amendment of a license. [5 ILCS 100/140]

"Order" means an Office of the Comptroller action of particular applicability that determines the legal rights, duties, privileges, immunities, or other legal interests of one or more specific persons. [5 ILCS 100/1-50]

"Party" means each person or entity named or admitted as a party or properly seeking and entitled as of right to be admitted as a party. [5 ILCS 100/1-55]

"Person" means any individual, partnership, corporation, association, or public or private organization of any character. [5 ILCS 100/1-60]

"Petitioner" is a party who, by written petition or application, seeks relief or licensure under any provision of the Statutes of the State of Illinois or any rule, order or determination of the Comptroller.

"Respondent" is a person, firm, association or corporation against whom a complaint or petition is filed or to whom an order or complaint is directed by the Comptroller initiating a proceeding.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.30 Institution of a Contested Case by the Department

a) A contested case is instituted by the Department when a Complaint and notice are:

1. deposited with the U.S. Postal Service by regular, certified or registered mail, postage prepaid, addressed to the licensee's last known address;

2. or delivered to the licensee by personal service.

b) A Complaint shall be in writing, be signed by the Director, and include a clear statement of the acts or omissions alleged to violate a statute or rule and citation of the statute or rule.

c) A notice shall be in writing, shall contain the date, time, place and nature of the hearing to be held, shall refer to the Comptroller's Rules of Practice, and shall comply with the notice requirements of Section 310.80.

d) In addition, prior to refusing to issue, revoking or suspending a license, the Comptroller shall institute a contested case as provided in this Section.

e) Unless precluded by law, disposition may be made of any contested case by stipulation, agreed settlement, consent order, or default. [5 ILCS 100/10-25]

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.40 Institution of a Contested Case by Petitioner

a) A contested case is instituted by a petitioner when a Petition for Hearing is mailed to the Comptroller, Attention: Legal Department.

b) In a case in which a petitioner is seeking restoration of a license that was revoked or suspended, the Petition for Hearing shall be in writing, signed by the petitioner, and shall set forth:

1. The number of the certificate that was suspended or revoked;

2. The docket number of the case;

3. The date on which the suspension or revocation was ordered;

4. Whether an order has been entered appointing a Receiver and, if so, whether that order has been appealed;

5. Whether the order that suspended or revoked the license was appealed and, if so, whether a stay of the imposition of the Comptroller's order was granted by any reviewing court;

6. All dates and types of employment held since the date of the Comptroller's order;

7. Any arrests or convictions since the date of the Comptroller's order; and

8. Date and disposition of any other petitions for restoration filed since the date of the Comptroller's order.

c) In a case in which a petitioner seeks to contest a decision by the Comptroller to deny his or her application for licensure, the Petition for Hearing shall be in writing, signed by the petitioner, and shall state with specificity the particular reasons why the applicant believes that the action by the Comptroller to deny licensure was incorrect.

d) Upon receipt by the Comptroller of a properly completed Petition for Hearing (eg., completed in accordance with this Section or Sections 310.30, 310.60 and 310.80), a case will be docketed and notice will be sent to the petitioner setting forth the date, time and place of hearing.

e) Unless precluded by law, disposition may be made of any contested case by stipulation, agreed settlement, consent order, or default. [5 ILCS 100/10-25]

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.50 Joinder

In the interest of the efficient disposition of related cases, the Comptroller may join cases relating to multiple licensees or petitioners without regard to whether the cases relate to the same license or licensed activity so long as the cases involve issues of law or fact which are common to the parties pursuant to the standards adopted under Section 2-404 of the Code of Civil Procedure. The respondent may contest the decision to join cases by filing a motion pursuant to Section 310.210 of this Part.

74 Ill. Adm. Code 310.60 Form of Papers

All papers filed or submitted to the Department or the Comptroller in a contested case shall be typewritten, on 8½ by 11 inch white paper. The first page of each document shall set forth the names of the parties and the docket number assigned to the case by the Comptroller. Petitions for Hearing which are filed before a docket number is assigned shall contain a space for entry of the assigned number.

74 Ill. Adm. Code 310.70 Service

a) Service of any document may be by mail or by personal delivery. Proof of service will be attached to the original of any document served. In the absence of evidence to the contrary, the date shown on the proof of service shall be deemed the date of service.

b) Service on the Comptroller, Director, or on the Department, is made by service on the Comptroller or Director, at the Chicago headquarters, or at the Springfield headquarters.

c) Service of any document as provided in the above paragraph will include at least three copies of the documents served.

74 Ill. Adm. Code 310.80 Notice

a) Notice shall include:

1. A statement of the time, place and nature of the hearing;

2. A statement of the legal authority and jurisdiction under which the hearing is held;

3. Except where a more detailed statement is otherwise provided for by law, a short and plain statement of the matters asserted, the consequences of a failure to respond, and the official file or other reference number. [5 ILCS 100/10-25(a)(4)]

4. The names and mailing addresses of the hearing officer, all parties, and all other persons to whom the Office of the Comptroller gives notice, unless otherwise confidential by law. [5 ILCS 100/10-25(a)(5)]

b) The licensee will be given at least 10 days notice prior to the first date set for the preliminary hearing or hearings, as the case may be. Once notice is given, it will thereafter be the responsibility of the licensee to become acquainted with subsequent hearing dates.

c) Nothing in this Section will prevent the Comptroller from scheduling a hearing within 10 days, upon the agreement of the parties.

d) Any contention that improper notice was given will be deemed waived unless it is raised by the licensee prior to argument on any other motion or, if no other motions are presented, prior to the commencement of opening statements.

e) Proper notice is given when a notice is deposited with the U.S. Postal Service, by regular, certified or registered mail, postage prepaid, addressed to the licensee's last known address, or is delivered to the licensee by personal service.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.90 Prehearing Negotiations

The Department and the Respondent may stipulate to facts and may agree to enter written orders conditioned upon the Comptroller's acceptance. The signature of the Comptroller shall signify consent to the agreement. The signed agreement shall be considered the Conclusions of Law and Findings of Fact. If the Comptroller rejects the agreement, the Respondent shall be entitled to a hearing on the merits.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.100 Representation

a) A party may be represented by an attorney who is licensed in Illinois. Attorneys who appear in a representative capacity must file written notice of appearance setting forth:

1. The name, address and telephone number of the attorney;

2. The name and address of the party represented; and

3. An affirmative statement indicating that the attorney is licensed in Illinois.

b) An attorney may withdraw from employment as a representative only upon written notice to the Comptroller that states his or her specific reasons for withdrawal.

c) Any individual may appear on his or her own behalf.

d) Attorneys appearing before the Comptroller or hearing officer shall conform their conduct to Article VIII of the Illinois Supreme Court Rules (Illinois Rules of Professional Conduct of 2010). In the event there is behavior that substantially impairs the administration of the Acts or the conduct of the hearing, the Comptroller or hearing officer shall take the following actions in a progressive manner:

1. Substitution of written argument in place of oral argument;

2. Exclusion of an attorney from the proceeding;

3. Suspension or revocation of an attorney's right to appear before the Comptroller or hearing officer.

e) If any of the actions described in subsection (d) are taken by the Comptroller or hearing officer, it shall be done as a matter of record, and the Comptroller or hearing officer shall state for the record the specific reasons for that action.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.110 Failure to Appear

Failure to appear at the time and place set for hearing shall be deemed a waiver of the right to present evidence. After presentation by the Department of an offer of proof that the licensee was given proper notice, the Comptroller shall enter an order or the hearing officer shall make its recommendation. When a petitioner fails to appear, the Petition for Hearing shall be dismissed.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.120 Amendment, Withdrawal of Complaints and Petitions for Hearing

a) The complaint may be amended at any time. An amended Complaint may be filed in the same manner as a Complaint, or it may be presented to the Comptroller or hearing officer during the course of the hearing. A continuance shall be granted whenever the amendment materially alters the Complaint, and when the licensee demonstrates that he or she would otherwise be unable to properly prepare an Answer to the Amended Complaint or prepare his or her case. "Materially altered" means the addition of a new issue of law or allegation of fact that may affect the decision to which the party has not had an opportunity to respond. Continuances will be granted for no more than 30 days.

b) A Complaint or Petition for Hearing may be withdrawn at any time prior to the hearing by the party who initiated it. After a hearing has begun, a Complaint may be withdrawn only upon written notice to the Comptroller or hearing officer.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.130 Requirement of an Answer

a) In all contested cases instituted by the Department, the licensee shall file an Answer within 10 days after the date on which the Complaint was filed. The Answer shall be in writing, signed by the licensee or his or her representative, and shall contain a specific response to each allegation in the Complaint. The response shall either admit or deny the allegation, or shall state that the licensee has insufficient information to admit or deny the allegation.

b) Any Answer that states that the licensee has insufficient information to admit or deny the allegation shall be accompanied by an affidavit attesting to the truth of this assertion.

c) On motion by the Department, the Comptroller or hearing officer will cause to be issued a notice to plead or be held in default. If, within 15 days after issuance of the notice, the Respondent does not answer or otherwise file a responsive Pleading, the Respondent will be held in default.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.140 Discovery

a) Discovery shall not be the subject of motions presented to the Comptroller or hearing officer, except when a motion is made alleging failure to comply with this provision, and requesting relief in the form of dismissal of the case, or recommendation to the Comptroller based on the pleadings without a hearing.

b) Upon written request served on the opposing party, any party shall be entitled to:

1. The name and address of any witness who may be called to testify;

2. Copies of any document which may be offered as evidence; and

3. A description of any other evidence which may be offered.

c) The above information will be provided within ten days of service of a request.

d) Whether or not a request is made, during discovery a licensee shall be entitled to any exculpatory evidence in the Comptroller's or the Department's possession. Exculpatory evidence is any evidence which tends to support the licensee's position or to call into question the credibility of a Department witness; and

e) Upon a written request served on the licensee, at any time after a Complaint is filed, or at any stage of the hearing, the licensee will be required to produce documents, books, records or other evidence which relate directly to conduct of the licensed business.

f) Nothing in this Section shall prevent the parties in a contested case from agreeing to a mutual exchange of information which is more extensive than what is provided for herein. Where the parties agree to the use of an evidence deposition, such agreement will be in writing, and will operate as a waiver of any objection not made during the deposition, except for an objection that the testimony of the witness is not relevant to the case.

g) This provision will be construed to impose a continuing obligation upon the parties to exchange new information as it becomes available.

74 Ill. Adm. Code 310.150 Subpoenas

a) The Comptroller will issue subpoenas for the attendance of witnesses or production of books, records, documents or other evidence.

b) Any licensee or petitioner seeking issuance of a subpoena shall apply in writing to the Comptroller, setting forth facts that purport to demonstrate that the subpoena is relevant to the disputed matter and is required. Upon refusal by the Comptroller to issue any subpoena, the licensee will be entitled to a hearing before the Comptroller or hearing officer, to be conducted as a matter of record.

c) Service of subpoenas shall be as provided in 735 ILCS 5/2-1101 (Illinois Code of Civil Procedure). Payment of witness fees and expenses shall be as provided in the Illinois Circuit Courts Act. 705 ILCS 35/4.3 (the Illlinois Circuit Courts Act).

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.160 Prehearing Conference

a) After a case is instituted, upon the written motion of either party, or on his or her own motion, the Comptroller or the hearing officer shall direct the parties to attend a prehearing conference. The prehearing conference may be conducted by telephone at the discretion of the hearing officer.

b) Unless waived by the parties, the conference will be conducted as a matter of record. Participation by the Director, the Comptroller or a hearing officer will not affect his or her rights to participate in a subsequent hearing on the matter.

c) The purposes of the conference include:

1. Simplification of issues;

2. Limitation of issues;

3. Negotiating admissions or stipulations;

4. Limitation of witnesses or evidence;

5. Exchange of exhibits; or

6. Discussion of any other matter that may aid in efficient disposition of the case.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.170 Hearings

The sequence to be followed for all contested cases is as follows:

a) Preliminary Hearing. The preliminary hearing may be conducted by telephone at the discretion of the hearing officer. The purpose is to set a date on which all parties expect to be prepared, and to rule on any preliminary motions that are presented. This may be eliminated by agreement of the parties and the Comptroller or hearing officer.

b) Prehearing Conference – Optional. The purposes are set out in Section 310.160. The prehearing conference may be conducted by telephone at the discretion of the hearing officer.

c) Hearings

1. Preliminary matters – Motion, attempts to narrow issues or limit evidence.

2. Opening Statements – The party bearing the burden of proof proceeds first.

3. Case in Chief – Evidence and witnesses are presented by the party bearing the burden of proof. As witnesses' testimony is completed, they are subject to cross-examination.

4. Defense – Evidence and witnesses may be presented by the opposing parties.

5. Closing Statements – The party bearing the burden of proof proceeds first, then the opposing party, then a final word by the party bearing the burden of proof.

6. Hearing Officer Report and Recommendation – Described in Section 310.240.

d) The location of the hearing will be determined by the Comptroller or hearing officer. Requests to change the location will be decided by the Comptroller or the hearing officer, with consideration given to the locations of the parties and their abilities to travel.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.180 Hearing Officers

a) In any contested case, the Comptroller may employ any attorney licensed to practice in Illinois to serve as hearing officer. The hearing officer may be empowered to conduct the hearing, administer oaths, question witnesses, make rulings on motions and objections, or submit suggested Findings of Fact and Conclusions of Law to the Comptroller at the conclusion of the case. The hearing officer shall provide the Comptroller such legal counsel as the Comptroller may require in evaluating the Findings of Fact and Conclusions of Law and the recommendations for decision.

b) It shall not be a bar to assignment as a hearing officer that the attorney is also an employee of the Comptroller.

c) Any hearing officer shall not have direct involvement with the case or have an interest in the decision to be reached. Mere familiarity with the facts shall not disqualify a hearing officer. A hearing officer may be disqualified for bias or conflict of interest. An adverse ruling, in and of itself, shall not constitute bias or conflict of interest.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.190 Burden of Proof

a) The burden of proof rests with the Department in all cases instituted by the Department by the filing of a Complaint. A recommendation for an order may be made by the hearing officer or an order entered by the Comptroller only when the Department establishes by a preponderance of the evidence that the allegations of the Complaint are true.

b) The burden of proof in all cases instituted by the filing of a Petition for Hearing rests with the petitioner. The petitioner must prove by a preponderance of the evidence that the license should be granted or restored, as the case may be.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.200 Documents

a) Business records shall be admissible. A business record is:

1. Relevant;

2. A memorandum, report, record or data compilation;

3. Made by a person with first-hand knowledge of the facts;

4. Made at or near the time of the facts;

5. Made as part of the regular practice of the activity; and

6. Kept in the course of regularly conducted activity.

b) Any party may prove elements subsection (a)(3) through subsection (a)(6), above, by presentation of a sworn statement by an individual responsible for making or keeping such records. Business records include medical reports and police reports.

c) Any party seeking introduction of document will be allowed to offer a mechanical reproduction or carbon copy of the original without any showing that the original is unavailable, upon representation of the party or attorney that the copy is a fair and accurate copy of the original.

74 Ill. Adm. Code 310.210 Motions

a) Motions will be made in writing, unless the Comptroller or hearing officer finds that oral motions would expedite the hearing and not interfere with the parties' presentation of their case. Motions are limited to the following:

1. To request dismissal of a Complaint, for failure to state facts which, if true, would form a sufficient basis for the action taken.

2. To request sanctions in accordance with the Section of this Part dealing with Representation.

3. To request sanctions in accordance with the Section of this Part dealing with Discovery.

4. To request dismissal of a Petition for Hearing, for failure to comply with the Section of this Part dealing with Institution of a Contested Case by a Petitioner.

5. To request dismissal of a Complaint where the Department's case has been concluded without sufficient evidence having been presented to form a basis for the action taken.

6. To request a continuance, or extension of time to comply with any provision of this Part.

7. To request an order granting a rehearing, or additional hearings.

8. To request an order that the Comptroller or hearing officer reconsider its Findings of Fact, Conclusion of Law or Recommendation to the Comptroller or to request a new hearing or additional hearings.

9. To request that the Comptroller or hearing officer deem a failure to file an Answer to be an admission of the truth of the allegations contained in the Complaint.

10. To request employment of a hearing officer in a case where the Comptroller is presiding.

11. To request that a hearing officer be excluded from the hearing or deliberations, for cause as specified in Section 310.180(c).

12. To request that an Order be vacated or modified.

13. To request a prehearing conference.

14. To request separation of cases joined by the Department.

b) When any motion is filed, the Comptroller or hearing officer is authorized to question either party to obtain information necessary to a fuller understanding of the issues presented. Where facts are alleged as a basis for the request, which are not a part of the record in the case, an affidavit will be attached to the motion setting forth such facts.

74 Ill. Adm. Code 310.220 Evidence

a) Irrelevant, immaterial, or unduly repetitious evidence shall be excluded. Except as otherwise provided in this Section, the rules of evidence and privilege as applied in civil cases in the circuit courts of this State shall be followed. Evidence not admissible under those rules of evidence may be admitted unless precluded by statute, if it is of a type commonly relied upon by reasonably prudent men in the conduct of their affairs. Objections to evidentiary offers may be made and shall be noted in the record. Subject to these requirements, when a hearing will be expedited and the interests of the parties will not be prejudiced, any part of the evidence may be received in written form. Subject to the evidentiary requirements of this Section, a party may conduct cross-examination required for a full and fair disclosure of the facts. Notice may be taken of matters of which the circuit courts of this State may take judicial notice. In addition, notice may be taken of generally recognized technical or scientific facts within the Office of the Comptroller's specialized knowledge. Parties shall be notified either before or during the hearing, or by reference in preliminary reports or otherwise, of the material noticed, including any staff memoranda or data, and they shall be afforded an opportunity to contest the material so noticed. The agency's experience, technical competence, and specialized knowledge may be utilized in the evaluation of the evidence. [5 ILCS 100/10-40]

b) Hearsay is not admissible. In addition to any other exceptions to the hearsay rule that exists in Illinois, a statement shall be admitted if it has circumstantial guarantees of trustworthiness and if the probative value of the statement outweighs any prejudice resulting from an inability to cross-examine the declarant.

c) Statements that Are Not Hearsay

1. Prior Statement by Witness. The declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement and the statement is:

A) inconsistent with the declarant's testimony, and was given under oath subject to the penalty of perjury at a trial, hearing or other proceeding, or in a deposition;

B) consistent with the declarant's testimony and is offered to rebut an express or implied charge against the declarant of recent fabrication or improper influence or motive; or

C) one of identification of a person made after perceiving the person.

2. Admission by Party-Opponent. The statement is offered against a party and is:

A) the party's own statement in either an individual or a representative capacity;

B) a statement of which the party has manifested an adoption or belief in its truth;

C) a statement by a person authorized by the party to make a statement concerning the subject;

D) a statement by the party's agent or servant concerning a matter within the scope of the party's agent or servant's agency or employment, made during the existence of the relationship; or

E) a statement by a co-conspirator of a party during the course and in furtherance of the conspiracy.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.230 Adverse Witness

a) Any party or witness may be called as an adverse witness. In such a case, examination of the witness will be allowed as if under cross-examination.

b) A witness called in good faith, whose testimony surprises the party calling the witness, can be examined as if under cross-examination, and the testimony of the witness may be impeached by prior statements.

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.231 Ex Parte Communications

a) Except in the disposition of matters that the Office of the Comptroller is authorized by law to entertain or dispose of on an ex parte basis, Office of the Comptroller Department heads, employees and hearing officers shall not, after notice of hearing in a contested case or licensing to which the procedures of a contested case apply under the Act, communicate, directly or indirectly, in connection with any issue of fact, with any person or party, or in connection with any other issue with any party or the representative of any party, except upon notice and opportunity for all parties to participate.

b) However, an Office of the Comptroller employee may communicate with other employees of the Office of the Comptroller, and an Office of the Comptroller employee or hearing officer may have the aid and advice of one or more personal assistants.

c) An ex parte communication received by any Office of the Comptroller Department head, employee or hearing officer shall be made a part of the record of the pending matter, including all written communications, all written responses to the communications, and a memorandum stating the substance of all oral communications and all responses made and the identity of each person from whom the ex parte communication was received.

d) Communications regarding matters of procedure and practice, such as the format of pleadings, number of copies required, manner of service, and status of proceedings, are not considered ex parte communications under this Section. [5 ILCS 100/10-60]

History

• Source: Added at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.232 Stay of Contested Case Hearings for Military Service

a) "Military Service" means any full-time training or duty, no matter how described under federal or State law, for which a service member is ordered to report by the President, Governor of a state, commonwealth, or territory of the United States, or other appropriate military authority.

"Service Member" means a resident of Illinois who is a member of any component of the U.S. Armed Forces or the National Guard of any state, the District of Columbia, a commonwealth, or a territory of the United States.

b) In a contested case in which a named party is a service member who has entered military service, for a period of 14 days that follow the conclusion of military service, the administrative law judge shall, upon motion made by or on behalf of the service member, stay the hearing for a period of 90 days if the service member's ability to appear at the hearing is materially affected by his or her military service.

c) In order to be eligible for the benefits granted to service members under this Section , a service member must demonstrate that his or her military service has been in excess of 29 consecutive days and has materially affected his or her ability to attend the hearing by submitting to the hearing officer a letter from the service member's commanding officer stating that the service member's military duty has prevented the service member from appearing at the hearing and that military leave has not been authorized. The service member must also provide the hearing officer with an approximate date of availability.

d) Additional stays of the contested case hearing shall be permitted at the discretion of the hearing officer if all of the requirements of this Section are met.

e) A violation of this Section constitutes a civil rights violation under the Illinois Human Rights Act [775 ILCS 5]. All proceeds from the collection of any civil penalty imposed under this subsection shall be deposited into the Illinois Military Family Relief Fund. [5 ILCS 100/10-63]

History

• Source: Added at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.233 Expenses and Attorney's Fees

a) In any contested case initiated by the Office of the Comptroller that does not proceed to court for judicial review and on any issue for which a court does not have jurisdiction to make an award of litigation expenses under Illinois Supreme Court Rule 137, any allegation made by the Office without reasonable cause and found to be untrue shall subject the Office to the payment of the reasonable expenses, including reasonable attorney's fees, actually incurred in defending against that allegation by the party against whom the case was initiated. A claimant may not recover litigation expenses when the parties have executed a settlement agreement that, while not stipulating liability or violation, requires the claimant to take correction action or pay a monetary sum.

b) The claimant shall make a demand for litigation expenses to the Office. If the claimant is dissatisfied because of the Office's failure to make any award or because of the insufficiency of the Office's award, the claimant may petition the Court of Claims for the amount deemed owed. If allowed any recovery by the Court of Claims, the claimant shall also be entitled to reasonable attorney's fees and the reasonable expenses incurred in making a claim for the expenses incurred in the administrative action. The Court of Claims may reduce the amount of the litigation expenses to be awarded under this Section, or deny an award, to the extent that the claimant engaged in conduct during the course of the proceeding that unduly and unreasonably protracted the final resolution of the matter in controversy.

c) In any case in which a party has any administrative rule invalidated by a court for any reason, including but not limited to the Office's exceeding its statutory authority or the Office's failure to follow statutory procedures in the adoption of the rule, the court shall award the party bringing the action the reasonable expenses of the litigation, including reasonable attorney's fees. [5 ILCS 100/10-55]

History

• Source: Added at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.240 Reports of Hearings

a) In every contested case conducted before a hearing officer, the hearing officer will file a written report that contains his or her Findings of Facts and Conclusions of Law with respect to the allegations contained in the Complaint or Petition for Hearing and his or her Recommendation to the Comptroller.

b) In every contested case conducted before the Comptroller, separate Findings of Fact and Conclusions of Law shall be stated in a written report in support of the Order of the Comptroller.

c) Decisions and Orders

1. A final decision or order adverse to a party (other than the Office of the Comptroller) in a contested case shall be in writing or stated in the record. A final decision shall include Findings of Fact and Conclusions of Law, separately stated. Findings of Fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings. If, in accordance with this subsection (c)(1), a party submitted proposed Findings of Fact, the decision shall include a ruling upon each proposed finding. Parties or their agents appointed to receive service of process shall be notified either personally or by registered or certified mail of any decision or order. Upon request, a copy of the decision or order shall be delivered or mailed forthwith to each party and to his or her attorney of record.

2. All orders shall specify whether they are final and subject to the Administrative Review Law [735 ILCS 5/Art. III]. Every final order shall contain a list of all parties of record to the case, including the name and address of the officer entering the order and the addresses of each party, as known to the officer, where the parties may be served with pleadings, notices, or service of process for any review or further proceedings. Every final order shall also state whether the rules of the Office of the Comptroller require any motion or request for reconsideration and cite the rule for the requirement. [5 ILCS 100/10-50]

d) The record in a contested case shall include the following:

1. All pleadings (including all notices and responses to pleadings), motions, and rulings.

2. All evidence received.

3. A statement of matters officially noticed.

4. Any offers of proof, objections, and rulings on offers of proof and objections.

5. Any proposed findings and exceptions.

6. Any decision, opinion, or report by the hearing officer.

7. All memoranda or data submitted to the hearing officer in connection with the hearing officer's consideration of the case that are inconsistent with Section 310.170(d).

8. Any communication prohibited by Section 310.170(d). No such communication shall form the basis for any finding of fact.

e) Oral proceedings or any part of those proceedings shall be recorded stenographically or by other means that will adequately insure the preservation of the testimony or oral proceedings and shall be transcribed on the request of any party.

f) Findings of Fact shall be based exclusively on the evidence and on matters officially noticed. [5 ILCS 100/10-35]

History

• Source: Amended at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.250 Requests for Rehearing

a) Where a rehearing, or additional hearings are requested, the request shall be in the form of a motion, and shall state with specificity the reasons for the request. If it is alleged that new evidence is available which was not available at the time of the hearing, the affidavit shall describe the new evidence, and reasons why it was not available for use at the hearing.

b) Where the hearing officer grants any motion which would dispose of the case, it shall first afford the parties an opportunity to cure the defects in pleading or proof, and the ruling shall be forwarded as a report of the hearing in accordance with Section 310.240.

74 Ill. Adm. Code 310.251 Waiver

Compliance with any or all of the provisions of these rules concerning contested cases may be waived by written stipulation of all parties. [5 ILCS 100/10-70]

History

• Source: Added at 42 Ill. Reg. 16010, effective August 1, 2018

74 Ill. Adm. Code 310.260 Severability

If any Section, subdivision, sentence or clause of this Part shall be held by a court of competent jurisdiction to be invalid, such holding shall not affect the remaining parts thereof.

Part 320 State Collections

74 Ill. Adm. Code 320.5 Scope

This Part establishes procedures for State agencies to follow in complying with the Illinois State Collection Act of 1986 (Ill. Rev. Stat. 1986 Supp., ch. 15, par. 151 et seq.). As used in this Part, the term "State agencies" shall have the meaning specified in the Illinois State Auditing Act (Ill. Rev. Stat. 1985, ch. 15, pars. 301-1 et seq.).

74 Ill. Adm. Code 320.10 Definition of Receivables

a) Receivables represent amounts or claims owed to the State or State agencies either directly or in a trust or agent capacity by any individual or entity. These claims are for the future receipt of cash. There are two criteria essential to the creation of an account receivable:

1. The transaction must be completed to the extent that payment is the only unconsummated act (i.e., the income is earned), and

2. the claim must be measurable in terms of the assignment of a monetary value established by State law and administrative regulations.

b) Receivables shall be recognized when such claim has been established pursuant to subsection (a) of this Section.

c) For purposes of this Part, receivables includes claims under protest once the monetary value of the claim has been established under subsections (a) and (b) of this Section.

74 Ill. Adm. Code 320.20 Reporting Requirements

State agencies shall maintain internal records of accounts receivable and shall submit for each fiscal year quarterly summary reports of accounts receivables and uncollectible accounts on the forms prescribed by the Comptroller for this purpose. For purposes of this Section, fiscal quarters end on September 30, December 31, March 31 and June 30. Reports are due no later than 45 days after the end of the quarter.

74 Ill. Adm. Code 320.30 Standards for Aging of Accounts Receivable

a) In order for an agency to effectively estimate the collectibility of its receivables and properly focus collection efforts, each outstanding receivable due the State must be "aged" relative to its formal due date. A receivable is considered "current" (not past due) prior to the passage of its formal due date. When the debtor's due date passes without full payment, the debt becomes "past due" and must be aged according to the number of days beyond the due date that the debt has been outstanding.

b) For purposes of aging and reporting outstanding receivables, the following aging periods will normally be used:

Past due: 1-30 days

31-90 days

91-180 days

181 days-one year

Over one year

c) When the above aging periods do not serve an agency's management needs, other reasonable aging periods may be utilized and shall be reported to the Comptroller. Such other aging periods may be utilized where the different aging period is suited to the monitoring of that receivable, e.g., where specific statutory or administrative provisions preclude action until the completion of a "waiting period". Also, in some instances a separate aging category will be determined by the agency to be necessary. For example, if an agency cannot begin collection efforts for a six-month period after the debt becomes past due, a separate category of aging should be set up for these receivables.

74 Ill. Adm. Code 320.40 Procedures for Estimating Uncollectible Receivables

a) Each agency must maintain records of "uncollectible receivables" which are defined as an agency's estimate of outstanding receivables which will ultimately be uncollectible.

b) In making its estimate of uncollectible receivables, an agency shall consider the following standards:

1. estimates of uncollectibles must be based upon prior collection experience for each type of receivable maintained by the agency; and

2. as a debt ages, the probability of collection decreases.

c) Within the aging categories established pursuant to Section 320.30, each Agency shall develop a percentage factor for uncollectibility. The percentage factor shall be calculated from the ratio of uncollectible receivables to total receivables, based upon the Agency's historical data for each receivable type. The uncollectibilty factor shall be applied to future gross receivables within the aging categories to determine the "net receivables," which are defined as gross receivables minus uncollectible receivables.

74 Ill. Adm. Code 320.50 Collection Through Use of the Comptroller's Offset Procedure

a) State agencies may use the Comptroller's Offset System provided in Section 10.05 of the State Comptroller Act (Ill. Rev. Stat. 1985, ch. 15, par. 210.05) for the collection of debts owed to the agency. All debts that exceed $1,000 and are more than 1 year past due shall be placed in the Comptroller's Offset System, unless the State agency shall have entered into a deferred payment plan or demonstrates to the Comptroller's satisfaction that referral for offset is not cost effective (Ill. Rev. Stat. 1986 Supp., ch. 15, par. 155 (c)).

b) The cost effectiveness test will be met where the total collection cost expended or anticipated will exceed the amount of the claim that would reasonably be expected to be realized as a result of those collection costs. The determination of "collection costs expended" shall include the direct costs for processing the Agency's offset claims. For the purposes of this Section, direct costs shall include, at a minimum the following: personnel and related fringe benefits, office space, equipment, supplies, and any other expenses determined by the agency to be directly associated with the processing offsets by the Agency. The estimation of future collections shall be based upon the historical collection efficiency of the Comptroller's Offset System for the particular type of receivable. The following examples set forth circumstances where referral for offset would not be cost effective:

1. Excessive age of the debt (e.g., initial investigation discloses that the debtor has changed addresses or names, or will be impossible to locate);

2. Ongoing negotiations with the debtor indicate that voluntary collection efforts will be successful;

3. A debtor company has ceased operations for a long period of time;

4. A debtor business has reorganized (e.g., from a sole proprietor to a partnership or corporation);

5. A debt has been placed with a private collection firm, and based on the collection firm's past history, it is likely that they will collect the debt;

6. The age or health of the debtor is such that is unlikely they will be receiving any payments from the State;

7. Foreign Student debtors who have left or will soon be leaving the country; and

8. Individuals and corporations in bankruptcy.

c) Requests for offsets must comply with the rules established under 74 Ill. Adm. Code 285.

d) State agencies or the Comptroller may remove claims from the Comptroller's Offset System, where such claims have been inactive for more than one year (Ill. Rev. Stat. 1986 Supp., ch. 15, par. 155(e)). Such claims shall be removed when the agency or the Comptroller determines that it is cost effective to do so (see subsection (b) of this Section for the standards for determining cost effectiveness) or where required by the doctrine of "due process of law" to do so.

e) A State agency which has submitted a claim to the Comptroller for offset must notify the Comptroller as soon as possible, but in no case later than 30 days, upon the occurrence of any event which affects the existence or current collectibility of the debt, such as payments received other than through a successful offset or the filing of a bankruptcy petition.

74 Ill. Adm. Code 320.60 State Agency Internal Offsets

a) State agencies shall develop internal procedures whereby agency-initiated payments to its debtors may be offset without referral to the Comptroller's Offset System (Ill. Rev. Stat. 1986 Supp., ch. 15, par. 155(d)).

b) These procedures must include the following standards:

1. A specified point at which a claim must be entered into the system; for example, claims more than $500 and over 120 days past due. This point will vary by agency and nature of the receivables.

2. Procedures for notifying the debtor of the amount and reason for a deduction.

3. Procedures for removing a claim from the system.

4. A procedure for reporting to the Comptroller whenever an offset is made between two different funds within the agency; this report must include:

A) The name and Comptroller-assigned number of the fund to which the debt is owed;

B) The amount owed;

C) The name and Comptroller-assigned number of the fund from which the offset deduction was made;

D) The amount deducted; and

E) The date of the deduction.

74 Ill. Adm. Code 320.70 Accounting for Bad Debts and Uncollectible Claims

a) For claims or accounts receivable of $1,000 or more, a State agency shall request the Attorney General to certify the account or claim as uncollectible pursuant to the standards established in Section 2 of "AN ACT in relation to uncollected claims and accounts receivable of the State agencies" (Ill. Rev. Stat. 1985, ch. 15, par. 102).

b) Claims or accounts receivable of less than $1,000 may be certified as uncollectible by the agency when the agency determines that further collection efforts are not in the best economic interest of the State (Ill. Rev. Stat. 1986 Supp., ch. 15, par. 102(c)). In determining the best economic interest of the State, State agencies shall determine whether the total collection cost expended or anticipated will exceed the amount of the claim that would reasonably be expected to be realized as a result of those collection costs.

c) Debts certified by the agency as uncollectible by the Attorney General may be reopened for collection by a State agency upon the approval of the Attorney General.

d) Debts certified by the agency as uncollectible may be reopened for collection where the agency determines that it is in the best economic interest of the State to do so (see subsection (b) of this Section for the standards for determining the best economic interest of the State).

e) After compliance with the procedures set forth in Section 2 of "AN ACT in relation to uncollected claims and accounts receivable of State agencies" (Ill. Rev. Stat. 1985, ch. 15, par. 102) and this Section, State agencies may delete from their records debts certified as uncollectible as follows:

1. When the debt is less than $1,000, immediately upon certification by the agency;

2. For debts of $1,000 or more that are less than 5 years old, when the agency determines that such deletion is in the best economic interest of the State. In determining the best economic interest of the State, State agencies shall determine whether the total collection cost expended or anticipated will exceed the amount of the claim that would reasonably by expected to be realized as a result of those collection costs;

3. For debts of $1,000 or more when, the debt is more than 5 years old (Ill. Rev. Stat. 1986 Supp., ch. 15, par. 102 (i)).

74 Ill. Adm. Code 320.100 Accounts Receivable Funds

a) Upon the written requests of a State agency, which meets a criteria established in this Section, the Comptroller, upon the concurrence in writing by the Governor, will establish an Accounts Receivable Fund for the State agency.

b) An application for establishment of an Accounts Receivable Fund shall include:

1. Agency name;

2. Description of the receipts to be deposited into the Accounts Receivable Fund, including receipt codes;

3. The percentage of such receipts estimated to be uncollectible by the creditor agency;

4. The percentage of such receipts certified as uncollectible by the Attorney General;

5. The potential increase in future receipts, as estimated by the State agency, if 25% of amounts collected from accounts more than 120 days past due are retained for collection efforts (Ill. Rev. Stat. 1986 Supp., ch. 15, par. 156);

6. The fund into which receipts are currently being deposited;

7. Amount of receipts deposited in the most recently concluded prior fiscal year, including an estimate of the proportion of such receipts representing collections on accounts more than 120 days past due;

8. Estimated deposits in the current fiscal year, including an estimate of the proportion of such receipts representing collections on accounts more than 120 days past due.

c) Applications shall be submitted to the Comptroller addressed as follows:

Comptroller

State of Illinois

201 State House

Springfield, Illinois 62706

Attention: Deputy Comptroller

d) After initial review by the Comptroller, the application shall be forwarded to the Governor. The Comptroller shall include a recommendation for approval or disapproval based upon the Comptroller's assessment of the impact of the establishment of the Accounts Receivable Fund on the relevant fund balances, the ability of the State to meet future obligations on a timely basis, and such related fiscal information that the Comptroller or the Governor may request. Upon the concurrence of the Comptroller and the Governor, the Accounts Receivable Fund shall be established for the receipt types designated in the application. Once established, all collections on accounts receivable which are more than 120 days past due for the receipt types designated in the approved application shall be deposited into the Accounts Receivable Fund. Seventy-five percent of receipts deposited into the Accounts Receivable Fund shall be transferred by the State agency within 10 days after the end of each calendar quarter. The remaining twenty-five percent of receipts into the Accounts Receivable Fund may be used by the State agency for collecting overdue accounts pursuant to appropriation by the General Assembly (Ill. Rev. Stat. 1986 Supp., ch. 15, par. 156).

Part 340 State Comptroller Minority Contractor Opportunity Initiative

74 Ill. Adm. Code 340.100 Definitions

"Administrative fee" is the fee the State Comptroller is required to collect from qualifying contracts under Section 23.9 of the State Comptroller Act [15 ILCS 405].

"Code" is the Illinois Procurement Code [30 ILCS 500].

"Qualifying contract" is a contract of $1,000 or more, filed with the State Comptroller, that was procured according to Section 20-10, 20-15, 20-25 or 20-30 of the Code. Qualifying contracts include, but are not limited to:

competitive sealed bids, sole source procurements, and emergency purchases of supplies and services awarded under Sections 20-10, 20-25 and 20-30 of the Code; and

competitive sealed bids, sole source procurements, and emergency purchases of construction and construction-related professional services awarded under Sections 20-10, 20-25 and 20-30 of the Code.

"SAMS" is the Statewide Accounting Management System that reflects the Comptroller's Uniform Accounting principles and procedures (see 74 Ill. Adm. Code 245).

"SAMS Procedures" are the procedures contained in the State Comptroller's Statewide Accounting Management System (SAMS) Manual.

"State Comptroller" is the Illinois Office of the Comptroller.

"Vendor" is any bidder or offeror awarded a contract of $1,000 or more under Section 20-10, 20-15, 20-25 or 20-30 of the Code.

74 Ill. Adm. Code 340.200 Filing of Contracts; Fees

a) An administrative fee of $15 shall be collected from all qualifying contracts required to be filed with the State Comptroller under SAMS Procedure 15.10.40, or as otherwise prescribed by law.

b) A contract is considered filed when the filing requirements contained in SAMS Procedure 15.10.40 have been met.

74 Ill. Adm. Code 340.300 Administrative Fee

a) The State Comptroller shall collect the administrative fee from the first warrant issued under a qualifying contract from which collection is technically and administratively feasible.

b) If collection is infeasible from any particular warrant, the administrative fee shall subsequently be collected from the first warrant issued under the qualifying contract for which collection is feasible. Circumstances of infeasibility include:

1. temporary limitations on the State Comptroller's operating capability, including, but not limited to, limitations of system designs, maintenance and upgrades; or

2. the amount payable on the warrant, prior to collection of the administrative fee, is less than $25.

c) If any vendor awarded a qualifying contract determines that the collection of the administrative fee from the first or subsequent warrant issued under that qualifying contract will place an undue hardship on the accounting practices of that vendor, the vendor may petition the State Comptroller, in writing, to be billed separately for the $15 administrative fee.

Chapter III Auditor General

Part 420 Code of Regulations

74 Ill. Adm. Code 420.10 Introduction

a) SUBJECT. This Subpart establishes the standards of construction applicable to all regulations promulgated by the Office of the Auditor General (74 Ill. Adm. Code 420).

b) AUTHORITY. This subpart is promulgated under the authority of Section 3-7 of the Illinois State Auditing Act [30 ILCS 5/3-7].

c) INCORPORATIONS. The following material is incorporated by reference and made a part of this regulation:

Definitions (Section 420.Subpart B of this Part).

d) EFFECTIVE DATE. This Subpart becomes effective on March 18, 1976.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.20 General Provisions

a) PLURALS AND SINGULARS. A plural word includes the singular although a singular word does not necessarily include the plural.

b) MEANING OF HEADNOTES. Titles and headnotes used in regulations are editorial devices to aid organization and readability, and do not limit, modify or expand the wording, effect, or meaning of the written provision of any regulation.

c) SEVERABILITY. Should any part of a regulation be declared or adjudged invalid, ultra vires, or unconstitutional, such declaration or adjudication shall affect only that part of the regulation specifically covered by the declaration or adjudication and shall not affect any other provisions or parts of the regulation. The other provisions or parts shall remain in full effect.

d) STATUTORY RULES OF CONSTRUCTION APPLICABLE. Rules of construction applicable to statutes shall be applicable to the regulations of the Office of the Auditor General unless by their nature they are clearly inapplicable or a different standard is specified by or within a regulation of the Office of the Auditor General.

e) AUTHORITY OF ANNOTATIONS. Annotations accompanying regulations are not regulatory materials and do not have regulatory authority. They are supplementary reference materials intended to provide historical and operational perspective to the regulations and aid readers in understanding and interpreting the regulations.

f) MEASUREMENT OF TIME.

1. All times are based on the legal local time at Springfield, Illinois.

2. If a time period is specified in days the first day of the period shall begin at 12:01 A.M., local time, Springfield, Illinois on the day immediately following the day on which the event starting the time period occurs.

3. If a time period specified in days is shorter than seven days, then Saturdays, Sundays, and State and Federal Holidays are not counted in measuring the time period. In all other cases Saturdays, Sundays and State and Federal Holidays are counted.

4. If a time period is specified in hours, the first hour of the period shall begin on the next whole hour immediately following the time at which the event starting the time period occurred.

5. If a specified time period ends on a Saturday, Sunday, or State or Federal Holiday; or at a time which is after 5:00 P.M. local time, Springfield, Illinois, then the end of the time period shall be extended to 9:00 A.M., local time Springfield, Illinois, on the next day immediately following, which is not a Saturday, Sunday, or State or Federal Holiday.

6. Where an event is to start on a specified date the starting time shall be at 12:01 A.M., local time, Springfield, Illinois, on the date specified.

7. Where an event is to terminate on a specified date the ending time shall be at 5:00 P.M. local time, Springfield, Illinois, on the date specified.

g) INCORPORATIONS IN REGULATIONS. Where materials from other rules or regulations or entire rules or regulations are incorporated by reference into a specific regulation, the effect shall be the same as if the text of the incorporated material were written into the regulation incorporating the material and without being affected by the status, construction, or validity of the rule or regulation being incorporated. Incorporated material shall be read and construed within the context of the regulation in which it is incorporated.

74 Ill. Adm. Code 420.110 Introduction

a) SUBJECT. This Subpart establishes the definitions of words, phrases, terms, and abbreviations used in regulations promulgated by the Office of the Auditor General.

b) AUTHORITY. This Subpart is promulgated under the authority of Section 3-7 of the Illinois State Auditing Act [30 ILCS 5/3-7].

c) INCORPORATIONS. The following material is incorporated by reference and made a part of this regulation:

Standards of Construction for Regulations (Subpart A of this Part).

d) EFFECTIVE DATE. This Subpart becomes effective March 18, 1976.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.120 General Provisions

a) DEFINITIONS ISAA. Words which are defined in the Illinois State Auditing Act [30 ILCS 5] have the same meanings when used in this Part as they have in the Illinois State Auditing Act unless there is an explicit indication to the contrary.

b) APPLICATION.

1. Words defined in this Subpart, when used in this Part, shall have the meanings or modifications established in this Subpart unless the context clearly requires otherwise or a different definition is explicitly made applicable.

2. If a word is defined in a particular Subpart, the definition given in that Subpart does not necessarily apply when the defined word is used in a different Subpart unless there is a specific incorporation.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.130 Abbreviations

a) C.RG. C.RG means Code of Regulations (74 Ill. Adm. Code 420).

b) C.RL. C.RL means Code of Rules (74 Ill. Adm. Code 440).

c) ISAA. ISAA means the Illinois State Auditing Act [30 ILCS 5].

History

• Source: Amended at 30 Ill. Reg. 2260, effective February 20, 2006

74 Ill. Adm. Code 420.140 Specific Definitions

a) Code of Regulations. Code of Regulations means the official compilation of Regulations promulgated by the Auditor General and currently in effect (74 Ill. Adm. Code 420).

b) Code of Rules. Code of Rules means the official compilation of Rules promulgated by the Auditor General and currently in effect (74 Ill. Adm. Code 440).

c) Officer of the Office of the Auditor General. Officer of the Office of the Auditor General means any individual designated as a State Auditor; or any Special Assistant Auditor, Deputy Auditor, or other individual empowered by the Auditor General to act with respect to the performance of a specific audit, study, or investigation.

d) Rulemaking. Rulemaking means separately or in combination any processes, procedures, or activities intended to or which results in a Rule or Regulation. Rulemaking includes the adoption, amendment, modification, update, suspension, repeal, recession, or termination of a rule or regulation.

e) State Auditor. State Auditor means a State payroll employee of the Office of the Auditor General who has been authorized to conduct audits, attestation engagements, investigations, and studies by the Auditor General, and who has otherwise been appointed State Auditor in accordance with the personnel rules of the Office of the Auditor General.

f) Word. Word includes terms, phrases, and abbreviations.

History

• Source: Amended at 30 Ill. Reg. 2260, effective February 20, 2006

74 Ill. Adm. Code 420.210 Introduction

a) SUBJECT. This Subpart deals with the procedures to be followed during investigations conducted by the Auditor General pursuant to the Illinois State Auditing Act (ISAA); standards of delegation of authority to conduct investigations to persons who are not employees of the Auditor General; consultation with heads of agencies before the issuance of reports; the opportunity for heads of agencies to respond to reports; and the opportunity for persons who may, individually, be the subject of a report to respond to findings or recommendations in the report which pertain to them.

b) AUTHORITY.

Pars. 3-8(b), 3-8(c), 3-8(d) ISAA [30 ILCS 5/3-8(b), 3-8(c), and 3-8(d)].

c) REFERENCES.

Section 1-17 ISAA Definition of Investigation [30 ILCS 5/1-17].

Section 3-1 ISAA Jurisdiction of Auditor General [30 ILCS 5/3-1].

Section 3-4 ISAA Investigations [30 ILCS 5/3-4].

Section 3-11 ISAA Maintenance of Records [30 ILCS 5/3-11].

Section 3-12 ISAA Cooperation of State Agencies [30 ILCS 5/3-12].

Section 3-15 ISAA Reports of Auditor General [30 ILCS 5/3-15].

d) INCORPORATIONS. The following materials are incorporated by reference and made a part of this Subpart:

1. Standards of Construction for Regulations (Subpart A of this Part).

2. Definitions (Subpart B of this Part).

e) DEFINITIONS. When used in this Subpart the term Audit Manager shall have the following meaning:

Audit Manager means the State Auditor assigned by the Auditor General or the Deputy Auditor General to be the person responsible for conducting the investigation and in charge of any of the auditors participating in the investigation.

f) EFFECTIVE DATE. This Subpart becomes effective on April 15, 1976.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.220 General Particulars

a) COMMENCEMENT OF INVESTIGATIONS. An investigation after being authorized pursuant to Section 3-4 ISAA shall be commenced only upon the written direction of the Auditor General or Deputy Auditor General to an Audit Manager.

b) NOTICE OF INVESTIGATION TO PARTIES.

1. The Audit Manager shall make a reasonable attempt to notify each party who is named in the resolution directing the investigation of the existence of the investigation and provide as part of this notice: a copy of the resolution directing the investigation; a copy of the Audit Manager's assignment by the Auditor General; a copy of the agency notification to employees; and a copy of this regulation.

2. Reasonable attempt to notify a party shall be accomplished:

A) If the party is an agency or artificial person, by

i) personal delivery to an officer or lawful agent; or

ii) certified U.S. mail, return receipt requested, addressed to an officer or lawful agent at any office of the agency or artificial person.

B) If the party is a natural person, by

i) personal delivery; or

ii) certified U.S. mail, return receipt requested, addressed to the person at the person's last known address or principal place of business or employment.

3. For purposes of this subsection (b), the phrase a "party who is named in the resolution" means any individual, business, partnership, agency, corporation or other entity that the resolution specifically requires the Auditor General to investigate and from whom the Auditor General is required to obtain information during the course of conducting the investigation.

c) AGENCY NOTIFICATION TO EMPLOYEES.

1. Within seven (7) days after the receipt of a notification of investigation, the chief executive officer (or person acting in his or her stead) of any agency involved in the investigation shall sign and cause to be circulated to those persons designated by the Audit Manager and such other persons as determined by the agency head, the Notice to Cooperate provided by the Office of the Auditor General. A signed copy of the notice shall also be given to the Audit Manager.

2. This notice shall be in the following form:

NOTICE TO COOPERATE IN INVESTIGATION

CONDUCTED BY THE AUDITOR GENERAL TO ALL EMPLOYEES:

Please be advised that has by resolution directed the Auditor General to investigate (set out specific language of resolution).

The Illinois State Auditing Act provides that the officers and employees of our agency shall make available to the Auditor General or the Auditor General's designated representative any record or information requested and shall provide for examination or copying all records, accounts, papers, reports, vouchers, correspondence, books and other documentation in the custody of the agency including information stored in electronic data processing systems which is related to or within the scope of the investigation described above.

(Agency Head may include a paragraph to remind personnel of statutory requirements of confidentiality, if any, that apply to the agency.)

Please extend your complete cooperation.

Agency Head

d) AGENCY RESPONSE TO NOTIFICATION. Within seven (7) days after receipt of the Notice of Investigation as provided in subsection (b) above, the chief executive officer or the person acting in his or her stead shall notify the Audit Manager of the name of some knowledgeable employee who shall be available to aid the Auditor General's representatives in locating material under the agency's control or in determining which agency personnel or other persons have knowledge of any matters within the scope of the investigation.

e) APPEAL TO THE AUDITOR GENERAL. When a controversy arises during the course of an investigation between the Audit Manager and a person named in the resolution or an agency involved in an investigation, the controverted issue may be appealed to the Auditor General by the person named or the agency head by submitting a concise statement of the controverted issue in writing to the Auditor General at the Auditor General's office in Springfield, Illinois. The Auditor General shall issue a written response within 5 days.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.230 Right to Information

a) AGENCY REPRESENTATION. An agency has no right to be represented by counsel in its response to an investigation. The representatives of the Auditor General shall not be required to submit to any screening of information requests or answers thereto as a condition to direct contact with agency personnel or records.

b) INDIVIDUAL'S RIGHT TO COUNSEL. Any individual shall have the right to engage counsel who has no connection with an agency or office whose personnel or activities are the subject matter of the investigation to advise the individual on his or her legal rights. Counsel may not answer or reply for the individual.

c) USE OF PROCESSES.

1. When requested by the Audit Manager, the Auditor General or Deputy Auditor General may issue subpoenas as desirable during the conduct of an investigation.

2. If an individual associated with the Office of the Auditor General is participating in an investigation and is not a State Auditor, then the Auditor General may, in his or her discretion, empower the individual to administer oaths and affirmations, and take depositions and testimony during the course of a specific investigation, by delegating such authority in writing.

d) ENFORCEMENT. Upon notification by the Audit Manager of an unreasonable delay or of a failure to respond to a request for information or process relating to the investigation, the Auditor General or Deputy Auditor General may initiate appropriate legal proceedings to secure compliance.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.240 Investigative Personnel

a) IDENTIFICATION.

1. State Auditors will possess the official identification portfolio supplied and issued by the Auditor General. This identification will verify that the issuee is a State Auditor of the Office of the Auditor General.

2. Special Assistant Auditors assigned to a particular investigation will be issued documentation substantiating their authority. The documentation will identify the Special Assistant Auditor and indicate the Special Assistant Auditor's powers and authorities and the investigation to which they apply.

b) STANDARDS FOR DELEGATION OF INVESTIGATORY POWERS TO PERSONS NOT EMPLOYEES OF THE AUDITOR GENERAL. Any person who is qualified by education or experience may be appointed a Special Assistant Auditor to conduct or assist in a specific investigation. The appointment shall be by written contract which shall provide that it may be cancelled by the Auditor General at any time without cause. No person who has been employed or associated within the past four years with an agency, entity or individual named or involved in the investigation, shall be employed in the investigation.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.250 Investigation Procedures and Reports

a) TIME DURING WHICH INVESTIGATION IS TO BE CONDUCTED. Any person authorized to participate on behalf of the Auditor General in an investigation shall make every effort to assure that the orderly and efficient conduct of agency activities are subject to a minimum amount of disruption. Interviewing of personnel and examination of records and materials in the possession of agencies or individuals shall be confined to normal business hours unless otherwise agreed upon.

b) FURNISHING OF WORK AREA. An agency involved in an investigation, shall make reasonable effort to furnish the Auditor General's representatives a private area to carry out their duties.

c) PRIVACY. In the discretion of any auditor assigned to an investigation, or at the request of the individual being questioned, any part of the investigation may be held outside the presence of all persons other than representatives of the Office of the Auditor General; the individual being questioned; and the individual's counsel, if the individual desires to have his or her counsel present.

d) SAFEGUARDING OF INFORMATION DURING INVESTIGATION. All information obtained during the conduct of an investigation shall be held in strict confidence by the Office of the Auditor General and the personnel of the agencies or offices involved in the investigation during the conduct of an investigation except as provided in subsections (e) and (f) below and Section 420.630(b)(1) of this Part. This Section shall not prohibit the communication of information among persons involved in the investigation in furtherance of the investigation.

e) RESPONSE TO REPORT BY INDIVIDUALS.

1. When the Audit Manager has determined the proposed findings and recommendations to be included in an investigation report, the Audit Manager shall forward to each individual who was the subject of an investigation report those proposed findings and recommendations which relate to him or her. After the receipt of these materials an individual shall have 21 days in which to direct to the Auditor General any written comments the individual may have concerning the findings or recommendations involving him or her. Copies of an individual's written comments will be included in the final version of the investigation report if they are received in the Springfield Office of the Auditor General on or before the 21st day after the materials being commented upon were received by the individual.

2. Any written comments received after the period indicated above will be maintained in the official files of the Office of the Auditor General and thereafter dispensed with copies of the investigation report to which they pertain.

3. The Auditor General, in his or her sole discretion, may extend any time period or deadline specified in this Section.

4. For purposes of this subsection, the term "individual" means any person, business, partnership, corporation or other entity, other than a State agency, that is specifically named in a recommendation contained in an investigation report.

f) RESPONSE TO REPORT BY HEADS OF AGENCIES.

1. When the Audit Manager has determined the proposed findings and recommendations to be included in an investigation report, the Audit Manager shall forward a copy to the head of each agency involved in the investigation. An agency head (or his or her designee) shall have

A)

i) 7 days from receipt of the proposed findings and recommendations in which to request a conference (if he or she desires one) with the Office of the Auditor General concerning the proposed findings and recommendations. All requested conferences shall be completed within 14 days from the agency's receipt of the proposed findings and recommendations.

ii) Within 3 days of the close of the conference, the Office of the Auditor General shall forward to the agency head any changes in the proposed findings and recommendations.

B) 21 days from receipt of the proposed findings and recommendations in which to deliver to the Auditor General any written comments the agency may have concerning the findings and recommendations involving the agency.

2. A copy of an agency's written comments will be included in the final version of the investigation report if they are received in the Springfield Office of the Auditor General on or before the 21st day after the agency's receipt of the proposed findings and recommendations.

3. In the absence of a written response from the agency, within 21 days from the receipt by the agency head of the proposed findings and recommendations, the investigation report may be submitted without response. If no conference was held, the reason therefore shall be included in the audit workpapers. Any written comments received after the period indicated above will be maintained in the official files of the Office of the Auditor General and thereafter dispensed with copies of the investigation report to which they pertain.

4. The Auditor General, in his or her sole discretion, may extend any time period or deadline specified in this Section.

g) INVESTIGATION REPORTS. Upon completion of the investigation, the Auditor General will issue a report and submit copies in accordance with the provisions of Section 3-4 ISAA and maintain the records in accordance with the provisions of Section 3-11 ISAA and the regulation promulgated in relation thereto.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.310 Introduction

a) Subject

1. This Subpart establishes the professional standards applicable to:

A) audits and attestation engagements conducted pursuant to the authority of the Auditor General; and

B) audits and attestation engagements conducted by State agencies of local government agencies or private agencies that are grantees or recipients of public funds of the State or of federal funds through projects administered by a State agency, but only to the extent these standards are not in conflict with any other applicable law, rule or regulation.

2. The standards established in this Subpart D concern the scope and quality of the engagement and prescribe the contents and attributes of an acceptable report.

b) Authority. This Subpart D is promulgated pursuant to the authority of Section 3-6 ISAA [30 ILCS 5/3-6].

c) Referenced Statutes

Section 3-7 ISAA. 30 ILCS 5/3-7.

Section 2-12(c) ISAA. 30 ILCS 5/2-12(c)

History

• Source: Amended at 43 Ill. Reg. 6361, effective May 31, 2019

74 Ill. Adm. Code 420.320 General Provisions

General Standards

a) Scope

1. The full scope of an audit and/or attestation engagement conducted by the Auditor General may encompass:

A) An examination of financial transactions, accounts and reports;

B) An examination of compliance with applicable laws and regulations and conformity with applicable fiscal and business practices;

C) A review of efficiency and economy in the use of resources and soundness of managerial and other operational aspects;

D) A review to determine whether intended program results are effectively achieved; and

E) A review of the controls and integrity associated with computerized information systems.

2. The scope for a particular audit and/or attestation engagement conducted by the Auditor General shall include:

A) That prescribed by Section 1-13 of the ISAA for compliance audits and other attestation engagements conducted pursuant to the provisions of Sections 3-1 and 3-2 of the ISAA;

B) That prescribed by Section 1-13.5 of the ISAA for financial audits conducted pursuant to the provisions of Sections 3-1 and 3-2 of the ISAA;

C) That specified by an authorizing resolution approved by the Legislative Audit Commission or by either house of the General Assembly for engagements conducted pursuant to the provisions of Sections 3-2 and 3-4 of the ISAA;

D) That specified by the terms of the agreement for reimbursable federal audits conducted pursuant to the provisions of Section 3-3A of the ISAA;

E) That specified by the Auditor General in a notice provided to the Legislative Audit Commission for engagements conducted pursuant to Section 3-3 of the ISAA;

F) That prescribed by Section 1-13.5 of the ISAA for engagements conducted pursuant to Section 2-3.17a of the School Code [105 ILCS 5/2-3.17a]; and

G) That specified by the terms of the engagement for change-over engagements conducted pursuant to Section 3-2.1 of the ISAA.

3. The scope for a particular audit or attestation engagement conducted by a State agency (other than the Office of the Auditor General) of a local or private agency shall be that specified by the terms of the agreement making the grant or award of funds to the local or private recipient agency.

b) General, Fieldwork and Reporting Standards. All audits and attestation engagements subject to the provisions of the ISAA and regulations issued under that Act shall be conducted in accordance with current standards applicable to the engagement, which may include: generally accepted auditing standards (GAAS) issued by the American Institute of Certified Public Accountants, Inc. (AICPA) and other relevant clarified Statements on Auditing Standards (SAS) and Statements on Standards for Attestation Engagements (SSAE) promulgated by the Auditing Standards Board; generally accepted government auditing standards, as embodied in Government Auditing Standards (2024 Revision for financial audits, attestation engagements, and reviews of financial statements for periods beginning on or after December 15, 2025, and for performance audits beginning on or after December 15, 2025; for all others, the 2018 Revision) (GAS) issued by the Comptroller General of the United States; and 2 CFR 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) (commonly referred to as the Uniform Guidance) issued pursuant to the Single Audit Act Amendments of 1996 (31 U.S.C. 7501 through 7507) by the Office of Management and Budget (OMB). Copies of GAAS, SSAE and SAS may be ordered on the internet at https://www.aicpa-cima.com/resources/landing/audit-attest-and-quality-control-standards. Copies of GAS may be downloaded from the internet at https://www.gao.gov/yellowbook/overview. Print copies may be obtained by contacting the U.S. Government Publishing Office (GPO) online or by calling 202-512-1800 or 1-866-512-1800. Copies of the Uniform Guidance may be obtained from the Office of Federal Financial Management, Office of Management and Budget, Washington, D.C. 20503 or downloaded from the internet at www.grants.gov/web/grants/learn-grants/grant-policies/omb-uniform-guidance-2014.html. These incorporations by reference do not include any later amendments or editions.

c) Specific standards for audits of regional offices of education and educational service centers conducted pursuant to Section 2-3.17a of the School Code [105 ILCS 5/2-3.17a]. This subsection (c) does not apply to an educational service center serving a school district in a city having a population exceeding 500,000. (See Section 2-3.17a of the School Code.)

1. "Books and records" as used in this subsection (c) means all financial statements, fiscal documents, vouchers for distributions, records of cash receipts, records of obligation and expenditure of funds, records of accounts and funds, journals, ledgers and subsidiary records of the ledgers, computer programs and data files integral to records of funds and accounts in the care, custody or control of the regional superintendent of schools or educational service center, and required for the purpose of enabling the Auditor General to perform the audits required by Section 2-3.17a of the School Code. The regional office of education and educational service center shall maintain records in accordance with this subsection (c), as applicable. Financial records shall be maintained on either a cash or accrual basis of accounting. However, supporting information must be maintained to allow preparation of an accrual statement as required by this subsection (c)(2).

2. For audit purposes, each regional office of education and educational service center subject to audit by the Auditor General shall make available to the Auditor General or its designee all books and records during regular business hours on such days in each fiscal year as the Auditor General or its designee shall deem necessary to make and complete the required audits. The records shall be completed in auditable form by August 15 of the succeeding fiscal year. Financial reports are to be available no later than August 31 in order that the annual audit may be done by an independent auditor selected by the Auditor General.

3. Each regional office of education and educational service center subject to audit by the Auditor General shall make available the books and records necessary to make the required audit by providing to the Auditor General or its designee full, complete and unrestricted access to those books and records and to those persons who may have prepared, reviewed, reported on or otherwise have knowledge of them.

4. Each regional office of education and educational service center subject to audit by the Auditor General shall retain all books and records for a period of five years or until each required audit is resolved. This provision shall not be construed to shorten any record retention requirement otherwise applicable to the records.

History

• Source: Amended at 49 Ill. Reg. 15692, effective November 25, 2025

Chapter III Auditor General

Part 420 Code of Regulations

74 Ill. Adm. Code 420.330 Examination and Evaluation Standards (repealed)

History

• Source: Repealed at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.340 Reporting Standards (repealed)

History

• Source: Repealed at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.410 Introduction

a) Subject. This Subpart designates the frequency with which specific agencies will be subject to financial audits, compliance audits or other attestation engagements by the Office of the Auditor General.

b) Authority. Section 3-8, ISAA [30 ILCS 5/3-8].

c) Referenced Statutes. Section 3-2 ISAA, Mandatory and Directed Post Audits [30 ILCS 5/3-2].

d) Effective Date. This Subpart becomes effective on March 18, 1976.

History

• Source: Amended at 30 Ill. Reg. 2260, effective February 20, 2006

74 Ill. Adm. Code 420.420 General Provisions

a) Standard Audit or Examination Period. Except as established in this Subpart all agencies for which the Auditor General is required to conduct a financial audit, compliance audit, or other attestation engagement will be so reviewed at least once every two years.

b) Agencies to be Audited or Examined Yearly. The Auditor General shall annually file a list with the Legislative Audit Commission of all agencies for which a mandatory financial audit and compliance attestation examination shall be conducted yearly.

c) Financial Audits.

1. The Auditor General shall annually file a list with the Legislative Audit Commission of all agencies subject to a yearly financial audit.

2. A financial audit shall have the meaning prescribed in Section 1-13.5 of the ISAA.

d) Administration. In order to adjust workloads, respond to future audit needs and priorities, comply with federal or State laws and regulations, assist in rendering an opinion on the statewide financial statements, or maintain an audit firm rotation program, the Auditor General, if necessary, may adjust the audit frequency of any program. The Auditor General shall quarterly notify the Legislative Audit Commission of any changes to the audit or examination frequency of any agency.

History

• Source: Amended at 30 Ill. Reg. 2260, effective February 20, 2006

74 Ill. Adm. Code 420.430 Miscellaneous Provisions

Nonlimitation. Nothing in this subpart shall limit the power of the Auditor General to initiate or conduct any audit, attestation engagement, study, investigation, or inquiry which the Auditor General would otherwise be authorized to conduct under any law or the Illinois Constitution.

History

• Source: Amended at 30 Ill. Reg. 2260, effective February 20, 2006

74 Ill. Adm. Code 420.510 Introduction (repealed)

History

• Source: Repealed at 8 Ill. Reg. 17244, effective September 15, 1984

74 Ill. Adm. Code 420.520 Review of Receipt or Collection of State Revenues by State Agencies (repealed)

History

• Source: Repealed at 8 Ill. Reg. 17244, effective September 15, 1984

74 Ill. Adm. Code 420.530 Miscellaneous Provisions (repealed)

History

• Source: Repealed at 8 Ill. Reg. 17244, effective September 15, 1984

74 Ill. Adm. Code 420.610 Introduction

a) SUBJECT. This Subpart establishes the standards concerning the maintenance, availability, and dissemination of information which is a part of or under the control of the Office of the Auditor General.

b) AUTHORITY.

Section 3-7 ISAA [30 ILCS 5/3-7].

Section 3-8(a) ISAA [30 ILCS 5/3-8(a)].

Section 3-11 ISAA [30 ILCS 5/3-11].

c) REFERENCES.

Section 2-11 ISAA, Special Assistant Auditors [30 ILCS 5/2-11].

Section 3-4 ISAA, Investigations [30 ILCS 5/3-4].

Section 3-14 ISAA, Audit Reports [30 ILCS 5/3-14].

Section 6-1 ISAA, Effect on Other Laws [30 ILCS 5/6-1].

d) INCORPORATIONS. The following materials are incorporated by reference and made a part of this Subpart:

1. Standards of Construction for Regulations (Subpart A of this Part).

2. Definitions (Subpart B of this Part).

e) EFFECTIVE DATE. This Subpart becomes effective on April 16, 1979.

History

• Source: Amended at 20 Ill. Reg. 701, effective January 31, 1996

74 Ill. Adm. Code 420.620 General Provisions

a) AVAILABILITY OF INFORMATION.

Except as provided in Section 420.630 of this Part, all information maintained by the Office of the Auditor General shall be public information and shall be available to the public as provided by this Subpart.

b) SUBPOENA OF EMPLOYEES.

1. Any employee or agent of the Office of the Auditor General who is served with a subpoena requiring the disclosure of information or the production of any document that is classified confidential shall appear as required by the subpoena and shall respectfully decline to disclose the information or produce any document called for basing the refusal on the requirement of this Section, unless the person subpoenaed has a written authorization permitting the release of the information or production of the document requested.

2. The authorization required by this Section may be issued only by the Auditor General, Deputy Auditor General, or the Chief Legal Counsel of the Office of the Auditor General. An authorization may be issued only if the release of the information:

A) would not contravene any statute;

B) would not interfere with an ongoing audit or investigation; or

C) would not unreasonably interfere with an individual's right of privacy.

3. In addition, information of other agencies that is confidential by or pursuant to law shall not be disclosed by the Office of the Auditor General, unless:

A) the information is not available from the officially authorized custodian and the officially authorized custodian consents to the release; or

B) a court orders the disclosure of the documents.

c) SUBPOENA OF CONTRACTORS.

1. Any Special Assistant Auditor or other contractor of the Office of the Auditor General who is served with a subpoena requiring the disclosure of information or the production of any document that is classified confidential and that was obtained or created in the exercise of audit authority delegated by the Auditor General pursuant to the ISAA shall appear as required by the subpoena and shall respectfully decline to disclose the information or produce any document called for basing the refusal on the requirement of this Section, unless the person subpoenaed has a written authorization permitting the release of the information or production of the document requested.

2. The authorization required by this Section may be issued only by the Auditor General, Deputy Auditor General, or the Chief Legal Counsel of the Office of the Auditor General. An authorization may be issued only if the release of the information:

A) would not contravene any statute;

B) would not interfere with an ongoing audit or investigation; or

C) would not unreasonably interfere with an individual's right of privacy.

3. In addition, information that is confidential by or pursuant to law shall not be disclosed, unless:

A) the information is not available from the officially authorized custodian and the officially authorized custodian consents to the release; or

B) a court orders the disclosure of the documents.

History

• Source: Amended at 32 Ill. Reg. 16372, effective October 10, 2008

74 Ill. Adm. Code 420.630 Confidential Information

a) Statutory. All information maintained by the office that was confidential by or pursuant to law when secured by the Auditor General shall be maintained in accordance with Section 6-1 of the Illinois State Auditing Act [30 ILCS 5/6-1] and other applicable law.

b) Information Related to Current Work.

1. Information not otherwise confidential, but acquired or developed as part of an ongoing audit, attestation engagement, investigation, study, or inquiry shall be classified confidential until the conclusion of the audit, attestation engagement, investigation, study, or inquiry to which the information pertains. The Auditor General may release the information only to:

A) persons or entities named in the audit, attestation engagement, investigation, study, or inquiry to which the information pertains;

B) governmental agencies with whom the Auditor General is jointly conducting or co-operating on an audit or attestation engagement, to the extent necessary for the conduct of the audit or attestation engagement;

C) prosecutorial offices, government agencies with investigatory powers and sworn law enforcement agencies if approved by the Auditor General but subject to subsection (b)(3) of this Section; and

D) current or potential contractors, but only on a need to know basis, for specific audit or engagement purposes.

2. The issuance of the final report shall establish the conclusion of the audit, attestation engagement, investigation, study, or inquiry that is the subject of the report, and all information acquired or developed as part of the audit, attestation engagement, investigation, study, or inquiry and classified confidential by operation of this subsection (b) shall at that time become public information, unless the Auditor General provides otherwise pursuant to subsection (c) or Section 420.640(h) of this Part.

3. Prosecutorial offices, government agencies with investigatory powers and law enforcement agencies shall not obtain through, or in conjunction with, the Office of the Auditor General, data, information, or evidence that the prosecutorial office, government agency with investigatory powers or law enforcement agency could not lawfully obtain through its own authorities.

c) Investigation. All information and documents pertaining to an investigation conducted pursuant to Section 3-4 ISAA may be classified as confidential and, if classified as confidential, may not be disclosed outside the office except as provided in Section 420.Subpart C of this Part or as declared in the resolution authorizing the investigation.

d) Personnel Information. All personnel information of the Office of the Auditor General matchable to an individual concerning job performance evaluations, personal conduct, disclosure statements, personal characteristics and health shall be confidential, and may be released only as authorized by law or with the consent of the individual affected.

e) Special Assistant Auditor Evaluations. Trade, business, and proprietary information concerning special assistant auditors and the performance evaluations of special assistant auditors shall be maintained confidential and may be disclosed to persons outside the office only as necessary to an authorized audit or inquiry concerning expenditures of our office. An audit or inquiry is authorized if it is required by law, by formal action of the General Assembly or the Legislative Audit Commission, or by request of a designated peer review committee reviewing the Office of the Auditor General's audit or attestation process.

f) Audit and/or Attestation Engagement Selection Criteria.

1. Any test, standard, or specification intended for use in an audit or attestation engagement may be maintained confidential if:

A) the test, standard, or specification under consideration is necessary or applicable to a future audit or attestation engagement and disclosure would impair the validity or reliability of the test, standard, procedure or specification for future application; or

B) disclosure might impair auditor techniques or methods or procedures designed to detect fraud, abuse, or other illegal activity.

2. Any information declared confidential under this subsection (f) shall be disclosed jointly to the Chair and Co-Chair of the Legislative Audit Commission at the joint request of the Chair and Co-Chair.

History

• Source: Amended at 32 Ill. Reg. 16372, effective October 10, 2008

74 Ill. Adm. Code 420.640 Disclosure and Dissemination of Information

a) Information Confidential when Acquired. Information maintained in the office of the Auditor General that was confidential by or pursuant to law when acquired may not be disseminated outside the office for any reason except by court order or as provided in Section 420.620(b) or (c) of this Part.

b) Information Established Confidential by the Office of the Auditor General. Information maintained by the Office of the Auditor General that the office of the Auditor General has established confidential by authority of the Illinois State Auditing Act or these regulations may be released to persons outside the Office of the Auditor General only by order of the Legislative Audit Commission pursuant to Section 3-11 ISAA, by court order, or as specifically provided in this Subpart.

c) Dissemination of Other State Agency Information.

1. The Office of the Auditor General may decline to make available records or information that is available or currently controlled by the originating or controlling State agency.

2. Records and information are considered "available" even if the agency or agent refuses to disseminate them, such as information that may be withheld as an exception to the Illinois Freedom of Information Act [5 ILCS 140].

d) Dissemination Procedures and Copies (Public Records).

1. All public records of the Office of the Auditor General stored in the Springfield or Chicago offices shall be available for inspection and copying at their respective office during regular working hours.

2. All public records of the Office of the Auditor General stored at locations other than the Springfield or Chicago offices shall be available for inspection and copying, but only by request and appointment.

3. Any person requesting inspection or copying of public records stored at locations other than the Springfield or Chicago office may require that the records be made available at the Springfield office.

4. The Auditor General may establish reasonable charges to defray the cost of any copies requested.

e) Purging of Acquired Confidential Information – Memorandum.

1. Records supplied to the Office of the Auditor General that are confidential by or pursuant to law shall be destroyed or returned to the agency from which they were obtained no later than the time of the issuance of the final report for which the information constitutes work papers, unless the Auditor General provides otherwise pursuant to subsection (h) of this Section.

2. However, if the records are confidential because they contain personally sensitive information that is matchable to individuals, the records need not be destroyed if all means of matching the information to its corresponding individuals has been destroyed. In such cases, the destruction of the means of matching the information to its corresponding individuals shall occur no later than the time of the issuance of the final report for which the information constitutes work papers.

3. The person destroying work papers pursuant to this Section shall place among the work papers a list of the number and type of records destroyed, identification of the source from which the records came, and an affidavit certifying how and when the records were destroyed and the fact that they were so destroyed. The affidavit shall be signed by the person destroying the workpapers and countersigned by a person who witnessed the destruction. Each affidavit shall be submitted to an Audit Manager for review.

f) Purging of Records Generally. The Auditor General may destroy any records five years after the release of the audit to which the records pertain unless a longer retention period is required by law. The Auditor General may establish schedules for the destruction and type of storage for all records relating to the Office of the Auditor General.

g) Maintenance and Reproduction of Permanent Records. Permanent records of the Office of the Auditor General may be kept on microform, optical image, or other reliable media. The Auditor General shall maintain suitable devices for reading and copying all permanent records.

h) Exceptions to Purging and Disclosure of Workpapers.

1. If the Auditor General or Deputy Auditor General determines, in a written document certified by the Auditor General or Deputy Auditor General, that the establishment of the working papers of a particular audit as public records or the purging of confidential information contained in the work papers of a particular audit would:

A) impair the reporting or defending of the audit;

B) impair future or follow-up audit work;

C) compromise the integrity of the audit process; or

D) disclose confidential information, because of the postponement of the purging of confidential information pursuant to the Auditor General's authority under this subsection (h),

2. then the Auditor General, or his or her designee, may postpone the implementation of the requirements of Section 420.630(b)(2) of this Part or subsection (e) for up to five years following release of the audit to which the information pertains. After that time period, the postponement shall lapse and may be renewed, for up to 12 months at a time, only if the Legislative Audit Commission shall specifically approve the renewal.

History

• Source: Amended at 32 Ill. Reg. 16372, effective October 10, 2008

74 Ill. Adm. Code 420.710 Introduction

a) Subject. This Subpart covers consultations with heads of agencies concerning findings and recommendations in reports before the issuance of such reports; and the opportunity for persons who are identified by name in a recommendation contained in a post audit report to respond to findings or recommendations in the report which pertain to them.

b) Authority. Sections 3-7, 3-8(c), 3-8(d), ISAA [30 ILCS 5/3-7, 3-8(c) and 3-8(d)].

c) Effective Date. This regulation becomes effective on November 29, 1979 (This regulation is subject to Section 3-7 of the ISAA requiring approval by the Legislative Audit Commission within 90 days of its submission to the Commission).

d) Definitions. Report means the document issued by the Auditor General upon the completion of a post audit or attestation engagement by the Auditor General, which report may include any or all of the following: financial statements, statements of facts, findings, conclusions, recommendations, responses to findings by agencies or individuals; and shall include a "Report Digest" signed by the Auditor General.

History

• Source: Amended at 30 Ill. Reg. 2260, effective February 20, 2006

74 Ill. Adm. Code 420.720 Consultations with Heads of Agencies and Individuals

a) Responses to Proposed Findings by Agencies

1. When the Office of the Auditor General has determined the proposed findings and recommendations to be included in a report, a copy shall be forwarded to the head of each agency covered by the engagement. Upon receiving a copy of the proposed findings and recommendations, an agency head (or his or her designee) shall have:

A) 5 days from receipt of the proposed findings and recommendations in which to request a conference (if the agency head desires one) with the Office of the Auditor General concerning the proposed findings and recommendations. All requested conferences shall be completed within 10 days from the agency's receipt of the proposed findings and recommendations. If no conference was held, the reason therefore shall be included in the workpapers.

B) 14 days from receipt of the proposed findings and recommendations in which to deliver to the Auditor General any written comments the agency may have concerning the findings and recommendations involving the agency.

2. A copy of the agency's written comments will be included in the final version of the report if the comments are received in the Springfield office of the Auditor General on or before the 14th day after the agency's receipt of the proposed findings and recommendations.

3. In the absence of a written response from the agency, within 14 days from the receipt by the agency of the proposed findings and recommendations, the report may be issued without response. Written comments received after 14 days will be placed in the engagement file.

4. Where size of the agency or the complexity of the engagement would require additional response time, the Division director assigned to the engagement by the Auditor General, upon request from the agency head, may extend any time period or deadline specified by this Section.

b) Responses to Proposed Findings by Individuals

1. When the audit manager has determined the proposed findings and recommendations to be included in a report, the audit manager shall forward to each individual who is identified by name in a recommendation contained in the report those proposed findings and recommendations which relate to that individual. After the receipt of these materials, the individual shall have 14 days in which to deliver to the Auditor General any written comments the individual may have concerning the findings or recommendations involving him or her. Copies of an individual's written comments will be included in the final version of the report if they are received in the Springfield office of the Auditor General on or before the 14th day after the proposed findings and recommendations were received by the individual. Comments received after 14 days will be placed in the engagement file.

2. When an individual who is the subject of a report demonstrates an inability because of personal hardship to meet the deadlines specified in this Section, the Division director may extend the specified time period or deadline.

c) Responses to New Matter in Report Digest. When a Report Digest contains findings and recommendations not previously submitted with the proposed report text, a copy of the Report Digest shall be forwarded to the agency and/or individual covered by the engagement for comment. The agency and/or individual covered by the new material will have 7 days from receipt of the Report Digest in which to make written comment.

History

• Source: Amended at 43 Ill. Reg. 6361, effective May 31, 2019

Part 440 Code of Rules

74 Ill. Adm. Code 440.10 Introduction

a) SUBJECT. This Subpart establishes the standards of construction applicable to all rules promulgated by the Office of the Auditor General (74 Ill. Adm. Code 440).

b) AUTHORITY. This Subpart is promulgated under the authority of Section 2-12(a) of the Illinois State Auditing Act [30 ILCS 5/2-12(a)].

c) INCORPORATIONS. The following material is incorporated by reference and made a part of this Subpart:

Definitions (Subpart B of this Part).

d) EFFECTIVE DATE. This Subpart becomes effective on February 1, 1976.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.20 General Provisions

a) PLURALS AND SINGULARS. A plural word includes the singular although a singular word does not necessarily include the plural.

b) MEANING OF HEADNOTES. Titles and headnotes used in rules are editorial devices to aid organization and readability, and do not limit, modify or expand the wording, effect, or meaning of the written provision of the rule.

c) SEVERABILITY. Should any part of a rule be declared or adjudged invalid, ultra vires, or unconstitutional, such declaration or adjudication shall affect only that part of the rule specifically covered by the declaration or adjudication and shall not affect any other provisions or parts of the rule. The other provisions or parts shall remain in full effect.

d) STATUTORY RULES OF CONSTRUCTION APPLICABLE. Rules of construction applicable to statutes shall be applicable to the rules of the Office of the Auditor General unless by their nature they are clearly inapplicable or a different standard is specified by or within a rule of the Office of the Auditor General.

e) AUTHORITY OF ANNOTATIONS. Annotations accompanying rules are not regulatory materials and do not have regulatory authority. They are supplementary reference materials intended to provide historical and operational perspective to the rules and aid readers in understanding and interpreting the rules.

f) MEASUREMENT OF TIME.

1. All times are based on the legal local time at Springfield, Illinois.

2. If a time period is specified in days the first day of the period shall begin at 12:01 A.M., local time, Springfield, Illinois on the day immediately following the day on which the event starting the time period occurs.

3. If a time period specified in days is shorter than seven days, then Saturdays, Sundays, and State and Federal Holidays are not counted in measuring the time period. In all other cases Saturdays, Sundays and State and Federal Holidays are counted.

4. If a time period is specified in hours, the first hour of the period shall begin on the next whole hour immediately following the time at which the event starting the time period occurred.

5. If a specified time period ends on a Saturday, Sunday, or State or Federal Holiday; or at a time which is after 5:00 P.M. local time, Springfield, Illinois, then the end of the time period shall be extended to 9:00 A.M. local time, Springfield, Illinois on the next day immediately following which is not a Saturday, Sunday, or State or Federal Holiday.

6. Where an event is to start on a specified date the starting time shall be at 12:01 A.M., local time, Springfield, Illinois, on the date specified.

7. Where an event is to terminate on a specified date the ending time shall be at 5:00 P.M. local time, Springfield, Illinois, on the date specified.

g) INCORPORATIONS IN RULES. Where materials from other rules or regulations or entire rules or regulations are incorporated by reference into a specific rule, the effect shall be the same as if the text of the incorporated material were written into the rule incorporating the material and without being affected by the status, construction or validity of the rule or regulation being incorporated. Incorporated material shall be read and construed within the context of the rule in which it is incorporated.

74 Ill. Adm. Code 440.110 Introduction

a) SUBJECT. This Subpart establishes the definitions of words, phrases, terms, and abbreviations used in rules promulgated by the Office of the Auditor General (74 Ill. Adm. Code 440).

b) AUTHORITY. This Subpart is promulgated under the authority of Subsection 2-12(a) of the Illinois Auditing Act [30 ILCS 5/2-12(a)].

c) INCORPORATION. The following material is incorporated by reference and made a part of this Subpart: Standards of Construction for Rules (Subpart A of this Part).

d) EFFECTIVE DATE. This Subpart becomes effective on February 1, 1976.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.120 General Provisions

a) DEFINITIONS ISAA. Words which are defined in the Illinois State Auditing Act [30 ILCS 5] have the same meanings when used in this Code of Rules (74 Ill. Adm. Code 440) as they have in the Illinois State Auditing Act unless there is an explicit indication to the contrary.

b) APPLICATION.

1. Words defined in this rule, when used in this Code of Rules (74 Ill. Adm. Code 440) shall have the meanings or modifications established in this subpart unless the context clearly requires otherwise or a different definition is explicitly made applicable.

2. If a word is defined in a particular rule, the definition given in that rule does not necessarily apply when the defined word is used in a different rule, unless there is a specific incorporation.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.130 Abbreviations

a) C.RG. C.RG means Code of Regulations (74 Ill. Adm. Code 420).

b) C.RL. C.RL means Code of Rules (74 Ill. Adm. Code 440).

c) ISAA. ISAA means the Illinois State Auditing Act [30 ILCS 5].

History

• Source: Amended at 30 Ill. Reg. 2280, effective February 20, 2006

74 Ill. Adm. Code 440.140 Specific Definitions

a) Code of Regulations. Code of Regulations means the official compilation of regulations promulgated by the Auditor General and currently in effect (74 Ill. Adm. Code 420).

b) Code of Rules. Code of Rules means the official compilation of rules promulgated by the Auditor General and currently in effect (74 Ill. Adm. Code 440).

c) Officer of the Office of the Auditor General. Officer of the Office of the Auditor General means any individual designated as a State Auditor, or any Deputy Auditor or other individual empowered by the Auditor General to act with respect to the performance of a specific audit, attestation engagement, study, or investigation.

d) Rulemaking. Rulemaking means separately or in combination any processes, procedures, or activities intended to result in, or which result in, a rule or regulation. Rulemaking includes the adoption, amendment, modification, update, suspension, repeal, rescission, or termination of a rule or regulation.

e) State Auditor. State Auditor means a State payroll employee of the Office of the Auditor General who has been authorized to conduct audits, attestation engagements, investigations, and studies by the Auditor General, and who has otherwise been appointed State Auditor in accordance with the personnel rules of the Office of the Auditor General.

f) Word. Word includes terms, phrases, and abbreviations.

History

• Source: Amended at 30 Ill. Reg. 2280, effective February 20, 2006

74 Ill. Adm. Code 440.210 Introduction

a) Subject. This subpart establishes clarifications and working interpretations concerning the meaning and requirements of a "financial audit" or "compliance audit."

b) Authority. Section 2-12 ISAA [30 ILCS 5/2-12]. This rule is necessary to effectively accomplish the requirements mandated by Sections 3-2, 1-13 and 1-13.5 of ISAA [30 ILCS 5/3-2, 1-13 and 1-13.5].

c) Effective Date. This Subpart becomes effective on March 1, 1977.

History

• Source: Amended at 30 Ill. Reg. 2280, effective February 20, 2006

74 Ill. Adm. Code 440.220 Clarification

a) Auditing of Grantees. The scope of any compliance audit conducted by the Auditor General of a State agency that made grants during the audit period will include testing to determine whether the audited agency is auditing the grantees of funds granted by the audited agency for compliance with the terms of the grants and other applicable laws, regulations, and rules and whether the frequency and quality of such audits is generally adequate.

b) Self Auditing of Grants. The scope of any compliance audit conducted by the Auditor General of a State agency that received grants during the audit period will include testing to determine whether the audited agency is reviewing grants received by the agency to determine that the grant funds are being used in accordance with grant requirements and applicable state and federal laws, regulations and rules, and whether the frequency and quality of such reviews is generally adequate.

History

• Source: Amended at 30 Ill. Reg. 2280, effective February 20, 2006

74 Ill. Adm. Code 440.310 Introduction

a) SUBJECT. This Subpart establishes the policy, procedures and forms governing the submission and disposition of requests by the public for rulemaking actions by the Office of the Auditor General.

b) AUTHORITY.

Section 5-145, the Illinois Administrative Procedure Act [5 ILCS 100/5-145].

Section 2-12, ISAA [30 ILCS 5/2-12].

c) INCORPORATIONS. The following materials are incorporated by reference and made a part of this Subpart:

1. Standards of Construction for Rules (Subpart A of this Part).

2. Definitions (Subpart B of this Part).

d) EFFECTIVE DATE. This Subpart becomes effective on February 2, 1979.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.320 General Provisions

RIGHT TO PETITION. Any person may petition the Office of the Auditor General to undertake a particular rulemaking action (e.g. adoption, amendment, repeal, etc. of a rule or regulation). For a petition to be officially considered and acknowledged, it must be submitted in accordance with the procedures and requirements of this subpart.

History

• Source: Added at 3 Ill. Reg. 5, p. 860, effective February 2, 1979

74 Ill. Adm. Code 440.330 Procedures

a) SUBMISSION OF PETITIONS. A petition for a rulemaking action by the Office of the Auditor General must be:

1. submitted in writing;

2. delivered to the Office of the Auditor General at its Springfield address; and

3. in a format covering the information required by this Subpart.

b) FORM OF PETITIONS. Each petition requesting a rulemaking action shall be legible and succinct and shall separately provide the following information:

1. The name of the person submitting the petition and the complete mailing address which the Auditor General should use in directing any correspondence or response to the petition.

A) If the rulemaking action covered by the petition involves an existing rule or regulation, then the title and number of the rule or regulation involved.

B) If the rulemaking action does not involve an existing rule or regulation, then a short synopsis of the subject and nature of the rulemaking.

3. A draft in as much detail as possible of the text of the proposed rulemaking action.

4. A statement detailing the reasons and basis for the petition and the desirable benefits if the proposed rulemaking is undertaken; and where necessary, an explanation of the key provisions of the proposal.

5. Any other matters, statements, or information which the petitioner deems desirable.

c) REVIEW OF PETITIONS.

1. Each petition submitted to the Office of the Auditor General in accordance with this subpart will be acknowledged to the petitioner at the address specified in the petition. After the petition is reviewed, the petitioner will be sent:

A) the results of the review;

B) the final decision of the Office concerning the petition; and

C) written answer to each specific question asked.

2. However, as provided by the Illinois Administrative Procedure Act [5 ILCS 100/5-145], if rulemaking action on the petition is not initiated within 30 days of receipt of the petition by the Office of the Auditor General, then the petition shall be deemed denied.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.410 Introduction

a) SUBJECT. A rule for the appointment of Special Assistant Auditors and/or nonlicensed entities or individuals performing contractual personal services for the Office of the Auditor General.

b) SCOPE. This Subpart governs all contracts with individuals and entities performing professional and artistic services for the Office of the Auditor General.

c) AUTHORITY. Section 2-12(c)(2), ISAA [30 ILCS 5/2-12(c)(2)].

d) INCORPORATIONS. The following materials are incorporated by reference and made a part of this rule:

1. Standards of Construction for Rules (Subpart A of this Part).

2. Definitions (Subpart B of this Part).

e) EFFECTIVE DATE. This Subpart becomes effective on November 21, 1980.

History

• Source: Amended at 24 Ill. Reg. 2321, effective February 7, 2000

74 Ill. Adm. Code 440.420 General Provisions

a) GENERAL PROVISIONS.

1. Conflicts. No Contractor, Subcontractor or associated principal shall have any interest which would conflict in any manner with the performance of the services to be provided under a contract.

2. Contractual evidence. All services secured under this subpart shall be the subject of a written contract, which contract shall be duly approved.

3. Delegations of authority.

Any delegation of authority by the Auditor General to sign, issue or effectuate, in the name of the Auditor General, Requests for Proposals or contracts to hire individuals or entities to assist in accomplishing the responsibilities or programs of the office shall be maintained in writing, signed and dated by the Auditor General, at the office's Springfield location. The form of signature for any delegated authority shall be specified in the document effecting the delegation.

b) SPECIAL ASSISTANT AUDITORS.

The services of special assistant auditors shall be procured pursuant to the requirements of the Auditor General's Standard Procurement Rules [44 Ill. Adm. Code 500].

History

• Source: Amended at 24 Ill. Reg. 2321, effective February 7, 2000

74 Ill. Adm. Code 440.510 Introduction

a) SUBJECT. This Subpart establishes:

1. the basic standards concerning the use of oaths by persons associated with the Office of the Auditor General;

2. the delegation of the authority to administer oaths; and

3. the general form of oath to be utilized.

b) AUTHORITY. This Subpart is promulgated under the authority of Section 2-12(c)(3) ISAA [30 ILCS 5/2-12(c)(3)].

c) INCORPORATIONS. The following materials are incorporated by reference and made a part of this Subpart:

1. Standards of Construction for Rules (Subpart A of this Part);

2. Definitions (Subpart B of this Part).

d) REFERENCES.

Section 2-11(c) ISAA [30 ILCS 5/2-11(c)].

Section 2-12(c)(3) ISAA [30 ILCS 5/2-12(c)(3)].

Section 3-13 ISAA [30 ILCS 5/3-13].

e) EFFECTIVE DATE. This Subpart becomes effective on February 1, 1976.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.520 General Provisions

a) Auditor General's Delegation.

1. The authority of the Auditor General to administer oaths is delegated to all State Auditors and this fact is stated in their identification credentials.

2. The authority of the Auditor General to administer oaths when delegated to persons who are not State Auditors shall be accomplished only in writing and shall be limited to a specific audit, attestation engagement or investigation.

b) Administration of Oaths. Oaths when administered by the Office of the Auditor General shall be administered in the same manner as customarily used or accepted in courts of law.

c) Form of Oath for Oral Testimony. A verbal oath administered by persons associated with the Office of the Auditor General shall be in substantially the following form:

I,

(NAME)

do solemnly swear that the testimony I am

about to give in this proceeding will be the truth, the whole truth and nothing but the truth so help me God.

d) Form of Affirmation for Oral Testimony. A verbal affirmation administered by persons associated with the Office of the Auditor General shall be in substantially the following form:

I,

(NAME)

do solemnly, sincerely, and truly declare and

affirm that the testimony I am about to give in this proceeding will be the truth, the whole truth and nothing but the truth.

e) Form of Oath or Affirmation for Written Statement. The following form of oath (affirmation) may be used on written statements:

State of Illinois

)

SS.

County of

)

I,

(NAME)

, have read the foregoing statement, know and

understand the contents thereof, and do solemnly (swear) (affirm) that the same is true and complete.

Subscribed and (sworn to) (affirmed) before me this

day of

,

.

(Title)

f) Form of Oath or Affirmation for Affidavit. The following language will be used in an affidavit taken by persons associated with the Office of the Auditor General:

State of Illinois

)

SS.

County of

)

I,

(NAME)

, being duly sworn, solemnly (swear) (affirm)

that:

Affiant

Subscribed and (sworn to) (affirmed) before me this

day of

,

.

g) Variations to Forms of Oaths and Affirmations. Additions to or modification of the forms of an oath and affirmation provided in this rule may be made, in the discretion of the administering officer, where necessary for accuracy, preciseness or clarity or because of special circumstances.

History

• Source: Amended at 30 Ill. Reg. 2280, effective February 20, 2006

74 Ill. Adm. Code 440.610 Introduction

a) SUBJECT. This Subpart establishes:

1. the basic policies and procedures concerning the issuance of subpoenas; and

2. the general form and content of subpoenas.

b) AUTHORITY. This Subpart is promulgated under the authority of Section 2-12(c)(4) ISAA [30 ILCS 5/2-12(c)(4)].

c) INCORPORATIONS. The following materials are incorporated by reference and made a part of this Subpart:

1. Standards of Construction for Rules (Subpart A of this Part).

2. Definitions (Subpart B of this Part).

d) REFERENCES.

Section 2-12(c)(4) ISAA [30 ILCS 5/2-12(c)(4)].

Section 3-13 ISAA [30 ILCS 5/3-13].

e) EFFECTIVE DATE. This Subpart becomes effective on February 1, 1976.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.620 General Provisions

a) REQUESTS FOR SUBPOENAS. Any State Auditor or Special Assistant Auditor of the Office of the Auditor General may request the issuance of a subpoena by directing a request, in writing, to the Auditor General. Such requests will be in a form and contain such information as specified by the Auditor General.

b) ISSUANCE OF SUBPOENAS. Subpoenas will be issued by the Auditor General or a Deputy Auditor General only upon review of an appropriate request. Subpoenas will be executed in two or more original copies, marked "first duplicate original," "second duplicate original," etc. each signed by the Auditor General or a Deputy Auditor General. The executed subpoenas shall be delivered to the requesting party for service.

c) SERVICE OF SUBPOENA. Subpoenas may be served by any person who is over age 18 years. Service may be made:

1. If the person being served is an individual, by personal delivery of an executed original to the individual, or by leaving an executed original at the individual's usual place of abode, with some person of the family, who is age 13 years or older, provided the server also sends a copy of the subpoena, postage prepaid addressed to the individual at the individual's usual place of abode.

2. If the person being served is a corporation, by leaving an executed original with the registered agent or officer or agent of the corporation.

3. If the person being served is an entity other than a corporation or an individual, by leaving an executed original with any officer, partner, associate, or agent of the entity.

4. By mailing an executed original by certified mail, return receipt requested, and postage prepaid, to the person to be served at the person's principal place of business or principal office or in the case of an individual at the individual's principal place of abode.

d) RETURN OF SERVICE OF SUBPOENA. After a subpoena is served, the server shall execute and have acknowledged before a person authorized to administer oaths, the Certificate of Service on the original retained by the server and return it to the individual in charge of the Post Audit or Investigation.

e) ENFORCEMENT. When a person fails to comply with a subpoena, the individual in charge of the post audit or investigation shall send to the Chief Legal Counsel a notice of failure to comply accompanied by the duplicate original subpoena showing service together with a request for further action by the Auditor General or other recommendations.

f) WITNESS FEES AND MILEAGE.

1. Persons complying with a subpoena of the Office of the Auditor General will be paid attendance costs as provided by statute for civil cases in Illinois Circuit Courts.

2. State employees will be asked to waive witness fees and mileage if they appear as witnesses during their regular working hours and within their regularly assigned work district.

g) SUBPOENA FORM. Subpoenas issued by the Office of the Auditor General shall be in a form specified by the Auditor General.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.710 Introduction

a) SUBJECT. This Subpart establishes:

1. the basic policies, procedures and guidelines concerning the taking of depositions by State Auditors and Special Assistant Auditors;

2. the procedure for a service of a Notice of Deposition.

b) AUTHORITY. Sections 2-12(c)(1) and (3), ISAA [30 ILCS 5/2-12(c)(1) and (3)].

c) INCORPORATIONS. The following materials are incorporated by reference and made a part of this Subpart:

1. Standards of Construction for Rules (Subpart A of this Part).

2. Definitions (Subpart B of this Part).

d) REFERENCES.

Sections 2-12(c)(1) and (3), ISAA [30 ILCS 5/2-12(c)(1) and (3)].

Section 3-13, ISAA [30 ILCS 5/3-13].

e) EFFECTIVE DATE. This Subpart becomes effective on December 13, 1979.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.720 General Provisions

a) USE OF DEPOSITION AUTHORITY. Depositions upon oral examination may be taken when, in the opinion of an audit Director, the need to preserve statements or the interrogation of a person under oath is essential to the conduct of an audit or upon direction of the Auditor General.

b) PERSONS BEFORE WHOM DEPOSITIONS MAY BE TAKEN. Depositions may be taken before a State Auditor, a Special Assistant Auditor, or an officer authorized to administer oaths by the laws of the State of Illinois or the United States.

c) WHERE DEPOSITION TAKEN. A deposition may be taken at the office of any State agency where the witness is employed, or in the case of a person other than a State employee, in a suitable location selected by the State Auditor or Special Assistant Auditor in the county in which the person resides.

d) RECORD OF EXAMINATION: OATH. The person before whom the deposition is taken shall put the witness on oath and shall personally, or by someone acting under that person's direction and in that person's presence, record the testimony of the witness. The testimony shall be taken stenographically or by sound recording service, and upon agreement of the parties may be taken by audio visual recording device. The testimony shall be transcribed at the request of any party. Objections made at the time of the examination shall be included in the deposition.

e) SCOPE OF EXAMINATION. The witness in a deposition may be examined regarding any matter within the scope of a post audit or investigation. No rules of evidence need be observed.

f) FEES AND CHARGES.

1. The Auditor General's office shall pay the fees of the witness and the charges of the recorder or stenographer for attending.

2. The witnesses who are State employees shall not be entitled to a witness or travel fee. Witnesses other than State employees shall be paid the witness and travel fees provided by statute for civil cases in Illinois Circuit Courts.

g) COPIES. Upon payment of reasonable charges therefor the recorder or stenographer shall furnish a copy of the deposition to the witness.

h) FAILURE OF STATE EMPLOYEE TO RESPOND TO SUBPOENA FOR DEPOSITION. In addition to any other remedy provided by law, the Auditor General shall report the failure by a State official or employee to respond to a subpoena issued by his office as an instance of failure to cooperate by a State agency pursuant to Section 3-12, ISAA [30 ILCS 5/3-12].

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.730 Procedure

a) NOTICE OF DEPOSITION. All Notices of Deposition shall be by service of a Subpoena for Deposition issued and served in accordance with Subpart G of this Part.

b) SUBPOENA FOR DEPOSITION FORM. Subpoena for Deposition issued by the Office of the Auditor General shall be in the form specified by the Auditor General.

History

• Source: Amended at 20 Ill. Reg. 730, effective January 31, 1996

74 Ill. Adm. Code 440.810 Introduction (repealed)

History

• Source: Repealed at 6 Ill. Reg. 12253, effective September 24, 1982

74 Ill. Adm. Code 440.820 Financial Provisions (repealed)

History

• Source: Repealed at 6 Ill. Reg. 12253, effective September 24, 1982

74 Ill. Adm. Code 440.910 Methods of Receiving Fraud Allegations

a) The Office of the Auditor General shall operate a toll-free telephone hot line for the public to report allegations of fraud in the executive branch of State government [30 ILCS 5/2-15].

b) Fraud allegations should be reported:

1. by toll free telephone to the Auditor General's Hotline at 855-217-1895 or (TTY) at 888-261-2887; or

2. by submitting the on-line form on the Auditor General's website at www.auditor.illinois.gov.

c) Fraud allegations may also be reported by U.S. Mail to Fraud Hotline, Auditor General's Office, 400 West Monroe Street, Suite 306, Springfield, IL 62704.

History

• Source: Amended at 49 Ill. Reg. 15700, effective November 25, 2025

Chapter III Auditor General

Part 440 Code of Rules

74 Ill. Adm. Code 440.920 Definition of Fraud

"Fraud" is generally defined as an intentional misrepresentation of a material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. Fraud may also be made by an omission or purposeful failure to state material facts, when nondisclosure makes other statements misleading.

History

• Source: Added at 36 Ill. Reg. 8246, effective May 18, 2012

74 Ill. Adm. Code 440.930 Review of Allegations

a) Allegations will be reviewed to determine whether they:

1. are sufficiently detailed and supported to enable follow-up;

2. appear to involve fraud; and

3. relate to agencies in the Executive branch of State government.

b) Persons making allegations may remain anonymous.

c) The Office may conduct audits concerning alleged fraud and, in appropriate circumstances, may refer allegations of fraud to law enforcement authorities or other governmental entities with jurisdiction over the alleged fraud [30 ILCS 5/2-15].

History

• Source: Added at 36 Ill. Reg. 8246, effective May 18, 2012

74 Ill. Adm. Code 440.940 Availability of Information

Information received by the Auditor General through fraud allegations that would reveal the identity of a complainant, subject, informant or witness is not subject to disclosure to the public but may be forwarded to other governmental entities, law enforcement and investigatory agencies for possible follow-up. A summary record of fraud allegations received will be maintained for a minimum period of two years from the date of receipt.

History

• Source: Added at 36 Ill. Reg. 8246, effective May 18, 2012

Part 470 Post Audit Guidelines

74 Ill. Adm. Code 470.1 Objectives of the Office of the Auditor General

The Office of Auditor General has been established to provide a comprehensive and thorough post audit of the obligation, expenditure, receipt and use of public funds of the State to the end that the government of the State of Illinois will be accountable to the General Assembly and the citizens and taxpayers, and to the end that the constitutional and statutory requirements governing State fiscal and financial operations will be enforced. All audits governed by this part are to be aimed toward the fulfillment of these objectives.

74 Ill. Adm. Code 470.2 Application of This Part

This part applies to all audits conducted by the staff of the Auditor General and all audits contracted for by the Auditor General.

74 Ill. Adm. Code 470.100 Audit Guidelines – Incorporation

Those audit guidelines required by Section 2-12(c)(1) of the Illinois State Auditing Act (Ill. Rev. Stat. 1983, ch. 15, par. 302-12(c)(1), as now or hereafter amended), which this part implements, are to be found in the following rules as defined by Section 1-70 of the Illinois Administrative Procedure Act (Ill. Rev. Stat. 1991, ch. 127, par. 1001-70, as now or hereafter amended), incorporated herein by reference: 74 Ill. Adm. Code 440: Subpart E (guidelines for the supervision and conduct of post audits, including allocation of supervisory responsibilities); 74 Ill. Adm. Code 440: Subparts F, G, and H (procedures for questioning, procedures for taking depositions); 74 Ill. Adm. Code 420: Subpart G and 2 Ill. Adm. Code 601 (maintenance of records and working papers relating to post audits), as now or hereafter amended.

Chapter V Treasurer

Part 600 Banking and Automated Teller Machine Services

74 Ill. Adm. Code 600.100 Introduction

Pursuant to Section 18 of the State Treasurer Act [15 ILCS 505/18], the Office of the Treasurer promulgates this Part for the procurement and placement of banking services at the State Capitol and automated teller machines at any State office building, State tourism center, State park or State fairgrounds (Program).

History

• Source: Amended at 49 Ill. Reg. 2206, effective February 5, 2025

74 Ill. Adm. Code 600.110 Definitions

"Administrative Expenses" means all expenses associated with the implementation, administration, marketing and operation of the Program. These expenses may include, but are not limited to, staff salaries, benefits, costs incurred in performing outreach activities and providing technical assistance to State agencies, the use of the Office of the Treasurer's equipment for Program purposes, the cost of office space and utilities incurred in connection with the Program, and fees payable to third parties.

"Automated Teller Machine" or "ATM" means any electronic information processing device that accepts or dispenses cash in connection with a credit, deposit or convenience account.

"Automated Teller Machine Provider" or "Provider" means any business entity or other person who operates an ATM and provides ATM services.

"Automated Teller Machine Services" or "ATM Services" means the act of providing an ATM pursuant to a written agreement as required by this Part.

"Banking Services" means those services provided by a financial institution relating to the management, investment, transfer and lending of money that the financial institution is authorized by law to provide to the public.

"Credit Union" means a cooperative, non-profit association, incorporated under the Illinois Credit Union Act [205 ILCS 305], under the laws of the United States of America or under the laws of another state, for the purposes of encouraging thrift among its members, creating a source of credit at a reasonable rate of interest, and providing an opportunity for its members to use and control their own money in order to improve their economic and social conditions.

"Currency Exchange" means either a "community currency exchange" or an "ambulatory currency exchange" as those terms are defined by the Currency Exchange Act [205 ILCS 405].

"Financial Institution", in relation to banking services, means a state or federally chartered bank, savings and loan association, savings bank or credit union.

"Jurisdiction of the Property" means the State agency that is in possession or occupancy of land by right or title.

"State Agency" means and includes all boards, commissions, agencies, institutions and authorities, created by or in accordance with the Illinois Constitution or Illinois statute, of the executive branch of State government. "State agency" does not include colleges, universities, institutions under the jurisdiction of the governing boards of the University of Illinois, Southern Illinois University, Illinois State University, Eastern Illinois University, Northern Illinois University, Western Illinois University, Chicago State University, Governors State University, Northeastern Illinois University, the Board of Higher Education, public employee retirement systems, investment boards that are subject to fiduciary duties imposed by the Illinois Pension Code [40 ILCS 5], the University of Illinois Foundation, units of local government, school districts, and community colleges under the Public Community College Act [110 ILCS 805].

"State Fairgrounds" has the same meaning as ascribed in the Illinois State Fair Act [20 ILCS 210].

"State Office Building" means any space or structure leased or owned by a State agency.

"State Property" means any property specified in the State Parks Designation Act [20 ILCS 840].

"State Tourism Center" means any property or facility operated and maintained by a State agency for the purpose, at least in part, of providing information to members of the public regarding local accommodations, businesses, restaurants, transportation, events, fairs, festivals and other items of interest.

History

• Source: Amended at 49 Ill. Reg. 2206, effective February 5, 2025

74 Ill. Adm. Code 600.120 Contact Office of the Treasurer

a) No State agency may procure services authorized by this Part at any State Office Building, State Tourism Center, State Property or State Fairgrounds without the approval of the Office of the Treasurer. State agencies seeking ATM Services and ATM Services approval from the Office of the Treasurer should contact:

Office of the Illinois State Treasurer

Marine Bank

1 East Old State Capitol Plaza

Springfield, IL 62701

b) In determining whether ATM services should be approved for any location, the Office of the Treasurer will consider one or more of the following criteria:

1. the approximate number of persons visiting the ATM location per day;

2. the likely demand for cash by persons in the immediate vicinity;

3. the likelihood of procuring an ATM at that location; and

4. any other relevant factor as determined by the Office of the Treasurer.

History

• Source: Amended at 49 Ill. Reg. 2206, effective February 5, 2025

74 Ill. Adm. Code 600.130 Agreements with State Agencies

a) The Treasurer may enter into written agreements with the State agency having jurisdiction of the property where ATM services are intended to be provided.

b) Agreements with a State agency may include the quantity of machines to be located at the property, the exact location of the device, establishment of responsibility for payment of expenses incurred in locating the machine or service, and any other terms deemed proper and necessary by the Treasurer.

74 Ill. Adm. Code 600.140 Competitive Procedures

Banking services and ATM services shall be procured in accordance with the Illinois Procurement Code [30 ILCS 500] and the Office of the Treasurer's procurement rules (44 Ill. Adm. Code 1400).

74 Ill. Adm. Code 600.150 Agreements with Financial Institutions and Providers

a) The Treasurer may enter into a written agreement with a financial institution or provider for the provision of banking services at the State Capitol. At a minimum, the agreement shall include the level of banking services to be provided, the amount of compensation to be paid to the financial institution or provider, and any other terms deemed proper and necessary by the Treasurer.

b) The Treasurer may enter into a written agreement with a financial institution or a provider for the provision of ATM services at a State Office Building, State Tourism Center, State Property or State Fairgrounds. At a minimum the agreement shall include:

1. the amount of compensation to be paid to the financial institution or provider;

2. the quantity of machines to be located at the property and the exact location of the service or machine; and

3. processes for payment of expenses incurred in location the machine or service. [15 ILCS 505/18]

History

• Source: Amended at 49 Ill. Reg. 2206, effective February 5, 2025

74 Ill. Adm. Code 600.160 Treasurer's Bank Services Trust Fund

Any payment, proceed, fee, compensation or other remuneration received by the Office of the Treasurer from a financial institution or provider as required by this Part shall be deposited in the Treasurer's Bank Services Trust Fund. (See 15 ILCS 505/18.)

History

• Source: Amended at 49 Ill. Reg. 2206, effective February 5, 2025

74 Ill. Adm. Code 600.170 Administrative Expenses

a) The administrative expenses of the Program shall be paid from the Treasurer's Bank Services Trust Fund. (See 30 ILCS 212/10.)

b) In the event that the Treasurer is obligated to pay administrative expenses of the Program, but the Treasurer's Bank Services Trust Fund has insufficient funds to make that payment, the obligation to pay the administrative expenses may accrue, but the Treasurer shall not pay the administrative expenses until such time as the Treasurer's Bank Services Trust Fund has sufficient funding to support the payment.

History

• Source: Amended at 49 Ill. Reg. 2206, effective February 5, 2025

74 Ill. Adm. Code 600.180 Restrictions

a) This Part does not apply to a State office building in which a currency exchange or a credit union providing financial services located in the building on July 1, 1995 is operating.

b) In the event the currency exchange or credit union that was providing financial services in the State office buildings referenced in subsection (a) ceases its provision of financial services, then that State office building shall become subject to the provisions of this Part.

c) The privileges bestowed upon a currency exchange or credit union pursuant to Section 18(d) of the State Treasurer Act are inalienable, may not be transferred to any other currency exchange or credit union, and are not subject to renewal.

74 Ill. Adm. Code 650.10 Definitions

The following definitions shall apply to this Part:

"Act" means the Charitable Trust Stabilization Act [30 ILCS 790].

"Applicant" means an organization, public or private, applying for grant funds to be awarded from the Charitable Trust Stabilization Fund created pursuant to Section 5 of the Act.

"Committee" means the Charitable Trust Stabilization Committee created pursuant to Section 10 of the Act.

"Designated Fiscal Agent" means a person designated by the applicant to manage the grant award and any related responsibilities, including post award obligations required under Section 650.110.

"Grant Agreement" means an agreement between the State Treasurer and the organization receiving grant funds from the Charitable Trust Stabilization Fund.

"Grant Award" means grants funds provided from the Charitable Trust Stabilization Fund.

"Grantee" means an organization awarded grant funds from the Charitable Trust Stabilization Fund.

"State Treasurer" means the Office of the Treasurer of the State of Illinois or a third-party administrator of the Charitable Trust Stabilization Fund designated pursuant to Section 10(d) of the Act.

History

• Source: Amended at 50 Ill. Reg. 7425, effective May 7, 2026

Chapter V Treasurer

Part 650 Rules for Charitable Trust Stabilization Committee

74 Ill. Adm. Code 650.20 Purpose

Upon recommendation of the Committee, the State Treasurer may make grant awards for the purpose of providing funds to community-based organizations and other not-for-profit entities operating in the State of Illinois.

74 Ill. Adm. Code 650.30 Grant Eligibility Criteria

Grant awards may be made to an applicant that:

a) is a not-for-profit corporation that is exempt from federal income taxation under Section 501(c)(3) of the federal Internal Revenue Code (26 U.S.C. 501(c)(3)) (Section 15(1) of the Act);

b) is organized under the General Not for Profit Corporation Act of 1986 [805 ILCS 105] for the purpose of providing charitable services to the community (Section 15(2) of the Act);

c) complies with the provisions of the Charitable Trust Act [760 ILCS 55] (Section 15(3) of the Act);

d) is domiciled in the State of Illinois and provides charitable services exclusively in the State of Illinois;

e) has the equivalent of:

1. one full-time paid employee; or

2. for grant awards provided to food pantries, soup kitchens, and other food assistance organizations that provide free food or meal programs to members of the community, a designated fiscal agent; and

f) certifies that it has adopted a nondiscrimination policy that complies with the Illinois Human Rights Act [775 ILCS 5] and all applicable federal and State laws.

History

• Source: Amended at 50 Ill. Reg. 7425, effective May 7, 2026

Chapter V Treasurer

Part 650 Rules for Charitable Trust Stabilization Committee

74 Ill. Adm. Code 650.40 Special Attention to Certain Applicants

Special attention shall be given to public and private entities with operating budgets of less than $1,000,000 that are located in a depressed area, as defined in Section 3 of the Illinois Enterprise Zone Act, and preferences for recommending grants to the State Treasurer may be given to these entities by the Committee. [30 ILCS 790/5(a)] For purposes of this Part, an applicant is located in a depressed area if the applicant meets one or more of the following conditions:

a) The unemployment rate in the census tract where the applicant is located had an annual average unemployment rate of at least 120% of the State's annual average unemployment rate for the most recent calendar year or the most recent fiscal year, as reported by the Department of Employment Security;

b) All or part of the census tract where the applicant is located has a poverty rate of at least 20%, according to the latest data from the U.S. Census Bureau;

c) The percent of households in the census tract where the applicant is located who receive SNAP Benefits is 20% or higher, according to the latest data from the U.S. Census Bureau; or

d) 50% or more of the children in the census tract where the applicant is located are eligible to participate in the federal free or reduced-price meals program, according to reported statistics from the State Board of Education.

History

• Source: Amended at 43 Ill. Reg. 437, effective December 21, 2018

74 Ill. Adm. Code 650.50 Grant Application Process

a) Applicants shall submit a written grant application, provided by the State Treasurer, with supporting documentation in order to be considered for a grant award. The following supporting documentation must accompany the application:

1. The applicant's current IRS determination letter or, if pending, Form 1023 or 1024.

2. Most recent Form 990 filed by the applicant with the IRS, including Schedule A, or an explanation of why none has been filed.

3. The following forms of, and statements required by, the Illinois Attorney General (see 14 Ill. Adm. Code 400):

A) Either:

i) Illinois Charitable Organization Registration Statement (Form CO‑1); or

ii) other official documentation showing that the applicant is currently registered with the Illinois Attorney General's Charitable Trust Bureau.

B) AG990‑IL, with all required attachments, fees and signatures, for each of the most recent three years of existence.

4. Articles of Incorporation, evidence of good standing from the Office of the Illinois Secretary of State, and all By-Laws.

5. A complete list of all officers, directors and/or trustees, including names, addresses and daytime phone numbers.

6. List of any other grants the applicant has received in the past two years, including, without limitation, federal, state or private grants.

7. Other documentation deemed necessary by the State Treasurer or the Committee.

b) Additional documentation may be provided voluntarily by the applicant, or may be requested by the State Treasurer or Committee upon receipt and review of the proposal.

c) The grant application, with all required supporting documentation, shall be submitted on the State Treasurer's website at www.illinoistreasurer.gov.

History

• Source: Amended at 50 Ill. Reg. 7425, effective May 7, 2026

Chapter V Treasurer

Part 650 Rules for Charitable Trust Stabilization Committee

74 Ill. Adm. Code 650.60 Initial Review Process

After receipt of an application, the State Treasurer will conduct an initial review to verify the applicant's eligibility and the completeness of the application and supporting documentation. During the initial review process, the State Treasurer may request other information, such as additional documentation, meetings with the applicant's officers or employees, and visits at the applicant's program site.

74 Ill. Adm. Code 650.70 Committee Consideration and Recommendation of Applications

a) After the applicant's eligibility has been determined and all necessary documentation has been provided and reviewed, the applicant's application will be placed on a meeting agenda for consideration by the Committee. The State Treasurer will notify any applicant when its application will be considered by the Committee.

b) The Committee will hold meetings at least quarterly, on a calendar basis, in order to review grant applications and make final recommendations to the State Treasurer on the making of grant awards. If the Committee does not recommend that an applicant receive a grant award, then the Committee shall notify the applicant and the grant application will not be presented to the State Treasurer for final consideration.

c) The final recommendations of the Committee for the making of grant awards are not binding upon the State Treasurer.

74 Ill. Adm. Code 650.80 Grant Award by Treasurer

After the Committee makes a final recommendation to approve a grant application, the State Treasurer will approve or deny the grant application in full or in part. The State Treasurer may also request that the Committee provide additional information in support of its recommendation for the approval of a grant application. Applicants shall be notified by the State Treasurer, by mail, of the approval, denial or other action on a grant application as soon as practicable.

74 Ill. Adm. Code 650.90 General Terms and Conditions of Grant Awards

a) A grant award may be used for stabilization purposes by a grantee. The grantee shall not use the grant award for any prohibited use as set forth in the Grant Funds Recovery Act [30 ILCS 705/4.3]. The State Treasurer may, in its discretion, limit the use of a grant award to a particular program or purpose.

b) The final dollar amount of a grant award shall be in the discretion of the State Treasurer, but the dollar amount in any calendar year may not exceed $25,000 per grantee.

c) Unless otherwise specified, grant awards shall be made in a lump sum payable to the grantee upon the effective date of a Grant Agreement.

d) Unless otherwise specified, the term of any grant award shall be for one year, with grant funds to be expended by a grantee within one calendar year after the effective date of the Grant Agreement.

e) Unless otherwise specified, the grant award shall be non-renewable, but a grantee may submit a new application for a grant award in a second consecutive calendar year. A grantee may not receive a grant award in more than two consecutive calendar years.

f) All grants awarded under this Part are subject to and shall comply with the Grant Funds Recovery Act [30 ILCS 705].

74 Ill. Adm. Code 650.100 Grant Agreements

The grant award shall be made pursuant to a Grant Agreement signed by the State Treasurer and the grantee. The Grant Agreement shall:

a) describe the purpose of the grant award;

b) specify how payments shall be made, what constitutes permissible expenditure of the grant award, and the financial controls applicable to the grant award, including required reports;

c) specify the period of time for which the grant is valid and the period of time during which the grant award may be expended;

d) contain a provision that the grantee is required to permit the State Treasurer, the Auditor General, or the Attorney General to inspect and audit any books, records, or papers related to the program, project, or use for which grant funds were provided, and that records shall be maintained for six years after the termination of the grant;

e) contain a provision that the grantee shall make its premises and program sites open to inspection by the State Treasurer or its designees upon reasonable notice;

f) contain a provision that all funds remaining at the end of the Grant Agreement or at the expiration of the period of time grant funds are available for expenditure or obligation by the grantee shall be returned to the State within 45 days; and

g) contain a provision in which the grantee certifies under oath that all information in the Grant Agreement is true and correct to the best of the grantee's knowledge, information, and belief; that the funds shall be used only for the purposes described in the Grant Agreement; and that the grant award is conditioned upon such certification. (Section 4(b) of the Grant Funds Recovery Act [30 ILCS 705/4(b)])

74 Ill. Adm. Code 650.110 Post Award Obligations

a) Unless otherwise specified in a Grant Agreement, grantees shall be required to submit a financial status report to the State Treasurer within six months after the date of the grant award detailing the use of grant funds, including the amount of funds expended to date.

b) Unless otherwise specified in a Grant Agreement, grantees shall be required to submit a final written narrative and financial report to the State Treasurer within 60 days after the termination date of the grant award detailing the use of grant funds, including any statistics available on the effectiveness of the subject of the grant award.

c) Failure of a grantee to comply with any provision of a Grant Agreement will result in affirmative action authorized by Section 6 of the Grant Funds Recovery Act to recover misspent or improperly held funds.

74 Ill. Adm. Code 650.120 Public Notice of Grant Information

The State Treasurer shall publish information about the program on its website or in any other public medium deemed appropriate by the State Treasurer. This information shall include, but is not limited to, instructions for applications, Committee meeting dates, minutes of Committee meetings, and notice of any grant awards.

Part 700 Joint Rules of the Treasurer and the Comptroller: Extensions of Time for the Deposit of Funds Into the State Treasury

74 Ill. Adm. Code 700.5 Introduction

These rules are jointly promulgated by the State Treasurer and the State Comptroller to implement their powers under Section 2 of "An Act in relation to the payment and disposition of moneys received by officers and employees by virtue of their office or employment", Ill. Rev. Stat. 1979, ch. 127, par. 171.

74 Ill. Adm. Code 700.10 Declaration

The following rules are hereby adopted to govern procedures for the extension of time periods for the payment of moneys into the State treasury or to the State Treasurer.

74 Ill. Adm. Code 700.20 Request

a) Any state agency subject to the provisions of Section 2(a) of "An Act in relation to the payment and disposition of moneys received by officers and employees by virtue of their office or employment", or Section 34 of "An Act in relation to state finance", may request an extension of the time period stated in these Sections for the payment of funds into the State treasury or to the State Treasurer.

b) The request shall be signed by the agency head or his designee and shall be sent to the State Treasurer and the State Comptroller.

c) The request for extension shall contain:

1. The new time period requested;

2. The type of funds to be subject to the extension;

3. The reasons for the extension, including the locations at which the funds are received;

4. Such documentation as the agency shall deem appropriate to support the request.

74 Ill. Adm. Code 700.30 Evaluation

a) Upon the receipt of the request, the State Treasurer and the State Comptroller shall jointly evaluate the information submitted by the agency. The State Treasurer and Comptroller may:

1. Approve the request with the same or a different time period from that requested by the agency;

2. Reject the request; or,

3. Request the agency to submit additional documentation.

b) When processing requests for extensions, representatives of both the State Treasurer and the State Comptroller may interview a representative of the requesting agency, review present procedures, and examine the receipt flow and necessary accounting records.

c) Extensions will be made only for that period of time which is determined to be the maximum period required for payment into the State treasury, but in no event to exceed 30 calendar days.

74 Ill. Adm. Code 700.40 Implementation

a) If the State Treasurer and the State Comptroller approve the request, the agency shall be notified by letter of the extended time period. The notification shall also specify the types of funds subject to the new time periods and any other terms and conditions deemed advisable by the State Treasurer and the State Comptroller. A copy of the notification letter shall be forwarded to the Auditor General.

b) The Treasurer and the Comptroller shall retain copies of letters granting extensions for public inspection.

Part 710 Disbursement of Funds – Special Handling

74 Ill. Adm. Code 710.10 Requests for Special Handling

Each payee desiring electronic disbursement of State funds must request special handling of State warrants by the State Treasurer.

Such requests must be presented in writing, and indicate the identity of the person authorized to receive State funds on behalf of the receiving entity.

74 Ill. Adm. Code 710.20 Details Required on Requests

By 10 a.m. the day of the request of transfer, the authorized individual must contact the Banking Division of the Office of the State Treasurer with the following information:

a) The identity and the account number of the payee for each warrant to be presented for electronic transfer

b) The amount of each warrant to be presented

c) The total amount of the transfer to be executed

d) The identity of the institution to which funds are to be transferred

74 Ill. Adm. Code 710.30 Deadline for Requests

Warrants must be presented to the Treasurer's Banking Division for transfer by 2:00 p.m. on the date requested.

74 Ill. Adm. Code 710.40 Surcharges

In the event that scheduled warrants are not presented by the above time, the Treasurer shall assess a surcharge to the presenting entity equal to the amount of investment income lost on reserved funds.

a) Such surcharge will be calculated on the principal amount of the non-completed transfer, at the average repurchase agreement rate received by the State Treasurer from its major clearing banks on that day.

b) This surcharge must be paid prior to making subsequent requests.

74 Ill. Adm. Code 710.50 Charges

a) The Treasurer will assess a $50 charge for each transfer of funds.

b) This charge may either be paid at the time of the transfer, or once each month for all transfers executed during the month.

Part 715 Community Development Loan Guarantee Program

74 Ill. Adm. Code 715.100 Establishment of Program

This Part governs the Loan Guarantee Program created by the Community Development Loan Guarantee Act [15 ILCS 516].

74 Ill. Adm. Code 715.110 Purpose of Program

a) The purpose of this Program is to establish a Program for guaranteeing small business loans to borrowers who would otherwise not qualify in low-income communities that have been historically excluded from investment opportunities. [15 ILCS 516/30-5]

b) The Act allows the Treasurer to allocate up to $10,000,000 of investment earnings each year for the Loan Guarantee Program, provided that no more than $50,000,000 may be used for guaranteeing loans at any given time. [15 ILCS 516/30-35]

74 Ill. Adm. Code 715.200 Definitions

The following definitions shall apply to this Part:

"Act" means the Community Development Loan Guarantee Act [15 ILCS 516] that establishes the Community Development Loan Guarantee Program.

"Approved Depository" means a financial institution subject to the federal Community Reinvestment Act of 1977 that meets the Treasurer's required CRA Rating of Satisfactory or Outstanding, has an IDC Rating of 75 or above, and completes all program documentation.

"Business Guarantee Application" means the form provided by the Treasurer to collect required information from a borrower and a participating financial institution for a borrower's enrollment into the Program.

"CRA Rating" means the rating a financial institution receives from the Illinois Department of Financial and Professional Regulation in accordance with the Illinois Community Reinvestment Act [205 ILCS 735] or from the Federal Financial Institutions Examination Council as authorized by the federal Community Reinvestment Act of 1977. (12 U.S.C. 2901)

"FDIC-Insured Financial Institution" means a financial institution that is insured by the Federal Deposit Insurance Corporation.

"Financial Institution" means a bank, a savings and loan association, a savings bank, a credit union, a minority depository institution as designated by the Federal Deposit Insurance Corporation, or a community development financial institution certified by the United States Treasury Community Development Financial Institutions Fund, which is operating in the State of Illinois. [15 ILCS 516/30-10]

"IDC Rating" means the rating a financial institution receives from IDC Financial Publishing, Inc, which is an entity that rates the safety and soundness of banks, holding companies, and credit unions.

"Lender Participation Application" means the application form provided by the Treasurer to collect required information from financial institutions seeking to participate in the Program.

"Loan Guarantee Account" means an account at a financial institution outside the State Treasury of which the State Treasurer is custodian with the purpose of guaranteeing loans made by a financial institution in accordance with the Act. [15 ILCS 516/30-10]

"Loan Guarantee Administrative Trust Fund" means a nonappropriated trust fund within the State treasury. Moneys in the Fund may be used by the State Treasurer to guarantee loans and to cover administrative expenses related to the Program. [15 ILCS 516/30-36]

"Low-Income Community" means:

a geographic area or areas that has a poverty rate of at least 20% according to the latest data from the U.S. Census Bureau;

in the case of a tract not located within a metropolitan area, the median family income for such tract does not exceed 80% of statewide median family income; or

in the case of a tract located within a metropolitan area, the median family income for such tract does not exceed 80% of the greater of statewide median family income or the metropolitan area median family income. (See 26 U.S.C. Section 45D(e)).

"NCUA" means the National Credit Union Administration.

"Participating Financial Institution" means a financial institution that:

applies to participate in the program; and

is allocated guarantee funds for the Program.

"Presence in Illinois" means at least one physical office and one full-time employee within the geographic borders of the State.

"Program" means the Community Development Loan Guarantee Program.

"Program Depository" means the host financial institutions awarded the contract for providing banking services as it relates to the Loan Guarantee Accounts for the Program.

"Small Business" or "Business" means a business operating in Illinois with less than 500 employees at the time of application to the Program. "Small business" shall not include businesses in the following industries: investment real estate, tobacco, adult entertainment, or gambling. "Small business" shall not include goodwill related to change in ownership.

"Treasurer" means the duly elected Treasurer of the State of Illinois or the Treasurer's designees.

74 Ill. Adm. Code 715.300 Treasurer Responsibilities

The Treasurer is responsible for establishing and administering the Program and will be responsible for the following:

a) allocating funds from investment earnings to the Loan Guarantee Administrative Trust Fund in accordance with Section 30-35 of the Act;

b) establishing one or more loan guarantee accounts at program depositories;

c) procuring any necessary custodial, investment, or banking services;

d) determining the administrative fees necessary to manage the Program in accordance with Section 30-25 of the Act and Section 715.430;

e) determining the eligibility of financial institutions to participate in the Program in accordance with Section 715.400;

f) establishing the terms and conditions for eligible financial institutions to participate in the Program;

g) accepting and processing applications for loan guarantees;

h) directing the payment of moneys in the loan guarantee account to be paid to participating financial institutions to cover losses on guaranteed loans; and

i) retaining documents in compliance with State statutes, including the State Records Act [5 ILCS 160] and the State Records Commission (44 Ill. Adm. Code 4400) administrative rules.

74 Ill. Adm. Code 715.310 Program Depository Eligibility and Responsibilities

a) The program depository will be selected through the Treasurer's procurement process and must meet the following criteria:

1. be authorized to conduct business in Illinois as an Illinois bank or a national bank with a presence in Illinois;

2. be a member of the Federal Reserve System and have access to all services as a member bank;

3. be an approved depository for public funds; and

4. have required licenses, bonding, facilities, equipment, and trained personnel necessary to perform the duties as the program depository.

b) The program depository will be responsible for the loan guarantee account in which funds will be used to guarantee certain loans made by participating financial institutions. The program depository will provide efficient and cost-effective banking services for the program, which shall include the following:

1. opening and maintaining a demand deposit account for the Treasurer in which all electronic transfers will be deposited;

2. opening and maintaining an interest-bearing account in the name of the Treasurer for the funds received in the demand deposit account; and

3. accepting and processing instructions from the Treasurer to transfer funds from the investment account to the demand deposit account.

74 Ill. Adm. Code 715.400 Participating Financial Institution Eligibility and Responsibilities

a) The Treasurer will determine the eligibility of financial institutions to participate in the Program. In determining the eligibility of the financial institution to participate, the Treasurer will consider the financial institution's commitment to low-income communities…and the financial institution's commitment to communities considered disproportionately impacted areas, depressed areas, or enterprise zones as determined, designated, or certified by the Department of Commerce and Economic Opportunity in accordance with any applicable federal law or program. [15 ILCS 516/30-20]

b) In order to participate in the Program, financial institutions must meet the following criteria:

1. have a CRA rating of satisfactory or outstanding or be a credit union that does not have a CRA rating at the time of application;

2. have an IDC rating of at least 75;

3. be an FDIC-insured financial institution, or a credit union insured by the NCUA or other approved share insurer pursuant to the Illinois Credit Union Act [205 ILCS 305/58];

4. be an Illinois or national financial institution that is authorized to do business in Illinois, and be in good standing with the financial institution's regulators;

5. have a presence in Illinois; and

6. comply with all Program requirements.

c) Participating financial institutions are responsible for the following:

1. understanding and complying with the Program requirements found in Section 715.420;

2. ensuring that the business meets the eligibility requirements for the Program found in Section 715.500;

3. the day-to-day management of the loans guaranteed by the Program in accordance with the participating financial institution's established internal loan processes; and

4. submitting annual reports to the Treasurer that include the following information for each business loan guaranteed through the Program:

A) the percentage of the loan that is guaranteed by the Program;

B) the dollar amount of the guarantee;

C) the type of loan (e.g., fixed or variable rate);

D) the terms of the loan;

E) the interest rates being charged to the business for the loan;

F) the frequency of interest rate changes, if applicable;

G) the highest interest rate possible over the life of the loan;

H) any pre-payment penalties that may apply on the loan;

I) the payment history for loans that have been guaranteed through the Program; and

J) any other information that is relevant to a full, fair, and effective disclosure of the operations of the Program.

74 Ill. Adm. Code 715.410 Financial Institution Application

Each participating financial institution will be required to submit a lender participation application, which will be submitted to the Treasurer for review and approval. The lender participation application shall contain the following:

a) narrative on the financial institutions' commitment to low-income communities…and the financial institution's commitment to communities considered disproportionately impacted areas, depressed areas, or enterprise zones as determined, designated, or certified by the Department of Commerce and Economic Opportunity in accordance with any applicable federal law or program; [15 ILCS 516/30-20]

b) certification that the business for which the guarantee is being allocated is located in a low-income community in the State of Illinois, is in good standing with the Illinois Secretary of State, and is not in arrears with the Illinois Department of Revenue; and

c) such other information that the Treasurer deems useful in administering the Program.

74 Ill. Adm. Code 715.420 Program Requirements

a) Upon approval to participate in the Program, participating financial institutions will be allocated up to $1,000,000 in loan guarantees based on the availability of guarantee funds. Financial institutions must allocate all of their guarantee funds within one year and in the event that the financial institution does not allocate all of its guarantee funds within one year, a new application will need to be completed;

b) Each business guarantee is for up to a maximum of 5 years;

c) The maximum allowable guarantee amount is 25% of the business loan amount, which cannot exceed the $1,000,000 in guarantees allocated to the participating financial institution;

d) Guarantees may not be used to refinance existing debt;

e) Participating financial institutions must submit a one-time, nonrefundable fee of $1,000 made payable to Treasurer;

f) Participating financial institutions will have 30 days from the allocation of the guarantee funds to submit the initial business guarantee application to the Treasurer for approval; and

g) Participating financial institutions must submit annual reports to the Treasurer for each business loan guaranteed through the Program in accordance with Section 715.400.

74 Ill. Adm. Code 715.430 Fees

Administrative fees will be charged to the participating financial institutions to cover expenses associated with the Program. Participating financial institutions must submit a one-time, nonrefundable fee of $1,000 made payable to the Treasurer.

74 Ill. Adm. Code 715.440 Termination of Participation

a) A participating financial institution may leave the program at a time mutually agreed upon between the participating financial institution and the Treasurer.

b) If the Treasurer becomes aware that a participating financial institution has violated any applicable State or federal regulatory guidelines and/or lending laws, including State predatory lending laws, the Treasurer may terminate the financial institution's participation in the Program. Such laws include, but are not limited to:

1. Federal statutes and regulations:

A) Equal Credit Opportunity Act [15 U.S.C. 1691] and Regulation B (12 CFR Part 1002);

B) Fair Housing Act [42 U.S.C. 3601];

C) Truth in Lending Act [15 U.S.C. 1601] and Regulation Z (12 CFR Part 1026);

D) Fair Credit Reporting Act [15 U.S.C. 1681] and Regulation V (12 CFR Part 1022);

2. State of Illinois statutes:

A) Illinois Human Rights Act [775 ILCS 5];

B) Illinois Fairness in Lending Act [815 ILCS 120];

C) Credit Card Issuance Act [815 ILCS 140];

D) Residential Mortgage License Act of 1987 [205 ILCS 635];

E) Predatory Loan Prevention Act [815 ILCS 123];

F) High Risk Home Loan Act [815 ILCS 137]; and

G) Consumer Fraud and Deceptive Business Practices Act [815 ILCS 505].

c) A participating financial institution may also be terminated for any violation of program requirements as set forth in Section 715.420 or for failure to adhere to the program responsibilities as set forth in Section 715.400.

74 Ill. Adm. Code 715.500 Business Eligibility

To qualify for a loan guarantee under this Program, the business must meet the following criteria:

a) be in good standing with the Office of the Illinois Secretary of State;

b) not be in arrears with the Illinois Department of Revenue; and

c) be located in a low-income community in the State of Illinois.

74 Ill. Adm. Code 715.510 Business Guarantee Application

A participating financial institution, in conjunction with a business seeking a loan guarantee, will submit a business guarantee application to the Treasurer for review and approval of the guarantee. The business guarantee application will include the following information for each business seeking a loan guaranteed by the Program:

a) the name and type of business;

b) projected annual revenues and expenses;

c) the current registered business address;

d) tax identification number associated with the business;

e) the dollar amount of the loan being sought;

f) the purpose of the loan;

g) the reason that existing loan products did not meet the needs of the borrower; and

h) other information that the Treasurer deems useful in determining the eligibility of the business to participate in the Program.

74 Ill. Adm. Code 715.520 Termination of Participation

If the Treasurer becomes aware that a business has violated any of the requirements in Section 715.500 or is found to have misrepresented any of the information provided pursuant to Section 715.510, the Treasurer shall terminate the business' participation in the program following consultation with the participating financial institution.

74 Ill. Adm. Code 715.600 Use of Loan Guarantee Accounts

The Treasurer may establish one or more Loan Guarantee Accounts at approved financial institutions. The Loan Guarantee Accounts may be used to cover the losses on guaranteed loans at a participating financial institution. [15 ILCS 516/30-15]

a) These accounts may be used to cover losses on guaranteed loans up to the full amount in the account or the amount of loss, whichever is less. [15 ILCS 516/30-30(a)]

b) Fees established by the Treasurer in accordance with Section 715.430, will be deposited into the account.

c) The Treasurer will withdraw the full amount in any loan guarantee account in the event the Program is discontinued.

d) In the event the participating financial institution leaves the Program, the Treasurer will reallocate the funds in the loan guarantee account.

e) The Treasurer may withdraw funds from any loan guarantee account for a financial institution's failure to comply with Program requirements. [15 ILCS 516/30-30(d)]

74 Ill. Adm. Code 715.610 Limitations on Funding

a) Account Maximum. The Treasurer may set a cap on the total funds held in any Loan Guarantee Account. Funds in excess of the cap may be withdrawn by the Treasurer. [15 ILCS 516/30-30]

b) Funding Maximum. The Treasurer may allocate up to $10,000,000 of investment earnings each year for the Program, provided that no more than $50,000,000 may be used for guaranteeing loans at any given time. [15 ILCS 516/30-35]

Part 719 Technology Development Account (tda) Program

74 Ill. Adm. Code 719.100 Purpose of Program

The purpose of the Technology Development Act is to attract, assist, and retain quality technology businesses and promote the growth of jobs and entrepreneurial and venture capital environments in Illinois. The creation of the Technology Development Account will allow the State to bring together, and add to, Illinois' rich science, technology, agricultural, financial, and business communities. [30 ILCS 265/5]

74 Ill. Adm. Code 719.200 Definitions

The following definitions shall apply to this Part:

"Act" means the Technology Development Act [30 ILCS 265].

"Fund Manager" means an entity that provides equity financing for starting up or expanding a company, or related purposes such as financing for seed capital, research and development, introduction of a product or process into the marketplace, or similar needs requiring risk capital.

"Green Technology" means technology that:

promotes clean energy, renewable energy, or energy efficiency;

reduces greenhouse gases or carbon emissions; or

involves the invention, design, and application of chemical products and processes to eliminate the use and generation of hazardous substances.

"Illinois Companies" means companies that are headquartered or that otherwise have a significant presence in the State at the time of initial or follow-on investment. [30 ILCS 265/11(d)]

"Illinois Venture Capital Firm" means an entity that:

has a majority of its employees in Illinois or that has at least one general managing partner or principal domiciled in Illinois; and

either:

provides equity financing for starting up or expanding a company, or related purposes such as financing for seed capital, research and development, introduction of a product or process into the marketplace, or similar needs requiring risk capital; or

has a track record of identifying, evaluating, and investing in Illinois companies and that provides equity financing for starting up or expanding a company, or related purposes such as financing for seed capital, research and development, introduction of a product or process into the marketplace, or similar needs requiring risk capital. [30 ILCS 265/11(c)]

"Investment Advisor" means one or more entities lawfully doing business in the State of Illinois selected by the Treasurer to oversee the investment, administration, and reporting for the Technology Development Account.

"Portfolio Company" means an entity in which a Fund Manager invests.

"Significant Presence" means at least one physical office and one full-time employee within the geographic borders of Illinois. A "physical office" may mean a professional workplace, a co-working location, or a home office.

"TDA II-Recipient Fund" means any fund in which the State Treasurer places money under Section 11 of the Act.

"TDA IIa Account Balance" means 5% of the State's investment portfolio, which shall be calculated as:

the balance at the inception of the State's fiscal year; or

the average balance in the immediately preceding 5 fiscal years, whichever number is greater.

"Technology Business" means a company that has as its principal function the providing of services including computer, information transfer, communication, distribution, processing, administrative, laboratory, experimental, developmental, technical, or testing services; manufacture of goods or materials; the processing of goods or materials by physical or chemical change; computer related activities; robotics, biological or pharmaceutical industrial activities; or technology-oriented or emerging industrial activity. [30 ILCS 265/11(c)]

"Technology Development Accounts" means the Technology Development Accounts established pursuant to Sections 10 and 11 of the Act ("TDA IIa").

"Track Record" means having made, on average:

at least one investment in an Illinois company in each of its funds if the Illinois venture capital firm has multiple funds; or

at least two investments in Illinois companies if the Illinois venture capital firm has only one fund. [30 ILCS 265/11(c)]

"Treasurer" means the duly elected Treasurer of the State of Illinois or his or her designees.

"Venture Capital" means equity financing that is provided for starting up, expanding, or relocating a company, or related purposes such as financing for seed capital, research and development, introduction of a product or process into the marketplace, or similar needs requiring risk capital. [30 ILCS 265/11(c)] This includes, but is not limited to, financing classified as venture capital, mezzanine, buyout, or growth.

74 Ill. Adm. Code 719.300 Responsibilities of the Treasurer

The Treasurer exercises authority and control over the management of the Technology Development Accounts by setting applicable policies and procedures that are followed by the Treasurer and Investment Advisor. As such, key roles and responsibilities include, but are not limited to:

a) Investment Policy − The Treasurer is responsible for drafting this policy and reviewing it at least annually to ensure accuracy and continued relevance.

b) Oversight − The Treasurer is responsible for the direction of investments and administration of the assets of the Technology Development Accounts.

c) Investment Advisor − In order to properly carry out its responsibilities, the Treasurer may use one or more Investment Advisors to assist in the administration of the Technology Development Accounts.

d) Performance and Fee Monitoring − The Treasurer will review the investment performance of the TDA II-Recipient Fund, as well as the fees, on a quarterly or annual basis, as determined by the Treasurer.

e) Due Diligence − The Treasurer will monitor investments and participate in operational due diligence activities in coordination with the contractors retained to assist in the administration of the Technology Development Accounts.

f) Accounting − Technology Development Accounts assets must be accounted for separately from other Treasurer monies. The Treasurer will execute investment valuation procedures in compliance with Statement No. 72, Fair Value Measurement and Application, February 2015 of the Governmental Accounting Standards Board of the Financial Accounting Foundation, evaluating available inputs for investments to determine the input level most applicable.

74 Ill. Adm. Code 719.310 Responsibilities of the Investment Advisor

In order to properly carry out its responsibilities, the Treasurer may use one or more Investment Advisors to assist in the administration of the Technology Development Accounts. The Treasurer may engage the Investment Advisor to provide services needed for the effective operation of the Technology Development Account in accordance with all applicable federal and State laws and regulations. These services may include, but are not limited to:

a) Evaluation of TDA II-Recipient Funds − The Investment Advisor may advise and provide fund evaluations to the Treasurer, taking into consideration the investment policy and objectives set forth in this Part. This may include investment analysis, portfolio construction, and due diligence. The Investment Advisor will have the responsibility to seek, recruit, screen, and evaluate fund managers for investment through TDA IIa.

b) Due Diligence − The Investment Advisor is responsible for fund manager due diligence, which includes, but is not limited to, research, financial analysis, and legal, accounting, and background investigations of fund managers. The Investment Advisor will undergo due diligence activities in coordination with the Treasurer.

c) Fund Monitoring − The Investment Advisor is responsible for monitoring the performance of TDA II-Recipient Funds, tracking the diversification of the investments and the amounts invested by TDA II-Recipient Funds, and reconciling all reporting and accounting requirements of portfolio companies and TDA II-Recipient Funds.

d) Benchmarking − The Investment Advisor is responsible for establishing applicable investment benchmarks (including public market equivalents), measuring the performance of TDA II-Recipient Funds against set benchmarks, and reviewing benchmarks.

e) Reporting − The Investment Advisor is responsible for administering all reporting and recordkeeping duties set forth in the investment policy and the Act. The Investment Advisor shall ensure standardization of reporting across TDA II-Recipient Funds. The Investment Advisor shall ensure that the following information is reported for TDA IIa to the Treasurer on a quarterly or annual basis, as determined by the Treasurer, for all investments:

1. the names of portfolio companies invested in during the applicable investment period;

2. the addresses of reported portfolio companies;

3. the date of the initial (and follow-on) investment;

4. the cost of the investment;

5. the current fair market value of the investment;

6. for Illinois companies, the number of Illinois employees on the investment date; and

7. for Illinois companies, the current number of Illinois employees. [30 ILCS 265/11(d)]

f) General Resource − The Investment Advisor shall serve as a general resource to the Treasurer for information, advice and training regarding investment, reporting, fund vetting and management, portfolio company valuation, and marketing strategies.

74 Ill. Adm. Code 719.320 Investment Policy and Objectives

a) The Treasurer shall develop, publish, and implement an investment policy covering the investment of monies in TDA IIa. The policy may be amended at any time, and shall be published on the Treasurer's website. The Treasurer shall review the policy at least once every year to ensure that it remains relevant to the Act, this Part, and prudent investment standards.

b) The investment policy is a written statement describing the risk management and oversight of the program and should be designed to describe the following:

1. the Treasurer's investment objectives;

2. the Treasurer's investment parameters;

3. the roles of the Treasurer and Investment Advisor; and

4. the reporting requirements for TDA II-Recipient Funds.

c) The Treasurer shall consider the following investment factors when selecting fund managers to invest in TDA IIa:

1. Diversification – The Treasurer shall aim to diversify its investments in areas including, but not limited to, the following:

A) strategy;

B) industry sector;

C) size of investment;

D) investment stage;

E) vintage year;

F) fund managers;

G) underlying portfolio companies;

H) geographic location; and

I) business model.

2. Small Business Investment Companies − The Treasurer shall endeavor to invest in qualified fund managers that participate in the U.S. Small Business Administration's Small Business Investment Companies Program (15 USC 14B).

3. Cost Efficiency − The Treasurer shall seek to minimize any fees or costs that diminish from the total assets or value of the Technology Development Account.

4. Investment in Illinois Technology Businesses − The Treasurer shall encourage the investment community to explore investment opportunities in Illinois technology businesses.

5. Fund Manager Diversity − The Treasurer shall seek to identify, recruit, and select fund managers that are more than 50% owned and/or managed by qualified minorities, women, military veterans, and persons with a disability.

6. Portfolio Company Diversity − The Treasurer shall seek to identify, recruit, and select fund managers that have demonstrated experience and/or express an intent to invest in:

A) portfolio companies that are more than 50% owned and/or managed by qualified minorities, women, military veterans, or persons with a disability; and/or

B) portfolio companies geographically located in diverse communities or low-to-moderate income areas.

7. Green Technology − The Treasurer shall seek to identify, recruit, and select fund managers that have demonstrated experience and/or an express ability to invest in green technology businesses located in Illinois.

8. Sustainability Factors − The Treasurer shall seek to integrate sustainability factors such as environmental, social capital, human capital, business model and innovation, and leadership and governance factors into its investment analysis, investment due diligence, and portfolio construction.

74 Ill. Adm. Code 719.330 Investment Parameters

a) TDA IIa Investment − The Treasurer, in accordance with the Act, shall segregate a portion of the Treasurer's State investment portfolio that at no time shall be greater than 5% of the portfolio, in the TDA IIa, an account that shall be maintained separately and apart from other moneys invested by the Treasurer. 5% of the State's investment portfolio shall be calculated as the greater of:

1. the balance at the inception of the State's fiscal year; or

2. the average balance in the immediately preceding 5 fiscal years. [30 ILCS 265/11(a)]

b) Reinvestment of Distributions − Distributions from the investments in TDA IIa may be reinvested into TDA IIa, not to exceed the original cost basis of the initial investments.

c) TDA IIa Excess Investments − In the event TDA IIa investments exceed 5% of the portfolio, as described in subsection (a), the Treasurer will, to the extent practicable, take reasonable steps to reduce the excess TDA IIa investments below the applicable threshold in a manner that will result in minimal negative financial impact.

d) TDA IIa Investment in Illinois Venture Capital Firms − In no case shall more than 15% of the TDA IIa account balance be invested in firms based outside of Illinois.

e) Cap on Investment in Individual Funds − The investment of the State Treasurer in any fund in which the State Treasurer places money under TDA IIa shall not exceed 15% of the total TDA IIa account balance.

74 Ill. Adm. Code 719.340 Program Documents

In order to establish and administer the Technology Development Accounts, the Treasurer may enter into all necessary agreements, documents and instruments with terms and provisions that shall not be inconsistent with the Act and this Part.

Part 720 Investment Programs

74 Ill. Adm. Code 720.5 Introduction

All state and national banks doing business in Illinois can participate in the State Treasurer's time deposit program if they meet the eligibility requirements.

74 Ill. Adm. Code 720.10 Eligibility Requirements

a) Before receiving state funds, a bank must prequalify with the Illinois Department of Human Rights and have a current assigned number.

b) As required by Chapter 130, Section 24 of the Illinois Revised Statutes, the bank must pledge not to reject arbitrarily mortgage loans for residential properties within any specific part of the community within the limits of its legal restrictions and prudent financial practices.

c) The bank must submit its bid on the form prescribed by the State Treasurer and submit such proposal on or before the date specified.

d) The bank must bid at or above the minimum rate set by the State Treasurer.

e) The bank must pledge collateral to secure the time deposit in the amount prescribed by the State Treasurer. The bid must be accompanied by the bank's last published statement of condition.

74 Ill. Adm. Code 720.20 Basic Deposit Program

The Basic Deposit Allocation recognizes the contribution of each local community to the state's overall wealth, and therefore acknowledges its right to share in the use of public funds. The criteria used in awarding such funds are:

a) bid interest rate,

b) bank size, and

c) outstanding bank loans.

74 Ill. Adm. Code 720.30 Community Service Program

The Community Service Program recognizes aggressive performance by banks in service to their communities. It not only rewards banks for past service, it also encourages banks to continue such service.

74 Ill. Adm. Code 720.40 Specific Opportunity Program

The Specific Opportunity Program differs substantially from the first two programs in that it rewards banks for engaging in specific community oriented loan activities as a consequence of state deposits.

74 Ill. Adm. Code 720.50 Short-Term Time Deposits

Chapter 130, Section 22 of the Illinois Revised Statutes states in part . . . The State Treasurer may also at any time receive a new or supplemental proposal from any national or state bank . . . for additional investment of state funds.

74 Ill. Adm. Code 720.60 Savings and Loan Associations

Savings and loan associations may participate in the time deposit program in the amount that is insured by the Federal Savings and Loan Insurance Corporation. They are not required to pledge collateral but must meet all other eligibility requirements listed above.

Part 721 Secure Choice Savings Program

74 Ill. Adm. Code 721.100 Establishment of Program

a) This Part governs the Illinois Secure Choice Savings Program created by the Illinois Secure Choice Savings Program Act [820 ILCS 80].

b) The Illinois Secure Choice Savings Program is a retirement savings program in the form of an automatic enrollment payroll deduction IRA for the purpose of promoting greater retirement savings for private-sector employees in a convenient, low-cost, and portable manner. [820 ILCS 80/10]

74 Ill. Adm. Code 721.110 Purpose of Program

The purpose of the Program is to provide a workplace retirement savings option for private sector workers who do not have access to an employer-sponsored plan so they can save their own money for retirement in a safe and convenient manner.

74 Ill. Adm. Code 721.200 Definitions

The following definitions shall apply to this Part:

"Act" means the Illinois Secure Choice Savings Program Act [820 ILCS 80].

"Account" means the IRA of a participant established and maintained under the Program.

"Account Revocation Period" means the period of time starting from the date an employee's IRA is established and the employee receives the disclosure statement and ending on the earlier of:

90 days after the date of the employee's first Secure Choice Account contribution; or

the Close of Business on the Business Day that the employee makes an Alternate Contribution Election;

provided, however, the Account Revocation Period shall last a minimum of seven days from the date the IRA is established and the employee receives the disclosure statement.

"Administrative Expenses" means all expenses associated with the implementation and administration of the Program, including fees payable to third parties providing services related to the Program.

"Administrative Fund" means the Illinois Secure Choice Administrative Fund created in Section 5.867 of the State Finance Act [30 ILCS 105].

"Beneficiary" means any person or entity designated by the participant to receive the benefits of the account in the event that the participant dies.

"Board" means the Illinois Secure Choice Savings Board or its designee or designees, which includes the Treasurer or one or more third party service providers. [820 ILCS 80/5]

"Business Day" means any day on which the New York Stock Exchange is open for trading.

"Client Employer" means an individual or entity that has contracted with a Professional Employer Organization to supply it with, or assume responsibility for, personnel management of one or more workers who perform services on an ongoing basis, rather than under a temporary help arrangement as defined in Section 15 of the Employee Leasing Company Act [215 ILCS 113]. For purposes of this Part, an employee who is performing services for a client employer pursuant to a contract between the client employer and a PEO shall be treated as employed by the client employer.

"Close of Business" means the time of day that trading closes on the New York Stock Exchange, generally 4 p.m. Eastern Standard Time.

"Day" means any calendar day.

"Department" means the Illinois Department of Revenue. [820 ILCS 80/5]

"Employee" means any individual who is employed by an employer or client employer, and who has wages that are allocable to Illinois during a calendar year under the provisions of Section 304(a)(2)(B) of the Illinois Income Tax Act [35 ILCS 5]. "Employee" includes both part-time and full-time employees. [820 ILCS 80/5]

"Employer" means a person, entity or client employer engaged in a business, industry, profession, trade, or other enterprise in Illinois, whether for profit or not for profit, that:

has employed at least 5 employees in the State during every quarter of the previous calendar year as indicated in employer-reported quarterly data submitted to the Department;

has been in business at least 2 years; and

is not offering or contributing to a qualified retirement plan.

"Employer" does not include the federal government, the State, any county, any municipal corporation, or any of the State's units or instrumentalities. [820 ILCS 80/5]

"Fund" means the Illinois Secure Choice Savings Program Fund. [820 ILCS 80/5]

"Internal Revenue Code" means Internal Revenue Code of 1986 (26 U.S.C.), or any successor law, in effect for the calendar year. [820 ILCS 80/5]

"Investment Policy" means the Investment Policy Statement adopted by the Board, pursuant to the Act, which includes a risk management and oversight program and sets forth the policies, objectives and guidelines that govern the investment of contributions to the Program.

"IRA" means a Roth or Traditional IRA (individual retirement account) under section 408 or 408A of the Internal Revenue Code. [820 ILCS 80/5]

"IRS" means the Internal Revenue Service.

"Online Portal" means the electronic platform utilized by the program administrator to manage the daily operations of the Program.

"Participant" or "Enrollee" means any individual who has an account.

"Participating Employer" means an employer, small employer, or client employer that facilitates a payroll deposit retirement savings arrangement as provided for by the Act for its employees. [820 ILCS 80/5]

"Payroll Deposit Retirement Savings Arrangement" means an arrangement by which a participating employer facilitates payroll deduction contributions from enrollees to the Program. [820 ILCS 80/5]

"Professional Employer Organization" or "PEO" means an individual or entity that contracts with a client employer to supply or assume responsibility for personnel management of one or more workers who perform services for the client employer on an ongoing basis, rather than under a temporary help arrangement as defined in Section 15 of the Employee Leasing Company Act. For purposes of this Part, PEOs are not the employer of any employee who is performing services for a client employer pursuant to a contract between the client employer and a PEO.

"Program" means the Illinois Secure Choice Savings Program. [820 ILCS 80/5]

"Program Administrator" means the person or firm selected by the Board to administer the daily operations of the Program and provide marketing, recordkeeping, investment management, custodial, and other services for the Program.

"Qualified Retirement Plan" includes a plan qualified under section 401(a), 401(k), 403(a), 403(b), 408(k) or 408(p) of the Internal Revenue Code. The term also includes an eligible governmental plan under section 457(b) of the Internal Revenue Code, as well as Simplified Employee Pension (SEP) plans, Savings Incentive Match Plan for Employees (SIMPLE) plans, and Taft-Hartley plans. Payroll deduction IRA programs are not qualified retirement plans.

"Small Employer" means a person or entity engaged in a business, industry, profession, trade, or other enterprise in Illinois, whether for profit or not for profit, that:

employed fewer than 5 employees during any quarter of the previous calendar year, as indicated in employer-reported quarterly data submitted to the Department;

has been in business less than 2 years; or

meets both of these criteria,

but notifies the Board that it is interested in being a participating employer. [820 ILCS 80/5]

"Treasurer" means the duly elected Treasurer of the State of Illinois or their designee or designees.

"Wages" means W-2 wages, as defined in 26 CFR 1.415(c) through 2(d)(4), that are received by an enrollee from a participating employer during the calendar year. [820 ILCS 80/5] For purposes of this Part, wages paid to employees by PEOs on behalf of a client employer shall be deemed wages paid by a client employer. [820 ILCS 80/5]

"Withdrawal" means a distribution of assets from an account.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.300 Responsibilities of the Board

The Board is responsible for the administration, management and oversight of the Program. Its responsibilities include, but are not limited to:

a) designing and establishing a Program that is simple, safe, efficient, and in accordance with best practices for retirement savings vehicles;

b) contracting with third party providers such as investment managers, recordkeepers, consultants, auditors, counsel, or other providers as necessary for the administration of the Program;

c) establishing an investment framework and selecting investment funds;

d) establishing the enrollment and contribution processes for participants, including voluntary participation;

e) identifying and contacting employers required to participate in the Program;

f) establishing the default investment option, default contribution rate, automatic-escalation process, and additional investment options, if any;

g) monitoring, replacing and removing investment options;

h) conducting outreach and education to employers and employees;

i) designing and disseminating program materials and information, including employee and employer information packets;

j) providing for the payment of any administrative or investment costs necessary to manage or operate the Program;

k) overseeing and managing the Fund;

l) preparing and adopting a written investment policy statement and risk management and oversight program; and

m) preparing and submitting an annual audit of the Program to the Governor, Comptroller, Treasurer, and Illinois General Assembly.

History

• Source: Amended at 46 Ill. Reg. 3194, effective February 8, 2022

74 Ill. Adm. Code 721.310 Responsibilities of the Treasurer

The Treasurer, or his or her designee, shall serve as chair of the Board. [820 ILCS 80/20] The Treasurer's duties include, but are not limited to, certifying to the Secretary of State, upon approval by the Treasurer, the Governor's Board appointments and preparing an annual report as specified in Section 80 of the Act. The Treasurer's Office serves as the administering agency for the administrative fund on behalf of the Board and shall provide administrative support to the Program as requested by the Board.

74 Ill. Adm. Code 721.320 Responsibilities of the Department

The Department is responsible for assessing and collecting penalties against employers who fail to enroll 1) employees in the Program and 2) remit their employee's contributions within the timeline prescribed by the Act and this Part. The Department may exchange information with the Board, Treasurer's Office and the Department of Employment Security for the purpose of implementing, administering and enforcing the Act.

History

• Source: Amended at 50 Ill. Reg. 1685, effective January 14, 2026

Chapter V Treasurer

Part 721 Secure Choice Savings Program

74 Ill. Adm. Code 721.330 Investment Policy and Guidelines

a) The investment policy is a written statement that describes the risk management and oversight program and should be designed to perform the following:

1. ensure that an effective risk management system is in place to monitor the risk levels of the Program;

2. outline the overarching investment framework of the Program, including, but not limited to, the investment options offered to participants and the composition of investment products;

3. expand upon the corresponding asset allocation and glide paths associated with the necessary investment options offered to participants;

4. provide an integrated process for overall risk management to ensure that the risks taken are prudent and properly managed and determine whether the risks taken are adequately compensated compared to applicable performance benchmarks and standards; and

5. assess investment returns and set applicable benchmarks to assess the investment returns for underlying investment funds.

b) The investment policy shall be adopted at a public meeting of the Board and posted on the Board's or Treasurer's website (see Section 721.720) at least 30 days prior to implementation of the policy. [820 ILCS 80/35]

c) The investment policy shall be reviewed annually by the Board.

d) To serve the best interest of participants, the Board shall abide by the following investment principles when selecting investment options for the Program:

1. Low Cost – The investment options shall be constructed and administered in a manner that minimizes fees to participants. It is understood that these costs diminish the total return accorded to participants. The lowest cost index-based portfolios shall be viewed as the default standard in evaluating investment management fees.

2. Open Architecture – The investment framework shall utilize an open architecture plan design, meaning it will not be required to use proprietary funds. The open architecture design shall allow the Board to select the underlying investment funds. The open architecture design shall also provide the Board with: access to best in class portfolio managers; the ability to use nonproprietary products; increased flexibility when choosing underlying strategies; and the ability to obtain the lowest participant fees for underlying investment funds and accounts.

3. Market Performance – The investment options may be selected and administered in a manner that consistently tracks market performance, as measured in comparison to applicable market benchmarks, thus eliminating the potential for significant underperformance.

4. Simplicity – The investment options shall be constructed and administered in a manner that provides a range of clear, easily understood options (defined in terms of expected risk/return) in order to maximize participation and savings. Furthermore, the Program shall be designed and administered in a manner that strives to achieve full transparency by delineating accordant investment expenses, program management fees, and administrative expenses. In addition, the Program shall provide a clear and simple investment approach for participants who fail to elect an investment option.

e) The Board shall establish investment options for any or all of the following categories:

1. The Life-Cycle Fund Option shall be the default investment option. This fund option shall utilize dynamic asset allocations that adjust throughout glide paths that are tailored to meet investment objectives based on various investor time horizons while maintaining an optimal balance of investment risk and return. The funds move towards a more risk-averse asset allocation as the target date approaches. These options shall be invested in investment vehicles, such as mutual funds, that may include some or all of the following asset classes:

A) domestic and international equity;

B) domestic and international fixed income;

C) real estate investment trusts (REITs); and

D) cash and cash equivalent (i.e., money market funds).

2. Static Portfolio Investment Option, which shall be composed of fixed asset allocations to fit a participant's risk profile (i.e., aggressive, moderate or conservative risk profiles). These options shall be invested in investment vehicles, such as mutual funds, that may include some or all of the following asset classes:

A) domestic and international equity;

B) domestic and international fixed income;

C) real estate investment trusts (REITs); and

D) cash and cash equivalent (i.e., money market funds).

3. Capital Preservation Investment Option, which shall be composed of high quality, short-term debt securities that reflect short-term interest rates with the objective of producing a rate of return that is higher than inflation while avoiding exposure to credit (i.e., default) risk and market price fluctuations.

f) The Board shall regularly monitor and review the investment options and its underlying investment funds that are offered to participants.

74 Ill. Adm. Code 721.340 Responsibilities of the Program Administrator

a) The program administrator is responsible for the day-to-day oversight, recordkeeping and management of the Program, including coordinating with any third party investment managers or other service providers to ensure the safekeeping of accounts. The program administrator shall abide by the Act, this Part, and the investment policy adopted by the Board.

b) The Board shall contract with the program administrator to provide services needed for the effective operation of the Program in accordance with all applicable federal and State laws and regulations. These services shall include, but are not limited to:

1. developing forms and any operating documents;

2. facilitating employer registration and participant enrollment;

3. maintaining participant and beneficiary accounts and information;

4. receiving contributions;

5. blocking receipt of annual contributions to a participant's account in excess of the maximum annual IRA contribution limit;

6. disbursing funds;

7. identifying abandoned accounts and addressing missing participants;

8. providing account owners with account information, transaction confirmations and account statements;

9. developing and filing required reports and forms with State and federal agencies; and

10. providing fraud prevention in accordance with industry standards.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.350 Applicable Law

For guidance in the interpretation of the Act and this Part, the Treasurer may refer to the Internal Revenue Code, the Final Rule of the Employee Benefits Security Administration, the U.S. Department of Labor on Employee Pension Benefit Plan (29 CFR 2510.3-2(d)), and the Interpretive Bulletin Relating to Payroll Deduction IRAs (29 CFR 2509.99-1).

74 Ill. Adm. Code 721.360 Program Fees

Total fees for the Program shall include the following categories:

a) Investment Fees

An investment manager will charge fees and expenses that are included in the cost of the underlying investment fund. When selecting an investment manager, the Board shall keep investment fees as low as possible, but in no event shall they exceed 0.25% of the total trust balance. [820 ILCS 80/30(m)]

b) Administrative Fees

The Board will charge administrative fees to participants that shall be consistent with industry standards. [820 ILCS 80/30(m)] Administrative fees include:

1. A State administration fee, not to exceed 0.05 percent (i.e., 5 basis points) of the participant's total account assets under management. This fee may be charged to defray certain expenses (e.g., marketing, auditing, program oversight) incurred by the Board or Treasurer in administering the Program.

2. A program administration fee to defray costs incurred by the program administrator for maintaining and administering the Program. This fee shall be made up of the following:

A) An asset-based fee not to exceed 0.25% (i.e., 25 basis points) of the participant's total account assets under management; and

B) A dollar-based fee not to exceed $4 per quarter.

3. Activity-Based Fees

The following additional fees will be charged based on each participant's elections or requests:

A) A paper delivery fee of $1.25 per quarter will be charged unless a participant elects to receive communications electronically.

B) A paper check fee of $5 per instance of a participant requesting a paper check for withdrawal of funds unless the participant elects to receive an electronic transfer of funds.

C) A priority delivery fee of $25 per instance of a participant requesting a priority delivery.

D) A rejected payment fee of $20 per instance of a participant Automated Clearing House (ACH) payment or a participant-provided check being rejected.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.370 Administrative Fund

The Illinois Secure Choice Administrative Fund is created as a nonappropriated separate and apart trust fund in the State Treasury. The Board shall use moneys in the Administrative Fund to pay for administrative expenses it incurs in the performance of its duties under the Act. The Board shall use moneys in the Administrative Fund to cover start-up administrative expenses it incurs in the performance of its duties under the Act. The Administrative Fund may receive any grants or other moneys designated for administrative purposes from the State, or any unit of federal or local government, or any other person, firm, partnership, or corporation. Any interest earnings that are attributable to moneys in the Administrative Fund must be deposited into the Administrative Fund. The State Treasurer shall be the administering agency for the Administrative Fund on behalf of the Board. [820 ILCS 80/16]

74 Ill. Adm. Code 721.380 Reporting Requirements

a) The Board shall annually submit to the Governor, the Comptroller, the Treasurer, and the General Assembly, during each fiscal year, by January 1 of the following year, an audited financial report, prepared in accordance with generally accepted accounting principles, on the operations of the Program. The report shall be provided electronically to any member of the General Assembly upon request. Additionally, the Board shall provide periodic reports at least annually to participating employers, reporting the names of each enrollee employed by the participating employer and the amounts of contributions made by each employee during the reporting period, as allowed under federal and State laws governing IRAs, as well as to enrollees, reporting contributions and investment income allocated to, withdrawals from, and balances in, their Program accounts for the reporting period.

b) For each State fiscal year, the Treasurer will prepare a report, in consultation with the Board, that includes a summary of the benefits provided by the Program, including the number of enrollees in the Program, the percentage and amounts of investment options and rates of return, and such other information that is relevant to make a full, fair, and effective disclosure of the operations of the Program and the Fund. The report will be made available on the Program website (see Section 721.720) by the January following the end of the State fiscal year. [820 ILCS 80/80]

History

• Source: Amended at 44 Ill. Reg. 5444, effective March 12, 2020

74 Ill. Adm. Code 721.390 Forms

The Board may use forms provided or promulgated by the IRS or other federal agencies pursuant to the Program. The Board may also promulgate its own forms reasonably necessary to implement the Program.

74 Ill. Adm. Code 721.395 Information Packets

Prior to the opening of the Program for enrollment, the Board shall design and disseminate to all employers an employer information packet and an employee information packet, which shall include background information on the Program. [820 ILCS 80/55(a)] The Board should strive to use plain language, whenever and wherever possible. The employee information packet shall include a disclosure form, as well as a document with information on how to opt out of the Program or select a contribution rate other than the default contribution rate. Participating employers shall provide the employee information packets to employees upon launch of the Program and to new employees at the time of hiring. Alternatively, participating employers shall provide the program administrator with the employee contact information necessary for the program administrator to send employees the employee information packet. Informational packets may be updated as necessary. Delivery of information packets may also be accomplished electronically in accordance with 26 CFR 1.401(a)-21 or in any other form permitted by the IRS.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.400 Eligibility

a) Provided they meet the requirements of section 408 and 408(A) of the Internal Revenue Code, the following individuals are eligible to participate in the Program:

1. All employees 18 years or older, who work for employers that had 5 or more employees during every quarter of the previous calendar year, that have been in business for at least 2 years, and that do not offer qualified retirement plans will be automatically enrolled in the Program;

2. All employees who work for a small employer that chooses to make the Program available to its employees;

3. Any employee who does not work for a participating employer may set up their own account but may be required to make contributions through methods other than a payroll deduction; and

4. Any individual with earned income during the calendar year, regardless of whether they work for an employer.

b) Employee count is based on employer-reported quarterly data submitted to the Department.

History

• Source: Amended at 50 Ill. Reg. 1685, effective January 14, 2026

74 Ill. Adm. Code 721.410 Registration and Enrollment

a) The Board shall establish an implementation timeline under which employers shall register for the Program and facilitate enrollment of their employees into the Program. The Board shall approve the implementation timeline at a public meeting of the Board and make the timeline publicly available by posting it on the Board's or Treasurer's website (see Section 721.720).

b) After implementation, the Board shall identify and notify employers not yet registered for the Program and facilitate enrollment of their employees into the Program on an annual basis.

c) The program administrator shall notify employers of the dates on which registration and enrollment of employees may begin and the dates by which registration of employers and enrollment of employees must be complete. The program administrator shall also provide employers with access to an online portal to register for the Program and facilitate enrollment of their employees.

d) Registration Information

1. In order to register for the Program, employers shall verify the following information on the online portal:

A) Employer name and assumed business name, if any;

B) Federal Employer Identification Number;

C) Employer mailing address;

D) Name, title, telephone number and email address of an individual designated by the employer to serve as the point of contact;

E) Number of employees; and

F) Any additional information necessary for registration.

2. In the event that any of the information listed in this subsection (d) is not available on the online portal or inaccurate, employers shall provide the missing or correct information, as applicable.

e) An employer who lacks access to the internet may register for the Program and facilitate enrollment of its employees through alternate means established by the Program, including by phone and paper forms.

f) By a date specified by the Board, employers shall facilitate enrollment of their employees into the Program and provide the program administrator with the following information for each employee:

1. Full legal name;

2. Social security number or taxpayer ID number;

3. Date of birth;

4. Mailing address;

5. Employee's phone number;

6. Employee's designated email address, if available; and

7. Any additional information needed to complete the enrollment when the information submitted for enrollment is unclear or insufficient, or when further information is required for purposes of administering the Program.

g) The Board shall establish an automatic enrollment process for employees, which shall include the establishment of an IRA by or on behalf of the State for each employee who has not opted out of the Program.

h) At the time of initial enrollment, employers shall automatically enroll in the Program each of their employees who are at least 18 years old, earn Illinois wages, and have been employed for 120 days or more by the employer. Following initial enrollment, employers shall enroll new employees as soon as practicable, but no later than 120 days after the employee is first employed by the employer.

i) Participating employers shall not contribute to or endorse the Program, or execute any discretionary authority, control, or responsibility with respect to the Program.

j) Any employer who is not required to participate in the Program but receives a registration notification from the program administrator shall indicate to the Program, through the online portal or by contacting the program administrator, that it is not required to participate.

History

• Source: Amended at 50 Ill. Reg. 1685, effective January 14, 2026

Chapter V Treasurer

Part 721 Secure Choice Savings Program

74 Ill. Adm. Code 721.415 Client Employer Registration and Enrollment

a) PEOs shall provide the Treasurer with a list of all Illinois client employers with whom they have a contract. On an annual basis, PEOs shall provide the following information for each client employer:

1. Full legal name;

2. Doing Business As (DBA) Name, if applicable;

3. FEIN, if available;

4. Contact person's full name;

5. Mailing address;

6. Email address, if available;

7. Client employer's phone number, if available;

8. Number of employees; and

9. Any additional information needed to contact the client employer when the information submitted is unclear or insufficient, or when further information is required for purposes of administering the Program.

b) The program administrator will contact each client employer to facilitate the registration and enrollment of its employees, as outlined in Section 721.410.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.420 Voluntary Participation

a) Small employers may choose to make the Program available to their employees.

b) Small employers who choose to make the Program available to their employees shall notify the program administrator and shall register for the Program using the online portal.

c) The program administrator will develop a process that allows for the enrollment of employees from small employers that choose to make the Program available to their employees.

d) The Board may, but need not, choose to allow for the automatic enrollment of employees from small employers as described in Section 721.410.

e) The Board may allow individuals who do not work for a participating employer to enroll in the Program. The program administrator will develop a process that allows those individuals to open accounts and make contributions separate from an employer payroll system.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.430 Opt Out Procedures

a) Employees who do not wish to participate in the Program will be given an opportunity to opt out before any payroll deduction contribution is made. The Board shall ensure that an employee has a minimum of 30 days to opt out of the Program from the time he or she is notified that the employer has facilitated the employee's enrollment before an IRA is established and the first payroll deduction is made.

b) The program administrator shall provide employees with a number of opt out methods, including electronically and by phone.

c) Any employee who does not opt out of the Program within the 30-day period described in subsection (a) will be automatically enrolled in the Program, and an IRA will be established for that employee pursuant to Section 721.410(g).

d) Any employee who is enrolled in the Program can cease participation and revoke his or her Roth IRA during the account revocation period.

e) Employees can opt out after the account revocation period at any time by giving notice to the program administrator, and participants may cease making contributions to their accounts at any time by giving notice to the program administrator. After receiving notice, the program administrator shall notify the employer to cease payroll deductions for the participants. Employers shall cease payroll deductions as soon as administratively feasible, not to exceed 30 days following receipt of the notification from the administrator.

f) Employees who opt out of the Program may enroll at any time by following the Program's enrollment procedures. Following notification of the employee's intent to enroll, employers shall enroll employees as soon as administratively feasible, not to exceed 30 days following receipt of the notification.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.440 Termination of Participation

a) An employer who begins offering a qualified retirement plan and becomes exempt from the Program may notify the program administrator of its exemption and terminate its participation in the Program.

b) Employers who choose to terminate participation in the Program must notify the program administrator and participants at least 60 days before payroll contributions cease and provide them with information describing how to contact the program administrator.

c) Accounts will remain in the Program and participants may continue to make contributions pursuant to Section 721.420(e), unless they elect to transfer or close their accounts, in accordance with Section 721.540 and Subpart F.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.500 Accounts

a) Accounts are IRAs into which participants contribute funds that, in turn, are invested in investment options established by the Board pursuant to Section 721.330, such as a Life-Cycle Fund Option. A separate account will be established for each participant and accounts are owned by the participant.

b) The savings accounts established under the Program shall be portable and allow for an enrollee to make contributions from multiple employers into a single account, either simultaneously or separately throughout the enrollee's lifetime.

c) An enrollee in the Program may have both a Roth IRA and a Traditional IRA through the Program.

History

• Source: Amended at 50 Ill. Reg. 1685, effective January 14, 2026

Chapter V Treasurer

Part 721 Secure Choice Savings Program

74 Ill. Adm. Code 721.510 Contributions

a) During the account revocation period, participant contributions will be directed into a capital preservation investment selected by the Board. As of the close of business on the business day coincident with or next following the expiration of the account revocation period, the existing balance in the account will be invested in the default investment option selected by the Board unless a participant has provided an alternate investment election.

b) Participant contributions made subsequent to the end of the account revocation period will be directed into the default investment option at the default contribution rate selected by the Board, unless a participant has provided an alternate investment election.

c) Participant contributions will be directed into the default investment option selected by the Board at the default contribution rate approved by the Board, unless a participant has provided alternate elections.

d) Participants may select any contribution rate by notifying the program administrator.

e) The program administrator shall notify employers of any changes to their participant employees' contribution rate, and the employer shall enter those changes into its payroll system as soon as administratively possible, not to exceed 30 days following receipt of the notification.

f) Participants may direct their contributions to any of the available fund options offered by the Program by notifying the program administrator.

g) The program administrator shall develop a process for participants to select their investment options and shall notify participants on how to make those selections.

h) On each payroll date following enrollment into the Program, and in accordance with their participant employees' contribution rate, employers shall make the necessary payroll deductions and remit the contributions to the program administrator as soon as administratively possible, not to exceed seven business days from the date of deduction. Notwithstanding the foregoing, amounts deducted by employers shall not exceed the amount of the employees' wages remaining after any payroll deductions required by law to have a higher precedence than the participant's Program deduction.

i) Failure by the employer to timely remit a participant employee's deducted wages to the program administrator constitutes an unlawful deduction under the Illinois Wage Payment and Collection Act [820 ILCS 115/9].

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.515 Automatic-Escalation

a) Contributions for participants who have been enrolled in the program for at least six months will automatically increase by 1% of an enrollee's wages at the beginning of each subsequent calendar year, up to a maximum of 10% of an enrollee's wages.

b) The program administrator shall notify all eligible enrollees in advance of any automatic contribution increase to allow for enrollees to opt out of automatic escalation or make alternative changes to their contribution rate.

c) The program administrator shall notify employers in advance of any automatic contribution increase for their eligible participant employees, and the employer shall enter the contribution changes into its payroll system as soon as administratively possible, not to exceed 30 days following receipt of the notification.

d) Participants may adjust the rate of their automatic increase, opt in to automatic escalation, or opt out of automatic escalation at any time by notifying the program administrator.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.520 Participant Statements

Account statements shall be provided to participants by the program administrator on a quarterly basis. The account statements may be sent by U.S. mail and/or provided electronically in accordance with 26 CFR 1.401(a)-21 or in any other form permitted by the IRS.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.530 Limits on Investment and Direction

a) The Board may set limits on the number of times participants can change the investment options of their contributions or adjust their contribution rate in any calendar year.

b) The Board shall select a default contribution rate for participants within the range of 3% to 6% of a participant's wages.

c) The Board shall select a default investment option for the accounts, in accordance with Section 721.330.

74 Ill. Adm. Code 721.540 Rollovers, Transfers and Conversions

a) At the direction of the Board, the program administrator shall develop processes through which a participant or beneficiary may roll over or transfer an account to a different retirement savings vehicle in accordance with the Internal Revenue Code. The Program may receive rollovers and transfers from other retirement savings vehicles in accordance with the Internal Revenue Code.

b) During a conversion from one program administrator to another, the program administrator shall take all commercially reasonable steps necessary to effect an orderly transition of the relevant portions of its duties and responsibilities in a manner that provides for reasonable consideration for the best interests of the participants and beneficiaries, avoids the likelihood of an increase in economic loss, and avoids the likelihood of resulting liability to the Board, its members, or the State. The program administrator shall not impede or delay the orderly transfer of its duties and responsibilities.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.600 Withdrawals

A participant may make a withdrawal of funds from his or her account at any time. Withdrawals shall be subject to any applicable State and federal income tax obligations and may be subject to penalties under the Internal Revenue Code (see 26 CFR 1.408A-6).

74 Ill. Adm. Code 721.610 Withdrawal Method

A participant may request a withdrawal of funds from his or her account by submitting a completed withdrawal request to the program administrator. This request may also be accomplished electronically or in any other form permitted by the IRS.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.620 Closure

A participant may close his or her account at his or her direction, or an account may be closed by a process established by the Board if:

a) all funds from the participant's account have been withdrawn pursuant to Section 721.600; or

b) all funds from the participant's account have been rolled over or transferred pursuant to Section 721.540.

74 Ill. Adm. Code 721.700 Abandoned Accounts

An account will be presumed abandoned according to the unclaimed property law of the state of the last known address of the participant. If the last known address of the participant is in Illinois, the provisions of the Revised Uniform Unclaimed Property Act [765 ILCS 1026] shall apply. If there is no last known address of the participant in the Program records, federal common law shall determine the state with the first priority claim.

74 Ill. Adm. Code 721.710 Disclosure

The Board may disclose aggregate data that does not include information that is identifiable by participant or employer for purposes of research or reporting associated with the Program. The Board may disclose information that it is required to disclose under the Freedom of Information Act [5 ILCS 140]. The Board may disclose account information to the program administrator, the providers of investments for the Program, the Treasurer's Office, Illinois Department of Revenue, Illinois Department of Employment Security, regulatory agencies to the extent disclosure is required by law, and to other persons or entities to the extent the disclosure is necessary to administer the Program.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

74 Ill. Adm. Code 721.720 Website

Information regarding the Program is available on the Treasurer's website at www.illinoistreasurer.gov or the Program's website at www.ilsecurechoice.com.

History

• Source: Amended at 47 Ill. Reg. 17903, effective November 16, 2023

Chapter XVI Treasurer

Part 722 Achieving a Better Life Experience (able) Account Program

74 Ill. Adm. Code 722.100 Establishment of Program

This Part governs the Achieving a Better Life Experience (ABLE) Account Program created by Section 16.6 of the State Treasurer Act [15 ILCS 505].

74 Ill. Adm. Code 722.110 Purpose of Program

a) The purpose of the ABLE Program is to encourage and assist individuals and families in saving private funds to support individuals with blindness or disabilities in order to maintain health, independence and quality of life, and to provide secure funding for disability-related expenses that will supplement, but not supplant, benefits provided through private insurance and federal and state medical and disability insurance.

b) The ABLE Program is established pursuant to the federal ABLE Act of 2014 (26 USC 529A), which amended the Internal Revenue Code of 1986 to allow states to establish tax-exempt savings accounts for individuals with blindness or disabilities if those savings are used to cover qualified disability expenses.

74 Ill. Adm. Code 722.120 Interstate Agreement or Compact

The Treasurer may enter into an interstate agreement for joint ABLE-related services, in order to achieve better programming and higher economies of scale in investment options.

74 Ill. Adm. Code 722.200 Definition of Terms

The following definitions shall apply to this Part:

"ABLE" means the federal Achieving a Better Life Experience Act of 2014 (26 U.S.C. 529A, as amended) that creates state-level tax-advantaged savings programs to assist persons with blindness or disability.

"ABLE Account Owner" means the owner of an established ABLE account or the prospective owner of an ABLE account that has yet to be established.

"ABLE Program" or "Program" means the Illinois ABLE Account Program administered by the State Treasurer under Section 16.6 of the Act.

"Act" means the State Treasurer Act, Section 16.6 of which establishes the Illinois ABLE Program.

"Account" means an individual investment account established and maintained in the ABLE Program.

"Account Administrator" means the person or entity selected by the State Treasurer to administer the daily operations of the ABLE account plan and provide marketing, recordkeeping, investment management, and other services for the plan. [15 ILCS 505/16.6(a)]

"Administrative Expenses" means all costs and expenses associated with the implementation and administration of the ABLE Program, including fees payable to third parties providing services related to the plan.

"Administrative Fund" means the Illinois ABLE Accounts Administrative Fund created in Section 5.868 of the State Finance Act [30 ILCS 105].

"Aggregate Account Balance" means the amount in an account on a particular date or the fair market value of an account on a particular date. [15 ILCS 505/16.6(a)]

"Applicant" means any person who is in the process of applying to open an account in the plan.

"Beneficiary" or "Designated Beneficiary" means the ABLE account owner. [15 ILCS 505/16.6(a)]

"Designated Representative" means a person or entity who is authorized to act on behalf of a "designated beneficiary".

"Disability Certification" means the certification described in Section 529A of the Code and Section 1.529A-1(b)(4) of the Treasury Regulation.

"Earnings" means the aggregate total of all dividends and interest income received by the ABLE savings account plan at any time following the plan's commencement. The aggregate total of dividends and interest income shall be reduced by the aggregate total of administrative expenses paid out of the ABLE Program prior to calculating earnings. Earnings shall be determined without regard to realized or unrealized capital gains and losses incurred by the plan.

"Eligible Individual" has the meaning given to that term under Section 529A of the Code. [15 ILCS 505/16.6(a)]

"FDIC" means the Federal Deposit Insurance Corporation.

"Internal Revenue Code" or "Code" means the federal Internal Revenue Code (26 U.S.C. 1 et seq., as amended).

"Investment Policy" means the written statement prepared and adopted by the Treasurer, that sets forth the policies, objectives, and guidelines that govern the investment of moneys in the ABLE Program.

"IRS" means the Internal Revenue Service.

"Participation Agreement" means an agreement to participate in the ABLE account plan between a designated beneficiary and the State, through its agencies and the State Treasurer. [15 ILCS 505/16.6(a)]

"Plan" means the ABLE savings account plan authorized by Section 16.6 of the Act.

"Qualified Disability Expenses" means expenses that are qualified under Section 529A of the Code.

"Qualified Withdrawal" or "Qualified Distribution" means a withdrawal from an ABLE account to pay the qualified disability expenses of the designated beneficiary of the account. [15 ILCS 505/16.6(a)]

"Secretary" means the U.S. Secretary of the Treasury.

"SSA" means the Social Security Administration.

"SSI Limit" means the Supplemental Security Income limit.

"Treasurer" means the duly elected Treasurer of the State of Illinois or the Treasurer's designee or designees.

"Treasurer's Website" means www.illinoistreasurer.gov, or any successor website.

"Treasury Regulation" means Treasury Regulation 1.529A-0 through 1.529A-8, codified at 26 CFR 1.529A-0 through 1.529A-8, as interpreted by Guidance Under Section 529A: Qualified ABLE Programs, 85 Fed. Reg. 74,010 (Nov. 19, 2020).

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.300 Responsibilities of the Treasurer

The Treasurer is the State administrator and program manager of the ABLE Program. The Treasurer's duties include, but are not limited to: the appointment of an account administrator and other tasks necessary to administer the Program. The Treasurer will contract with one or more third parties to carry out administrative duties, including: accepting and processing applications, maintaining accounting records, and making payments. The Treasurer is also responsible for establishing fees to be imposed on participants to cover the expenses of administration, recordkeeping and investment management.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.310 Investment Policy and Guidelines

a) The investment policy is a written statement prepared by the Treasurer describing the risk management and oversight program.

b) The investment policy will be designed to:

1. ensure that an effective risk management system is in place to monitor the risk levels of the ABLE Program;

2. ensure that the risks taken are prudent and properly managed;

3. provide an integrated process for overall risk management;

4. assess investment returns; and

5. assess risks to determine if the risks taken are adequately compensated compared to applicable performance benchmarks and standards.

c) The investment policy shall be reviewed annually.

d) The investment policy will be posted on the Treasurer's website.

e) The Treasurer will utilize the following investment principles when constructing, evaluating, and selecting the investment framework, investment options, and investment funds for ABLE accounts:

1. Simplicity – The Program's investment portfolios and asset allocation model will be constructed and administered in a manner that provides a range of clear, easily understood options (defined in terms of expected risk/return) in order to maximize participation and provide opportunities for investment returns for designated beneficiaries. Furthermore, the Program will be designed and administered in a manner that promotes full transparency by delineating all accordant investment expenses.

2. Low Cost – The Program's investment options will be constructed and administered in a manner that is designed to minimize investment fees to designated beneficiaries while still providing value to designated beneficiaries and meeting the investment option's risk and return objectives. The lowest cost index-based investment funds will be viewed as the default standard in evaluating investment management fees.

3. Investment Horizons and Risk Tolerances – The Program's investment options will account for a diversity of time horizons (e.g., short-term, long-term) and risk tolerances (e.g., aggressive, moderate, conservative) among designated beneficiaries. Portfolios will also be constructed in a manner that accounts for investment time horizons and risk tolerances through the utilization of investment options including, but not limited to, those listed in subsection (f).

4. Open Architecture – The Program's investment framework will utilize an open architecture plan design, meaning it will not be required to select proprietary investment funds or investment options. The open architecture design is intended to offer appropriate authority benefits, such as access to best in class managers, increased flexibility when choosing underlying investment strategies, and the ability to minimize designated beneficiary fees on underlying investment funds and accounts.

5. Passive Versus Active Funds – The Program's investment options will consist of passively managed strategies that replicate the risk and return characteristics of its respective benchmark. In asset classes in which passively managed strategies are not prevalent or in asset classes that are deemed to be inefficient, actively managed strategies may be considered.

f) The Treasurer will establish investment options for any or all of the following categories:

1. Static Portfolio Investment Option, which shall be composed of fixed asset allocations to fit a participant's risk profile (i.e., aggressive, moderate or conservative risk profiles). These options will be invested in pooled investment vehicles, such as mutual funds, that include some or all of the following asset classes:

A) domestic and international equity;

B) domestic and international fixed income;

C) real estate investment trusts (REITs); and

D) cash and cash equivalent (i.e., money market funds).

2. Banking Option, which will be a short-term investment option in the form of a Demand Deposit Account. The banking option will be a Federal Deposit Insurance Corporation (FDIC) insured bank account whose primary objective is the preservation and safety of the principal and the provision of a stable and low-risk rate of return.

3. Pre-mixed Dynamic Portfolio Option, which shall be composed of dynamic asset allocations and rebalancing of portfolios based on a participant's age and/or a target date. These options will be invested in pooled investment vehicles, such as mutual funds, that include some or all of the following asset classes:

A) domestic and international equity;

B) domestic and international fixed income;

C) real estate investment trusts (REITs); and

D) cash and cash equivalent (i.e., money market funds).

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.320 Account Administration/Administrator

The account administrator is responsible for the day-to-day oversight and management of the ABLE Program, including coordinating with any third party investment managers or recordkeepers to ensure the safekeeping of the Program accounts.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.330 Recordkeeping and Recordkeeping Responsibilities

The Treasurer will contract with an account administrator to manage recordkeeping for the ABLE Program. The account administrator shall provide all services needed for the effective operation of the Program in accordance with all applicable federal and State laws and regulations. These services shall include, but are not limited to:

a) developing forms and any operating documents;

b) processing enrollments and obtaining completed forms and follow-up documentation;

c) maintaining designated beneficiary accounts as outlined in ABLE;

d) receiving contributions;

e) blocking receipt of excess contributions;

f) disbursing funds;

g) providing designated beneficiaries with account information, transaction confirmations and account statements;

h) complying with applicable SSA, banking, tax and security law requirements;

i) filing required reports and forms with federal agencies; and

j) providing fraud prevention.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.340 Enrollment and Fees

a) An applicant may apply, on forms prescribed by the Treasurer, to open an ABLE account. A designated beneficiary may have only one account. The Treasurer may impose a nonrefundable application fee. The application fee shall not exceed $100.

b) The Treasurer may charge the designated beneficiary an annual administrative fee, not to exceed $20. This fee may be charged to defray certain expenses (e.g., marketing, auditing and program oversight) incurred by the Treasurer in administering the ABLE Program.

c) For the Program's investment options, the investment manager shall charge fees and expenses, which shall be reflected in the returns received from each investment option. The account administrator shall also charge fees and expenses for maintaining and administering the Program.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.350 Able Administrative Fund

The Illinois ABLE Accounts Administrative Fund is created as a non-appropriated trust fund in the State treasury. The State Treasurer shall use moneys in the Administrative Fund to cover administrative expenses incurred, as provided for in Section 530. The Administrative Fund may receive any grants or other moneys designated for administrative purposes from the State, or any unit of federal, state, or local government, or any other person, firm, partnership, or corporation. Any interest earnings that are attributable to moneys in the Administrative Fund must be deposited into the Administrative Fund. Any fees established by the State Treasurer to cover the costs of administration, recordkeeping, and investment management shall be deposited into the Administrative Fund. [15 ILCS 505/16.6(g)]

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.360 Marketing and Promotion

The Treasurer is responsible for the marketing and promotion of the Program and may hire a third party contractor to assist with these efforts.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.370 Contracting States (repealed)

History

• Source: Repealed at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.380 Forms

The Treasurer may use forms provided or promulgated by the SSA, the IRS, or other federal agencies pursuant to ABLE. The Treasurer may also promulgate its own forms reasonably necessary to implement the ABLE Program and comply with statute, rules and regulations. The account administrator is responsible for ensuring forms required by statute, rule or regulation are completed.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.400 Eligibility

An individual is an eligible individual for a taxable year if, during that taxable year, the individual meets the requirements under Section 529A(e)(1) of the Code.

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.410 Authority to Establish and Manage an Able Account

a) An eligible individual may establish an ABLE account on their own behalf as a designated beneficiary, or a person or entity recognized as a designated representative under this Section may establish an ABLE account for a designated beneficiary who is also an eligible individual.

b) A designated beneficiary is authorized to act on his or her own behalf unless the designated beneficiary is a minor or the designated beneficiary has been adjudicated to have a disability so that a guardian has been appointed.

c) A designated beneficiary who is authorized to act on their own behalf under subsection (b) may select any person or entity, not otherwise prohibited from acting as a fiduciary, to act as a designated representative.

d) If a designated beneficiary is not authorized under subsection (b) to act on their own behalf, the Treasurer shall recognize a person or entity listed in subsection (e) as a designated representative, in accordance with Section 1.529A-2(c)(1)(i)(C) of the Treasury Regulation.

e) The Treasurer will recognize the following as a designated representative without appointment by a court in the following order:

1. The agent named by the designated beneficiary in a property power of attorney in accordance with the Illinois Power of Attorney Act [755 ILCS 45] or the law of the state of residence of the designated beneficiary.

2. The designated beneficiary's guardian of the person, plenary guardian of the estate, limited guardian of financial or contractual matters, or any other State-appointed guardian, including the Office of the State Guardian. A guardian acting in this capacity shall not be required to seek court approval for any ABLE account activity.

3. A spouse, parent, sibling, or grandparent, in that order, of the designated beneficiary.

4. A representative payee appointed for the designated beneficiary by the SSA.

f) A designated representative acts in a fiduciary capacity to the designated beneficiary. [15 ILCS 505/16.6(a)]

g) A person or entity seeking to be recognized by the Treasurer as a designated representative shall provide a certification, made under penalties of perjury, as to the basis for the person’s or entity’s authority to act as the designated representative and that there is no other person or entity with a higher authority to establish the ABLE account under Section 529A of the Code and Section 1.529A-2(c)(1)(i) of the Treasury Regulation. The certification shall meet the requirements of the certification permitted by Section 1.529A-2(c)(1)(ii) of the Treasury Regulation. The Treasurer may require a person or entity seeking to open an account as a designated representative to provide documentation to establish by a preponderance of the evidence the person’s or entity’s authority to act on behalf of a designated beneficiary when the Treasurer determines proof of that authority is necessary or beneficial to the administration of the program.

h) If a designated representative is a nonresident of Illinois, the Clerk of the Circuit Court of Cook County will be the agent for service of process.

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.420 Enrollment Application

a) The Treasurer will require an applicant to submit an application, including the following information:

1. The name, address, social security number or individual taxpayer identification number, and birth date of the designated beneficiary;

2. The name, address, and social security number or individual taxpayer identification number of the designated representative, if the designated beneficiary is not the applicant;

3. Certification, under penalties of perjury, regarding the following subjects:

A) that all of the information provided on the form is accurate and complete;

B) that the designated beneficiary qualifies as an eligible individual under Section 529A(e) of the Code in accordance with Section 1.529A-2(d) – (e) of the Treasury Regulation;

C) that the applicant will promptly notify the ABLE Program if the designated beneficiary no longer qualifies as an eligible individual;

D) that, to the best of the applicant’s knowledge, no other ABLE program account exists for the benefit of the designated beneficiary, except in the case of a rollover from an account in another ABLE program; and

E) If the applicant is seeking to open the account as a designated representative, the applicant shall provide a certification as to the basis for the applicant's authority to act as the designated representative and that there is no other person or entity with a higher authority to establish the ABLE account under Section 529A of the Code and Section 1.529A-2(c)(1)(i) of the Treasury Regulation. The certification must be in accordance with Section 1.529A-2(c)(1)(ii) of the Treasury Regulation.

4. Any additional certification, information, or documentation that may be beneficial to the administration of the program, or that is needed to clarify the application when the information submitted in the application is unclear or insufficient, or when further information is required by the Code or Treasury Regulations.

b) Completed applications shall be submitted as specified on the application form.

c) Applications that are incomplete or fail to meet the requirements established by the Treasurer in this Part in an effort to comply with section 529A of the Internal Revenue Code or this Part shall be rejected.

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.430 Signature Authority

a) Account Signature Authority

1. The designated beneficiary has signature authority over their account.

2. Except as recognized in subsection (b), if a person or entity other than the designated beneficiary is recognized as the designated representative pursuant to Section 722.410, that person or entity has signature authority.

b) In the case of a designated representative selected by a designated beneficiary who is authorized to act on their own behalf under Section 722.410(b), both the designated representative and the designated beneficiary may have signature authority.

c) At any time, the designated beneficiary, who is authorized to act on their own, may remove and replace a designated representative. The replacement may be any other person or entity selected by the designated beneficiary pursuant to Section 722.410(c) or the designated beneficiary may exercise signature authority over their own account.

d) The designated beneficiary may designate a successor designated representative. In the absence of the designation of a successor by the designated beneficiary, a designated representative may designate a successor pursuant to the order specified in Section 722.410(e).

e) Co-signatories and sub-accounts may be allowed in accordance with Section 1.529A-2 of the Treasury Regulation.

History

• Source: Added at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.500 Able Accounts

ABLE accounts are investment savings accounts into which the designated beneficiary deposits funds that, in turn, are invested in marketplace-based investment options such as FDIC insured interest bearing accounts. Earnings on the investments are tax-free as long as withdrawals are used to pay qualified disability expenses. A separate account will be established for each designated beneficiary, and no more than one account will be established per beneficiary. If an ABLE account is established for a designated beneficiary, no account subsequently established for that beneficiary shall be treated as an ABLE account. The preceding sentence shall not apply in the case of an ABLE account established for purposes of a rollover as permitted under sections 529 and 529A of the Internal Revenue Code. [15 ILCS 505/16.6(d)]

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.510 Allocation of Investment Earnings or Losses

Investment earnings in excess of the administrative expenses of the ABLE Program and all monies collected by the ABLE Program as penalties as a result of withdrawals that are not used to pay qualified disability expenses, after the payment of expenses:

a) will be credited or paid monthly to participants in the ABLE Program in a manner that reflects:

1. the differing amounts of their respective investments in the ABLE Program; and

2. the differing periods of time for which those amounts were in the custody of the ABLE Program; and

b) will be allocated among the ABLE Program's underlying investment portfolios in a manner determined by the Treasurer.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.520 Limits on Investment and Directions

a) A designated beneficiary under the ABLE Program shall, no more than two times in any calendar year, direct the investment of any contributions to the Program, along with any earnings on those investments.

b) To the extent allowed under Section 529A of the Code and the Treasury Regulation, the Treasurer may, from time to time, establish a default investment allocation for accounts under the Program.

c) The assets of ABLE accounts and their income may not be used as security for a loan. All assets of the plan, including any contributions to accounts, are held in trust for the exclusive benefit of the designated beneficiary and shall be considered spendthrift accounts exempt from all of the designated beneficiary's creditors. [15 ILCS 505/16.6(m)]

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.530 Administrative Expenses

a) The administrative expenses of the ABLE Program may be paid from the Administrative Fund.

b) Administrative expenses may be paid from fees established pursuant to Section 340. The fees may be deducted from the principal and earnings of each account. Administrative expenses will be allocated among the ABLE Program's underlying investment portfolios to cover the costs of administration, recordkeeping, and investment management, and payments to third parties. These administrative fees, costs, and expenses may be imposed on accounts.

c) Subject to appropriation, the State Treasurer may pay administrative costs associated with the creation and management of the plan until sufficient assets are available in the Administrative Fund for that purpose. [15 ILCS 505/16.6(g)]

d) The Treasurer may permit a third party service provider to provide compensation to participating financial institutions or other financial services providers that promote the ABLE Program to their customers.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.540 Participant Statements

Account statements shall be provided to designated beneficiaries and designated representatives. The account statements may be sent via U.S. mail and/or provided electronically via website access or e-mail, as selected by the designated beneficiary or designated representative. Account statements may also be provided to other individuals authorized to receive that information under the Electronic Signatures in Global and National Commerce Act (15 USC 96 et seq.) and the Truth in Lending Act (15 USC 1601 et seq.).

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.550 Conversions and Rollovers

a) At the direction of the Treasurer, the account administrator shall develop processes through which a designated beneficiary may roll over an account from the Illinois ABLE Program to a different state's ABLE program, for either the same designated beneficiary or an allowable new eligible individual. The Illinois ABLE Program may receive rollovers from other states' ABLE programs. Rollover processes shall conform to the requirements set forth in the Treasury Regulation.

b) The Treasurer will require that during a conversion, the account administrator shall take all commercially reasonable steps necessary to effect an orderly transition of the relevant portions of its duties and responsibilities in a manner that provides for reasonable consideration for the best interests of the designated beneficiaries, avoids the likelihood of an increase in economic loss, and avoids the likelihood of resulting liability to the Treasurer. The Treasurer will further require that the account administrator shall use commercially reasonable efforts to ensure that the account administrator and its agent do not impede or delay the orderly transfer of its duties and responsibilities.

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.560 Contributions

a) Any person or entity may make contributions to an ABLE account after the account is opened, in accordance with and subject to, the limitations imposed by section 529A(b)(2) of the Code and Section 1.529A-2(g) of the Treasury Regulation.

b) Annual contributions are limited to the amount excluded from the federal gift tax under federal law (26 U.S.C. 2503(b)).

c) The ABLE Program will not accept contributions that exceed the annual contribution limit under Section 529A(b)(2)(B) of the Code except for compensation contributions under Section 529A(b)(2)(B)(ii) of the Code.

d) A designated beneficiary who is an employee as described under Section 529A(b)(7) of the Code may make additional compensation contributions as described in Section 529A(b)(2)(B)(ii) and Section 1.529A-2(g)(2)(ii) of the Treasury Regulation. The employed designated beneficiary or, if the employed designated beneficiary has a designated representative, the designated representative is solely responsible for ensuring that any compensation contribution made by the designated beneficiary meets the requirements of Section 529A(b)(2)(B)(ii) of the Code and Section 1.529A-2(g)(2)(ii) of the Treasury Regulation and for requesting the return of any excess compensation contributions.

e) An employed designated beneficiary seeking to make contributions under Section 529A(b)(2)(B)(ii) of the Code or the beneficiary’s designated representative shall certify under penalties of perjury in accordance with Section 1.529A-2(g)(v)(B) of the Treasury Regulation that:

1. the designated beneficiary is an employed designated beneficiary; and

2. the designated beneficiary’s contributions of compensation are not excess compensation contributions.

f) The ABLE Program may allow the designated beneficiary or designated representative to restrict persons that may make contributions to the designated beneficiary’s account.

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.570 Aggregate Account Balance Limits

The ABLE Program shall provide safeguards to prevent aggregate contributions on behalf of a designated beneficiary in excess of the limit under 23 Ill. Adm. Code 2500.90 pursuant to Section 529(b)(6) of the Code. As permitted under Section 1.529A-2(g)(3)(ii) of the Treasury Regulation, the ABLE Program will comply with this requirement by refusing to accept any additional contributions to an ABLE account, except as otherwise permitted by Section 1.529A-2 of the Treasury Regulation, while the aggregate account balance in that account equals or exceeds the limit established by the State under 23 Ill. Adm. Code 2500.90 pursuant to Section 529(b)(6) of the Code. Once the aggregate account balance falls below that limit, additional contributions may again be accepted, subject to the annual contribution limit described in Section 722.560 of this Part. For purposes of this Section, aggregate contributions include contributions under any prior qualified ABLE program of any state or agency or instrumentality of either.

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.600 Qualified Withdrawals/Distributions

A qualified withdrawal/distribution is a withdrawal or a distribution from an ABLE account to pay the qualified disability expenses of the designated beneficiary of the account.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.610 Qualified Disability Expense

Under section 529A(e)(5) of the Code, qualified disabilities expenses are expenses related to the eligible individual's blindness or disability that are made for the benefit of an eligible individual who is the designated beneficiary, including, but not limited to, the following expenses:

a) education;

b) housing;

c) transportation;

d) employment training and support;

e) assistive technology and personal support services;

f) health, prevention and wellness;

g) financial management and administrative services;

h) legal fees;

i) expenses for oversight and monitoring;

j) funeral and burial expenses; and

k) other expenses approved by the Secretary under federal regulations and/or guidance.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.630 Federal Reporting Requirements

The Program will comply with all reporting responsibilities as outlined in Section 529A of the Code and the Treasury Regulation. The Treasurer will compile or cause to be compiled the needed information to complete any reports.

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.700 Death of a Designated Beneficiary

Upon the death of the designated beneficiary, proceeds from an account may be transferred to the estate of a designated beneficiary, or to an account for another eligible individual specified by the designated beneficiary or the estate of the designated beneficiary, or transferred pursuant to a payable on death account agreement. A payable on death account agreement may be executed by the designated beneficiary or a designated representative who has been granted such power. Upon the death of a designated beneficiary, prior to distribution of the balance to the estate, account for another eligible individual, or transfer pursuant to a payable on death account agreement, the State Treasurer may require verification that the funeral and burial expenses of the designated beneficiary have been paid. An agency or instrumentality of the State may not seek payment under section 529A(f) of the Code from the account or its proceeds for benefits provided to a designated beneficiary. [15 ILCS 505/16.6(o)]

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.710 Missing Persons/Abandonment

An ABLE account will be presumed abandoned according to the unclaimed property law of the state of the last known address of the designated beneficiary. If the last known address of the designated beneficiary is in Illinois, the provisions of the Revised Uniform Unclaimed Property Act [765 ILCS 1026] shall apply. If there is no last known address of the designated beneficiary in the records of the Treasurer, pursuant to federal common law the provisions of the Revised Uniform Unclaimed Property Act shall apply.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.720 Nonassignability

The contract entered into between the Treasurer and a designated beneficiary under the Program, and the benefits, proceeds or payments under the Program cannot be sold, assigned, pledged, commuted, transferred or otherwise conveyed by a vendor, State agency or designated beneficiary. Any attempt to assign or transfer shall not be recognized and shall impose no liability upon the Treasurer.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.730 Website

Information regarding the ABLE program is available on the Treasurer's website.

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

74 Ill. Adm. Code 722.740 Excess Contributions

a) If any contribution or any portion of a contribution is deposited into or allocated to an account in excess of the limits under Section 560(b) or Section 570, or the Program is made aware that it received an excess compensation contribution under Section 560(d), the Program must return the amount of the excess contribution to the person or persons that made the contribution along with all net income attributable to such excess, in accordance with and as required by Section 1.529A-2(g)(4) of the Treasury Regulation. In accordance with Section 1.529A-6(a)(2) of the Treasury Regulation, the Program must also furnish the required federal tax information to the designated beneficiary of the ABLE account and to each contributor who received a returned contribution in accordance with Section 1.429A-2(g)(4) of the Treasury Regulation. Tax consequences of any excess contribution are the responsibility of the person who made the excess contribution.

b) If a contribution or portion of a contribution in excess of the limits under Section 722.560 or 722.570 is returned to a contributor other than the designated beneficiary, the ABLE Program must notify the designated beneficiary or the designated representative of such return at the time of the return. No notification is required if the amounts are rejected by the Program before they are deposited or allocated into the designated beneficiary’s account.

c) If the Program directs the account administrator to carry out the Program’s obligations under this Section, the account administrator will carry out these obligations as required by Sections 1.529A-2(g)(4) and 1.529A-6(a), (b) of the Treasury Regulation.

History

• Source: Amended at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.750 Change of Designated Beneficiary

A change in the designated beneficiary during the lifetime of the designated beneficiary shall be permitted to the extent allowed by Section 529A of the Code and the Treasury Regulation.

History

• Source: Added at 46 Ill. Reg. 19242, effective November 20, 2022

74 Ill. Adm. Code 722.800 Amendment of Rules

Notice of any proposed substantive amendment to this Part shall be provided to all designated beneficiaries and designated representatives prior to adoption. Notice may be provided by e-mail or U.S. mail. The notice need not include a full copy of the proposed amendments. Amendments to this Part automatically amend the participation agreement. Any amendments to the operating procedures and policies of the plan shall automatically amend the participation agreement after adoption by the Treasurer. [15 ILCS 505/16.6(l)]

History

• Source: Amended at 45 Ill. Reg. 4133, effective March 12, 2021

Chapter V Treasurer

Part 725 Capital Crimes Litigation Trust Fund

74 Ill. Adm. Code 725.5 Grant Application

a) In each State fiscal year, the Cook County State's Attorney and the Cook County Public Defender shall each make a separate application to the State Treasurer for a grant from the Capital Litigation Trust Fund. The form shall be created and provided by the State Treasurer's office.

b) The State Treasurer, based on the grant application, shall make grants to the Cook County Treasurer from the Capital Litigation Trust Fund. Grants shall be made as soon as possible after the beginning of the State fiscal year.

c) The amount of each grant shall be equal to the amount that has been appropriated to the State Treasurer from the General Assembly for the Capital Litigation Trust Fund for grants to be made by the State Treasurer to the Cook County Treasurer.

74 Ill. Adm. Code 725.10 Report Requirements

a) The Cook County Treasurer, as the grant recipient, shall report on a monthly basis the following to the State Treasurer:

1. how much of each grant has been expended;

2. how much of each grant is remaining; and

3. the purpose for which any grant money has been used.

b) The monthly reports to the State Treasurer by the Cook County Treasurer shall contain a certification that the expenditures of the funds have been made for expenses that are reasonable, necessary, and appropriate for payment from the Trust Fund.

c) The Cook County Treasurer shall keep funds in separate accounts for the Cook County State's Attorney, the Cook County Public Defender, and appointed trial lawyers other than the Cook County Public Defender.

74 Ill. Adm. Code 725.20 Record Requirements

a) The Cook County Treasurer shall maintain, for a minimum of five years after an expenditure is made, adequate books, records, and supporting documents to verify the following:

1. the amount of funds received;

2. the recipients of the funds; and

3. the purpose of all disbursements of funds in conjunction with the application.

b) All books, records, and supporting documentation related to expenditure of grants shall be available for review by the State Treasurer and the Auditor General.

c) As generally accepted accounting principles, the Treasurer incorporates by reference "Accounting Standards" of the Financial Accounting Standards Board, 401 Merritt 7, Norwalk, Connecticut 06856, (203)847-0700, as of January 1, 2000, no subsequent dates or editions.

74 Ill. Adm. Code 725.30 State Treasurer's Report Requirements

The State Treasurer as necessary shall report to the General Assembly any unexpended balance of funds of the grant recipient.

Subchapter d Home Services Program

Part 730 Rules of Practice in Administrative Hearings

74 Ill. Adm. Code 730.110 Applicability

This Part shall apply to all Administrative Hearings conducted by the State Treasurer that are not specifically provided for under any other Section of the Illinois Administrative Code.

74 Ill. Adm. Code 730.120 Definitions

As used in this Part, unless the context otherwise requires:

"Administrative Hearing" or "Hearing" means the adjudicatory proceeding used to resolve a contested case.

"Complainant" means the Party who initiates the Administrative Hearing.

"Contested Case" has the meaning ascribed in Section 1-30 of the IAPA.

"Hearing Officer" means the Administrative Law Judge as defined in Section 1-15 of the IAPA, and is the person appointed or retained by the Treasurer to preside over the Administrative Hearing proceedings.

"IAPA" means the Illinois Administrative Procedure Act [5 ILCS 100].

"Notice of Hearing" means a notice of an Administrative Hearing.

"Order" has the meaning ascribed in Section 1-50 of the IAPA.

"Party" has the meaning ascribed in Section 1-55 of the IAPA.

"Person" has the meaning ascribed in Section 1-60 of the IAPA.

"Petition for Hearing" means a request for an Administrative Hearing.

"Proof of Service" means evidence submitted specifying the date, method and person who served a document on another Party. All proofs of service must be signed by the server.

"Respondent" means any Party who answers/responds to a Notice of Charges, Petition for Hearing, or Motion.

"Treasurer" or "State Treasurer" means the duly elected Treasurer of the State of Illinois.

74 Ill. Adm. Code 730.130 Modification of Procedures

a) The Hearing Officer may modify the procedures promulgated in this Part under the following circumstances:

1. The Parties agree by written stipulation;

2. Upon motion by a Party who cannot obtain agreement from other Parties; or

3. Upon the Hearing Officer's own motion when he or she finds that compliance with the rule is unreasonable or unnecessarily burdensome in a particular instance.

b) When a motion for modification is brought, the movant must show that compliance with the rule from which the modification or waiver is requested would, in that particular instance, be unreasonable or unnecessarily burdensome.

c) When the Hearing Officer rules on a motion for modification, he or she shall set forth the reasons for his or her decision and shall notify the Parties within a reasonable time thereafter.

74 Ill. Adm. Code 730.140 Initiating an Administrative Hearing

a) An Administrative Hearing is initiated by a Party serving a Petition for Hearing on the Treasurer, or by the Treasurer serving a Notice of Hearing on a Party. In either case, the service must be made within the required period of time specifically set forth in the Act.

b) The Petition for Hearing/Notice of Hearing must be in writing and signed by the Complainant.

c) The Petition for Hearing must contain the following information:

1. The name of the Parties involved;

2. The subject matter of the Administrative Hearing;

3. The date; and

4. A list of the Treasurer's findings and/or decisions that are being challenged, and the specific reasons why the Complainant asserts that the Treasurer's findings and/or decisions are incorrect.

d) The Notice of Hearing must contain all information set forth in Section 730.190.

e) The Petition for Hearing must be personally delivered, or mailed via certified mail, return receipt requested, with Proof of Service attached, to:

Illinois State Treasurer

Office of the General Counsel

219 State House

Springfield IL 62706

f) The Notice of Hearing by the Treasurer must be personally delivered, or mailed via certified mail, return receipt requested, with Proof of Service attached, to the Party's last known address.

74 Ill. Adm. Code 730.150 Form of Documents

a) All documents submitted pursuant to an Administrative Hearing shall be typewritten, on 8½ by 11 inch white paper. The first page of each document shall set forth the names of the Parties and the Hearing number assigned to the case by the Treasurer. A Petition for Hearing that is filed before a Hearing number is assigned shall contain a space for entry of the assigned Hearing number.

b) All documents submitted to the Treasurer that require verification shall be signed by the Party filing them. All other documents submitted by the Party shall be signed by the Party or his or her representative. That signature constitutes a representation by the Party or the representative that the Party or representative has read the documents and that, to the best of the Party's or representative's knowledge, information and belief, the statements made in the documents are true and are not made for purpose of delay or harassment.

c) All documents submitted to the Treasurer after the Petition for Hearing shall be submitted in duplicate, together with a Proof of Service, unless other arrangements are agreed to between the Parties. Any Party submitting or filing a document in the administrative proceedings must also simultaneously send a copy to the opposing Party and the Hearing Officer at their designated addresses.

d) Except as provided in Section 730.140, documents may be sent by telefax or e-mail attachment if the receiving Party or his or her representative agrees. When a telefax or an unsigned e-mail communication is used, a hard copy shall also be sent by regular mail. The failure to send or receive a hard copy shall not negate or render invalid the contents of the original communication. The date the telefax or e-mail attachment is sent shall be deemed the date notice is given.

74 Ill. Adm. Code 730.160 Service

a) Service of all documents after a Petition for Hearing or Notice of Hearing has been initiated shall be made by personal delivery upon all Parties or by U.S. Mail, properly addressed, with postage prepaid, unless otherwise required in this Section. Proof of service must be attached to the original of any document served. The Parties may agree to service by telefax or e-mail attachment; however, if the Parties so agree, the proof of service shall contain a confirmation of receipt attached to the document faxed or e-mailed.

b) Service on the Treasurer is made by serving the Office of the General Counsel, at the Springfield office address, unless otherwise designated by the Treasurer. Service on a Party other than the Treasurer shall be at its last known address, unless otherwise designated by the Party.

74 Ill. Adm. Code 730.170 Voluntary Dismissal or Withdrawal

Prior to the hearing, an unopposed motion to voluntarily dismiss or withdraw a Petition for Hearing/Notice of Hearing shall be granted, and the Hearing Officer shall issue an order dismissing the Petition for Hearing/Notice of Hearing and its underlying cause with prejudice. However, the Hearing Officer, within his or her discretion, may hear and decide a motion that has been filed prior to a motion to voluntarily dismiss or withdraw when that prior filed motion could result in a final disposition of the cause. After a hearing begins or when a motion to voluntarily dismiss or withdraw is challenged, the Hearing Officer shall exercise discretion in allowing the motion when the voluntary dismissal or withdrawal would serve the interests of justice.

74 Ill. Adm. Code 730.180 Waiver of Issues

Any issues that are not specifically, directly or implicitly addressed in the Petition for Hearing or Notice of Hearing will be waived in any Administrative Hearing.

74 Ill. Adm. Code 730.190 Notice of Hearing

Upon receipt by the Treasurer of a properly submitted Petition for Hearing, a Notice of Hearing shall be served, personally or by certified or registered mail, return receipt requested, by the Treasurer upon the Parties or their agents appointed to receive service of process. Whether in response to a Petition for Hearing or upon the Treasurer's action, a Notice of Hearing shall include the following:

a) A statement of the date, time, place, and nature of the Administrative Hearing;

b) A statement of the legal authority and jurisdiction under which the Administrative Hearing is to be held;

c) A reference to the particular Sections of the substantive and procedural statute and program rules involved;

d) If upon the Treasurer's action, a list of the Treasurer's charges against the Party;

e) A short and plain statement of the matters asserted, the consequences of a failure to respond, and the assigned Hearing number; and

f) The names and mailing addresses of the Hearing Officer, all Parties involved, and all other persons to whom the Treasurer gives Notice of Hearing, unless otherwise confidential by law. [5 ILCS 100/10-25]

74 Ill. Adm. Code 730.200 Requirement of an Answer

a) In all contested cases initiated by either a Petition for Hearing or Notice of Hearing, the Respondent shall file an answer within 28 days after the date on which the Petition for Hearing/Notice of Hearing was served. The answer shall be in writing, signed by the Respondent, and shall contain a specific response to each allegation. The answer shall either admit or deny the allegation, or shall state that the Respondent has insufficient information to either admit or deny the allegation. Any answer that states that the Respondent has insufficient information to admit or deny the allegation shall be accompanied by an affidavit of the Respondent attesting to the truth of this assertion.

b) On motion by any Party, the Hearing Officer will issue a notice to plead or be held in default to any Respondent who has failed to answer or otherwise file a responsive pleading. If, within 15 days after issuance of that notice, the Respondent does not answer or otherwise file a responsive pleading, the Respondent will be held in default and a default order may be entered by the Hearing Officer.

74 Ill. Adm. Code 730.210 Hearing Officer

a) In any Administrative Hearing, the Treasurer shall appoint and/or retain an impartial person as a Hearing Officer to conduct the hearing. The Hearing Officer shall be an impartial attorney licensed to practice law in Illinois and of high integrity and good personal repute. An attorney subject to disciplinary action in the past five years, or under current investigation by the Attorney Registration and Disciplinary Commission (ARDC), may not be a Hearing Officer.

b) The Treasurer is not prohibited from selecting an employee of the Treasurer to act as the Hearing Officer provided that the employee meets the qualifications stated in subsection (a) and has not had any direct involvement with the case. Mere familiarity with the facts shall not disqualify an otherwise qualified person from action as the Hearing Officer.

c) The Hearing Officer shall conduct the hearing and, with respect to the Administrative Hearing, shall have, but is not limited to, the following powers:

1. To administer, or to authorize a court reporter to administer, oaths;

2. To examine witnesses;

3. To authorize the issuance of subpoenas;

4. To rule upon the admissibility of evidence;

5. To grant specific extensions of time;

6. To read into the hearing record any stipulations of fact and other matters agreed upon at the pre-hearing conference and to enter into the record any pre-hearing orders; and

7. To render decisions and issue orders and clarifications.

74 Ill. Adm. Code 730.220 Hearing Officer Recusal

a) If any Party has reason to believe the Hearing Officer has a personal bias or conflict of interest, that Party may file a timely and sufficient motion, supported by affidavit, requesting that the Hearing Officer recuse himself or herself from hearing the case. The affidavit shall set forth allegations of personal bias or conflict of interest of the Hearing Officer. If a Hearing Officer recuses himself or herself, the Treasurer shall appoint and/or retain another Hearing Officer.

b) An adverse ruling, in and of itself, shall not constitute bias or conflict of interest. [5 ILCS 100/10-30(b)]

c) The Hearing Officer may at any time voluntarily disqualify himself or herself upon written notice to the Treasurer.

74 Ill. Adm. Code 730.230 Ex Parte Communication

a) Once appointed and/or retained, the Hearing Officer shall not communicate directly or indirectly with any Party or any person interested in the outcome of the proceeding, with respect to the merits of any case not concluded, except upon notice and opportunity for all Parties to participate. [5 ILCS 100/10-60(a)] The Hearing Officer may impose and enforce sanctions against a Party who violates this Section.

b) An ex parte communication received by the Hearing Officer shall be made a part of the record of the pending matter, including all written communications, all written responses to the communications, and a memorandum stating the substance of all oral communications and all responses made and the identity of each person from whom the ex parte communication was received. Communications regarding matters of procedure and practice, such as the format of pleadings, number of copies required, manner of service, and status of proceedings, are not considered ex parte communications under this Section. [5 ILCS 100/10-60(c) and (d)]

74 Ill. Adm. Code 730.240 Representation and Appearance

a) Any Party may be represented by an attorney, provided that the attorney is licensed to practice law in Illinois or, with the permission of the Hearing Officer, by an attorney permitted to practice law in Illinois pro hac vice pursuant to Illinois Supreme Court Rules, including the required filing of a statement and payment of fees.

b) Attorneys who appear in a representative capacity must file a written Notice of Appearance setting forth the following:

1. The name, address, telephone number, and ARDC number of the attorney upon whom service of documents may be made;

2. The name and address of the Party represented; and

3. An affirmative statement indicating that the attorney is licensed to practice law in Illinois (or the statement required by attorneys appearing pro hac vice pursuant to Illinois Supreme Court Rules).

c) A natural person who is a Party may appear and be heard on his or her own behalf. A Party may use an interpreter if necessary.

d) A corporation or association may be represented by a corporate officer, provided that the officer is qualified to practice law in Illinois, as set forth in subsection (a).

e) Only attorneys licensed to practice law in Illinois or appearing pro hac vice, as set forth in subsection (a), shall represent any other individuals or entities in an Administrative Hearing.

f) All attorneys appearing in Administrative Hearing proceedings before the Hearing Officer shall conform their conduct to the Illinois Rules of Professional Conduct. In the event that an attorney's behavior substantially impairs the administration of the Administrative Hearing, the Hearing Officer may take the following actions in a progressive manner:

1. Substitution of written argument for oral argument;

2. Exclusion of the attorney from the proceeding; and

3. Suspension or revocation of the attorney's right to appear before the Hearing Officer in that contested case.

g) If the Hearing Officer takes any of the actions listed in subsection (f), it shall be done as a matter of record. The Hearing Officer shall state for the record the specific reasons for the action.

h) Non-attorneys appearing in proceedings before the Treasurer shall be courteous and dignified and shall maintain the decorum of the Administrative Hearing.

i) An attorney may withdraw his or her appearance and/or representation only upon motion and appropriate ruling by the Hearing Officer. However, substitution of attorneys is permitted without motion if notice is given to all Parties and to the Hearing Officer, the substitution will not delay the proceedings, and a statement to that effect is contained in the notice.

74 Ill. Adm. Code 730.250 Motions

a) Motions, unless made during a hearing, shall be in writing, shall specify the relief and/or order sought, and shall be served on all Parties and filed with the Treasurer.

b) When any motion is filed, the opposing Party has 28 days, or such other period as the Hearing Officer may prescribe, to file a written response setting forth the arguments, authorities relied upon, and affidavits or other supporting evidence. The moving Party shall have 14 days, or such other period as the Hearing Officer may prescribe, to file a written reply. When any oral motion is presented during a hearing, the Respondent may respond instanter or may request leave to file a written response within the same time periods set forth in this subsection. If no response is filed nor orally presented, the responding Party's right to object will be deemed waived.

c) The Hearing Officer may allow oral argument and is authorized to question either Party if the Hearing Officer deems it necessary for a fuller understanding of the issues presented. When facts that are not part of the record in the case are alleged in support of a motion, an affidavit shall be attached to the motion setting forth those facts. A written motion shall be disposed of by written order and notice to all Parties.

d) The Hearing Officer shall rule, within a reasonable time, upon all motions properly presented before him or her. All motions and corresponding orders shall be part of the administrative record. Any dispositive motion that disposes of all claims or all Parties in the action that is granted by the Hearing Officer shall be part of the administrative record and shall be treated as a final decision for purposes of appeal.

e) Before granting any dispositive motion, the Hearing Officer may first afford the Party an opportunity to cure defects in pleading or proof. The ruling whether to afford that opportunity to cure defects shall be made part of the administrative record in accordance with Section 10-35 of the IAPA.

f) Unless otherwise ordered, the filing of a motion or response shall not stay the proceeding nor extend the time for the performance of any act.

g) In calculating the timelines specified in this Part, Section 1.11 of the Statute on Statutes [5 ILCS 70] shall apply.

74 Ill. Adm. Code 730.260 Discovery

a) Discovery shall only commence after a Petition for Hearing/Notice of Hearing has been initiated/filed, docketed and assigned a Hearing Number by the Treasurer. Discovery shall not be the subject of motions presented to the Hearing Officer, except when a motion is made alleging failure to comply with this Section.

b) The following discovery procedures shall be used upon service of a written request on the opposing Party:

1. Interrogatories;

2. Request for production of documents or things;

3. Depositions; and

4. Requests to Admit.

c) The Hearing Officer may restrict discovery when necessary to prevent undue delay or harassment.

d) Upon written request served on the opposing Party, any Party shall be entitled to the following, at a minimum:

1. The name and address of all witnesses who may be called to testify at the Administrative Hearing;

2. Copies of all documents that may be offered as evidence; and

3. A description of any other evidence that may be offered.

e) This minimum information shall be provided within 28 days after receipt of the discovery request, unless a longer or shorter period is agreed upon by the Parties or granted by the Hearing Officer.

f) When a Party obtains or is in possession of exculpatory evidence, that Party must submit that evidence to the opposing Party immediately.

g) A Party shall respond to any properly served written discovery requests. The responding Party is required to answer the discovery request within 28 days after receipt, unless a longer or shorter period is agreed upon by the Parties or granted by the Hearing Officer. If a Party fails to answer a request to admit within 28 days, the request to admit shall be deemed admitted against that Party.

h) Nothing in this Section shall prevent the Parties in a contested case from agreeing to a mutual exchange of information that is more extensive than what is provided for in this Section. When the Parties agree to the use of an evidence deposition, that agreement shall be in writing and shall operate as a waiver of any objection not made during the deposition, except for an objection that the testimony of the witness is not relevant to the case.

i) There shall be a continuing obligation upon the Parties to tender new information as it becomes available, as well as a continuing obligation to supplement any disclosures or responses to discovery requests to include information acquired after original submission.

74 Ill. Adm. Code 730.270 Prehearing Conference

a) Upon motion by the Hearing Officer or any Party, the Hearing Officer may direct the Parties to attend a prehearing conference, at a mutually convenient time and place prior to the Administrative Hearing date, for the purpose of:

1. Simplifying the issues;

2. Limiting the issues;

3. Amending the Petition for Hearing or Notice of Hearing, if necessary;

4. Stipulating to facts and/or admissions;

5. Limiting the number of witnesses or evidence;

6. Mutually exchanging prepared testimony and exhibits; and

7. Any other matters that aid in the simplification of the Administrative Hearing.

b) Any agreements, understandings or conclusions made at a prehearing conference shall be in the form of a prehearing order, signed by the Hearing Officer and all Parties or representatives involved in the Administrative Hearing, and shall become a part of the administrative record.

c) Unless otherwise precluded by law, any case may be disposed of by stipulation, agreed settlement, consent order or default. Any settlement must be signed by the Hearing Officer and all Parties involved. The settlement agreement shall be memorialized by a report and the Hearing Officer shall enter an Order dismissing the case with prejudice.

74 Ill. Adm. Code 730.280 Hearings

a) All Administrative Hearings shall be conducted at a location determined by the Treasurer, unless otherwise agreed to by the Parties and the Hearing Officer.

b) The sequence to be followed for all Administrative Hearings is as follows:

1. Preliminary Hearing − The purpose is to set a date on which all Parties expect to be prepared and to rule on any preliminary motions that are presented. This may be eliminated by agreement of the Parties and/or ordered by the Hearing Officer.

2. Prehearing Conference.

3. Hearings

A) Preliminary Matters − motions, attempts to narrow issues or limit evidence;

B) Opening Statements − the Party bearing the burden of proof proceeds first;

C) Case in Chief − evidence and witnesses are presented by the Party bearing the burden of proof. After a witness' testimony is completed, he or she is subject to cross-examination;

D) Defense − evidence and witnesses may be presented by the opposing Party;

E) Closing Statements − the Party bearing the burden of proof proceeds first, then the opposing Party, then a final reply by the Party bearing the burden of proof; and

F) Final Decision.

74 Ill. Adm. Code 730.290 Postponement or Continuance of Hearing

Upon motion by a Party or decision of the Hearing Officer, a hearing may be postponed or continued for just cause. Written notice of any postponement or continuance shall be given to all Parties within a reasonable time in advance of the previously scheduled hearing date. All Parties shall attempt to avoid unnecessary and repetitive postponements or continuances so that the administrative proceedings may be resolved expeditiously.

74 Ill. Adm. Code 730.300 Failure to Appear

Any Party failing to appear at a hearing, other than a preliminary hearing or prehearing conference, shall waive its right to present evidence. If the Hearing Officer determines that proper notice was given, he or she shall grant affirmative relief to the Party appearing or shall enter an Order dismissing the Petition for Hearing/Notice of Hearing with prejudice.

74 Ill. Adm. Code 730.310 Burden of Proof

The burden of proof, which includes both the burden of production and the burden of persuasion, rests with the Petitioner in all cases initiated by the filing of a Petition for Hearing or with the Treasurer in all cases initiated by the filing of a Notice of Hearing.

74 Ill. Adm. Code 730.320 Standard of Proof

Unless otherwise provided by law, the standard of proof for an Administrative Hearing under this Part shall be the preponderance of the evidence. [5 ILCS 100/10-15]

74 Ill. Adm. Code 730.330 Evidence

a) Except as otherwise provided in this Section, the rules of evidence and privilege applicable to all contested Administrative Hearings will be the rules of evidence that are applied in civil cases in the circuit courts of the State of Illinois. In addition, the Hearing Officer may receive material, relevant evidence that would be relied upon by a reasonably prudent person in the conduct of serious affairs [5 ILCS 100/10-40] that is reasonably reliable and reasonably necessary to a resolution of the issue for which it is offered.

b) The Hearing Officer shall exclude immaterial, irrelevant and repetitious evidence.

c) The Hearing Officer shall use discretion in admitting or denying the admission of evidence.

d) Hearsay is not admissible except when exceptions to the hearsay rule exist under Illinois law, or when a statement has circumstantial guarantees or trustworthiness, and if the probative value of the statement outweighs any prejudice resulting from an inability to cross-examine the declarant.

74 Ill. Adm. Code 730.340 Business Records

a) The rules for admitting business records will be the same as those contained in the Illinois Supreme Court Rule R-236.

b) Any Party seeking to admit documents other than the originals may do so, provided the Party certifies that the copy is a true and correct copy of the original. The Party need not show that the original is unavailable.

74 Ill. Adm. Code 730.350 Examination of Witnesses by Hearing Officer

a) The Hearing Officer may examine any witness.

b) A Party may object to specific questions asked by the Hearing Officer, but it shall not be objectionable that a question violates a technical rule of evidence. For purposes of this Section, the rule against hearsay is a substantive, rather than a technical, rule of evidence.

74 Ill. Adm. Code 730.360 Adverse Witness

a) Any Party or witness may be called as an adverse witness. Examination of the adverse witness shall be allowed as if under cross-examination.

b) A witness called in good faith whose testimony surprises the party who called the witness may be examined by that calling Party as if under cross-examination, and the testimony of the witness may be impeached by prior statements.

74 Ill. Adm. Code 730.370 Transcript of Hearing

a) Oral proceedings or any part of oral proceedings shall be recorded stenographically or by other means that will adequately ensure the preservation of the testimony or oral proceedings, and shall be transcribed at the request of any Party. The Parties shall agree to the method of recording and shall share the costs equally.

b) An official court reporter may be engaged by the Treasurer to make and transcribe a stenographic record of the hearing. The Treasurer will not provide copies of the transcript to the Parties, but the Parties may obtain copies from the official reporter upon payment of the appropriate costs.

74 Ill. Adm. Code 730.380 Administrative Record

a) A full and complete record shall be kept of all proceedings. The record shall consist of the following:

1. All pleadings (including, but not limited to, the Petition for Hearing/Notice of Hearing and any Answers);

2. Motions, briefs, arguments, affidavits, exhibits, documents and records;

3. All evidence received;

4. All discovery responses;

5. A transcript of the hearing, as well as any transcript of any proceeding applicable for appeal or for administrative review;

6. A statement of matters officially noticed;

7. Offers of proof, objections and rulings;

8. Any proposed findings and exceptions;

9. Any order, decision, opinion or report by the Hearing Officer;

10. All staff memoranda or data submitted to the Hearing Officer of the case; and

11. Any communication prohibited by Section 10-60 of the IAPA or the rules concerning ex parte communications.

b) Findings of fact shall be based exclusively on the evidence and on matters officially noticed. [5 ILCS 100/10-35]

c) The record shall not contain the following, unless a Party requests that the documents be included in the record.

1. Cover Letters;

2. Notices of Filing;

3. Proofs of Service of Regular Mail;

4. Notices of Deposition; or

5. Discovery Requests.

d) The Treasurer shall be the official custodian of the administrative record of the Administrative Hearing proceedings held before the Treasurer.

74 Ill. Adm. Code 730.390 Proposal for Decision

Unless otherwise expressly provided by law, when, in a contested case, the Treasurer has not heard the case or read the record, the final decision, if adverse to a Party to the proceeding other than the Treasurer, shall not be made until a proposal for decision is served upon the Parties and an opportunity is afforded to each Party adversely affected to file exceptions and to present a brief. The proposal for decision shall contain a statement of the reasons for that proposal and of each issue of fact or law necessary to the proposed decision. It shall be prepared by the persons who conducted the hearing or one who has read the record. [5 ILCS 100/10-45]

74 Ill. Adm. Code 730.400 Final Decision

a) The final decision in a contested case shall be in writing and shall become a part of the administrative record. A final decision shall include findings of fact and conclusions of law, separately stated. Parties or their agents appointed to receive service of process shall be notified either personally or by certified or registered mail, return receipt requested, of any decision. Upon request, a copy of the decision shall be delivered or mailed forthwith to each Party and to its attorney of record.

b) All Treasurer orders shall specify whether they are final and subject to the Administrative Review Law [735 ILCS 5/Art. III]. [5 ILCS 100/10-50]

c) The final decision shall be issued in writing as soon as practicable after the Administrative Hearing is concluded, unless otherwise provided for by law.

d) The final decision may require any Party to the proceeding to pay part or all of the costs of the Administrative Hearing, including, but not limited to: witness fees, court reporter fees, Hearing Officer fees, and the cost of the transcript.

74 Ill. Adm. Code 730.410 Administrative Review

a) Final administrative decisions of the Treasurer are subject to review under the provisions of the Administrative Review Law.

b) The Treasurer shall certify the record of its Administrative Hearing proceedings.

c) In all cases in which administrative review is sought in the circuit court, the original certification of the administrative record will be filed by the Treasurer with the Clerk of the Circuit Court. Additional copies will also be prepared by the Treasurer and forwarded to the Illinois Attorney General. The Party seeking administrative review shall bear the cost of producing the original and copies of the certified record. The cost of the record may be waived when the Treasurer is satisfied that the Party seeking review under the Administrative Review Law cannot afford to pay those costs.

Part 735 E-Pay Program

74 Ill. Adm. Code 735.100 Establishment of Program

This Part governs the E-Pay Program created by Sections 7 and 17 of the State Treasurer Act.

74 Ill. Adm. Code 735.110 Purpose of Program

a) The Act requires the Treasurer to receive the revenues and all other public moneys of the State, and all moneys authorized by law to be paid to the Treasurer, and safely keep the same. The Act also provides that revenue received by the State in the form of coins, cash, checks, drafts, electronic fund transfers, electronic checks, credit card payments, debit card payments, or other similar payment instruments and the processing thereof shall be authorized for acceptance and collection by the State Treasurer. [15 ILCS 505/7] Pursuant to this authority, the Treasurer maintains contractual relationships with vendors in order to process financial transactions, such as credit card processing and electronic checks, on the State's behalf.

b) The Act permits the Treasurer to establish an E-Pay program to supplement and enhance both the investment opportunities and the secure electronic payment options otherwise available to other custodians of public funds for public agencies in this State [15 ILCS 505/17].

c) Pursuant to this authority, the Treasurer has established the E-Pay Program that provides a convenient, secure and affordable electronic payments processing option to facilitate the acceptance and processing of credit card, debit card and electronic check (E-check) payments to public agencies. The management, administration, processing and settlement of electronic payments are provided by the Treasurer and its vendors, selected through a competitive bidding process.

History

• Source: Amended at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.200 Definitions

"Act" means the State Treasurer Act [15 ILCS 505] that establishes the E-Pay Program.

"Constituent" means a person or entity that utilizes the E-Pay Program to make payments or donations of public funds to a participant.

"Custodian" means a public agency or a recipient.

"Electronic Signature" means a signature in electronic form attached to or logically associated with an electronic record. [5 ILCS 175/5-105]

"E-Pay Agreement" means the participant agreement that sets forth the Treasurer's terms and conditions for participation in the E-Pay Program.

"E-Pay Program" means the electronic payments processing program provided to public agencies to facilitate the acceptance and processing of credit card, debit card or E-check payments made to public agencies.

"Enrollment Form" means the form provided by the Treasurer to collect the required pertinent public agency information for enrollment into the E-Pay Program.

"Master Services Agreement" means the participant agreement that sets forth the E-Pay Program fees and the processor's terms and conditions for participation in the E-Pay Program.

"Participant" means a public agency that has been accepted by the Treasurer and enrolled into the E-Pay Program.

"PCI Data Security Standards" means the technical and operational requirements set forth by the Payment Card Industry (PCI) Security Standards Council for organizations accepting or processing payment transactions, and for software developers and manufacturers of applications and devices used in those transactions.

"Principal" means an individual who is authorized by the public agency or statute to execute contractual agreements on behalf of the public agency.

"Processor" means a vendor designated by the Treasurer, through a competitive bidding process, to provide electronic payment services via point-of-sale (POS), internet and telephone for the E-Pay Program.

"Public Agency" has the same meaning as in Section 17 of the Act. Questions regarding whether an entity qualifies as a component unit of a public agency shall be resolved by the Treasurer, referring to Governmental Accounting Standards Board (GASB) pronouncements, including but not limited to GASB Statement 14: The Financial Reporting Entity. Component units need not be limited to those entities which may be designated as component units by the Illinois Office of the Comptroller and may include, but need not be limited to, area agencies on aging and other providers under the Illinois Act on the Aging [20 ILCS 105].

"Public Funds" means current operating funds, special funds, interest and sinking funds, and funds of any kind or character belonging to or in the custody of any public agency. [30 ILCS 235/1]

"Recipient" means a person or entity that receives public funds in the form of a fee or donation on behalf of a public agency.

"Settlement Account" means an account established by a participant to settle funds from E-Pay Program activity.

"Settlement Bank" means the institution designated by the participant that is responsible for the settlement of funds from E-Pay Program activity.

"State Agency" means the State of Illinois or any officer, agency, board, commission, authority or department thereof. "State Agency" does not include the judicial or legislative branches of state government, and does not include colleges or universities.

"Treasurer" means the duly elected Treasurer of the State of Illinois or the Treasurer's designees.

"Treasurer's Website" means www.illinoistreasurer.gov or the successor to that website.

History

• Source: Amended at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.210 Incorporation by Reference

a) The following materials are incorporated by reference in this Part:

PCI Security Standards Council, LLC, 401 Edgewater Place, Suite 600, Wakefield MA 01880

Payment Card Industry (PCI) Data Security Standard v.3.2.1 (May 2018); https://www.pcisecuritystandards.org/documents/PCI_DSS_v3-2-1.pdf

Payment Card Industry (PCI) Data Security Standard v.4.0 (March 2022); https://www.pcisecuritystandards.org/documents/PCI-DSS-v4_0.pdf

b) The materials incorporated by reference in this Section are incorporated as of the date specified and do not include any later amendments or editions.

History

• Source: Amended at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.300 Treasurer Responsibilities

a) The Treasurer will procure and designate a credit/debit card and electronic check payment processing vendor to provide electronic payment services via point-of-sale, internet and telephone for the E-Pay Program. This shall include the acceptance of major credit/debit card providers and E-checks for all participants.

b) Pursuant to PCI Data Security Standards, the E-Pay Program will comply with operational and technical requirements for accepting or processing payment transactions, and for software developers and manufacturers of applications and devices used in those transactions.

c) The Treasurer is responsible for the administration of the E-Pay Program and will perform the following:

1. Review the eligibility of public agencies prior to enrollment;

2. Establish enrollment, quality control, and maintenance requirements and processes;

3. Establish terms and conditions;

4. Establish customer service processes;

5. Procure any necessary services administered through the E-Pay Program;

6. Retain documents in compliance with the State Records Act [5 ILCS 160] and the State Records Commission administrative rules (44 Ill. Adm. Code 4400);

7. Respond to waiver requests for a State agency’s required participation in the E-Pay Program in accordance with Section 735.420; and

8. Other tasks necessary to administer the E-Pay Program.

History

• Source: Amended at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.310 Processor Responsibilities

The Processor is responsible for the day-to-day management of the E-Pay Program and will perform the following:

a) Enroll public agencies into the E-Pay Program as determined by the Treasurer;

b) Provide for electronic credit card and check payment services via multiple payment formats in accordance with PCI data security standards and industry best practices;

c) Provide customer service as determined by the Treasurer;

d) Distribute funds from E-Pay Program activity into the participant's settlement account or to third-party service providers as described in Section 735.500;

e) Retain copies of participant documents, including the enrollment form;

f) Charge participants for the applicable services in accordance with the cost schedule;

g) Provide the Treasurer and participants with sufficient reports and/or the ability to run reports; and

h) File the participant's accurate 1099K with the Internal Revenue Service by the due date.

History

• Source: Amended at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.320 Fees

To the extent permitted by law, the Treasurer shall permit participants to absorb the processing fees associated with electronic payment services or pass the processing fees to constituents. Processing fees shall be publicly available and disclosed to public agencies prior to enrollment. Processing fees will be established through the competitive procurement of the processor. Processing fees may include, but are not limited to:

a) Cost of interchange rates, dues, assessments, and any other pass through fees from the issuing credit card bank and the card networks;

b) Fees collected by the processor for the authorization, clearing, and settlement of credit card transactions and electronic check payments; and

c) Fees paid to the Treasurer by the processor for the program administration, pursuant to Section 735.300. Administrative fees paid to the Treasurer shall not exceed the product of 25 basis points multiplied by the monthly processing volume, excluding transaction fees.

74 Ill. Adm. Code 735.330 Termination (repealed)

History

• Source: Repealed at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.400 Participation

a) The E-Pay Program is offered to public agencies to facilitate the acceptance and processing of credit card, debit card or E-check payments. The E-Pay Program is offered to local governments to facilitate the acceptance and processing of credit card payments as authorized by the Local Government Acceptance of Credit Cards Act [50 ILCS 345].

b) In order to participate in the E-Pay Program, a public agency shall submit an enrollment form and agree to the terms and conditions established by the Treasurer and its vendors.

c) State agencies, when accepting or processing credit card, debit card or E-check payments to be held within the State Treasury, must either participate in the E-Pay Program or receive a waiver in accordance with Section 735.420 in order to comply with Section 7 of the Act.

d) Participation in the Public Treasurers' Investment Pool shall not be a prerequisite for participation in the Treasurer's E-Pay Program. [15 ILCS 505/17]

History

• Source: Amended at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.410 Enrollment

A public agency may enroll in the E-Pay Program on documents prescribed by the Treasurer and its vendors. Electronic signatures are permitted when electronically submitting any documents, E-Pay agreements, or master services agreements.

a) The enrollment form shall require public agencies to provide the following information for the public agency and may require this information for any custodians that are not the public agency itself:

1. names;

2. tax identification numbers;

3. mailing and physical street addresses;

4. email addresses;

5. phone numbers;

6. name and title of the person who will be the principal;

7. processing and technical requirements to be used;

8. settlement banks; and

9. any additional information needed to assist in clarifying when the enrollment form is unclear or insufficient.

b) Public agencies shall sign a master services agreement in which they agree to the fees and the terms and conditions of the processor.

c) Public agencies shall sign an E-Pay agreement in which they agree to the terms and conditions of the Treasurer.

74 Ill. Adm. Code 735.420 Waiver

The Treasurer may waive a State agency’s required participation in the E-Pay Program for a specified duration of time when the Treasurer determines a waiver is in the best interest of the State.

a) A State agency seeking a waiver may submit a waiver application to the Treasurer. The Treasurer will prescribe the information required from a State agency in applying for a waiver, which may include the following information:

1. the name of the State agency seeking the waiver;

2. a contact person at the State agency who is responsible for the application and any further contact information the Treasurer requests from the State agency;

3. the basis for the requested waiver, which must include any applicable considerations listed in subsection (b);

4. information regarding any procurement utilized by the State agency to procure existing payment processing or other related services;

5. the requested duration of the waiver; and

6. any additional information requested by the Treasurer in evaluating the waiver request.

b) The Treasurer will not unreasonably withhold a waiver, and will consider the following factors prior to granting, in whole or in part, or denying a waiver:

1. the sufficiency of information provided by the State agency seeking a waiver;

2. any current payment processing or related services used by or available to the State agency, the benefits or drawbacks of those services, and prior efforts, if any, to participate in the E-Pay Program;

3. potential technical impacts;

4. potential operational impacts;

5. potential financial impacts; and

6. any additional information the Treasurer determines necessary or important in its evaluation of the waiver request.

History

• Source: Added at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.430 Termination

a) In the event that a participant’s E-Pay Program services fail to comply with the terms and conditions of the process as set forth in the master services agreement under Section 735.410(b), or the Treasurer as set forth in the E-Pay agreement under Section 735.410(c), the Treasurer may freeze and/or terminate any or all of the participant’s E-Pay Program services.

b) Prior to freezing or terminating any services, the Treasurer will provide a minimum of 24 hours’ notice of the intent to freeze or terminate that identifies the grounds for that action. If satisfactory remedial action is not taken by the participant and/or its recipient within the notice period, the Treasurer will freeze or terminate the services depending upon the notice given.

c) The Treasurer may freeze any or all of the participant’s E-Pay Program services without notice in any of the following circumstances:

1. if there is illegal, or suspected illegal, use of the E-Pay Program services;

2. use of the E-Pay Program services that is unauthorized by the participant, or suspected to be so unauthorized; or

3. any reason that E-Pay Program services cannot be provided through no fault of the Treasurer’s (e.g., problems with the settlement bank).

History

• Source: Added at 46 Ill. Reg. 19013, effective November 10, 2022

74 Ill. Adm. Code 735.500 Settlement Account

Funding from the E-Pay Program activity will be distributed by the processor into settlement accounts at the participant's settlement banks, except that where a participant incurs charges for services provided by a third party and ancillary to the E-Pay Program, the participant may direct the processor to distribute relevant fees for services to the third-party service provider. The Treasurer may give public agencies the option of using their own settlement banks, a settlement bank selected by the Treasurer via a competitive procurement process, or the processor's settlement bank. The participant's settlement bank must, at minimum, be authorized to do business in Illinois as an Illinois bank or a national bank with a presence in Illinois. In addition, the participant's settlement bank must be insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, be a member of the Automated Clearing House network, and qualify as a depository for public funds pursuant to either the Public Funds Investment Act [30 ILCS 235] or the Deposit of State Moneys Act [15 ILCS 520].

History

• Source: Amended at 46 Ill. Reg. 19013, effective November 10, 2022

Part 740 Illinois Public Treasurers' Investment Pool for Public Treasurers in the State of Illinois

74 Ill. Adm. Code 740.100 Establishment

This Part governs the Illinois Public Treasurers' Investment Pool for Public Treasurers in the State of Illinois, permitted by Sections 7 and 17 of the Act.

74 Ill. Adm. Code 740.110 Purpose

a) The Act allows the Treasurer to establish and administer a Public Treasurers' Investment Pool called Illinois Funds to supplement and enhance the investment opportunities otherwise available to other custodians of public funds for public agencies in this State.

b) In administering the Illinois Public Treasurers' Investment Pool, the Act permits the Treasurer to receive public funds paid into the pool by any other custodian of such funds and to serve as the fiscal agent of that custodian of public funds for the purpose of holding and investing those funds. [15 ILCS 505/17]

c) Pursuant to this authority, the Treasurer has established IPTIP, which provides units of State and local government a convenient investment pool option that utilizes the Treasurer's resources to safely invest their funds while allowing participants to enjoy economies of scale. IPTIP allows participants to safely invest their monies, while providing a competitive rate of return and daily access to invested funds. IPTIP assists participants in complying with the Deposit of State Moneys Act [15 ILCS 520] or the Public Funds Investment Act [30 ILCS 235], as applicable.

74 Ill. Adm. Code 740.200 Definitions

"Act" means the State Treasurer Act [15 ILCS 505].

"Custodian Bank" means the financial institution, designated by the Treasurer, responsible for fund accounting, recordkeeping, transfer agent, custodial and trust services for IPTIP.

"Custodian Bank Agreement" means the participant agreement that sets forth the Custodian Bank's terms and conditions.

"Custodial Accounts" means the accounts established for a public agency to hold and invest public funds.

"Enrollment Form" means the form provided by the Treasurer to collect the required pertinent participant information prior to the deposit of any public funds in IPTIP.

"Fiscal Agent" means the Treasurer of the State of Illinois or their designees.

"Illinois Funds Agreement" means the participant agreement that sets forth the Treasurer's terms and conditions for participation in IPTIP.

"IPTIP" or "Illinois Funds" means the Illinois Public Treasurers' Investment Pool provided to public agencies to supplement and enhance investment opportunities otherwise available to managers of public funds or public agencies in the State.

"Participant" means a public agency that has been accepted by the Treasurer and enrolled into IPTIP.

"Pool" means combined public monies invested through IPTIP.

"Principal" means an individual who is authorized by the public agency or statute to execute contractual agreements on behalf of the public agency.

"Public Agency" has the same meaning as in Section 17 of the Act. Questions regarding whether an entity qualifies as a component unit of a public agency shall be resolved by the Treasurer, referring to Governmental Accounting Standards Board (GASB) pronouncements, including, but not limited to, GASB Statement 14: The Financial Reporting Entity. Component units need not be limited to those entities which may be designated as component units by the Illinois Office of the Comptroller and may include, but need not be limited to, area agencies on aging and other providers under the Illinois Act on the Aging, [20 ILCS 105].

"Public Funds" means current operating funds, special funds, interest and sinking funds, and funds of any kind or character belonging to or in the custody of any public agency. [30 ILCS 235/1]

"Signer" means the individual authorized by the principal, public agency, or statute to open, close or make changes to a custodial account.

"Trader" means the individuals authorized by the principal or signer to do any or all of the following: receive balance and transaction information on the custodial account, make changes to the custodial account, and direct investments.

"Treasurer" means the duly elected Treasurer of the State of Illinois or their designees.

History

• Source: Amended at 47 Ill. Reg. 1724, effective January 19, 2023

74 Ill. Adm. Code 740.300 Treasurer Responsibilities

The Treasurer is responsible for overseeing the management of IPTIP and will perform the following:

a) review the eligibility of public agencies prior to enrollment;

b) establish enrollment, quality control and maintenance requirements and processes;

c) establish terms and conditions;

d) establish customer service processes;

e) determine the administrative fees paid from earnings of IPTIP in accordance with Section 330;

f) notify all participants of any increase in the administrative fee above 5 basis points, in accordance with Section 330;

g) provide investment management services through the use of authorized securities to achieve investment returns for the participants;

h) procure any necessary custodial, investment, or banking services administered through IPTIP;

i) retain documents in compliance with State statutes, including the State Records Act [5 ILCS 160], the State Records Commission administrative rules (44 Ill. Adm. Code 4400) and the Treasurer's Application for Authority to Dispose of State Records (Application 98-02M), approved by the State Records Commission;

j) provide administrative accounting; and

k) other tasks necessary to administer IPTIP.

74 Ill. Adm. Code 740.310 Investment Policy

The Treasurer shall develop, publish, and implement an investment policy covering the management of funds in the Public Treasurers' Investment Pool. The policy shall be published each year as part of the audit of IPTIP by the Auditor General, which shall be distributed to all participants. The Treasurer shall notify all IPTIP participants in writing, and the Treasurer shall publish in at least one newspaper of general circulation in both Springfield and Chicago, any changes to a previously published investment policy at least 30 calendar days before implementing the policy. Any such investment policy adopted by the Treasurer shall be reviewed, and updated if necessary, within 90 days following the installation of a new Treasurer. [15 ILCS 505/17]

a) The investment policy is a written statement describing the investment objectives, permissible investments, pool oversight and due diligence, and risk management practices and should be designed to:

1. describe the Treasurer's investment objectives;

2. state permissible investments;

3. describe the process of evaluating pool performance compared to applicable performance benchmarks and standards;

4. ensure that risks taken are prudent, properly managed and adequately compensated compared to applicable performance benchmarks and standards; and

5. ensure that an effective risk management process is in place to monitor the risk levels of the pool.

b) Permissible Investments – The pool's permissible investments may include, but are not limited to:

1. short-term investments (i.e., money market funds rated AAA); and

2. fixed income investments (i.e., government agency bonds, corporate bonds, and supranational bonds).

c) No participant may, directly or indirectly, cause the investment of any monies to an account to be made to any investment option other than one currently offered to all the participants.

74 Ill. Adm. Code 740.320 Custodian Bank Responsibilities

The custodian bank is responsible for the day-to-day management of IPTIP and will perform the following:

a) Enroll public agencies that meet the participation requirements set forth in Section 740.400;

b) Provide participant accounting services;

c) Provide custodial services to participants;

d) Provide customer service;

e) Provide transfer agent and recordkeeping services;

f) Provide training;

g) Retain copies of participant documents; and

h) Provide sufficient reporting capabilities to the Treasurer and to participants.

74 Ill. Adm. Code 740.330 Fees

Administrative fees will be charged to the participants. Administrative fees cover expenses related to the pool, such as fund accounting, transfer agent services, customer service, marketing, and investment management. Administrative fees shall be publicly available and disclosed to public agencies prior to enrollment.

a) The administrative fees will be determined by the Treasurer as set forth in this Section and paid from earnings of IPTIP. In determining the administrative fees, the Treasurer shall weigh the following factors:

1. the IPTIP current and projected asset size; and

2. the Treasurer's anticipated administrative and management expenses.

b) The Treasurer shall notify all participants of any increase in the total administrative fees above 5 basis points. In no event shall the total administrative fees exceed 25 basis points (annualized), calculated on a daily basis. One basis point equals .01%.

c) The Treasurer may reduce administrative fees to ensure a certain level of participant earnings.

74 Ill. Adm. Code 740.340 Allocation of Investment Earnings or Losses

Interest income will be computed daily, credited or paid monthly, and reinvested in the participant's account or distributed to the participant in a manner that equitably reflects the differing amounts of their respective investments in the pool and the differing periods of time for which those amounts were in the custody of the pool.

74 Ill. Adm. Code 740.400 Participation

In order to participate in IPTIP, a public agency shall submit an enrollment form and agree to the terms and conditions established by the Treasurer and its custodian bank.

74 Ill. Adm. Code 740.410 Enrollment

A public agency may enroll in IPTIP on documents prescribed by the Treasurer and the custodian bank. Electronic signatures are permitted when electronically submitting any documents, Illinois Funds agreements, or custodian bank agreements.

a) The enrollment forms shall require public agencies to provide the following information:

1. name of public agency;

2. name and title of person who will be the principal;

3. names and titles of authorized traders;

4. names and titles of authorized signers;

5. tax identification number;

6. mailing and physical street address;

7. email address;

8. phone number;

9. bank instructions; and

10. any additional information needed to assist in clarifying when the enrollment form is unclear or insufficient.

b) If applicable, public agencies shall sign a custodian bank agreement in which they agree to the terms and conditions of the custodian bank.

c) Public agencies shall sign an Illinois Funds agreement in which they agree to the terms and conditions of the Treasurer.

74 Ill. Adm. Code 740.420 Termination

The Treasurer reserves the right to freeze and/or terminate the participant's IPTIP services for failure to comply with the terms and conditions of the custodian bank as set forth in the custodian bank agreement or the Treasurer as set forth in the Illinois Funds agreement (see Section 744.410(b) and (c)). Prior to freezing or terminating any services, the Treasurer will provide a minimum of 30 days' notice of the intent to freeze or terminate. The notice will identify the grounds for freezing or terminating. If satisfactory remedial action is not taken by the participant within the 30 day period, the Treasurer will freeze or terminate the services, depending upon the type of notice given. Notwithstanding anything to the contrary in this Section, the Treasurer may freeze the participant's custodial accounts without notice if there is illegal, or suspected illegal, use of the custodial accounts; if there is use of the custodial accounts that is unauthorized by the participant, or suspected to be so unauthorized; if there is a request from law enforcement; or for any reason that the custodial accounts cannot be provided through no fault of the Treasurer's (e.g., problems with the custodian bank). Failure by the Treasurer to freeze or terminate services in one instance does not waive the Treasurer's right to freeze or terminate services in subsequent instances.

74 Ill. Adm. Code 740.500 Custodial Account

Funding from investment activity will be distributed to the participant's custodial account at the custodian bank. The custodian bank must, at minimum, be authorized to do business in Illinois as an Illinois bank or a national bank with a presence in Illinois. In addition, the custodian bank must be a member of the Automated Clearing House network, participate in the Federal Reserve's wire network, and qualify as a depository for public funds pursuant to the Deposit of State Moneys Act [15 ILCS 520].

Part 750 Home Ownership Made Easy Act

74 Ill. Adm. Code 750.10 Definitions

The following definitions shall apply to this Part:

"Account Enrollment Form" A form, substantially similar to Appendix C of this Part, which will be filed by a Program Depository upon enrolling a Participant.

"Account Report Form" A form, substantially similar to Appendix D of this Part.

"Certification Instruction Form" A form, substantially similar to Appendix B of this Part, which will accompany the Certification Notice Form.

"Certification Notice Form" A form, substantially similar to Appendix A of this Part.

"Effective Date" The effective date of P.A. 87-1206, H.B. 4119, the 1992 amendment to the Home Ownership Made Easy Act, which is September 25, 1992.

"Employer Direct-Deposit Program" A program administered by a Participant's employer and Program Depository to make a direct deposit of some portion of the Participant's paycheck into a H.O.M.E. account.

"Matching Deposit Program" A program by which a Participant's employer will match deposits made to a H.O.M.E. account according to a schedule determined by such employers individually.

"Passbook Savings Account" An account at a certified Program Depository which utilizes a passbook retained by the Program Participant.

"Program Depositories" The financial institutions certified by the Treasurer which will market and administer the H.O.M.E. Program after the Effective Date.

"Qualifying Balance for transfer tax return eligibility" That portion of the purchase price of a home for which a certified H.O.M.E. Participant is exempt from paying the State real estate transfer tax.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.20 Treasurer's Authority to Make and Continue Contracts and Agreements

To provide for administration of the Home Ownership Made Easy Act of 1989, as amended ("H.O.M.E." or the "Program"), the Treasurer may enter into such contracts as may be necessary:

a) When:

1. It is more cost efficient;

2. Services are not provided by other State agencies;

3. It results in lower costs or higher effectiveness or quality of services or responsiveness.

b) Such contracts include, but are not limited to, contracts for the administration and distribution of investment options by third parties and for investment advisory and transfer agency services to be performed by third parties.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.30 Eligibility for the Program

The Program is available to any person, age 18 or older, who does not, as a sole owner, tenant in common or joint tenant with a right of survivorship, hold a fee simple absolute or any other ownership interest in residential real estate upon application for, and participation in, the Program.

74 Ill. Adm. Code 750.40 Certification of Program Depositories

a) The following are eligible to apply for certification as a Program Depository:

1. Any federally chartered commercial bank or savings and loan association organized and operating in this State pursuant to the laws of the United States;

2. Any bank subject to the Illinois Banking Act [205 ILCS 5];

3. Any savings and loan association subject to the Illinois Savings and Loan Act of 1985 [205 ILCS 105];

4. Any credit union subject to the Illinois Credit Union Act [205 ILCS 325];

5. Any broker or dealer registered under the Securities Exchange Act of 1934 (15 U.S.C. 789 et seq.);

6. Any dealer registered under the Illinois Securities Law of 1953 [815 ILCS 5].

b) Applications for certification as a Program Depository shall be evaluated according to the following criteria:

1. A commitment to making home ownership a reality for a broad base of Illinois residents;

2. Current and/or past participation in the Treasurer's other programs;

3. Ability to comply with the reporting and other requirements of the H.O.M.E. Act and this Part.

c) Applications shall be by letter from the financial institution to the Treasurer, describing how the financial institution meets the criteria for participation.

d) The Treasurer shall, from time to time, evaluate Program Depositories in order to insure that the goals of the H.O.M.E. Program are being furthered efficiently and to the fullest extent possible. The Treasurer shall withdraw certification from any Program Depository on 30 days notice if such Program Depository:

1. violates this Part, or

2. is determined by a court of competent jurisdiction to have violated any fair housing laws.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.41 Penalty for Not Sufficient Funds (nsf) Checks

Participants who deposit checks with not sufficient funds shall be charged a fee of $15.00. The fee will be charged to the participant's account and shown separately on the participant's monthly statement. If the check is to open a new account, the fee will be charged directly to the applicant by mailing a statement to the applicant's residence.

History

• Source: Added at 16 Ill. Reg. 17359, effective October 28, 1992

74 Ill. Adm. Code 750.50 Enrollment Procedures

New Participants may enroll in the Program as follows:

a) Participants shall select an Illinois financial institution certified as a Program Depository by the Treasurer. A list of financial institutions so certified is available from the H.O.M.E. office, or by calling 312-814-1700.

b) Each Program Depository will determine the type or types of investment options which will be offered to Program Participants. Permissible investments include, but are not limited to statement savings accounts, passbook savings accounts, certificates of deposit, and securities accounts. A representative of the Program Depository will present the investment option or options available at that Program Depository to the Participant, who shall then make an initial deposit. The investment account must be specifically designated as a H.O.M.E. account and must be insured in one of the following: the Federal Deposit Insurance Corporation, the National Credit Union Association, or the Securities Investors Protection Corporation.

c) Where the selection for the investment option is a Passbook Savings Account, the initial deposit amount shall be no less than $100. A Program Depository need not offer a Passbook Savings Account as an investment option. The Program Depository may determine the minimum deposit for alternative investment options. Subsequent deposits may be made in any amount subject to the requirements of the Program Depository.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.60 Saver Deposit/Withdrawal Options

All Participants holding accounts with Program Depositories shall make deposits and withdrawals according to rules determined by the Program Depositories individually. Deposit arrangements may include Employer Direct-Deposit and Matching Deposit Programs.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.70 Participant Statements

Participants with accounts at certified Program Depositories shall receive statements from the Program Depository holding such Participant's account according to rules determined by the Program Depositories individually, provided such statements will issue annually at the minimum.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.80 Tax Reporting

Program Participants with accounts at certified Program Depositories will receive reports of interest or dividends earned according to rules adopted by the Program Depositories individually.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.90 Transfer Requests

a) At any time, a Program Participant may transfer a H.O.M.E. account into another designated H.O.M.E. investment option at the same certified Program Depository without having to notify the Treasurer's office.

b) At any time, a Program Participant may transfer a H.O.M.E. account into another certified Program Depository by filing an Account Report form, checking the box designated "Transfer." For the purpose of determining Program benefits, participation will relate back to the initial enrollment date, provided the proceeds are directly deposited from the original certified Program Depository to the newly selected certified Program Depository. Such Participants should check the box designated "Transferred Account" on the Account Enrollment Form filed with the transferee Program Depository.

74 Ill. Adm. Code 750.100 Termination Requests

a) Program Participants with accounts at a certified Program Depository may terminate participation by notifying their Program Depository according to rules determined by the individual Program Depositories. Such Participants should designate their intention either to terminate participation in the program or to transfer to another Program Depository on the Account Report form.

b) A terminating Participant may, within 60 days after submitting a termination request, reinvest such Participant's proceeds in a certified Program Depository. Such Participants should check the box designated "Transferred Account" on the Account Enrollment Form filed with the transferee's Program Depository. For the purpose of determining Program benefits, participation will relate back to the initial enrollment date.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.110 Treasurer's Certification of H.o.m.e. Participants

a) Old H.O.M.E. Program: For terminating program Participants with deposits in the Administering Financial Institution who have not transferred their accounts to a Program Depository, the Treasurer shall provide a final account statement and a formal notice of certification if such Participant has adhered to the Program rules. For terminating Participants with accounts at certified Program Depositories, the Program Depository shall transmit an Account Report form to the Treasurer. Such form will specify: the ending date of participation; income earned on the account to date for the current calendar year; and the ending deposit balance upon termination. The Treasurer will provide a formal notice of certification on the Certification Notice form if such Participant has adhered to the Program rules.

1. Such program Participants qualify for certification if they deposit moneys for a period of at least two years in a chosen investment vehicle specifically designated as a H.O.M.E. account according to the Program Depository's requirements.

2. For such Program Participants, a Qualifying Balance for transfer tax return eligibility shall be calculated at 20 times the Participant's final account balance.

b) For all terminating Program Participants eligible for certification:

1. The Program Participant shall be notified of the amount of a home's purchase price on which the tax imposed under the Real Estate Transfer Tax Act [35 ILCS 305] will be waived for such Participant by the Illinois Department of Revenue on the Certification Notice form.

2. The certification shall have an initial term of 6 months. Certification may be renewed for an additional 6 months. Such renewal requests can be made by written request to the Treasurer before the expiration of the initial 6 month period.

3. The certification shall be accompanied by instructions on how to file for waiver of the real estate transfer tax with the Illinois Department of Revenue, and the County Treasurer (if appropriate).

4. The Treasurer shall provide copies of all certifications to the Illinois Department of Revenue, the Illinois Housing Development Authority, and the County Treasurer (if appropriate), upon request.

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.120 Benefits of Program Certification

Program Participants shall receive the following benefits upon certification, provided such Participants acquire an ownership interest in residential real estate prior to expiration of certification:

a) Exemption from paying the State Real Estate Transfer tax, to the extent specified in the Certification Notice, where it is the contractual responsibility of the Participant to purchase the transfer tax stamps;

b) Priority position for making applications for mortgages in the Illinois Housing Development Authority's Single Family Mortgage Purchase Program;

c) Priority over persons who are not so certified in the Treasurer's housing programs;

d) All income earned on H.O.M.E. investments during participation in the program may be subtracted in computing the Participant's Illinois base income for the year in which the Participant acquires his or her interest in residential real estate under the Illinois Income Tax Act.

74 Ill. Adm. Code 750.130 Illinois Housing Development Authority Mortgage Priority

Upon request of the Participant, the Treasurer shall certify to the Director of the Illinois Housing Development Authority that the Program Participant has satisfied all requirements under Section 750.110 of this Part to become eligible for priority consideration under the Authority's Single Family Mortgage Purchase Program. The Treasurer does not participate in the review or approval of Illinois Housing Development Authority applications.

a) Certified Program Participants shall have priority over persons who are not so certified for making applications for mortgages in the Illinois Housing Development Authority's Single Family Mortgage Purchase Program.

b) To qualify for mortgage priority, Program Participants must meet all applicable requirements of the Illinois Housing Development Authority's Single Family Mortgage Purchase Program, as set forth in 47 Ill. Adm. Code 250, as amended and supplemented, or any other rules that the Illinois Housing Development Authority may promulgate in connection with the Single Family Mortgage Purchase Program and Section 143 of the Internal Revenue Code of 1986 and the regulations promulgated thereunder, both as they may be amended and supplemented.

c) Program Participants must present the Treasurer's certification with their application for an Illinois Housing Development Authority mortgage.

74 Ill. Adm. Code 750.140 Program Depository Requirements

All Program Depositories will agree to abide by the following:

a) Upon enrollment of a Program Participant, the enrolling Program Depository will forward a copy of the Account Enrollment form (see Appendix C of this Part) to the Treasurer's office;

b) All H.O.M.E. accounts will be designated as such upon enrollment and will be identifiable as such by account number and Social Security number;

c) Program Depositories will maintain a record of total income earned for each H.O.M.E. account;

d) Program Depositories shall compile annual reports regarding H.O.M.E accounts administered, including ending balance, annual income, and addresses for each account, and forward these reports to the Treasurer's office. Said reports may be on computer printouts or in such format as certified Program Depositories normally utilize in maintaining their business records.

e) Program Depositories will forward to the Treasurer's office an Account Report (see Appendix D of this Part) upon termination or transfer of any Participant.

f) Program Depositories shall make reasonable efforts to market the H.O.M.E. program and apprise the Treasurer's office of the means and the media markets used to market the Program.

74 Ill. Adm. Code 750.150 Payment of Expenses (repealed)

History

• Source: Repealed at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.APPENDIX A Certification Notice Form

CERTIFICATION NOTICE

The individual(s) names below have met the requirements established for the H.O.M.E. program and are hereby given certification status. The certification entitles the H.O.M.E. Saver(s) to the benefits of the program as defined in its rules.

Name(s)

Address

Account #

Transfer Tax Credit Up To

Total income earned on H.O.M.E. investments during participation in the program may be subtracted in computing the Participant's Illinois base income for the year in which the Participant acquires his or her interest in residential real estate under the Illinois Income Tax Act.

Total income earned

Treasurer's Office

Date of Issuance:

Expiration Date:

This certificate expires in six (6) months. To renew the certificate, call the H.O.M.E. office at 312-814-1700. You may renew the certificate once, for an additional 6 months.

To receive an exemption from the Real Estate Transfer tax for your home purchase, have the seller(s) of the home you purchased and a witness who is not a party of the real estate transaction sign this certification.

NOTE: A H.O.M.E. saver is only eligible for waiver of the Real Estate Transfer Tax where the H.O.M.E. saver, as buyer, has taken the contractual responsibility of paying such transfer tax.

We/I hereby certify that the buyer is contractually responsible for payment of the Real Estate Transfer Tax as part of the sale of this property, as shown on the statement of closing proceeds and that we/I are the parties/witness to this transaction.

H.O.M.E. Saver(s)

date

Seller(s)

date

H.O.M.E. Saver(s)

date

Seller(s)

date

Witness

date

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.APPENDIX B Certification Instruction Form

INSTRUCTIONS FOR USING YOUR H.O.M.E. CERTIFICATION

FOR REAL ESTATE TRANSFER PAYMENT

NOTE: By law, a H.O.M.E. Saver may only be exempted from paying the Real Estate Transfer Tax if and when it is the buyer's contractual responsibility to purchase the transfer tax stamps. You must keep this in mind when negotiating for the purchase of your new home and the sales contract must specify that the buyer will be responsible for paying the transfer tax.

1. Take the H.O.M.E. certificate with you to your closing.

2. As part of the closing process, have the seller(s) sign and date the back of the form. Sign the certificate yourself. Have a witness who is not a party to the real estate transaction sign and date the back of the form.

3. Attach the certificate to a copy of the final closing statement.

4. Keep a copy of all documents for your records.

5. At the time of recording the sale, present to the recorder (in addition to all other documents necessary for recording the sale): a deed or trust document, or the real estate sales contract with attached contract rider specifying that the buyer is contractually responsible for paying the Real Estate Transfer tax.

FOR IHDA MORTGAGES

1. Call the IHDA office at 1-800-942-8439 and ask for the latest mortgage program and eligibility requirements.

2. Read the requirements carefully.

3. Look for your new home.

4. When you contact a participating financial institution, tell them you are a certified H.O.M.E. Program Participant.

5. Be prepared to file a copy of your H.O.M.E. certificate with the IHDA application. Be sure to keep a copy for your records. You will need it to obtain exemption from the real estate transfer tax after you close (see above).

74 Ill. Adm. Code 750.APPENDIX C Account Enrollment Form

ACCOUNT ENROLLMENT FORM

Owner's Name (First, Initial, Last)

Owner's Social Security Number

Date of Birth

Street or P.O. Box Number

Phone

City

State

Zip

Joint Owner's Name (First, Initial, Last)

Joint Owner's Social Security Number

Date of Birth

Street or P.O. Box Number

Phone

City

State

Zip

Date of Enrollment:

Initial Account Balance:

Check One:

New H.O.M.E. Saver

Transferred account

Investment type:

Deposit method:

Program Depository Name:

I/We hereby authorize the Program Depository to disclose to the Treasurer's Office such information as is necessary for verification of Program participation.

Signature

Signature

History

• Source: Amended at 22 Ill. Reg. 15631, effective August 24, 1998

74 Ill. Adm. Code 750.APPENDIX D Account Report Form

ACCOUNT REPORT FORM

Date:

Owner's Name (First, Initial, Last)

Owner's Social Security Number

Phone

Street or P.O. Box Number

City

State

Zip

Joint Owner's Name (First, Initial, Last)

Joint Owner's Social Security Number

Phone

Street or P.O. Box Number

City

State

Zip

Program Depository Name

Account # at Transferor Program Depository

Select one:

Termination

Transfer

I/We hereby request that

release all

funds held pursuant to the H.O.M.E. program. I/We understand that such funds must be redeposited within 60 days of this request at a certified Program Depository in order to retain program benefits dating from the original enrollment date of this account. I/We hereby authorize the Program Depository to disclose to the Treasurer's office such information as is necessary for

verification of Program participation.

Signature

Signature

FINAL REPORT

Date:

Program Depository Name:

Account # at program Depository:

Ending date:

Ending balance:

Total income earned to date for current calendar year

Participant designates transaction as:

Termination

Transfer

The undersigned institution hereby certifies that the Program Participant has adhered to the Program requirements.

Program Depository

By:

Title:

Part 755 Hospital Basic Services Preservation Act

74 Ill. Adm. Code 755.100 Introduction

a) This Part has been developed to regulate the Hospital Basic Services Preservation Fund. It delineates the Treasurer's role in the maintenance and administration of the Fund.

b) The Treasurer aims to ensure the Fund will be used to enable essential community hospitals to continue to provide basic quality health care services, especially those that aid the elderly and those exhibiting financial need who would not otherwise be able to receive the services, that are subject to and meet standards of need under the Health Facilities Planning Act [20 ILCS 4050].

74 Ill. Adm. Code 755.200 Definitions

The following words or phrases, when used in this Part, shall have the meanings ascribed to them in this Section.

"Act" – the Hospital Basic Services Preservation Act [20 ILCS 4050].

"Basic Services" – emergency room and obstetrical service provided within a hospital. "Basic services" is limited to the emergency room and obstetric units and services provided within those units [20 ILCS 4050/5].

"Eligible Expenses" – expenses for expanding obstetrical or emergency units, updating equipment, repairing essential equipment, and purchasing new equipment that will increase the quality of basic services provided. "Eligible expenses does not include expenses relating to cosmetic upgrades, staff expansion or salary, or structural expansion of any unit or department of a hospital. [20 ILCS 4050/5]

"Essential Community Hospital Provider" – an Illinois general acute care hospital as described in 89 Ill. Adm. Code 148.270(c)(1) that would not otherwise be able to meet financial institution credit standards for issuance of a standard commercial loan or obtain the loan at an affordable rate.

"Fund" – the Hospital Basic Services Preservation Fund established in Section 10 of the Act.

"Treasurer" – the Office of Illinois State Treasurer.

74 Ill. Adm. Code 755.300 Preferred Hospitals

a) Preference shall be given to those facilities that serve significant numbers of Medicaid recipients to preserve access to basic services.

b) Additional preference shall be given to those facilities that qualify for expedited reimbursement for medical services as described in 89 Ill. Adm. Code 140.71.

74 Ill. Adm. Code 755.400 Hospital Responsibilities

Each hospital receiving a loan collateralized under the Act shall:

a) Submit documentation that the expenses for which the loan was granted were approved by the Illinois Health Facilities Planning Board (HFPB) in accordance with Section 15(a) of the Act [20 ILCS 4050/15(a)] and the Hospital Basic Services Review Board in accordance with Section 15(b) of the Act [20 ILCS 4050/15(b)].

b) File quarterly reports with the Treasurer. The reports shall include a cash basis statement of expenditures for the loan proceeds, a loan payment history, and the current loan balance. The cash basis method recognizes revenues and expenses at the time physical cash is actually received or paid out.

74 Ill. Adm. Code 755.500 Bank Proposals

a) Before disbursing moneys from the Fund, the Treasurer shall contact at least 5 approved financial institutions.

b) Potential lenders shall provide the Treasurer with an estimated collateralization ratio and a potential range of interest rates applicable to the proposed loan.

74 Ill. Adm. Code 755.600 Treasurer Review

The Treasurer shall be responsible for:

a) Reviewing HFPB's determination as to whether applicant hospitals offer basic services as defined by the Act and this Part.

b) Reviewing HFPB's determination as to whether applicant hospitals are seeking funds to cover eligible expenses as defined by the Act and this Part.

1. Eligible expenses shall be limited to tangible improvements such as expansion of the emergency and obstetrical units and the purchase of new equipment. The goal is to increase the quality of the basic services provided.

2. Cosmetic improvements and salary increases are specifically excluded from eligible expenses.

c) Reviewing the hospitals' last audited financial statement to determine whether hospital could have obtained the sought-after funding without the requested collateralization.

d) Determining whether the applicant hospital is an essential care provider as defined by the Act and this Part.

74 Ill. Adm. Code 760.100 Definitions

"Act" or "Revised Act" means the Revised Uniform Unclaimed Property Act [765 ILCS 1026].

"Administrator" means the State Treasurer.

"Administrator's Agent" or "Auditor" means a person with whom the administrator contracts to conduct an examination under Article 10 of the Act on behalf of the administrator. The term includes an independent contractor of the person and each individual participating in the examination on behalf of the person or contractor. [765 ILCS 1026/15-102]

"Affiliated Group of Merchants" means 2 or more affiliated merchants or other persons that are related by common ownership or common corporate control and that share the same name, mark, or logo. The term also applies to 2 or more merchants or other persons that agree among themselves, by contract or otherwise, to redeem cards, codes, or other devices bearing the same name, mark, or logo (other than the mark, logo, or brand of a payment network), for the purchase of goods or services solely at such merchants or persons. However, merchants or other persons are not considered to be affiliated merely because they agree to accept a card that bears the mark, logo, or brand of a payment network.

"Apparent Owner" means a person whose name appears on the records of a holder as the owner of property held, issued or owing by the holder.

"Business Association" means a corporation, joint stock company, investment company, unincorporated association, joint venture, limited liability company, business trust, trust company, land bank, safe deposit company, safekeeping depository, financial organization, insurance company, federally chartered entity, utility, sole proprietorship, or other business entity, whether or not for profit.

"Confidential Information" means information that is "personal information" under the Personal Information Protection Act [815 ILCS 530/5], "private information" under the Freedom of Information Act [5 ILCS 140/2(c-5)], or personal information contained within public records, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, unless the disclosure is consented to in writing by the individual subjects of the information as provided in the Freedom of Information Act [5 ILCS 140/7(1)(c)].

"Debt Collection Agency" means any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due, to another. The term debt collection agency excludes any officer or employee of a creditor while the officer or employee is collecting debts for the creditor in the creditor’s name.

"Domicile" means:

for a corporation, the state of its incorporation;

for a business association whose formation requires a filing with a state, other than a corporation, the state of its filing;

for a federally chartered entity or an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 through 80a-63), the state of its home office; and

for any other holder, the state of its principal place of business. [765 ILCS 1026/15-102]

"DOR" means the Illinois Department of Revenue.

"Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.

"Electronic Mail" or "E-mail" means a communication by electronic means that is automatically retained and stored and may be readily accessed or retrieved.

"Escheat Fee" means any charge imposed solely by virtue of property being reported as presumed abandoned.

"Financial Organization" means a bank, savings bank, foreign bank, corporate fiduciary, currency exchange, money transmitter, or credit union. [765 ILCS 1026/15-102]

"Finder" means:

a person engaged in the location, recovery, purchase, or assignment of property held by the administrator for a fee, compensation, commission, or other remuneration paid by the owner of the property; or

a person engaged in assisting in the location, recovery, purchase, or assignment of property held by the administrator for a fee, compensation, commission, or other remuneration paid by the owner of the property. [765 ILCS 1026/15-102(9.5)] "Finder" does not include:

an attorney retained by an owner or an apparent owner to pursue a claim for recovery of specifically identified property held by the administrator or to contest the administrator's denial of a claim for recovery of the property where the attorney has an attorney-client relationship with the owner [765 ILCS 1026/15-1302(f)]; or

a CPA firm licensed under the Illinois Public Accounting Act, or an affiliate of such firm, that has registered with the administrator, is in good standing with the Illinois Department of Financial and Professional Regulation, which is providing services to an apparent owner that is not a natural person including assisting with the apparent owner's compliance with the reporting requirements of the Act. [765 ILCS 1026/15-1302(g)]

"Former Act" means the Uniform Disposition of Unclaimed Property Act [765 ILCS 1025], repealed effective January 1, 2018.

"Game-Related Digital Content" means digital content that exists only in an electronic game or electronic game platform. The term includes:

game-play currency such as a virtual wallet, even if denominated in United States currency;

the following, if for use or redemption only within the game or platform or another electronic game or electronic game platform:

points sometimes referred to as gems, tokens, gold and similar names; and

digital codes; and

does not include an item that the issuer:

permits to be redeemed for use outside a game or platform for money or goods/services that have more than minimal value; or

otherwise monetizes for use outside a game or platform.

"Gift Card" means a record evidencing a promise made for consideration by the seller or issuer of the record that goods, services or money will be provided to the owner of the record to the value or amount shown in the record that is either:

a record:

issued on a prepaid basis primarily for personal, family or household purposes to a consumer in a specified amount;

the value of which does not expire;

that is not subject to a dormancy, inactivity or post-sale service fee;

that is redeemable upon presentation for goods or services; and

that, unless required by law, may not be redeemed for or converted into money or otherwise monetized by the issuer; or

a prepaid commercial mobile radio service, as defined in 47 CFR 20.3.

"Holder" means a person obligated to hold for the account of, or to deliver or pay to, the owner, property subject to the Act.

"Insurance Company" means an association, corporation or fraternal or mutual-benefit organization, whether or not for profit, engaged in the business of providing life endowments, annuities or insurance, including accident, burial, casualty, credit-life, contract performance, dental, disability, fidelity, fire, health, hospitalization, illness, life, malpractice, marine, mortgage, surety, wage protection, and workers' compensation insurance.

"Loyalty Card" means a record given without direct monetary consideration under an award, reward, benefit, loyalty, incentive, rebate, or promotional program that may be used or redeemed only to obtain goods or services or a discount on goods or services. The term does not include a record that may be redeemed for money or otherwise monetized by the issuer. [765 ILCS 1026/15-102]

"Merchandise Credit" means in-store credit for returned merchandise redeemable for merchandise, goods or services upon presentation at a single merchant or an affiliated group of merchants.

"Mineral" means gas, oil, coal, oil shale, other gaseous liquid or solid hydrocarbon, cement material, sand and gravel, road material, building stone, chemical raw material, gemstone, fissionable and nonfissionable ores, colloidal and other clay, steam and other geothermal resources, and any other substance defined as a mineral by other law of this State.

"Mineral Proceeds" means an amount payable for extraction, production, or sale of minerals, or, on the abandonment of the amount, an amount that becomes payable after abandonment. The term includes an amount payable:

for the acquisition and retention of a mineral lease, including a bonus, royalty, compensatory royalty, shut-in royalty, minimum royalty, and delay rental;

for the extraction, production or sale of minerals, including a net revenue interest, royalty, overriding royalty, extraction payment, and production payment; and

under an agreement or option, including a joint-operating agreement, unit agreement, pooling agreement, and farm-out agreement.

"Money Order" means a payment order for a specified amount of money. The term includes an express money order and a personal money order on which the remitter is the purchaser.

"Net Card Value" means the original purchase price or original issued value of a stored-value card, plus amounts added to the original price or value, minus amounts used and any service charge, fee, or dormancy charge permitted by law.

"Non-Freely Transferable Security" means a security that cannot be delivered to the administrator by the Depository Trust Clearing Corporation or similar custodian of securities providing post-trade clearing and settlement services to financial markets or cannot be delivered because there is no agent to effect transfer. The term includes a worthless security. [765 ILCS 1026/15-102] A non-freely transferable security includes a security that cannot be delivered to or liquidated by the administrator because of sanctions and imposed by the federal government, including sanctions administered by the U.S. Department of the Treasury's Office of Foreign Assets Control.

"Online Sports Wagering" means internet sports gaming and sports betting that is subject to the applicable laws administered by the Illinois Gaming Board under the Sports Wagering Act [230 ILCS 45] and the Illinois Racing Board under the Illinois Horse Racing Act of 1975 [230 ILCS 5].

"Owner", unless the context otherwise requires, means a person that has a legal, beneficial, or equitable interest in property subject to the Act or the person's legal representative when acting on behalf of the owner. The term includes:

a depositor, for a deposit;

a beneficiary, for a trust other than a deposit in trust;

a creditor, claimant or payee, for other property; and

the lawful bearer of a record that may be used to obtain money, a reward, or a thing of value.

"Payroll Card" means a record that evidences a payroll-card account as defined in 12 CFR 1005 (Regulation E). [765 ILCS 1026/15-102]

"Payroll-Card Account" is an account that is directly or indirectly established through an employer and to which electronic fund transfers of the consumer's wages, salary or other employee compensation (such as commissions) are made on a recurring basis, whether the account is operated or managed by the employer, a third-party payroll processor, a depository institution, or any other person. See 12 CFR 1005.2(b)(3)(i)(A).

"Person" means an individual, estate, business association, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal entity, whether or not for profit.

"Property" means tangible property described in Section 15-205 of the Act or a fixed and certain interest in intangible property held, issued, or owed in the course of a holder's business or by a government, governmental subdivision, agency or instrumentality. The term:

includes all income from or increments to the property;

includes property referred to as or evidenced by:

money, virtual currency, interest, or a dividend, check, draft, deposit or payroll card;

a credit balance, customer's overpayment, stored-value card, security deposit, refund, credit memorandum, unpaid wage, unused ticket for which the issuer has an obligation to provide a refund, mineral proceeds, or unidentified remittance;

a security except for:

a worthless security; or

a security that is subject to a lien, legal hold, or restriction evidenced on the records of the holder or imposed by operation of law, if the lien, legal hold, or restriction restricts the holder's or owner's ability to receive, transfer, sell, or otherwise negotiate the security;

a bond, debenture, note, or other evidence of indebtedness;

money deposited to redeem a security, make a distribution, or pay a dividend;

an amount due and payable under an annuity contract or insurance policy;

an amount distributable from a trust or custodial fund established under a plan to provide health, welfare, pension, vacation, severance, retirement, death, stock purchase, profitsharing, employee savings, supplemental unemployment insurance, or a similar benefit; and

any instrument on which a financial organization or business association is directly liable; and

does not include:

game related digital content;

a loyalty card;

a gift card; or

funds on deposit or held in trust pursuant to Section 16 of the Illinois Pre-Need Cemetery Sales Act. [815 ILCS 390]

"Putative Holder" means a person believed by the administrator to be a holder, until the person pays or delivers to the administrator property subject to the Act, or the administrator or a court makes a final determination that the person is or is not a holder.

"Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

"Records of the Holder" includes records maintained by a third party that has contracted with the holder.

"Security" means:

a security as defined in Article 8 of the Uniform Commercial Code [810 ILCS 5/8-102];

a security entitlement as defined in Article 8 of the Uniform Commercial Code, including a customer security account held by a registered broker-dealer, to the extent the financial assets held in the security account are not:

registered on the books of the issuer in the name of the person for which the broker-dealer holds the assets;

payable to the order of the person; or

specifically indorsed to the person; or

an equity interest in a business association not included in the above paragraph.

"Sign" means, with present intent to authenticate or adopt a record:

to execute or adopt a tangible symbol; or

to attach to or logically associate with the record an electronic symbol, sound or process.

"State", when not limited to the State of Illinois, means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. When capitalized, the term "State" means the State of Illinois. [765 ILCS 1026/15-102]

"State Treasurer" means the duly elected Treasurer of the State of Illinois.

"Stored-Value Card" means a card, code, or other device that is:

issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount, whether or not that amount may be increased or reloaded in exchange for payment; and

redeemable upon presentation at multiple unaffiliated merchants for goods or services or usable at automated teller machines;

Stored value card does not include a gift card, payroll card, loyalty card, or game related digital content.

"Utility" means a person that owns or operates for public use a plant, equipment, real property, franchise, or license for the following public services:

transmission of communications or information;

production, storage, transmission, sale, delivery, or furnishing of electricity, water, steam or gas; or

provision of sewage or septic services, or trash, garbage or recycling disposal.

"Virtual Currency" means any type of digital unit, including cryptocurrency used as a medium of exchange, unit of account, or a form of digitally stored value that does not have legal tender status recognized by the United States. The term does not include:

the software or protocols governing the transfer of the digital representation of value;

game related digital content; or

a loyalty card or gift card.

"Worthless Security" means a security whose cost of liquidation and delivery to the administrator would exceed the value of the security on the date a report is due under the Act. [765 ILCS 1026/15-102]

History

• Source: Amended at 50 Ill. Reg. 778, effective December 31, 2025

74 Ill. Adm. Code 760.200 Tax-Deferred and Tax-Exempt Accounts

a) Sections 15-202 and 15-203 of the Act indicate when "tax deferred" and "tax exempt" accounts are presumptively abandoned. Section 15-202 prescribes the rules for tax deferred and tax exempt retirement accounts and Section 15-203 prescribes the rules for other tax deferred accounts. These rules for tax deferred and tax exempt accounts generally have longer periods of abandonment than accounts covered by Section 15-201 of the Act.

b) A Roth IRA is covered under Section 15-202.

c) In some cases, federal law, specifically ERISA (29 U.S.C. 1001 et seq.), may preempt the Act and prevent reporting and remitting retirement accounts or other property representing a retirement plan asset that would otherwise be reportable under the Act. Concerning ERISA preemption and unclaimed property statutes, see Commonwealth Edison Co. v. Vega, 174 F.3d 870 (7th Cir. 1999). Nonqualified, government and church plans are not subject to an ERISA preemption, nor are uncashed plan distribution checks issued by a qualified plan that lacks, or has failed to exercise, a forfeiture or other reversionary interest.

d) If a holder is uncertain whether an account qualifies as tax deferred or tax exempt under the Act (i.e., whether the account is covered by Section 15-201 or by Sections 15-202 and 15-203), whether ERISA preempts the Act for a retirement account, or whether an account is covered by Section 15-202 or Section 15-203, the holder may specifically identify the property in a report filed with the administrator or give express notice to the administrator of a potential dispute regarding the property. Specifically identifying the property in a report or providing express notice to the administrator both ensures that the property will be covered by the limitations period of Section 15-610 of the Act and demonstrates that the holder is attempting to comply with the Act in good faith and without negligence. Specifically identifying the property in a report filed with the administrator indicating that the property is not being remitted because ERISA preemption allows a holder to satisfy both its fiduciary obligation under ERISA, which would generally prohibit remitting the property to the administrator, and any obligation under the Act.

e) Pursuant to Section 15-405 of the Act (property reportable and payable or deliverable absent owner demand provision) and Section 15-610(a) of the Act (anti-limitations provision) a nonqualified plan or plan not otherwise subject to preemption under ERISA is prohibited from forfeiting an account or other property.

f) The administrator will accept missing participants' account balances reported and remitted by an ERISA plan fiduciary for a terminated defined contribution plan. See United States Department of Labor Field Assistance Bulletin No. 2014-01 (available at www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins), which indicates that, despite the ERISA preemption for ongoing plans, a plan fiduciary may report and remit "missing participants' account balances under a state's unclaimed property statute to complete the plan termination process".

g) Additional outreach for non-retirement, long-term, tax-deferred and tax-exempt accounts:

1. In the tenth year after the opening of an account holding property covered by Section 15-203 of the Act in which the apparent owner has not, within the previous three years, indicated an interest under Section 15-210 of the Act and the account is not otherwise presumed abandoned, the holder shall attempt to contact the apparent owner of the account in a manner substantially similar to the manner in which notice is provided under Section 15-501 of the Act.

2. This additional outreach is not a replacement for the due diligence notice requirement under Section 15-501 of the Act and Section 760.460 of this Part.

3. The purpose of this additional holder outreach is to ensure that the apparent owner is both alive and aware of the account. If the owner of the account is deceased, then the provisions of Section 15-203(b) of the Act apply.

4. If the apparent owner of the account indicates interest in the account as defined in Section 760.300 of this Part, the holder does not need to make any additional outreach to the apparent owner.

5. For accounts valued at $50 or more, the holder shall attempt to contact the apparent owner.

A) The holder may initially attempt to contact the apparent owner using the U.S. Mail, e-mail, telephone, or an in-person visit.

B) If the initial attempt to contact the apparent owner does not result in apparent owner interest, as defined in Section 760.300 of this Part, the holder should attempt a different method of contacting the apparent owner.

C) To the extent not otherwise prohibited by other laws, the holder may:

i) use electronic search tools to find more up-to-date contact information for the apparent owner, and

ii) attempt to contact individuals that the apparent owner designated as a beneficiary or contingent beneficiary (e.g., spouse, children) to find updated contact information for the apparent owner.

D) The holder shall send notice by certified U.S. Mail to the apparent owner if:

i) the value of the account is more than $1,000,

ii) other attempts at contact have not resulted in apparent owner interest, as defined in Section 760.300 of this Part, and

iii) the holder has in its records an address for the apparent owner that the holder's records do not disclose to be invalid and is sufficient to direct the delivery of U.S. Mail to the apparent owner.

6. After at least two attempts to contact the apparent owner which do not result in apparent owner interest, as defined in Section 760.300 of this Part, the holder may report and pay or deliver the property in the account to the administrator pursuant to Section 15-608(b) of the Act and Section 760.430 of this Part. No additional consent from the administrator is required to report and pay or deliver the property under this Section. The payment or delivery of the property to the administrator pursuant to this Section is considered to have been made in good faith. On payment or delivery of the property to the administrator, the property is presumed abandoned.

History

• Source: Amended at 50 Ill. Reg. 778, effective December 31, 2025

Chapter V Treasurer

Part 760 Revised Uniform Unclaimed Property Act

74 Ill. Adm. Code 760.210 Safe Deposit Boxes

a) Safe deposit boxes with contents that have remained unclaimed for 5 years after expiration of the lease or rental period are presumed abandoned. [765 ILCS 1026/15-205] Presumptively abandoned boxes shall be opened and inventoried in the presence of at least two employees of the holder who shall verify the accuracy of the inventory. The property shall then be sealed for safekeeping until delivered to the owner or the administrator.

b) The Annual Report containing information about the contents of safe deposit boxes must be filed before November 1, for financial organizations, and before May 1, for all other business associations, in the year in which the report is due. The Annual Report is to be submitted online. If a holder provides safe deposit boxes, then the Annual Report must be completed in its entirety, verified for accuracy, and filed regardless of whether a holder has abandoned safe deposit boxes to report. A "negative report" indicating no safe deposit box contents are being reported and remitted serves as a control to assist in detecting and preventing fraud or theft.

c) Notice to the apparent owner must be given prior to remittance to the administrator.

1. The holder of property presumed abandoned shall send to the apparent owner notice by first-class United States mail that complies with Section 15-502 of the Act in a format acceptable to the administrator not more than one year nor less than 60 days before filing the Annual Report under Section 15-401 of the Act if:

A) the holder has in its records an address for the apparent owner that the holder's records do not disclose to be invalid and is sufficient to direct the delivery of first-class United States mail to the apparent owner; and

B) the value of the property is $50 or more.

2. If an apparent owner has consented to receive electronic-mail delivery from the holder, the holder shall send the notice both by first-class United States mail to the apparent owner's last-known mailing address and by electronic mail, unless the holder believes that the apparent owner's electronic-mail address is invalid. [765 ILCS 1026/15-501]

d) Tangible property from a safe deposit box may not be delivered to the administrator until a mutually agreed upon date that is no sooner than 60 days after filing the Annual Report. [765 ILCS 1026/15-603(b)]

1. All safe deposit box shipments shall include a full copy of the previously submitted Annual Report. The Annual Report shall list all properties included and an inventory of each property.

2. Each property shall be provided in a tamper evident bag or envelope. An inventory sheet for each specific property shall be attached to or enclosed in the bag or envelope.

3. When remitting multiple properties at the same time, each property shall be in a separate tamper evident bag or envelope and labeled with the name of the owner. If a single property requires the use of more than one bag/envelope, the bags/envelopes are to be numbered accordingly (i.e., 1 of 3, 2 of 3, etc.).

e) Reimbursement of Holder

1. Property removed from a safe deposit box and delivered to the administrator under the Act is subject to the holder's right to reimbursement for the cost of opening the box and a lien or contract providing reimbursement to the holder for unpaid rent charges for the box. Upon application by the holder, and after there are sufficient cash funds available either from the contents of the box or the sale of the property, the administrator shall reimburse the holder from the proceeds. [765 ILCS 1026/15-606]

2. Holders may only be reimbursed for any costs and charges that were included in the Annual Report listing the contents of the safe deposit box whose owner owes the costs and charges to the holder.

3. It is the responsibility of the holder to apply for reimbursement of costs and charges under Section 15-606 of the Act. The administrator shall make available on the administrator's website a form for holders to apply for reimbursement under Section 15-606 of the Act.

4. If, after the sale of property removed from a safe deposit box and delivered to the administrator, there are not sufficient cash funds available to fully reimburse the holder for costs and charges allowed under Section 15-606 of the Act, the holder may apply to the administrator to be partially reimbursed up to the amount of cash funds available. If, however, the administrator pays all available cash funds to the holder under this subsection (e), the holder may not claim any additional costs and charges from the same safe deposit box.

f) Exceptions to the sale of tangible property.

1. Military medals or decorations. The administrator may not sell a medal or decoration awarded for military service in the armed forces of the United States.

2. Property with historical value. Property that the administrator reasonably believes may have historical value may be, at their discretion, loaned to an accredited museum in the United States where it will be kept until the administrator orders it to be returned to their custody.

3. Human remains. If human remains are delivered to the administrator under the Act, the administrator shall deliver those human remains to the coroner of the county in which the human remains were abandoned for disposition under the Counties Code [55 ILCS 5].

4. Evidence in a criminal investigation. Property that may have been used in the commission of a crime or that may assist in the investigation of a crime, as determined after consulting with the Illinois State Police, shall be delivered to the Illinois State Police or other appropriate law enforcement authority to allow law enforcement to determine whether a criminal investigation should take place.

5. Firearms. The administrator shall deliver to the Illinois State Police any firearm that has been stolen or used in the commission of a crime. Further, if the administrator is unable to return a firearm to its owner, the administrator shall transfer custody of the firearm to the Illinois State Police.

6. Religious artifacts and records. Despite being property that has no substantial commercial value under Section 15-609(a) of the Act, property that the administrator reasonably believes may be a religious artifact or record, which has no substantial commercial value or where the cost of disposing of that property exceeds the value of the property, will be preserved and retained by the administrator until that property is claimed by the owner or the owner's heirs or successors if storage of that property does not unduly burden the administrator.

7. Wills, testamentary instruments, and trust documents. Despite being property that has no substantial commercial value under Section 15-609(a) of the Act, records that the administrator reasonably believes to be an original will, codicil, or other testamentary instrument under the Probate Act of 1975 [755 ILCS 5] or a trust document under the Illinois Trust Code [760 ILCS 3] will be preserved and retained by the administrator until such property is claimed by the owner or by the owner's heirs or successors, if those records are not required to be filed with the clerk of the appropriate court, if storage of those records does not unduly burden the administrator.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.215 Financial Organizations

a) Demand, Savings, or Time Deposits. A demand, savings, or time deposit is presumed abandoned as follows:

1. a demand deposit, 3 years after the date of the last indication of interest in the property by the apparent owner;

2. a savings deposit, 3 years after the date of last indication of interest in the property by the apparent owner;

3. a time deposit for which the owner has not consented to automatic renewal of the time deposit, 3 years after the later of maturity or the date of the last indication of interest in the property by the apparent owner; and

4. an automatically renewable time deposit for which the owner consented to the automatic renewal in a record to file with the holder, 3 years after the date of last indication of interest in the property by the apparent owner, following the completion of the initial term of the time deposit and one automatic renewal term of the time deposit. [765 ILCS 1026/15-201(6)]

b) Automatically Renewable Deposits

1. General Rule. A deposit that is automatically renewable is presumed abandoned 3 years after the date of last indication of interest in the property by the apparent owner, following the completion of the initial term of the time deposit and one automatic renewal term of the time deposit. [765 ILCS 1026/15-201(6)]

2. Anti-penalty Provision. If property in a report under Section 15-401 of the Act is an automatically renewable time deposit and the holder determines that a penalty or forfeiture in the payment of interest would result from paying the deposit to the administrator at the time of the report, the date for reporting and delivering the property to the administrator is extended until a penalty or forfeiture no longer would result from delivery of the property to the administrator. The holder shall report and deliver the property on the next regular date prescribed for reporting by the holder under Section 15-603(b) of the Act after this extended date, and the holder shall indicate in its report to the administrator that the property is being reported on an extended date pursuant to this subsection. [765 ILCS 1026/15-603(b)]

3. Under the Act, the time when a holder is required to remit to the administrator a presumptively abandoned automatically renewable deposit is dependent upon both the term of the deposit and whether there is a penalty or forfeiture of interest provision applicable to such an automatically renewable deposit.

4. If it does not have a penalty or forfeiture of interest provision, then a presumptively abandoned automatically renewable deposit should be remitted to the administrator with the holder's first report after the initial term of the deposit and one automatic renewal term plus 3 years.

5. When a holder is required to remit a presumptively abandoned automatically renewable deposit with a penalty or forfeiture of interest provision depends upon the term of the deposit.

A) A presumptively abandoned automatically renewable deposit with a term of less than one year should be remitted to the administrator in the holder's first report after the initial term and one automatic renewal term plus 3 years.

EXAMPLE: A 6-month certificate of deposit would be remitted with the holder's first report after 4 years have passed. This would be the initial 6-month term, one automatic 6-month renewal term, plus the 6 additional 6-month terms that comprise the 3-year period of abandonment and then the time, which should be less than a year, until the holder's next report is due under the Act.

B) A presumptively abandoned automatically renewable deposit with a term of less than 3 years, but more than one year, should be remitted to the administrator with the holder's first report after the initial term and one automatic renewal term plus 3 years plus any time needed to avoid a penalty.

EXAMPLE: A 2-year certificate of deposit would be remitted with the holder's first report after 8 years have passed. This would be the initial 2-year term, one automatic 2-year renewal term, plus the 3-year period of abandonment plus the final year of the fourth 2-year term so as to avoid the penalty (i.e., the first report after four 2-year terms).

C) A presumptively abandoned automatically renewable deposit with a term of 3 years or more should be remitted to the administrator with the holder's first report after the end of the third term of the deposit.

EXAMPLE: A 5-year certificate of deposit would be remitted with the holder's first report after 15 years have passed. After the first 5-year term and one automatic renewal term, the end of the 3-year period of abandonment falls within the third 5-year term. So, to avoid any penalty, the certificate of deposit is remitted with the holder's first report after the end of the third 5-year term.

c) Money Orders. Subject to Section 15-201 of the Act, money orders are presumed abandoned 5 years after issuance.

d) Instruments other than money orders. Subject to Section 15-201 of the Act, any instrument on which a financial organization or business association is directly liable, other than a money order, is presumed abandoned 3 years after issuance. [765 ILCS 1026/15-201(3)]

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.220 Stored Value Cards

a) Stored Value Cards

1. Unless otherwise exempted by the Act or this Part, the net card value of a stored value card is required to be reported and remitted under the Act as property that is presumed abandoned pursuant to Section 15-206 of the Act.

2. In determining whether property falls within the definition of stored value card under the Act, the State Treasurer will consider the federal regulations concerning gift cards and gift certificates and official staff interpretations issued by the Board of Governors of the Federal Reserve System as part of what is commonly known as "Regulation E" (12 CFR 1005 (2011)). A stored value card will, in most cases, be a "general-use prepaid card" under those federal regulations. The use of those federal regulations and interpretations by the State Treasurer is intended to harmonize definitions and concepts used by state and federal regulators to make compliance easier for affected businesses.

3. Property that satisfies the definition of payroll card, merchandise credit, or gift card is not a stored value card.

4. If a holder has reported and remitted to the administrator the net card value on a stored-value card presumed abandoned under the Act and the stored-value card does not have an expiration date, then the holder must honor the card on presentation indefinitely and may then request reimbursement from the administrator under Section 15-605 of the Act.

A) This provision is required for the Act to avoid preemption by federal law.

B) See Notice of preemption determination "Electronic Fund Transfers; Determination of Effect on State Laws (Maine and Tennessee)" (Docket No. CFPB-2012-0036) issued by the federal Bureau of Consumer Financial Protection holding that Maine's unclaimed property law was not preempted by federal law because it contained an indefinite presentation provision, but Tennessee's unclaimed property law, which did not contain an indefinite presentation provision, was preempted by federal law.

74 Ill. Adm. Code 760.230 Gift Cards

a) Gift cards as defined in the Act are exempt from being reported and remitted as property that is presumed abandoned. Gift cards are excluded from the definition of property in the Act (see 765 ILCS 1026/15-102(24)(C)(iii)).

b) If property does not satisfy all the parts of the definition of gift card under the Act, then it does not qualify for the gift card exemption.

c) Property that does not qualify as a gift card includes, but is not limited to, property that:

1. has an expiration date;

2. is subject to a dormancy, inactivity, or post-sale service fee; or

3. may be redeemed for money, including at automated teller machines.

74 Ill. Adm. Code 760.240 Payroll Cards

a) Amounts held on payroll cards are presumed abandoned one year after the amount becomes payable under Section 15-201(13) of the Act.

b) Because payroll cards are not stored value cards, this one year period of abandonment applies to payroll cards instead of the 5-year period of abandonment for stored value cards under Section 15-206 of the Act.

74 Ill. Adm. Code 760.250 Merchandise Credits

a) Merchandise credits are exempt from being reported and remitted under the Act pursuant to Section 15-201(7) of the Act.

b) This exemption includes, but is not limited to, a stored value card that is given as in-store credit for returned merchandise.

c) However, the exemption for merchandise credits does not include stored value cards that:

1. are redeemable at multiple, unaffiliated merchants; or

2. may be redeemed for or converted into money or otherwise monetized by the issuer.

74 Ill. Adm. Code 760.260 Loyalty Cards

A loyalty card as defined in the Act is not a stored value card and is exempt from being reported and remitted. The exemption from the Act for loyalty cards does not apply to a "rebate card" as defined in Section 2LLL of the Consumer Fraud and Deceptive Business Practices Act [815 ILCS 505] as rebate cards are given for the direct monetary consideration of the consumer's purchase of a product or service.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.270 Property Related to Pre-Need Death Care Contracts

a) Illinois Funeral or Burial Funds Act [225 ILCS 45]

1. Funds on deposit or held in trust pursuant to the Illinois Funeral or Burial Funds Act are covered under the Act pursuant to Section 15-201(9).

2. Proceeds of a life insurance policy or annuity contract, even if used to fund a pre-need contract pursuant to the Illinois Funeral or Burial Funds Act, are covered under the Act pursuant to Sections 15-201(8) and 15-211.

3. The relevant provisions of Section 4 of the Illinois Funeral or Burial Funds Act determine the amount to be reported and remitted as unclaimed property under the Act.

A) If, after the death of the beneficiary, no funeral merchandise or services are provided or if the funeral is conducted by another provider, the seller may keep no more than 10% of the payments made under the pre-need contract or $300, whichever sum is less. The remainder of the trust funds or insurance or annuity proceeds shall be forwarded to the legal heirs of the deceased beneficiary or as determined by probate action. [225 ILCS 45/4(c-5)] If the legal heirs of the deceased beneficiary cannot be located and there is not an active probate action, the remainder of trust funds should be reported and remitted as unclaimed property pursuant to Section 15-201(9) of the Act and insurance or annuity proceeds should be reported and remitted pursuant to Sections 15-201(8) and 15-211 of the Act.

B) Refunds provided pursuant to Section 4 of the Illinois Funeral or Burial Funds Act may become unclaimed property as the debt of a business association under Section 15-201(5) of the Act.

4. If a pre-need contract requires entrustment under both the Illinois Funeral or Burial Funds Act and the Illinois Pre-Need Cemetery Sales Act [815 ILCS 390] and the only item that requires entrustment under the Illinois Pre-Need Cemetery Sales Act is an outer burial container, then, for the purposes of determining a presumption of abandonment under the Act, all amounts entrusted under the pre-need contract shall be treated as though they were entrusted under the Illinois Funeral or Burial Funds Act.

5. Funds on deposit or held in trust pursuant to the Illinois Funeral or Burial Funds Act are presumed abandoned the earliest of:

A) 2 years after the date of death of the beneficiary;

B) one year after the date the beneficiary has attained, or would have attained if living, the age of 105 when the holder does not know whether the beneficiary is deceased; or

C) 40 years after the contract for prepayment was executed, unless the apparent owner has indicated an interest in the property more than 40 years after the contract for prepayment was executed, in which case, 3 years after the last indication of interest in the property by the apparent owner. [765 ILCS 1026/15-201]

6. Pre-need funeral trusts established in jurisdictions other than the State of Illinois are generally not governed by the Illinois Funeral or Burial Funds Act. Pursuant to federal common law (U.S. Supreme Court Texas v. New Jersey, 379 U.S. 674 (1965); Pennsylvania v. New York, 407 U.S. 206 (1972); and Delaware v. New York, 507 U.S. 490 (1993)) and the Act, these non-Illinois pre-need funeral trusts should be reported and remitted to the administrator as unclaimed property when the address of the apparent owner in the records of the holder is in Illinois. The amount to be reported and remitted for these non-Illinois pre-need funeral trusts is determined by applicable law, including but not limited to the pre-need law of the state under which the contract was entered into.

b) Illinois Pre-Need Cemetery Sales Act [815 ILCS 390]

1. Burial rights, along with rights of interment, entombment or inurnment are all interests in real property. Interests in real property are not covered by the Act and do not become unclaimed property under the Act.

2. Refunds provided pursuant to Section 18 of the Illinois Pre-Need Cemetery Sales Act may become unclaimed property as the debt of a business association under Section 15-201(5) of the Act.

3. Funds on deposit or held in trust pursuant to Section 16 of the Illinois Pre-Need Cemetery Sales Act are not property under the Act. Instead, Section 18.5 of the Illinois Pre-Need Cemetery Sales Act provides an alternative mechanism for unclaimed pre-need cemetery trust funds. The Illinois Office of the Comptroller is the primary regulator for these trust funds.

4. Pre-need cemetery trusts established in jurisdictions other than the State of Illinois are generally not governed by the Illinois Pre-Need Cemetery Sales Act. These non-Illinois pre-need cemetery trusts are not exempt from the Act. Instead, pursuant to federal common law and the Act, they must be reported and remitted to the administrator as unclaimed property when the address of the apparent owner in the records of the holder is in Illinois. The amount to be reported and remitted for these non-Illinois pre-need cemetery trusts is determined by applicable law, including but not limited to the pre-need cemetery trusts law of the state under which the contract was entered into.

c) Death Master File

1. The Act does not mandate holders of trust funds under the Illinois Funeral or Burial Funds Act or the Illinois Pre-Need Cemetery Sales Act to compare their records against the Social Security Administration's Death Master File.

2. While the Act does not mandate holders of life insurance or annuities, including those intended to fund a pre-need contract under the Illinois Funeral or Burial Funds Act or Illinois Pre-Need Cemetery Sales Act, to compare their records against the Social Security Administration's Death Master File, holders must still comply with the provisions of the Unclaimed Life Insurance Benefits Act [215 ILCS 185].

3. Nothing in the Act or this Part restricts the ability of the administrator or the administrator's agent to conduct a comparison between the Social Security Administration's Death Master File and a holder's records during an examination conducted pursuant to the Act.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.280 Reporting Securities

Remittance of securities. Unless otherwise provided, all securities and commodities when remitted by the holder to the administrator shall:

a) be registered as "Treasurer of the State of Illinois"; or

b) be deposited into a new or existing securities or commodities account either in the name of "Treasurer of the State of Illinois" or in a nominee account (aka "street name" account) established by a vendor acting as a custodian for the administrator; and

c) include all dividends, interest, warrants, or other rights, or associated cash in a check payable to "Treasurer of the State of Illinois" unless otherwise directed by the administrator.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.290 Deceased Owner

a) Subject to the owner interest provisions of Section 15-210 of the Act, a deceased owner cannot indicate interest in his or her property. [765 ILCS 1026/15-201]

1. Apparent owner interest shall include the activity of beneficiaries and estate executors or other persons who have a legal or equitable right to ownership or custody of the property when the apparent owner as listed in the records of the holder is deceased.

2. Thus, while a deceased apparent owner can no longer indicate interest in their own property, the new owner or his/her agent(s) may indicate interest in the property and, thus, prevent abandonment.

b) If the apparent owner as listed in the records of the holder is deceased and the abandonment period for the owner's property is greater than 2 years, then the property, shall instead be presumed abandoned 2 years from the date of the owner's last indication of interest in the property. This provision does not apply to an amount owed by an insurance company on a life or endowment insurance policy or an annuity contract that has matured or terminated. [765 ILCS 1026/15-201] This statutory provision does not apply to situations involving the death of the apparent owner when the property is covered by either Section 15-202(a)(2)(B) of the Act (tax-deferred retirement accounts) or Section 15-208(d) of the Act (concerning securities), as in neither case is the abandonment period greater than 2 years.

c) A holder who fails to report, pay, or deliver property within the time prescribed by the Act shall not be required to pay interest or be subject to penalties if the failure to report, pay, or deliver the property was due to lack of knowledge of the death that established a shorter period of abandonment under the Act. [765 ILCS 1026/15-1204(c)]

d) The Act does not impose a new or separate duty on a holder to determine whether an apparent owner is deceased. However, the Act does not relieve a holder of any duty imposed by another law, whether state or federal, that may impose such a duty.

e) Sections 15-202 and 15-208 of the Act both provide that when a holder, in the ordinary course of its business, receives notice or an indication of the death of an apparent owner, the holder shall attempt not later than 90 days after receipt of the notice or indication to confirm whether the apparent owner is deceased.

1. These provisions are not intended to require a holder to independently confirm the death of the apparent owner when the holder reasonably believes that the apparent owner is deceased.

2. Instead, these provisions establish a 90-day deadline for a holder to conduct any independent investigation or search to confirm the death of the apparent owner.

3. EXAMPLE: If a holder learns that an apparent owner is listed on the Social Security Administration's Death Master File (DMF) and the holder is satisfied that the presumption of death from such a match is correct, then the holder does not need to independently confirm the death of the apparent owner.

74 Ill. Adm. Code 760.300 Apparent Owner Interest

a) Under Section 15-210(a) of the Act the period after which property is presumed abandoned is measured from the later of:

1. the date the property is presumed abandoned under the Act; or

2. the latest indication of interest by the apparent owner in the property.

b) Under Section 15-210(b) of the Act, an indication of an apparent owner's interest in property includes, but is not limited to:

1. a record communicated by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held;

2. an oral communication by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held, if the holder or its agent contemporaneously makes and preserves a record of the fact of the apparent owner's communication;

3. presentment of a check or other instrument of payment of a dividend, interest payment, or other distribution with respect to an account, underlying security, or interest in a business association;

4. activity directed by an apparent owner in the account in which the property is held, including accessing the account or information concerning the account, or a direction by the apparent owner to increase, decrease, or otherwise change the amount or type of property held in the account;

5. a deposit into or withdrawal from an account at a financial organization, except for a recurring ACH debit or credit previously authorized by the apparent owner or an automatic reinvestment of dividends or interest; and

6. subject to Section 15-210(e) of the Act, payment of a premium on an insurance policy.

c) Owner-initiated Activity. Owner-initiated financial transactions or authenticated owner-initiated administrative activity are an indication of an apparent owner's interest in the property. A holder must maintain a record of owner-initiated activity. These include, without limitation:

1. trading activity in the account;

2. depositing funds into the account or withdrawing funds from the account;

3. non-automated electronic distributions;

4. contacting the holder to discuss any account related matters;

5. sending the holder paperwork or documents related to the account;

6. meeting with (or otherwise interacting with) a financial advisor regarding the account;

7. modifying the account profile;

8. sending the holder correspondence regarding the account whether via mail or electronic means, including e-mail;

9. submitting an account service request online;

10. voting a proxy;

11. setting up the account for e-delivery;

12. accessing the account via the holder's website or other electronic means; and

13. the initial authorizing of automatic payments or distributions from the account by the apparent owner.

d) Activity that Does Not Show Apparent Owner Interest. Apparent owner interest is distinguishable from holder-generated activity such as, without limitation, crediting dividends, posting account fees, and mailing account statements, which does not constitute apparent owner interest.

1. Automatic financial or administrative transactions or activity, such as automatic payments or distributions or automatic portfolio rebalancing, or system conversions, shall not be considered apparent owner interest.

2. Non-return of Mail

A) Non-return of mail sent by the holder to an account owner does not constitute apparent owner interest.

B) Returned Post Officer (RPO) Standard

i) Despite the general rule that non-return of mail does not constitute apparent owner interest, certain types of property are considered abandoned when first-class mail is returned undelivered to the holder by the U.S. Postal Service. This is commonly referred to as an RPO standard and is used in Sections 15-202, 15-204 and 15-208 of the Act.

ii) When an RPO standard is used in the Act, the non-return of mail still does not constitute apparent owner interest. Instead, the presumption of abandonment is triggered by the return of the mail instead of by the passage of time without apparent owner interest.

iii) In Section 15-208 of the Act, a security is presumptively abandoned on the earlier of 3 years after an RPO standard is met or 5 years from the last indication of interest by the apparent owner. The non-return of mail does not constitute apparent owner interest for the 5-year presumption under Section 15-208 of the Act.

e) Interest by a Person Other Than the Apparent Owner

1. An action by an agent or other representative of an apparent owner, other than the holder acting as the apparent owner's agent, is presumed to be an action on behalf of the apparent owner. [765 ILCS 1026/15-210(c)]

2. A communication with an apparent owner by a person other than the holder or the holder's representative is not an indication of interest in the property by the apparent owner unless a record of the communication evidences the apparent owner's knowledge of a right to the property. [765 ILCS 1026/15-210(d)]

3. If an apparent owner is deceased, apparent owner interest shall include, but is not limited to, activity of beneficiaries and estate executors or other persons who have a legal or equitable right to ownership or custody of the property.

f) Consolidated Statement Rule for Financial Organizations

1. If the apparent owner has another property with the holder to which Section 201(6) of the Act applies, then activity directed by an apparent owner in any other accounts, including loan accounts, at a financial organization holding an inactive account of the apparent owner shall be an indication of interest in all such accounts if the apparent owner engages in one or more of the following activities:

A) the apparent owner undertakes one or more of the actions described in this Section regarding any of the other accounts the apparent owner has with the financial organization;

B) the apparent owner increases or decreases the amount of funds in any other account the apparent owner has with the financial organization; or

C) the apparent owner engages in any other relationship with the financial organization, including payment of any amounts due on a loan.

2. This subsection (f) applies so long as the mailing address for the apparent owner in the financial organization's books and records is the same for both the inactive account and the active account. [765 ILCS 1026/15-210(f)]

g) For an amount held on a payroll card, an indication of owner interest includes wages from an employer pursuant to Section 14.5 of the Illinois Wage Payment and Collection Act [820 ILCS 115] in the form of a recurring ACH credit previously authorized by the apparent owner; however, an ACH credit is not an indication of owner interest if the holder assesses fees for account inactivity on the payroll card account. [765 ILCS 1026/15-210(g)]

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.310 Anti-Limitations Provision

a) Expiration of a period of limitation on an owner's right to receive or recover property, whether specified by contract, statute, or court order, does not prevent the property from being presumed abandoned or affect the duty of a holder under the Act to file a report or pay or deliver property to the administrator. [765 ILCS 1026/15-610(a)]

b) This provision of the Act is a continuation of existing Illinois law. Under the common law in Illinois, contracts could not serve as a limitation on the ability of the State to take custody of unclaimed property. (See People ex rel. Callahan v. Marshall Field & Co., 83 Ill. App. 3d 811, 818, 404 N.E.2d 368, 374 (1980) citing Connecticut Mutual Life Insurance Co. v. Moore, 333 U.S. 541 (1948); Screen Actors Guild, Inc. v. Cory (1979), 91 Cal. App. 3d 111, 154 Cal. Rptr. 77; and State v. Jefferson Lake Sulphur Co. (1962), 36 N.J. 577, 178 A.2d 329.)

74 Ill. Adm. Code 760.320 Online Sports Wagering

a) As the debt of a business association, an online sports wagering account with a balance, where 3 years have passed from the date of last indication of interest by the apparent owner, is presumed to be an abandoned account.

b) The amount to be reported and remitted to the administrator from an abandoned online sports wagering account is determined by relevant law beyond the Act including where applicable, the relevant state laws concerning online sports wagering. However, the anti-limitations provisions of Section 15-610(a) of the Act are applicable.

History

• Source: Added at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.330 Virtual Currency

Virtual currency is presumed abandoned 5 years after the last indication of interest in the property by the apparent owner. [765 ILCS 1026/15-201(6.5)]

History

• Source: Added at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.400 Holder Reporting Required

a) A holder of property presumed abandoned shall report to the administrator via the internet in a format approved by the administrator, unless granted written permission by the administrator to file a paper report.

b) A holder may contract with a third party to make the report required, but remains responsible to the administrator for the complete, accurate, and timely reporting of property presumed abandoned and for paying or delivering to the administrator property described in the report. Any reports filed by a third party must provide the holder's contact name, email address, mailing address, and phone number.

c) The administrator will accept a report filed in the current National Association of Unclaimed Property Administrators (NAUPA) standard format found on the administrator's website: icash.illinoistreasurer.gov.

d) A business association who has no reportable property shall so report to the administrator on forms via the Internet in a format approved by the administrator if the business association has:

1. annual sales of more than $1,000,000;

2. securities that are publicly traded;

3. a net worth of more than $10,000,000; or

4. more than 100 employees. [765 ILCS 1026/15-401(d)]

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.405 Reporting and Remitting by Pension Systems Subject to Section 15-1506 of the Act

a) All retirement systems, pension funds, and investment boards created pursuant to Article 3, 4, or 22 of the Illinois Pension Code (Police, Firefighters' and Miscellaneous Collateral Provisions) must report abandoned property to the administrator.

b) The report must include:

1. Name of the owner and the names of any beneficiaries;

2. Last known address, if known, of owner and beneficiaries, if any;

3. Social Security number or taxpayer identification number of owner and beneficiaries, if any; and

4. Dollar amount.

c) All retirement systems, pension funds, and investment boards created pursuant to Article 3, 4, or 22 of the Illinois Pension Code shall engage in the following due diligence for presumptively abandoned property with a value of $50 or more:

1. Attempt to contact the apparent owner not less than 90 days before the filing of the report with the administrator, using first-class U.S. Mail, telephone, and email;

2. Send a notice to the apparent owner, not less than 60 days before filing the report with the administrator, using certified U.S. Mail;

3. Check related plan and employer records for more current contact information for the apparent owner, as well as for more current contact information for any beneficiaries;

4. Attempt to contact designated beneficiaries to find updated contact information for the apparent owner;

5. Make reasonable use of free internet search tools to search for an apparent owner; and

6. Conduct additional due diligence, such as the use of internet search tools, commercial locator services, credit reporting agencies, information brokers, investigation databases, and analogous services that may involve charges if the property is valued over $1,000.

d) A retirement system, pension fund, or investment board subject to this Section does not need to send due diligence mail or email to an address that it knows to be invalid.

e) The due diligence requirements of this Section follow the U.S. Department of Labor Employee Benefits Security Administration's Field Assistance Bulletin No. 2014-01. If the U.S. Department of Labor issues subsequent guidance or regulations that require additional due diligence or otherwise conflict with this Section, this subsection will be amended accordingly.

f) All retirement systems, pension funds, and investment boards created pursuant to Article 3, 4, or 22 of the Illinois Pension Code shall enter into an interagency agreement with the administrator concerning the due diligence and reporting requirements of this Section. The interagency agreement shall require an annual certification that the retirement system, pension fund, or investment board meets or exceeds the due diligence requirements of this Section.

g) If a retirement system, pension fund, or investment board created pursuant to Article 3, 4, or 22 of the Illinois Pension Code satisfies the due diligence and certification requirements of Section 15-1506 of the Act, then that retirement system, pension fund, or investment board shall report presumptively abandoned property in an annuity, pension, or benefit fund held in a fiduciary capacity by or on behalf of that retirement system, pension fund, or investment board (see subsections (a) and (b)), but is not required to remit presumptively abandoned property to the administrator.

h) If a retirement system, pension fund, or investment board created pursuant to Article 3, 4, or 22 of the Illinois Pension Code does not meet the due diligence and certification requirements of Section 15-1506 of the Act, then that retirement system, pension fund, or investment board is required to both report and remit all presumptively abandoned property, as required by the Act, including presumptively abandoned property in an annuity, pension, or benefit fund held in a fiduciary capacity.

i) A retirement system, pension fund, or investment board created pursuant to Article 3, 4, or 22 of the Illinois Pension Code is still required to report and remit to the administrator all other presumptively abandoned property that is not in an annuity, pension, or benefit fund held in a fiduciary capacity.

History

• Source: Added at 44 Ill. Reg. 6403, effective April 8, 2020

74 Ill. Adm. Code 760.406 Reporting and Remitting by Pension Systems Subject to Section 15-1505 of the Act

a) Property in an annuity, pension, or benefit fund held in a fiduciary capacity by or on behalf of a retirement system, pension fund, or investment board created pursuant to any Article of the Illinois Pension Code, except for Articles 3, 4, and 22, that would be presumed abandoned under Article 2 of the Act shall be reported to the administrator but not paid or delivered to the administrator.

b) The report must include:

1. Name of the owner and the names of any beneficiaries;

2. Last known address, if known, of owner and beneficiaries;

3. Social Security number or taxpayer identification number of owner and beneficiaries, if any; and

4. Dollar amount.

c) A retirement system, pension fund, or investment board created pursuant to any Article of the Illinois Pension Code is still required to report and remit to the administrator all other presumptively abandoned property that is not in an annuity, pension, or benefit fund held in a fiduciary capacity.

History

• Source: Added at 44 Ill. Reg. 6403, effective April 8, 2020

74 Ill. Adm. Code 760.407 Reporting Virtual Currency

a) If property reported to the administrator is virtual currency, the holder shall liquidate the virtual currency and remit the proceeds to the administrator. The liquidation shall occur anytime within 30 days prior to the filing of the report under Section 15-401 of the Act.

b) The owner shall not have recourse against the holder or the administrator to recover any gain in value that occurs after the liquidation of the virtual currency under this Section. [765 ILCS 1026/15-603(i)]

c) If a holder reasonably believes it cannot liquidate virtual currency and cannot otherwise cause virtual currency to be liquidated, the holder shall promptly notify the administrator in writing and explain the reasons why the virtual currency cannot be liquidated as otherwise required by the Act. Reasons why a holder cannot liquidate virtual currency include, but are not limited to, the following:

1. the cost of liquidation and delivery to the administrator would exceed the value of the virtual currency on the date a report is due under the Act;

2. there is no functioning market in the virtual currency; or

3. trading in the virtual currency is so limited that liquidation of the virtual currency would result in a market distortion for such virtual currency.

d) The administrator may direct the holder to:

1. transfer the virtual currency that cannot be liquidated to a custodian selected by the administrator; or

2. continue to hold the virtual currency until the administrator or the holder determines that the virtual currency can be liquidated pursuant to the Act or there is an indication of apparent owner interest pursuant to Section 15-210 of the Act.

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.410 Report Contents

a) The report required by Article 4 of the Act must:

1. be signed by or on behalf of the holder and verified as to its completeness and accuracy;

2. if filed electronically, be in a secure format approved by the administrator that protects confidential information of the apparent owner;

3. describe the property;

4. except for a traveler's check, money order, or similar instrument, contain the name, if known, complete last-known address, if known, e-mail address, if known, and Social Security number or taxpayer identification number, if known or readily ascertainable, of the apparent owner of property with a value of $5 or more;

5. for an amount held or owing under a life or endowment insurance policy, annuity contract, or other property in which ownership vests in a beneficiary upon the death of the owner, contain the name and last-known address of the insured, annuitant, or other apparent owner of the policy or contract and of the beneficiary;

6. for property held in or removed from a safe deposit box, indicate the location of the property, where it may be inspected by the administrator, and any amounts owed to the holder under Section 15-606 of the Act;

7. combine all dividend checks into one property for each reported account;

8. contain the commencement date for determining abandonment;

9. state that the holder has complied with the notice requirements of the Act;

10. identify property that is a non-freely transferable security and explain why it is a non-freely transferable security;

11. detail the gross amount of the property as well as any dormancy fees or escheat fees deducted as allowed under Section 15-602 of the Act;

12. identify the remitter and payee for all two-party checks (e.g., cashier's checks); and

13. identify a bank issued check for the closure of an account as Outstanding Official Checks with the appropriate corresponding NAUPA code.

b) Holders may report property valued at less than $5 each in the aggregate. However, the administrator may request that the holder provide information about the name, address, Social Security number or taxpayer identification number of an apparent owner of property with a value of less than $5 when the information is necessary to verify or process a claim filed with the administrator by an apparent owner.

c) If a holder has changed its name while holding property presumed abandoned or is a successor to another person that previously held the property for the apparent owner, the holder must include in the report its former name or the name of the previous holder, if any, and the known name and address of each previous holder of the property. [765 ILCS 1026/15-402(d)]

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.420 Filing Dates

a) Financial organizations, governments, governmental entities, and insurance companies except life insurance companies must file a report before November 1 of each year that covers the 12 months preceding July 1 of that year.

b) All other business associations must file before May 1 of each year for the immediately preceding calendar year.

74 Ill. Adm. Code 760.430 Early Reporting and Remittance of Property

a) A holder may pay or deliver property to the administrator before the property is presumed abandoned under the Act if the holder:

1. provides the apparent owner of the property any notice required by Section 15-501 of the Act and provides the administrator evidence of the holder's compliance with any notice required by the Act;

2. includes with the payment or delivery a report regarding the property conforming to the Act and this Section; and

3. first obtains the administrator's written consent to accept payment or delivery of the property.

b) A holder's request for the administrator's consent to remit or deliver property before the property is presumed abandoned under the Act must be in writing.

c) If the administrator fails to respond to the request not later than 30 days after receipt of the request, the administrator is deemed to consent to the payment or delivery of the property and the payment or delivery is considered to have been made in good faith.

d) On payment or delivery of property under this Section, the property is presumed abandoned. [765 ILCS 1026/15-608]

e) A holder that pays or delivers property to the administrator pursuant to Section 15-608 of the Act in good faith and substantially complies with Sections 15-501 and 15-502 of the Act is relieved of all liability that thereafter may arise or be made in respect to the property to the extent of the value of the property so paid or delivered. [765 ILCS 15-604(a)]

74 Ill. Adm. Code 760.440 Extensions

a) A holder may request an extension for filing. The request must be in writing and must specify the proposed period of extension.

b) The request must include a reasonable cause for an extension.

1. Reasonable cause includes, without limitation, natural disaster, criminal activity related to the holder's books and records, recent changes in the form of ownership of the holder, etc.

2. Providing due diligence notices to apparent owners and other holder actions required by the Act does not constitute reasonable cause.

c) Extension requests must be received by the administrator at least 15 business days before the date the report would otherwise be due.

d) Not later than 10 business days after the date of the request, the administrator shall respond to the request. The administrator may grant the request, deny the request, or grant an extension for a different period of time.

e) If an extension is granted, the holder may pay or make a partial payment of the amount the holder estimates ultimately will be due. The payment or partial payment terminates accrual of interest on the amount paid. [765 ILCS 1026/15-403(c)]

74 Ill. Adm. Code 760.450 Incomplete and Rejected Reports

If the administrator notifies a holder that a report is incomplete or incorrect, then a corrected report must be filed by the holder no later than 20 calendar days after notification by the administrator. The administrator may grant an extension in writing for reasonable cause.

74 Ill. Adm. Code 760.460 Due Diligence Notice by Holder

a) Sections 15-501 and 15-502 of the Act specify when and how a holder must provide notice to the apparent owner of property presumed abandoned. This notice process is a "due diligence notice" from the holder to the apparent owner. A due diligence notice is intended to provide an opportunity for an apparent owner to indicate interest in the property presumed abandoned prior to such property being reported and remitted to the administrator.

b) Unless otherwise provided by the Act or these rules, the holder of property presumed abandoned shall send to the apparent owner a due diligence notice by first-class U.S. Mail between 60 days and one year before reporting the property (see 765 ILCS 1026/15-501(a)).

c) A holder does not need to send notice by first-class U.S. Mail if any of the following are true:

1. the property is valued at less than $50;

2. the holder does not have in its records an address for the apparent owner that is sufficient for delivery of first-class U.S. Mail;

3. the holder's records indicate that the address for the apparent owner is invalid; or,

4. the holder sends notice by certified U.S. Mail.

d) If the holder has in its records an e-mail address for an apparent owner and the apparent owner has consented to receive e-mail from the holder, then unless the holder believes the e-mail address is invalid, the holder shall send a due diligence notice by e-mail to the apparent owner in addition to any other due diligence notice required by the Act (see 765 ILCS 1026/15-501(b)). Due diligence notice by e-mail does not have to be sent at the same time as a due diligence notice by U.S. mail.

e) Certified Mail Due Diligence for Securities Valued at $1,000 or More

1. If the property presumed abandoned is securities valued at $1,000 or more and the holder has in its records an address for the apparent owner that the holder's records do not disclose to be invalid and is sufficient to direct the delivery of U.S. Mail to the apparent owner, then the due diligence notice shall be sent by certified U.S. Mail (see 765 ILCS 1026/15-501(c)). If the apparent owner is a natural person, then the holder should utilize Certified Mail Restricted Delivery to direct the due diligence notice to the apparent owner or the apparent owner's authorized agent.

2. If the holder sends a due diligence notice by certified mail, then the holder does not need to send a due diligence notice by first-class U.S. Mail.

3. A signed return receipt in response to a notice sent by certified U.S. Mail shall constitute a record communicated by the apparent owner to the holder concerning the property or the account in which the property is held, and thus shall constitute an indication of interest by the apparent owner in the property under Section 15-210 of the Act.

f) A holder may contract with a third party to provide the required due diligence notice to an apparent owner under the Act and these rules.

1. Whether or not the holder contracts with a third party to provide required due diligence notices, the holder remains responsible for ensuring that any required due diligence notices are provided prior to the reporting and remitting of property presumed abandoned to the administrator.

2. If a holder contracts with a third party to provide required due diligence notices and the due diligence notice is being sent after the date the property was presumed abandoned under the Act, then, pursuant to Section 15-1302 of the Act, neither the holder nor the third party may charge the apparent owner a fee to indicate an interest in property presumed abandoned or to otherwise prevent the reporting and remitting of property presumed abandoned to the administrator.

g) Contents of Due Diligence Notice

1. A due diligence notice by a holder must contain a heading that reads substantially as follows: "Notice. The State of Illinois requires us to notify you that your property may be transferred to the custody of the State Treasurer if you do not contact us before (insert date that is 30 days after the date of this notice)."

2. A due diligence notice by a holder must:

A) identify the nature and, except for property that does not have a fixed value, the value of the property that is the subject of the notice;

B) state that the property will be turned over to the State Treasurer;

C) state that after the property is turned over to the State Treasurer an apparent owner that seeks return of the property may file a claim with the State Treasurer;

D) state that property that is not legal tender of the United States may be sold by the State Treasurer;

E) provide instructions that the apparent owner must follow to prevent the holder from reporting and paying or delivering the property to the State Treasurer; and,

F) provide the name, address, and e-mail address or telephone number to contact the holder.

3. In a due diligence notice, the holder may also list a website where apparent owners may obtain more information about how to prevent the holder from reporting and paying or delivering the property to the State Treasurer.

h) Holder Deduction of Costs of Due Diligence Notices

1. A holder that reports and remits money may deduct from total amounts remitted, the actual costs of due diligence notices.

2. The deduction shall consist of the cost of envelopes, postage, and stationery. No other costs may be deducted.

3. For purposes of holder deductions for due diligence mailings, postage includes amounts paid to the United States Postal Service for first class United States mail and certified United States mail.

4. A holder may be required to document or certify to the costs incurred and deducted.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.470 Retention of Records by Holder

a) A holder is required to retain records for 10 years after the later of the date the report was filed or the last date a timely report was due to be filed.

b) The records must contain:

1. the information required to be included in the report;

2. the date, place, and nature of the circumstances that gave rise to the property right;

3. the amount or value of the property;

4. the last address of the apparent owner, if known to the holder;

5. sufficient records of items that were not reported as unclaimed, to allow examination to determine whether the holder has complied with the Act [765 ILCS 1026/15-404];

EXAMPLE: Records related to property when the holder gave express notice to the administrator of a dispute regarding the property. [765 ILCS 1026/15-610(b)]; and

6. a record of the instruments while they remain outstanding indicating the state and date of issue if the holder sells, issues, or provides to others for sale or issue in this State traveler's checks, money orders, or similar instruments, other than third-party bank checks, on which the holder is directly liable. [765 ILCS 1026/15-404].

c) If a holder fails to maintain records required by Section 15-404 of the Act, the administrator may determine the value of property due using a reasonable method of estimation based on all information available to the administrator, including extrapolation and use of statistical sampling when appropriate and necessary, consistent with examination procedures and standards in this Part.

d) Both the records retention period of Section 15-404 of the Act and the statute of limitations in Section 15-610(b) of the Act are 10 years. However, the statute of limitations only applies after the holder specifically identified the property in a report filed with the administrator or gave express notice to the administrator of a dispute regarding the property. [765 ILCS 1026/15-610(b)] If the statute of limitations has been tolled because the holder failed to either report property or provide express notice to the administrator and the holder fails to maintain sufficient records of items that were not reported as unclaimed, to allow examination to determine whether the holder has complied with the Act [765 ILCS 1026/15-404(5)], the administrator may use estimation in an examination of that holder pursuant to Section 15-1006 of the Act and this Part.

74 Ill. Adm. Code 760.500 Notices by United States Mail

a) The administrator shall send at least one written notice by first-class U.S. Mail to each apparent owner of unclaimed property held by the administrator and valued at $100 or more.

b) However, the administrator shall not send a notice under this Section by first-class U.S. Mail if the administrator reasonably believes that a mailing by first-class U.S. Mail would not be received by the apparent owner.

c) In the case of a security held in an account for which the apparent owner had consented to receiving e-mail from the holder, the administrator shall send notice by e-mail if the e-mail address of the apparent owner is known to the administrator, instead of by first-class U.S. Mail. [765 ILCS 1026/15-503(b)(1)]

74 Ill. Adm. Code 760.510 E-Mail Notices

a) Whenever the administrator has an e-mail address for an apparent owner of unclaimed property held by the administrator and valued at $100 or more and the administrator does not know that e-mail address to be invalid, the administrator shall send at least one notice to the apparent owner by e-mail if the administrator did not send a written notice by first-class U.S. Mail. (See 765 ILCS 1026/15-503(b)(2).)

b) In addition to any notice mandated by the Act, the administrator may send an additional notice to an apparent owner to any e-mail address for the apparent owner that the administrator does not know to be invalid.

c) When practicable, e-mail notices from the administrator shall provide a hyperlink to the website maintained by the administrator.

74 Ill. Adm. Code 760.520 Newspaper Notices

a) Twice every year, the administrator shall cause to be published in at least one English language newspaper of general circulation in each county in this State a notice concerning the unclaimed property program.

b) The newspaper notice shall include the following information:

1. an estimate of the total value of property available to be claimed from the administrator;

2. the approximate total value of claims paid by the administrator statewide during the preceding fiscal year;

3. the internet web address of the unclaimed property website maintained by the administrator;

4. an e-mail address to contact the administrator to inquire about or claim property; and

5. a statement that computers may be available at a local public library to search for unclaimed property. [765 ILCS 1026/15-503(c)(1)]

c) The administrator may contract with a vendor to cause to be published the required newspaper notices. A contract concerning newspaper notices may, but is not required to, be part of a more comprehensive marketing services contract or specific contract.

d) Newspaper notices may include other information at the discretion of the administrator.

e) The administrator may cause additional notices or advertisements to be published in newspapers and print publications other than the required notices. The additional notices do not need to contain the mandatory information listed in subsection (b).

History

• Source: Amended at 50 Ill. Reg. 778, effective December 31, 2025

Chapter V Treasurer

Part 760 Revised Uniform Unclaimed Property Act

74 Ill. Adm. Code 760.530 Website

a) The administrator shall maintain a website accessible by the public and electronically searchable that contains the names reported to the administrator of apparent owners for whom property is being held by the administrator.

b) The administrator does not need to list property on the unclaimed property website when:

1. no owner name was reported;

2. a claim has been initiated or is pending for the property;

3. the administrator has made direct contact with the apparent owner of the property; and

4. in other instances in which the administrator reasonably believes exclusion of the property is in the best interests of both the State and the owner of the property. [765 ILCS 1026/15-503(c)(1)]

c) The administrator's unclaimed property website shall include an online claim form and instructions for filing a claim with the administrator. The administrator may also make available a printable claim form with instructions for its use. [765 ILCS 1026/15-503(d)]

d) The administrator may include on the website the names and addresses of apparent owners of property held by the administrator. [765 ILCS 1026/15-1401(d)]

e) In addition to the required website, the administrator may utilize other websites, including any websites endorsed by the National Association of Unclaimed Property Administrators (NAUPA), to promote the unclaimed property program and seek to reunite owners with their unclaimed property.

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.540 Tax Return Identification of Apparent Owners

The administrator will work with the Illinois Department of Revenue (DOR) to facilitate the return of unclaimed property to Illinois taxpayers through data sharing as required by the Act. This data sharing is intended to update contact information for apparent owners in the administrator's records, to allow the administrator to return some types of unclaimed property directly to apparent owners without a claim being filed, and to otherwise facilitate the return of unclaimed property in the custody of the administrator to the legal owners.

74 Ill. Adm. Code 760.550 Updating Apparent Owner Data

a) The administrator may utilize publicly and commercially available databases, as well as information obtained through data sharing agreements authorized by the Act, to find and update or add information for apparent owners of property held by the administrator.

b) The administrator may, but is not required to, update or add a mailing address or e-mail address for an apparent owner prior to sending notices required by the Act.

c) If a required notice has already been sent by the administrator, the administrator does not need to send a new written notice merely because a mailing address or e-mail address for an apparent owner has been subsequently updated or added.

74 Ill. Adm. Code 760.560 Other Discretionary Means of Providing Notice

a) Paid Advertising

1. The administrator may use paid advertising to increase awareness of the unclaimed property program, provide notice to persons who may be the owners of unclaimed property in the custody of the administrator, or to otherwise facilitate the return of unclaimed property to legal owners.

2. Any paid advertising shall conform to the requirements of Section 5-20 of the State Officials and Employees Ethics Act [5 ILCS 430].

b) Direct Contact

1. The administrator may use contact information reasonably believed to be accurate to attempt to directly contact apparent owners of property held by the administrator.

2. When directly contacting an apparent owner, the administrator may reveal additional information concerning the apparent owner's property if the administrator believes the information will assist in identifying and returning property to the owner and does not disclose personal information as defined in the Personal Information Protection Act [815 ILCS 530].

3. Direct contacts include, but are not limited to, telephone calls, in-person meetings, direct electronic communications, targeted social media contacts, and similar methods of contact.

c) Broadcast Media

1. The administrator may make agreements with broadcast media outlets to use live telethons, call-in programs, and similar events of limited duration to both promote the unclaimed property program authorized by the Act and to notify owners of the existence of unclaimed property.

2. These broadcasts should be considered the dissemination of news and should not be considered a public service announcement or advertisement.

d) Contractual Vendors

1. The administrator may contract with one or more vendors that provide websites, including any websites endorsed by the National Association of Unclaimed Property Administrators (NAUPA), to promote the unclaimed property program and seek to reunite owners with their unclaimed property.

2. The administrator may contract with one or more vendors that provide applications to assist apparent owners in identifying and claiming property in the custody of the administrator. The vendors shall be selected by a competitive request for proposals pursuant to the Office of the Treasurer Procurement Rules [44 Ill. Adm. Code 1400]. Compensation must conform with the restrictions in Article 13 of the Act concerning agreements to locate property of apparent owners held by the administrator.

74 Ill. Adm. Code 760.570 Confidentiality

The administrator may include in published notices, printed publications, telecommunications, the Internet, or other media and on the website or in the database additional information concerning the apparent owner's property if the administrator believes the information will assist in identifying and returning property to the owner and does not disclose personal information as defined in the Personal Information Protection Act [815 ILCS 530]. [765 ILCS 1026/15-1401(d)]

74 Ill. Adm. Code 760.580 Notice to State Agencies and Units of Local Government

a) If the administrator reasonably believes that the apparent owner of property presumed abandoned held by the administrator under this Act is a unit of local government in this State which files an audit report or annual financial report with the Comptroller, the administrator may give written notice to the person or persons identified in the most recent annual financial report as the contact person, the chief executive officer, and the chief financial officer. [765 ILCS 1026/15-504(b)]

1. Various State laws mandate that specified units of local government file an annual financial report with the Comptroller. The Governmental Account Audit Act mandates each governmental unit file an annual financial report with the Comptroller. [50 ILCS 310] The Illinois Municipal Auditing Law in the Illinois Municipal Code mandates each municipality file an annual financial report with the Comptroller. [65 ILCS 5/8-8-1] The County Auditing Law of the Counties Code mandates that counties file an annual financial report with the Comptroller. [55 ILCS 5/6-31001]

2. The Comptroller requires as part of the annual financial report that the unit of local government provide contact information for a Contact Person, the Chief Executive Official, and the Chief Financial Officer. Depending upon the unit of local government these may all be separate individuals or the same individual. The Comptroller requires the unit of local government to validate an email address for each listed government official.

3. The administrator may provide notice to a unit of local government by sending a written notice to the Contact Person, the Chief Executive Official, and the Chief Financial Officer indicated in the most recent annual financial report filed with the Comptroller. A holder may report unclaimed property to the administrator with the name of a previous official or employee of a unit of local government, but the administrator should provide notice to the current officials or employees designated by the unit of local government. The written notice from the administrator may be by e-mail or U.S. Mail or both.

b) If the administrator reasonably believes that the apparent owner of property presumed abandoned held by the administrator under the Act is a State agency as defined in the Illinois State Auditing Act [30 ILCS 5/1-7], the administrator may give written notice to the chief executive officer of such State agency and the Governor's Office of Management and Budget. [765 ILCS 1026/15-504(c)]

History

• Source: Amended at 50 Ill. Reg. 778, effective December 31, 2025

Chapter V Treasurer

Part 760 Revised Uniform Unclaimed Property Act

74 Ill. Adm. Code 760.600 Claims

A person claiming to be the owner of property held under the Act by the administrator or of the proceeds from the sale of property may file a claim for the property or proceeds from the sale of property on a form prescribed by the administrator and that is available on the Administrator's website at icash.illinoistreasurer.gov. [765 ILCS 1026/15-903]

74 Ill. Adm. Code 760.610 Burden of Proof

a) The administrator is the custodian for property delivered to the State under the Act and is responsible for the safekeeping of that property. Therefore, any person who files a claim for any property held by the administrator pursuant to the Act shall bear the burden of proof in establishing that person is the lawful owner of the property or has an interest in the property.

b) The administrator will release the property to a claimant after the person establishes his or her ownership of the property or an interest in the property by a preponderance of the evidence.

c) Notwithstanding the requirements of subsection (a) and (b), the administrator may waive those requirements if a claimant satisfies the requirements for payment or delivery of property under Section 760.620 or 760.630.

74 Ill. Adm. Code 760.620 Filing of Claims

a) Claimants may file claims with the administrator either in writing on forms prescribed by the administrator or through completion of a form on the administrator's website.

b) Claims shall be verified or signed by the claimant under penalty of perjury.

c) If the subject property, including contents of a safe deposit box, is valued at more than $5,000, the claimant may either provide a claim form or verify the claim under penalty of perjury via the administrator's website. The administrator may require a notarized signature for claims submitted on the website when requesting a notarized signature would aid in the determination of whether the claimant has met their burden of proof.

d) If the value of the subject property is $5,000 or less:

1. a fully completed owner claim and owner indemnification form, submitted to the administrator either in writing or through completion of a form on the administrator's website, will be accepted as prima facie evidence of validity of the claim, unless the administrator has facts within the administrator's knowledge that would tend to rebut the claim; and

2. the administrator may waive the requirement to complete a claim form and may pay or deliver property directly to a claimant if the person receiving the property is shown to be the apparent owner of the property included on a report filed pursuant to the Act, and the administrator reasonably believes the claimant is entitled to receive the property or payment. [765 ILCS 1026/15-903]

e) An heir or agent who files an unclaimed property claim in which the decedent's property does not exceed $250 may submit an affidavit attesting to the heir's or agent's capacity to claim in lieu of submitting a certified copy of the will to verify a claim. [765 ILCS 1026/15-904(b-5)]

f) If the property being claimed is a two-party check, in addition to submitting a fully completed claim form, the claimant must:

1. submit the original check;

2. submit verification in the form of an affidavit from the issuing agent of the check that the claimant is the true owner of the check and the issuing agent would then pay the value of the check to the claimant if the issuing agent had not remitted the funds to the administrator;

3. post a surety bond, issued by an insurance company with an A+ or A rating by A.M. Best and Company, in the amount of the check;

4. submit a release of interest executed by all persons not claiming the property who were listed as apparent owners by the holder;

5. submit an order from a court of competent jurisdiction indicating the claimant is the owner of the unclaimed property; or

6. submit an indemnification form if the administrator does not have facts within its knowledge that would tend to rebut the claim and all the following apply:

A) the original check is missing or has been destroyed;

B) the original check is older than seven years;

C) incomplete information was reported by the holder; and

D) the amount of the two-party check is $5,000 or less.

g) A claim will be considered complete when a claimant has provided all the information and documentation requested by the administrator as necessary to establish legal ownership and that information or documentation is entered into the unclaimed property system. Unless extended for reasonable cause, the administrator shall issue a decision no later than 90 days after a claim is complete.

h) If a claimant is unable to provide documentation sufficient to establish ownership by a preponderance of the evidence, the claimant may request that the administrator formally deny the claim in order to allow the claimant to commence a contested case, pursuant to Article 10 of the Illinois Administrative Procedure Act [5 ILCS 100], for review of the administrator's decision.

i) Closing Claims

1. If a claimant fails to provide information and documentation necessary to establish legal ownership of the property by a preponderance of the evidence and the claim is inactive for at least 90 days, the administrator may close the claim without issuing a final decision.

2. If the claimant makes a request in writing for a final decision prior to the administrator's closing of the claim, the administrator shall issue a final decision.

3. If, after a claim is closed, a claimant subsequently provides additional information or documentation concerning the same property, the administrator shall open a new claim and shall incorporate by reference all information and documentation provided for the closed claim.

j) Not later than one year after filing a claim, a claimant may commence a contested case pursuant to the Illinois Administrative Procedure Act to establish a claim by the preponderance of the evidence after either receiving notice of the denial from the administrator or the claim is deemed denied. [765 ILCS 1026/15-906]

k) This Section is the sole administrative and legal procedure for claiming property under the Act. Compliance with this Section is required prior to exercising the exclusive judicial remedy found in Section 15-906 of the Act.

History

• Source: Amended at 50 Ill. Reg. 778, effective December 31, 2025

Chapter V Treasurer

Part 760 Revised Uniform Unclaimed Property Act

74 Ill. Adm. Code 760.630 Tax Return Identification of Apparent Owners

a) At least annually the administrator shall notify the Illinois Department of Revenue of the names of apparent owners of abandoned property.

1. The administrator shall also provide to DOR the social security numbers of apparent owners of abandoned property, if available. [765 ILCS 1026/15-503(e)]

2. The administrator may also provide DOR with other data, such as the mailing address of the apparent owner.

3. The administrator shall not provide DOR with the name of an apparent owner of unclaimed property if a claim has been filed for that property with the administrator and the claim has not been denied or closed.

4. The administrator does not need to notify DOR of the names or social security numbers of apparent owners of abandoned property if the administrator reasonably believes that DOR will be unable to provide information that would provide sufficient evidence to establish that the person in DOR's records is the apparent owner of unclaimed property in the custody of the administrator. [765 ILCS 1026/15-503(e)(6)]

5. EXAMPLE: The administrator does not need to notify DOR of the name of an apparent owner of unclaimed property in the custody of the administrator when:

A) the administrator has previously notified DOR of the name of an apparent owner, DOR was unable to match the name to any person in DOR's records, and the administrator reasonably believes that DOR would continue to not be able to match the name;

B) the administrator's records contain the name of an apparent owner without an address or social security number and that name is so common as to prevent an unique match with DOR records;

C) the administrator has reason to believe that the apparent owner is deceased; or

D) even if DOR provided a current address for the apparent owner, the administrator would not be able to deliver the unclaimed property to that owner because the property is jointly owned, is an escrow account, or has other legal impediments to clear ownership of the property by a unique owner.

b) DOR shall notify the administrator if any person matching the name of an apparent owner has filed an Illinois income tax return and shall provide the administrator with the last known address and/or additional addresses of the person as it appears in DOR records, except as prohibited by federal law. (See 765 ILCS 1026/15-503(e)(2))

c) The administrator may deliver property or pay the amount owing to a person matched under this Section without the person filing a claim if the following conditions are met:

1. the value of each individual property that is owed the apparent owner is $5,000 or less;

2. the property is not either tangible property or securities;

3. there are no legal impediments to delivering the property or paying the amount owed to an unique apparent owner;

4. the last known address for the apparent owner according to DOR records is less than 12 months old; and

5. the administrator has evidence sufficient to establish that the person who appears in DOR records is the owner of the property and the owner currently resides at the last known address from DOR.

d) If the name, address and social security number of the apparent owner in the records of the administrator and DOR match, there is a presumption that the administrator has sufficient evidence to deliver property or pay the amount owing to the apparent owner.

e) After receiving a match from DOR, the administrator may use additional databases to verify the identity of the person and that the person currently resides at the last known address. The administrator may utilize publicly and commercially available databases to find and update or add information for apparent owners of property held by the administrator. [765 ILCS 1026/15-503(f)]

f) In determining whether there is sufficient evidence to deliver property or pay the amount owing to the apparent owner, the administrator may rely upon evidence beyond the match provided by DOR.

g) When the name of an apparent owner has an unique match with DOR records and the property owed to the apparent owner is greater than $5,000, or is tangible property or securities, the administrator shall provide notice to the person, informing the person that he or she is the owner of abandoned property held by the State and may file a claim with the administrator for return of the property. The administrator may provide the notice by email, U.S. Mail, direct contact, or any combination of these methods.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.631 Identification of Apparent Owners of Abandoned Property Using Other State Databases

a) The administrator may enter into interagency agreements with the Secretary of State and the Illinois State Board of Elections to identify persons appearing to be owners of abandoned property with databases under the control of the Secretary of State and the Illinois State Board of Elections. These interagency agreements shall include protection of confidential information, data match rules, and other necessary and proper issues. [765 ILCS 1026/15-503(h)(1)]

b) Except as prohibited by federal law, after January 1, 2022, the administrator may provide the Secretary of State with names and other identifying information of persons appearing to be owners of abandoned property. [765 ILCS 1026/15-503(h)(2)] Consistent with any interagency agreements with the Secretary of State, the administrator will use the last known address as it appears in its respective records of any person reasonably believed to be the apparent owner of abandoned property provided by the Secretary of State to pay apparent owners pursuant to the Act. [765 ILCS 1026/15-503(h)(2)] Similar to the tax return identification of apparent owners in Section 760.630, the administrator will provide unclaimed property data to the Secretary of State in order for the Secretary of State to perform the data matching so that the Secretary of State can comply with relevant federal laws concerning data privacy that prevent the administrator from performing the data matching.

c) The administrator will request that the Illinois State Board of Elections provide electronic data or compilations of voter registration information to the administrator at least annually. The administrator may use such electronic data or compilations of voter registration information to identify persons appearing to be owners of abandoned property. [765 ILCS 1026/15-503(h)(3)] Unlike the data matching with the Illinois Department of Revenue and the Secretary of State, the Illinois State Board of Elections has the legal authority to provide this data to the administrator, and the administrator may perform the data matching. [10 ILCS 5/1A-25 and 765 ILCS 1026/15-503(h)(3)]

d) The administrator may deliver, as provided under Section 15-904 of the Act, property or pay the amount owing to a person matched under this Section without the person filing a claim under Section 15-903 of the Act if:

1. the value of the property that is owed the person is $5,000 or less;

2. the property is not either tangible property or securities;

3. the last known address for the person according to the records of the Secretary of State or Illinois State Board of Elections is less than 12 months old; and

4. the administrator has evidence sufficient to establish that the person who appears in the records of the Secretary of State or Illinois State Board of Elections is the owner of the property and the owner currently resides at the last known address from the Secretary of State or the Illinois State Board of Elections. [765 ILCS 1026/15-503(h)(4)]

e) If the name, address and other identifying information of the apparent owner in the records of the administrator and the Secretary of State or Illinois State Board of Elections match, there is a presumption that the administrator has sufficient evidence to deliver property or pay the amount owing to the apparent owner.

History

• Source: Added at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.640 Crediting Income or Gain to Owner's Account

a) If property other than money is delivered to the administrator, the owner is entitled to receive from the administrator income or gain realized or accrued on the property before the property is sold. [765 ILCS 1026/15-607(a)] (See Canel v. Topinka, 212 Ill. 2d 311, 818 N.E.2d 311 (2004).)

b) Before August 22, 2017, interest on money is not payable to an owner for periods where the property is in the possession of the administrator. [765 ILCS 1026/15-607(b)] August 22, 2017 is the earliest start date for interest under this Section. The date is set by the Act, but comes from the date of a Seventh Circuit opinion requiring the State to begin paying interest to owners. (See Kolton v. Frerichs, 869 F.3d 532 (7th Cir. 2017).)

c) Beginning on August 22, 2017, the administrator shall pay interest to the owner of property in the form of money at the greater of:

1. the percentage increase, if any, in the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor (CPI-U); or

2. the actual rate of return the State Treasurer earned on the Unclaimed Property Trust Fund.

d) Interest begins to accrue when property in the form of money is delivered to the administrator or when the administrator converts property to money pursuant to Article 7 of the Act and ends on the earlier of the expiration of 10 years after the property begins to accrue interest or the date on which payment is made to the owner. [765 ILCS 1026/15-607(c)]

e) As provided in the settlement agreement entered in the case of Kolton v. Frerichs, 869 F.3d 532 (7th Cir. 2017), the administrator will not pay interest when transferring property to another state's unclaimed property administrator when using an interstate exchange process pursuant to Section 15-901 of the Act. The administrator will not pay interest when reimbursing a holder pursuant to Section 15-605 of the Act as the holder is not the owner of the property entitled to just compensation under Section 15-607 of the Act or the settlement agreement entered in the case of Kolton v. Frerichs, 869 F.3d 532 (7th Cir. 2017).

f) When calculating interest for the month in which the claim is to be paid, the most recent rate of return earned by the Unclaimed Property Trust Fund and CPI-U data available at the time the claim is approved will be used.

EXAMPLE: A holder reported two pension properties to the Treasurer on June 30, 2018. On December 11, 2020, the owner was reunited with the properties totaling $1,210.69. Although August 22, 2017 is one of the possible start dates used to calculate the interest payment, June 30, 2018 is used because pursuant to Section 15-607(c) of the Act, the later date prevails. As such, the interest payment is calculated from June 30, 2018 to December 10, 2020. The owner is entitled to interest in the amount of $50.97 from which a $5 administrative fee is deducted from the interest amount for each property. At the time of this claim’s approval, the most recent CPI-U interest rate is used because it was the higher amount than the rate of return earned by the Treasurer in the Unclaimed Property Trust Fund.

g) When paying interest to an owner, the administrator shall charge a one-time administrative fee of $5, deductible only from interest. [765 ILCS 1026/15-607(d)]

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.650 Agreements to Locate Property

a) Required elements of a valid finder contract. An agreement by an owner or an apparent owner and a finder, the primary purpose of which is to locate, recover, or assist in the location or recovery of property held by the administrator for a fee, compensation, commission, or other renumeration, is enforceable only if the agreement:

1. is in a record that clearly states the nature of the property and the services to be provided;

2. is signed by or on behalf of the owner or apparent owner;

3. states the amount or value of the property reasonably expected to be recovered, computed before and after a fee, compensation, commission, or other renumeration to be paid to the finder has been deducted;

4. clearly states that the property is in the possession of the administrator and may be recovered from the administrator without paying a fee; and

5. provides the contact information for recovering the property from the administrator. [765 ILCS 1026/15-1301(a)]

b) A finder may only receive compensation directly from the administrator if the agreement explicitly provides for direct payment to the finder. (See 765 ILCS 1026/15-1301(c))

c) Copy of the contract required. For claims involving a finder, the administrator shall receive from the claimant a full and unredacted copy of the agreement signed by the owner or apparent owner and the finder. [765 ILCS 1026/15-1301(b)]

d) Time period when a contract is void. An agreement between a finder and an owner or apparent owner pursuant to Section 15-1301 of the Act and subsection (a) of this Section is void if it is entered into during the period beginning on the date the property was presumed abandoned under the Act and ending 24 months after the payment or delivery of the property to the administrator. [765 ILCS 1026/15-1302(a)]

e) Prohibition on future assignments. If a provision in an agreement between a finder and an owner or apparent owner pursuant to Section 15-1301 of the Act and subsection (a) of this Section applies to an obligation that did not exist or was not owed to the assignor at the time of the execution of the agreement, then that provision is void regardless of when the agreement was entered into. [765 ILCS 1026/15-1302(b)]

f) Limit on fees. An agreement between a finder and an owner or apparent owner pursuant to Section 15-1301 of the Act and subsection (a) of this Section that provides for a fee, compensation, commission, or other remuneration in an amount that is more than 10% of the amount collected is unenforceable except by the apparent owner. The purchase, assignment, or other conveyance of unclaimed property to a finder, resulting in a net fee, compensation, commission, remuneration, or other profit to the finder in excess of 10% of the amount collected is prohibited. [765 ILCS 1026/15-1302(c)]

NOTE: This 10% limit on fees is a longstanding provision of Illinois unclaimed property law; a similar California provision was upheld as a proper exercise of the state's police power ("…the statute was enacted to protect the public from overcharging for recovery of unclaimed property by unscrupulous probate searchers. Thus, we conclude that the statute furthers a legitimate goal by rational means." Goodman v. Cory (1983) 142 Cal. App. 3d 737, 742; 191 Cal. Rptr. 272, 275).

g) Other grounds for being void. An apparent owner or the administrator may assert that an agreement between a finder and an owner or apparent owner pursuant to Section 15-1301 of the Act and subsection (a) of this Section is void on a ground other than it provides for payment of compensation in excess of the amount authorized by paragraph (c) of Section 15-1302 of the Act. [765 ILCS 1026/15-1302(d)]

History

• Source: Amended at 50 Ill. Reg. 778, effective December 31, 2025

74 Ill. Adm. Code 760.651 Finder Licensing

a) License required and limited exemptions.

1. A person attempting or seeking to act as a finder must be licensed as a finder by the administrator pursuant to Section 15-1503 of the Act. [765 ILCS 1026/15-1302(e)] No person shall, without a valid license issued by the administrator, represent or present to the public in any manner to be a finder in the State of Illinois or act as a finder. [765 ILCS 1026/15-1303(a)]

2. Attorneys acting to pursue a claim for recovery of specifically identified property held by the administrator or to contest the administrator's denial of a claim for recovery of the property are not required to be licensed as finders. [765 ILCS 1026/15-1302(f)]

A) This exemption from the requirement that finders be licensed is limited to attorneys who have an attorney-client relationship with the claimant.

B) Being an attorney licensed in Illinois is a necessary, but not sufficient, precondition for this exemption to be applicable. The attorney must be in an attorney-client relationship with the claimant.

C) An attorney representing a person or entity other than the claimant is not covered by this exemption.

D) Attorneys are required to comply with the Illinois Supreme Court's Rules of Professional Conduct.

E) This exemption does not authorize an attorney to bypass the claims process established by Section 15-903 of the Act.

3. A CPA firm licensed under the Illinois Public Accounting Act, or an affiliate of such firm, is not required to be licensed under the Act, if all of the following apply:

A) the CPA firm has registered with the administrator and is in good standing with the Illinois Department of Financial and Professional Regulation;

B) the apparent owner is not a natural person; and

C) the CPA firm, or an affiliate of such firm, also provides the apparent owner professional services to assist with the apparent owner's compliance with the reporting requirements of the Act. [765 ILCS 1026/ 15-1302(g)]

b) Qualifications for licensure. An applicant is qualified for licensure as a finder if the applicant meets all the following qualifications:

1. If the applicant is a natural person, the person is at least 21 years of age.

2. The applicant is of good moral character. When determining the moral character of an applicant, the administrator shall take into consideration the following:

A) Whether the applicant has engaged in any unethical or dishonest business practices.

B) Whether the applicant has been adjudicated, civilly or criminally, to have committed fraud or to have violated any law of any state involving unfair trade or business practices, has been convicted of a misdemeanor of which fraud is an essential element or which involves any aspect of the finder business or claiming or reporting of unclaimed property, or has been convicted of any felony.

C) Whether the applicant has intentionally violated any provision of the Act or a predecessor law or any regulations relating thereto.

D) Whether the applicant has been permanently or temporarily suspended, enjoined, or barred by any government agency or court of competent jurisdiction in any state from engaging in or continuing any conduct or practice involving any aspect of the finder business, the claiming or reporting of unclaimed property, or any other regulated business or occupation.

E) Whether any charges or complaints lodged against the applicant for which fraud, deceptive business practices, or similar offenses involving moral turpitude were an essential element that resulted in civil or criminal litigation or administrative proceedings.

F) Whether the applicant has made any misrepresentations or false statements or concealed any material fact. [765 ILCS 1026/15-1303(b)]

3. If the applicant is a corporation, limited liability company, partnership, or other entity permitted by law, then for any person holding 25% or more of corporate stock who is a principal, owner, member, officer, or shareholder, the administrator shall take into consideration for compliance with subsection (b) of this Section. (See Section 15-1303(a)(3) of the Act.)

4. The applicant demonstrates knowledge and understanding of the Act, including, but not limited to, the provisions of Article 13 of the Act. [765 ILCS 1026/15-1303(b)(4)]

c) Application for license. Every person seeking to be licensed as a finder shall apply to the administrator in writing on forms or electronically as prescribed by the administrator.

1. Every application shall be accompanied by a $500 fee payable to "Illinois State Treasurer". The $500 application fee shall be deposited into the State Treasurer's Administrative Fund. The application fee is not refundable.

2. All applicants shall provide a valid mailing address and email address to the administrator, which shall serve as the address of record and email address of record, respectively, at the time of application for licensure or renewal of a license. Applicants and licensees shall inform the administrator in writing of any change in address of record or email address of record within 14 days after the change.

3. The applicant shall authorize the administrator to conduct a criminal background check to determine if the applicant has ever been charged with a crime and, if so, the disposition of those charges. If the applicant is a corporation, limited liability company, partnership, or other entity permitted by law, then the authorization shall include each person who holds 10% or more of corporate stock and is a principal, owner, member, officer, or shareholder, as applicable.

4. The administrator shall pay for criminal background checks from the State Treasurer's Administrative Fund. If the actual cost of the criminal background check does not exceed $500, then the administrator shall not charge an additional fee for the criminal background check. If the actual cost of the criminal background check exceeds $500, then the administrator shall charge the applicant a fee equal to the amount that the actual costs exceeds $500.

5. The applicant shall provide the applicant's Social Security Number, Individual Taxpayer Identification Number, or Federal Employer Identification Number. If the applicant is a corporation, limited liability company, partnership, or other entity permitted by law, then the applicant shall provide the Social Security Number or Individual Taxpayer Identification Number for each person holding 10% or more of corporate stock who is an owner, member, officer, or shareholder, as applicable.

6. The applicant shall provide a color digital copy of a valid government issued ID of the applicant. If the applicant is a corporation, limited liability company, partnership, or other entity permitted by law, then the applicant shall provide a color digital copy of a valid government issued ID for each person holding 10% or more of corporate stock who is an owner, member, officer, or shareholder, as applicable.

7. Applications for licensure shall also be accompanied by a fidelity bond issued by a bonding company or insurance company authorized to do business in this State in the amount of $100,000. This bond shall run to the benefit of the administrator and the administrator's successor for the benefit of the Unclaimed Property Trust Fund. [765 ILCS 1026/15-1303]

8. The applicant shall submit a written statement under penalty of perjury that the applicant has read and understands the Act, including Article 13 of the Act, and has read and understands this Part. If the applicant is a corporation, limited liability company, partnership, or other entity permitted by law, then such written statement under penalty of perjury shall be submitted by the chief executive or other principal of the entity authorized to legally bind the entity. The statement required by this provision may be submitted electronically. The administrator may prepare and provide a written statement that satisfies the requirements of this provision.

d) Issuing license. Upon approval of the application by the administrator, the administrator shall issue a license to the applicant. The license shall be valid for a period of three years.

e) License renewal. The holder of a finder license issued by the administrator may apply to renew the license within 90 days preceding the expiration date by:

1. completing and submitting to the administrator a renewal application in writing on forms or electronically as prescribed by the administrator; and

2. paying a license renewal fee of $250 payable to "Illinois State Treasurer". The $250 renewal fee shall be deposited into the State Treasurer's Administrative Fund. The renewal fee is not refundable. (See Section 15-1303(e) of the Act.)

f) When license deemed denied. Any fully completed application for licensure or for renewal not acted upon by the administrator within 90 calendar days may be deemed denied. (See Section 15-1303(f) of the Act.)

g) Grounds for denial, suspension, or revocation of license. The administrator may refuse to issue or may suspend or revoke a license on any of the following grounds:

1. The applicant or licensee has made any misrepresentations or false statements or concealed any material fact.

2. The applicant or licensee is insolvent.

3. The applicant or licensee has conducted or is about to engage in dishonorable, unethical, or unprofessional conduct of a character likely to deceive, defraud, or harm the public.

4. The applicant or licensee has failed to satisfy any enforceable judgment or decree rendered by any court of competent jurisdiction against the applicant or licensee.

5. The applicant or licensee fails to make a substantive response to a request for information by the administrator within 30 days after the request.

6. The applicant or licensee, including any member, officer, or director thereof if the applicant or licensee is a firm, partnership, association, or corporation or any shareholder holding more than 10% of the corporate stock, has violated any provision of the Act or this Part or a valid order entered by the administrator under the Act.

7. The applicant or licensee aided or assisted another person in violating any provision of the Act or this Part.

8. The applicant or licensee engaged in solicitation of professional services by using false or misleading advertising.

9. The administrator finds any fact or condition existing which, if it had existed at the time of the original application for the license, would have warranted the administrator in refusing the issuance of the license. [765 ILCS 1026/15-1303(g)]

h) Process for denial, suspension, or revocation of license.

1. If the administrator determines that an application for licensure or for renewal of a license should be denied, then the applicant shall be sent a notice of intent to deny and the applicant shall be given the opportunity to request, within 20 days after the notice, a hearing on the denial.

2. If the administrator determines that a license should be suspended or revoked, then the licensee shall be sent a notice of intent to suspend or revoke the license and the licensee shall be given the opportunity to request, within 20 days after the notice, a hearing on the suspension or revocation.

3. Any hearing on the denial, suspension, or revocation shall be conducted in accordance with 74 Ill. Adm. Code 730. [765 ILCS 1026/15-1303(h)]

History

• Source: Added at 50 Ill. Reg. 778, effective December 31, 2025

74 Ill. Adm. Code 760.653 CPA Firm Registration and Claims

a) A CPA firm licensed under the Illinois Public Accounting Act [225 ILCS 450] may register with the administrator pursuant to Section 15-1302(g) of the Act by completing an electronic form on the administrator's website and shall provide the administrator with a digital copy of its current CPA Firm license. The administrator may not charge any fee in connection with the registration of a CPA firm under this Section.

b) As part of the registration process, a natural person with authorization to legally bind the CPA firm shall attest under penalty of perjury that the person has read and understands all relevant provisions of the Act and this Part and the CPA firm will adhere to all relevant provisions.

c) The administrator may refuse to register or may suspend or revoke a registration for a CPA firm on any of the following grounds:

1. The CPA firm has made any misrepresentations or false statements or concealed any material fact relevant to their representation of a client pursuant to the Act.

2. The CPA firm is insolvent.

3. The CPA firm has conducted or is about to engage in dishonorable, unethical, or unprofessional conduct related to their services pursuant to the Act of a character likely to deceive, defraud, or harm the public.

4. The CPA firm fails to make a substantive response to a request for information by the administrator within 30 days after the request.

5. The CPA firm, including any partner, member, officer, or director thereof, has intentionally violated any provision of the Act or this Part or a valid order entered by the administrator under the Act.

6. The CPA firm engaged in solicitation of professional services related to the Act by using false or misleading advertising.

7. The Illinois Department of Financial and Professional Regulation has suspended or revoked the CPA Firm license.

d) Process for denial, suspension, or revocation of registration.

1. If the administrator determines that registration should be denied, suspended, or revoked, then the CPA firm shall be sent a notice of intent to deny, suspend, or revoke the registration and the CPA firm shall be given the opportunity to request, within 20 days after the notice, a hearing on the suspension or revocation.

2. Any hearing on the denial, suspension, or revocation shall be conducted in accordance with 74 Ill. Adm. Code 730.

History

• Source: Added at 50 Ill. Reg. 778, effective December 31, 2025

Chapter V Treasurer

Part 760 Revised Uniform Unclaimed Property Act

74 Ill. Adm. Code 760.660 Property Subject to Recovery by Another State

a) If the administrator is aware that property held under the Act is subject to a superior claim of another state, the administrator shall either report and deliver the property to the other state or return the property to the holder for delivery to the other state.

b) A claim by another state to recover property under this Section must be presented in a form prescribed by the administrator, unless the administrator waives presentation of the form.

c) The administrator shall decide a claim under this Section not later than 90 days after it is presented.

d) To the extent permitted under the law of the other state, the administrator may require another state to agree to indemnify the administrator and the State of Illinois and its agents, officers and employees against any liability on a claim to the property.

74 Ill. Adm. Code 760.670 Debt Collection Agencies

a) A debt collection agency shall initiate its own claims for unclaimed property in the custody of the administrator. The administrator will not initiate claims for debt collection agencies.

b) Debt collection agencies shall submit citations to discover assets to the administrator at least 30 days in advance of the return date.

c) Unclaimed property held by the administrator for a debtor will be held pursuant to a citation to discover assets for up to 90 days.

d) Claims submitted by debt collection agencies will be closed after 90 days without the submission of a valid turnover order from a court of competent jurisdiction.

e) Claims submitted by debt collection agencies will be paid after receipt of a valid turnover order from a court of competent jurisdiction.

f) The administrator shall reject claims submitted by debt collection agencies on behalf of entities that:

1. are under examination by the administrator pursuant to the Act; or

2. the administrator reasonably believes are not in compliance with the requirements of the Act including, but not limited to, failure to file reports under Section 15-401 of the Act.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.680 Holder Reimbursement

a) A holder that pays money to the administrator may file a claim for reimbursement from the administrator of the amount paid if the holder:

1. paid the money in error; or

2. after paying the money to the administrator, paid money to a person the holder reasonably believed entitled to the money.

b) If a claim for reimbursement is made for a payment made on a negotiable instrument, including a traveler's check, money order, or similar instrument, the holder must submit proof that the instrument was presented and payment was made to a person the holder reasonably believed entitled to payment. The holder may claim reimbursement even if the payment was made to a person whose claim was made after expiration of a period of limitation on the owner's right to receive or recover property, whether specified by contract, statute or court order.

c) If a holder is reimbursed by the administrator, the holder may also recover any income or gain that would have been paid by the administrator to the owner on an owner claim provided the holder paid the earned income or gain to the owner.

d) A holder that delivers property other than money to the administrator may file a claim for return of the property from the administrator if:

1. the holder delivered the property to the administrator in error; or

2. the apparent owner has claimed the property from the holder.

e) If a claim for return of property is made, the holder shall include with the claim evidence sufficient to establish that the apparent owner has claimed the property from the holder or that the property was delivered by the holder to the administrator in error.

f) The administrator may make a determination that an affidavit submitted by a holder is evidence sufficient to establish that the holder is entitled to reimbursement or to recover property under this Section.

g) A holder is not required to pay a fee or other charge for reimbursement or return of property.

h) The administrator shall allow or deny a holder's claim not later than 90 days after the claim is complete and give the holder notice in a record of the decision. The administrator may grant an extension for reasonable cause.

i) A claim will be considered complete when a holder has provided all the information and documentation requested by the administrator as necessary to establish legal ownership and that information or documentation is entered into the administrator's unclaimed property system.

j) If a holder fails to provide all the information and documentation requested by the administrator as necessary to establish legal ownership of the property and the claim is inactive for at least 90 days, the administrator may close the claim without issuing a final decision. However, if the claimant makes a request in writing for a final decision prior to the administrator's closing of the claim, the administrator shall issue a final decision.

k) The holder may initiate a proceeding under Article 10 of the Illinois Administrative Procedure Act for review of the administrator's decision on the earlier of 30 days following receipt of the notice of the administrator's decision or 120 days following the filing of a claim. [765 ILCS 1026/15-605]

74 Ill. Adm. Code 760.690 Securities Sale and Claims

a) Sale of Securities

1. The administrator may not sell a security prior to attempting to provide notice as provided for in Section 15-503 of the Act.

2. Unless the administrator reasonably determines it would be in the best interests of the owner for the sale to occur sooner, the administrator may not sell or otherwise liquidate a security until 3 years after the administrator receives the security.

A) Instances in which it would be in the best interest of the owner for a sale of securities to occur prior to the expiration of the 3-year period include, without limitation: responding to a tender offer; a bankruptcy filing; a business liquidation; heirs of a deceased apparent owner file a claim for their portions of the securities or the net proceeds of the securities; and instances in which fees will significantly deplete the value of the securities.

B) If the administrator sells a security prior to the expiration of the 3-year period, the administrator shall document in a record the reasons for the sale.

3. Unless otherwise provided in the Act or this Part, the administrator may sell a security at any time after 3 years after the administrator receives the security.

A) The administrator may not sell a security listed on an established stock exchange for less than the price prevailing on the exchange at the time of sale.

B) The administrator may sell or otherwise dispose of a security not listed on an established exchange by any commercially reasonable method. [765 ILCS 1026/15-702(b)]

4. Securities will not be sold when a claim has been filed with the administrator by an apparent owner, heir, or agent for those securities.

A) However, the apparent owner, heir, or agent may direct the administrator to dispose of the securities by sale and remit the net proceeds to the owner, heir, or agent.

B) Upon denial of a claim, the administrator may dispose of the securities as provided in the Act and this Part.

C) The administrator may also dispose of the securities as provided in the Act and this Part if, after being requested by the administrator, the apparent owner, heir, or agent fails to provide necessary and sufficient information to allow the administrator to transfer the securities within 30 days after the administrator's request.

D) The administrator may also dispose of any securities that remain unclaimed as provided in the Act and this Part if:

i) the apparent owner of the securities is deceased; and

ii) one or more, but not all, heirs of the apparent owner file a claim for their portions of the securities or the net proceeds of the securities.

E) The administrator may dispose of securities that while in the custody of the administrator become a non-freely transferable security because of sanctions, government action administered by the U.S. Department of the Treasury's Office of Foreign Assets Control in any manner in conformity with federal law.

b) Recovery of Securities or Value by Owner

1. If the administrator sells a security before the expiration of 3 years after delivery of the security to the administrator, an apparent owner that files a valid claim under the Act for the security before the 3-year period expires is entitled, at the option of the owner, to receive:

A) replacement of the security;

B) the market value of the security at the time the claim is filed, plus dividends, interest, and other increments on the security up to the time the claim is paid; or

C) the net proceeds of the sale of the security, plus dividends, interest, and other increments on the security up to the time the security was sold. [765 ILCS 1026/15-703(a)]

2. Replacement of the security or calculation of market value under subsection (b)(1) must take into account a stock split, reverse stock split, stock dividend, or similar corporate action. [765 ILCS 1026/15-703(b)]

3. A person that makes a valid claim under the Act for a security after expiration of 3 years after delivery of the security to the administrator is entitled to receive:

A) the security the holder delivered to the administrator, if it is in the custody of the administrator, plus dividends, interest, and other increments on the security up to the time the administrator delivers the security to the person; or

B) the net proceeds of the sale of the security, plus dividends, interest, and other increments on the security up to the time the security was sold. [765 ILCS 1026/15-703(c)]

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.700 Authority

Pursuant to the Act the administrator may, at reasonable times and on reasonable notice, examine the records of any person to determine whether the person has complied with the Act even if the person believes it is not in possession of any property that must be reported, paid, or delivered under the Act. [765 ILCS 1026/15-1002(1)]

74 Ill. Adm. Code 760.710 Purpose

a) The goal of an unclaimed property examination shall be to determine whether a person is in compliance with the Act. Unclaimed property is reported to the State of Illinois pursuant to the Act and the federal common law as established by the U.S. Supreme Court (Texas v. New Jersey, 379 U.S. 674 (1965); Pennsylvania v. New York, 407 U.S. 206 (1972); and Delaware v. New York, 507 U.S.490 (1993)).

b) The administrator's goal in every examination is to be predictable, fair and consistent while determining the historical compliance of the person being examined, and to encourage and facilitate that person's ongoing and future compliance with the Act.

74 Ill. Adm. Code 760.720 Contract Auditors

a) The administrator may contract with a person to conduct unclaimed property examinations to determine compliance with the Act. Such a contract shall be awarded pursuant to a request for proposals issued in compliance with the Office of the Treasurer Procurement Rules (44 Ill. Adm. Code 1400). [765 ILCS 1026/15-1009(a)]

b) A contract to conduct an examination may provide for compensation of the person based on a fixed fee, hourly fee, or contingent fee. [765 ILCS 1026/15-1009(b)(1)]

1. A contingent fee arrangement may not provide for a payment that exceeds 15% of the amount or value of property paid or delivered as a result of the examination. [765 ILCS 1026/15-1009(b)(2)]

2. As authorized in the State Officers and Employees Money Disposition Act [30 ILCS 230/2(a)(3.5)], the administrator may permit the deduction of fees from property recovered during an unclaimed property examination prior to depositing funds received under the Act into the Unclaimed Property Trust Fund. [765 ILCS 1026/15-1009(b)(3)]

c) A contract with a person to conduct an examination is a public record under the Freedom of Information Act. [765 ILCS 1026/15-1009(c)]

d) An auditor shall collectively possess sufficient training and experience to adequately perform unclaimed property examinations.

e) An auditor shall not engage in any unclaimed property examination to determine compliance with the Act without written authorization from the administrator.

f) An auditor shall report in writing to the administrator at least monthly on the status of all unclaimed property examinations the auditor has been authorized to perform by the administrator.

g) An auditor shall have data security practices, policies, and procedures to prevent any security breach or loss as well as protect user privacy, computer security, and network security. An auditor shall also have a cyber incident response plan in the event of a security breach or loss as well as cybersecurity training programs on new user awareness, annual user awareness, and post-incident refresher training.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.730 Holder Advocates

a) A person subject to examination may retain third-party advocates to assist them in the examination process.

b) The retention of an advocate is no basis to delay the commencement of the examination and the administrator will not delay the examination so that the advocate may conduct a review or its own audit of the books and records of the person subject to examination in advance of the administrator's examination.

c) The administrator will, to the extent practicable, cooperate with the person subject to examination and its advocate and keep both apprised of records requests, interviews, and the progress of the audit in general.

74 Ill. Adm. Code 760.740 Notice of Examination

a) All unclaimed property examinations begin with an official notice of examination letter.

b) A notice letter shall notify the person subject to examination that:

1. its books and records (including those belonging to subsidiary and related entities or maintained by a third party that has contracted with the person) are subject to examination;

2. identify the assigned auditor; and

3. include auditor contact information.

c) A notice letter may either be sent directly to the person subject to examination by the administrator or to the auditor assigned to the examination for delivery to the person subject to examination.

d) Failure to strictly adhere to the requirements of this Section does not invalidate an examination and may be cured by the administrator prior to the conclusion of the examination so long as all other requirements regarding notification and the conduct of an examination were met.

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.750 Entrance Conference

a) Once an examination is assigned and written notice of an examination is provided to the person subject to examination, an entrance conference will be scheduled with the auditor and representatives of the person subject to examination. A representative of the administrator may, but is not required, to participate in an entrance conference. If the person subject to examination refuses to schedule an entrance conference with the auditor, the auditor shall inform the administrator of that refusal.

b) During the entrance conference, the auditor shall, to the extent practicable:

1. identify of the types of property that will be subject to the examination and the time period covered by the examination;

2. discuss an examination work plan, a tentative schedule, and any potential scoping issues;

3. provide contact information for both the auditor and the administrator;

4. if a draft has not been presented prior to the entrance conference, provide the person subject to examination a draft confidentiality agreement;

5. notify the person subject to examination of his or her ability to request an informal conference with the administrator pursuant to Section 15-1008 of the Act;

6. advise the person subject to examination that the administrator and not the auditor makes determinations concerning that person's liability under the Act and that interpretations of the Act are made by the administrator;

7. request records and materials necessary to proceed with the next steps of the examination;

8. explain the requirement to provide a due diligence notice to the apparent owner of property presumed abandoned; and

9. explain that, unless otherwise agreed to in writing by the administrator, the person subject to examination shall remit to the auditor any unclaimed property identified during the examination that is owed to the State of Illinois.

74 Ill. Adm. Code 760.760 Examination Guidelines

a) The auditor and the person subject to examination shall act in good faith to conduct the examination under the terms and within the time frame established in the entrance conference.

b) During the examination, the auditor may make subsequent requests, to the person subject to examination, for additional books and records required to complete the examination.

1. The auditor shall submit record requests to the person subject to examination in writing or, if the request is made verbally, shall follow up with written documentation of the request.

2. Record requests shall have reasonable deadlines in order to move the examination forward and avoid unnecessary delays.

3. The auditor shall provide a reasonable timeframe for the person subject to examination to respond to the request based on the type and extent of the information requested and other relevant facts and circumstances.

4. The auditor shall provide confirmation of receipt with reasonable projected response times to submissions received from the person subject to examination.

5. The person subject to examination cannot unilaterally require the auditor to perform an onsite examination. Onsite examinations may be allowed if mutually agreed upon by the person subject to examination, the auditor, and the administrator.

c) The examination shall not be limited to a review of work papers, compilations, or record summaries prepared by the person subject to examination or an advocate, but shall include access to the original books and records deemed by the administrator to be necessary to ascertain compliance with the Act.

d) The auditor shall properly document the examination and make the working papers gathered during the unclaimed property examination available for review by the administrator. The working papers shall include planning information and all related calculations, statistical analyses, and summarizations.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.770 Confidentiality Agreement

a) A person subject to examination may require, as a condition of disclosure of the records of the person to be examined, that the administrator, if the administrator is performing the examination, or the administrator's agent execute and deliver to the person to be examined a confidentiality agreement that:

1. is in a form that is reasonably satisfactory to the administrator; and

2. requires the person having access to the records to comply with the provisions of Article 14 of the Act (Confidentiality and Security of Information) applicable to the person. [765 ILCS 1026/15-1402]

b) If the person subject to examination and the auditor are unable to enter into a confidentiality agreement within 90 calendar days from the date an agreement reasonably satisfactory to the administrator was first presented to the person subject to the examination by the auditor or the administrator, the examination may commence without a confidentiality agreement in place and the parties shall rely on the confidentiality provisions of Article 14 of the Act.

74 Ill. Adm. Code 760.780 Evidence of Unpaid Debt or Undischarged Obligation

a) A record of a person subject to examination showing an unpaid debt or undischarged obligation is prima facie evidence of the debt or obligation. [765 ILCS 1026/15-1005(a)]

b) A person subject to examination may establish by a preponderance of the evidence that there is no unpaid debt or undischarged obligation for a debt or obligation or that the debt or obligation was not, or no longer is, a fixed and certain obligation of the person subject to examination. [765 ILCS 1026/15-1005(b)] Thus, the prima facie evidence may be rebutted by the person subject to examination.

c) A person subject to examination may overcome prima facie evidence by establishing by a preponderance of the evidence that a check, draft, or similar instrument was:

1. issued as an unaccepted offer in settlement of an unliquidated amount;

2. issued but later was replaced with another instrument because the earlier instrument was lost or contained an error that was corrected;

3. issued to a party affiliated with the issuer;

4. paid, satisfied, or discharged;

5. issued in error;

6. issued without consideration;

7. issued but there was a failure of consideration;

8. voided not later than 90 days after issuance for a valid business reason set forth in a contemporaneous record;

A) for purposes of this provision "valid business reason" does not include a policy of voiding outstanding checks, drafts, or similar instruments after a specified number of days;

B) a policy of automatically voiding would be tantamount to a private escheat law in violation of longstanding public policy in Illinois (see People ex rel. Callahan v. Marshall Field & Co., 83 Ill. App. 3d 811, 818, 404 N.E.2d 368, 374 (1980));

C) this defense merely indicates that when a check, draft, or similar instrument is voided quickly, for a valid business reason (i.e., not as a private escheat law), and the reason is indicated in a contemporaneous record, there is sufficient evidence to overcome the prima facie evidence of the existence of a debt or obligation; or

9. issued but not delivered to the third-party payee for a sufficient reason recorded within a reasonable time after issuance. [765 ILCS 1026/15-1005(c)]

d) In asserting a defense under this Section, and subject to the records retention requirements of the Act, a putative holder may present evidence of a course of dealing between the putative holder and the apparent owner. [765 ILCS 1026/15-1005(d)]

74 Ill. Adm. Code 760.790 Estimation

a) If a person subject to examination does not retain the records required by the Act, the administrator may determine the value of property due using a reasonable method of estimation based on all information available to the administrator, including extrapolation and use of statistical sampling when appropriate and necessary.

b) A payment made based on estimation under this Section is a penalty for failure to maintain the records required by the Act and does not relieve a person from an obligation to report and deliver property to a state in which the holder is domiciled. [765 ILCS 1026/15-1006]

c) Unless agreed to by a person subject to examination, estimation should be used only when there has been a violation of Section 15-404 of the Act. The ability of the administrator to use estimation is intended as a deterrent to the intentional or negligent destruction of records that would be used in an unclaimed property examination to identify unclaimed property.

d) An auditor may not use estimation in an examination unless:

1. the person subject to examination agrees in writing to the use of estimation as part of an audit resolution agreement; or

2. the administrator approves in writing the use of estimation in the examination.

e) Estimation by the administrator should reasonably approximate the amount of unclaimed property that should have been reported to Illinois if all reports had been filed and records had been maintained as required by the Act. Thus, estimation should attempt to determine the amount of unclaimed property that should have been reported to Illinois under Sections 15-301, 15-302, and 15-303 (addressed property) and 15-304 (unaddressed property when the holder is domiciled in Illinois).

f) Prior to approving the use of estimation in an examination, the administrator shall:

1. notify the person subject to examination, in writing, that the administrator is considering the use of estimation because of a failure to maintain the records required by Section 15-404 of the Act;

2. after considering any evidence submitted by the auditor and the person subject to examination, make a written determination that the person subject to examination has failed to maintain the records required by Section 15-404 of the Act;

3. provide an opportunity for the person subject to examination to submit written objections, including, but not limited to:

A) submitting evidence that the person subject to examination has maintained sufficient records to perform the examination for some or all of the years during the time period covered by the examination; or

B) proposing an estimation methodology;

4. notify in writing the person subject to examination of:

A) the estimation methodology to be used; and

B) for which years during the time period covered by the examination estimation will be used.

74 Ill. Adm. Code 760.800 Multistate Examinations

a) The administrator may agree to participate in an examination of a person for compliance with unclaimed property laws of multiple states, including the Act, when a single auditor performs an examination for more than one state.

b) Multistate examinations are intended to be more efficient and effective for both the person being examined and the states that have authorized the examination. Having a single auditor conducting an unclaimed property examination reduces the occurrence of a person being simultaneously subject to multiple unclaimed property examinations by multiple auditors representing multiple states.

c) Because different states participating in a multistate examination will have different rules for examinations, there may be conflicts between the statutory or regulatory requirements for how the auditor should conduct the examination. When practicable, the auditor should comply with the requirements of this Section when conducting a multistate examination. However, if there is a conflict between the requirements of this Section and the requirements of one or more other states, the auditor may vary from the requirements of this Section so long as the auditor:

1. follows any requirements imposed by the Act, including but not limited to confidentiality requirements;

2. uses the Act with regards to any property for which the State of Illinois has the superior claim pursuant to the federal common law established in the U.S. Supreme Court cases listed in Appendix A(g); and

3. complies with the goal to be predictable, fair and consistent while determining the historical compliance of the person being examined, and to encourage and facilitate that person's ongoing and future compliance with the Act.

d) A person subject to examination retains the ability to request an informal conference with the administrator pursuant to Section 15-1008 of the Act.

74 Ill. Adm. Code 760.810 Bankruptcy

If, at any time before or during the course of an examination, the person subject to examination files for bankruptcy, that person shall give notice of the filing to the auditor. The auditor shall, within 7 calendar days after receiving notice or the discovery of the event, notify the administrator of the bankruptcy filing. If the administrator so elects, the auditor shall assist the administrator to ensure that a proper proof of claim is timely filed in the bankruptcy action.

74 Ill. Adm. Code 760.820 Audit Resolution Agreements

a) Pursuant to the administrator's authority to conduct an examination, the administrator possesses the authority to resolve an examination via negotiation and settlement with the person subject to examination. This provides flexibility to both the person subject to examination and the administrator to resolve issues that could require formal appeal or litigation. These settlements are often referred to as audit resolution agreements.

b) The administrator may not agree in a settlement to provide indemnification beyond that provided in Section 15-604 of the Act.

c) Pursuant to Section 15-1206(1) of the Act, the administrator may agree to reduce or waive interest and penalties as part of a settlement.

d) A mutually-agreed upon settlement resolves a specific examination and does not create any precedent on specific legal issues.

74 Ill. Adm. Code 760.830 Report to Holder

At the conclusion of an examination, unless waived in writing by the person being examined, the administrator shall provide to the person whose records were examined a report that specifies:

a) the work performed;

b) the property types reviewed;

c) the methodology of any estimation technique, extrapolation, or statistical sampling used in conducting the examination;

d) each calculation showing the value of property determined to be due; and

e) the findings of the person conducting the examination. [765 ILCS 1026/15-1007]

74 Ill. Adm. Code 760.840 Voluntary Disclosure Agreement Program

a) Pursuant to the authority of the administrator under Section 15-1206 of the Act to waive, in whole or in part, interest and penalties, the administrator may establish a voluntary disclosure agreement (VDA) program for persons who are not in compliance with the Act.

b) Under a VDA program, the administrator will agree to waive, in whole or in part, interest and penalties for a person who voluntarily reports and remits to the administrator property that should have been previously reported, paid or delivered to the administrator pursuant to the Act. The VDA program includes, but is not limited to, property that is reportable pursuant to the transition provisions of Section 15-1503 of the Act. Thus, property reportable under the Act or the previous Uniform Disposition of Unclaimed Property Act may be eligible to be voluntarily reported and remitted under the VDA program.

c) A person who has been sent an official notice of examination letter may not participate in the VDA program.

d) Participation in the administrator's VDA program does not waive or otherwise limit the administrator's authority to order and conduct an unclaimed property examination pursuant to Section 15-1002 of the Act.

74 Ill. Adm. Code 760.850 Examination of Regulated Financial Organizations

a) Purpose of Section 15-1002.1 of the Act

1. Section 15-1002.1 of the Act establishes a system in which the Illinois Department of Financial and Professional Regulation (DFPR) will include unclaimed property compliance as part of the regular audits or examinations performed on State-regulated financial organizations. Because DFPR will perform regular examinations of these entities, the administrator will not perform unclaimed property examinations of these State-regulated financial organizations pursuant to Section 15-1002 of the Act.

2. State-regulated financial organizations whose operations are either entirely or almost entirely within the State of Illinois shall be regularly examined by DFPR for compliance with unclaimed property laws. This should both ensure compliance with the Act and generally subject these State-regulated financial organizations to only one set of unclaimed property examinations.

3. Section 15-1002.1 of the Act is not, however, intended to restrict the ability of the administrator to examine national banks, national credit unions, and other financial organizations that operate in multiple states. For financial organizations that operate in multiple states or are created pursuant to a federal law, the administrator should either participate in multi-state examinations to determine compliance with the Act and similar unclaimed property laws of other states or otherwise perform an unclaimed property examination pursuant to Section 15-1002 of the Act.

b) Entities for which DFPR is the Primary Prudential Regulator. The administrator may perform an unclaimed property examination of a financial organization for which DFPR is the primary prudential regulator when either:

1. the administrator consults with DFPR and DFPR has not examined the State-regulated financial organization for compliance with the Act within the past 5 years; or

2. DFPR waives, in writing, the restrictions of Section 15-1002.1 and permits the administrator to examine a financial organization or group of financial organizations for compliance with the Act.

c) Federally Chartered Financial Organizations

1. The administrator may, at reasonable times and upon reasonable notice:

A) examine the records of a financial organization that is a federally chartered bank, savings bank, or credit union if the administrator has reason to believe that the financial organization has failed to comply with the Act;

B) issue an administrative subpoena requiring the financial organization or an agent of the financial organization to make records available for examination; and

C) bring an action seeking judicial enforcement of the subpoena. [765 ILCS 1026/15-1002.1(c)]

2. Reasons to believe under (c)(1)(A) of this Section include, but are not limited to, the following:

A) A holder has submitted negative reports to the administrator for two successive calendar years;

B) A holder has not submitted a report to the administrator for two successive calendar years;

C) A holder does any of the following:

i) adjusts its asset statements by writing off property that is presumed unclaimed property under the Act;

ii) fails to follow generally-accepted accounting principles or the Act with respect to unidentified remittances or the establishment of unclaimed property liability accounts;

iii) fails to follow generally-accepted accounting principles or the Act with respect to reporting unidentified credits;

iv) fails to retain records 10 years beyond the period of abandonment to determine the reporting of property which could be presumed abandoned under the Act; or

v) the holder's records precludes the holder from reporting property which could be presumed abandoned under the Act.

D) The administrator is notified in writing by another governmental agency that a holder is not in compliance with the Act;

E) The total unclaimed property remitted by a holder is below the average remittance for other holders in the same industry and that have assets of similar size to the holder;

F) A holder does not report all types of unclaimed property that they may be holding as indicated by, but not limited to, the following:

i) a previous examination of the holder; or

ii) a comparison with asset types reported by other holders in the same industry and that have assets of similar size to the holder.

G) A holder is discovered as a subsidiary or affiliate of another holder which has been or is being examined;

H) A holder is discovered as a principal or holding company of another holder which has been or is being examined;

I) An unclaimed property examination of the records of the holder has not been performed for 5 or more calendar years;

J) Changes in a holder's business practices including, but not limited to, changes in financial status, technological advances, corporate structure, or change in ownership; or

K) The administrator has issued a written notice of deficiency to a holder.

3. This subsection (c) is intended to comply with federal law applicable to federally chartered financial organizations which provides that "lawfully authorized State auditors and examiners may, at reasonable times and upon reasonable notice to a bank, review its records solely to ensure compliance with applicable State unclaimed property or escheat laws upon reasonable cause to believe that the bank has failed to comply with such laws." [Section 412 of the Garn-St. Germain Depository Institutions Act of 1982, Public Law 970-320 (Oct. 15, 1982)]

d) Primary Prudential Regulator. For purposes of the Act, DFPR is the primary prudential regulator for entities:

1. for which it performs regular regulatory examinations that include unclaimed property compliance at least once every 5 years;

2. that operate primarily or exclusively in Illinois; and

3. that are created pursuant to one of the following Acts: Illinois Banking Act [205 ILCS 5], Savings Bank Act [205 ILCS 205], Pawnbroker Regulation Act [205 ILCS 510], Corporate Fiduciary Act [205 ILCS 620], Residential Mortgage License Act of 1987 [205 ILCS 635], Illinois Credit Union Act [205 ILCS 305], Currency Exchange Act [205 ILCS 405], Transmitters of Money Act [205 ILCS 657], Sales Finance Agency Act [205 ILCS 660], Debt Management Service Act [205 ILCS 665], Consumer Installment Loan Act [205 ILCS 670], Title Insurance Act [215 ILCS 155], Debt Settlement Consumer Protection Act [225 ILCS 429], Safety Deposit License Act [240 ILCS 5], Payday Loan Reform Act [815 ILCS 122], Foreign Banking Office Act [205 ILCS 645], and Foreign Bank Representative Office Act [205 ILCS 650].

e) Related Entities Not Covered by Section 15-1002.1

1. Nothing in this Section is intended to restrict the ability of the administrator to perform an unclaimed property examination pursuant to Section 15-1002 of the Act when DFPR is not the primary prudential regulator. Thus, if a financial organization has DFPR as a primary prudential regulator under this Section, but a separate entity related to that financial organization does not have DFPR as a primary prudential regulator, the administrator may perform an unclaimed property examination of that entity pursuant to Section 15-1002 of the Act even if the administrator would defer to DFPR's unclaimed property examination of the financial organization pursuant to Section 15-1002.1.

2. EXAMPLE: If an investment company is related to a state bank chartered by DFPR, the administrator would be able to perform an unclaimed property examination of the investment company even if the administrator would defer to DFPR's examination of the state-chartered bank.

f) Disputes Over Application. If there is a dispute over whether an entity is covered by Section 15-1002.1 of the Act, the administrator and DFPR should consult to resolve the dispute using the framework established by Section 15-1002.1 of the Act and subsection (a) of this Section.

g) Training. When requested by DFPR, the administrator shall provide or otherwise make available appropriate training to employees or representatives of DFPR regarding the examination for compliance with the Act. DFPR shall be responsible for all expenses incurred for the training of DFPR employees or representatives.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

Chapter V Treasurer

Part 760 Revised Uniform Unclaimed Property Act

74 Ill. Adm. Code 760.860 Holder Self-Examination

a) The administrator may direct a person to participate in a self-audit or holder self-examination. A holder self-examination is intended to provide a cost-effective means of determining the historical compliance of the person being examined, and to encourage and facilitate that person's ongoing and future compliance with the Act.

b) A holder self-examination is a form of verified report pursuant to Section 15-1001 of the Act and not an examination pursuant to either Sections 15-1002 or 15-1002.1 of the Act. To assist in a holder self-examination the administrator may retain a contract auditor as provided in Section 760.720 and the holder may retain a holder advocate as provided in Section 760.730.

c) Under a holder self-examination a person will be sent an official written notice by the administrator. If the administrator retains an audit firm to facilitate or review the results of a holder self-examination, the audit firm will be identified in the official notice.

History

• Source: Added at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.900 Purpose of Enforcement

a) State unclaimed property laws are based on a theory of truthful self-reporting by the holders of unclaimed property. Enforcement actions by the administrator are intended to both bring holders subject to enforcement actions into compliance with the Act and to encourage voluntary compliance by other holders. The expectation is that a holder who has been the subject of an enforcement action by the administrator will voluntarily comply with the Act in the future. And, further, a program of enforcement by the administrator will encourage holders to voluntarily comply with the Act in order to avoid being subject to enforcement actions.

b) Unclaimed property examinations are an essential aspect of unclaimed property compliance. However, if a holder is reporting correctly under the Act, there should be no determination of liability by the administrator. (For rules concerning unclaimed property examinations, see Subpart F.)

74 Ill. Adm. Code 760.910 Verified Report of Property

a) If a person does not file a report required by Section 15-401 of the Act or the administrator believes that a person may have filed an inaccurate, incomplete, or false report, the administrator may require the person to file a verified report in a form prescribed by the administrator.

b) The verified report must:

1. state whether the person is holding property reportable under the Act;

2. describe property not previously reported or about which the administrator has inquired;

3. specifically identify property about which there is a dispute whether it is reportable under the Act; and

4. state the amount or value of the property. [765 ILCS 1026/15-1001]

c) A verified report must otherwise comply with the requirements of Section 15-402 of the Act and Section 760.410 of this Part.

74 Ill. Adm. Code 760.920 Administrative Subpoenas

a) The administrator may, at reasonable times and on reasonable notice, issue an administrative subpoena requiring the person or agent of that person to make records available for examination pursuant to the Act. [765 ILCS 1026/15-1002(2)]

b) Prior to issuance, administrative subpoenas shall be reviewed and approved by the administrator's General Counsel or by another employee of the administrator who is an attorney licensed to practice law in Illinois designated by the General Counsel.

c) The administrator may request that the Attorney General bring an action seeking judicial enforcement of a subpoena issued pursuant to the Act on behalf of the administrator.

d) If a person to whom the administrator issues an administrative subpoena brings an action seeking a judicial order to quash, limit, or otherwise prevent enforcement of the administrative subpoena, then the administrator shall request that the Attorney General represent the administrator in that action.

e) The administrator may request that the Attorney General appoint a Special Assistant Attorney General to represent the administrator in any action to enforce or defend an administrative subpoena issued pursuant to the Act.

74 Ill. Adm. Code 760.930 Determination of Liability

a) If the administrator determines from an examination conducted under Section 15-1002 of the Act that a putative holder failed or refused to pay or deliver to the administrator property that is reportable under the Act, the administrator shall issue a determination of the putative holder's liability to pay or deliver and give notice in a record to the putative holder of the determination. [765 ILCS 1026/15-1011]

b) The administrator may give notice of any interest and civil penalties at the same time that notice of a determination of liability is given.

74 Ill. Adm. Code 760.940 Interest and Penalties

a) Interest on Unreported Property. A holder that fails to report, pay or deliver property within the time prescribed by the Act shall pay to the administrator interest at a rate of 1% per month on the property or value of the property from the date the property should have been reported, paid or delivered to the administrator until the date reported, paid or delivered. [765 ILCS 1026/15-1204(a)] Thus, unless waived by the administrator pursuant to Section 15-1206, payment of interest on unreported reportable property is mandatory under the Act.

b) Civil Penalty for Failure to Act in Timely Manner. The administrator may require a holder that fails to report, pay, or deliver property within the time prescribed by the Act to pay to the administrator, in addition to interest, a civil penalty of $200 for each day the duty is not performed, up to a cumulative maximum amount of $5,000. [765 ILCS 1026/15-1204(b)] Thus, unless the administrator determines that the holder acted in good faith and without negligence pursuant to Section 15-1206(b) of the Act, payment of a penalty for failure to act in a timely manner is a discretionary enforcement action by the administrator.

c) Civil Penalty for Willful Failure to Perform a Duty Under the Act. If a holder willfully fails to perform a duty imposed on the holder under the Act, the administrator may require the holder to pay the administrator, in addition to interest, a civil penalty of $1,000 for each day the obligation is evaded or the duty is not performed, up to a cumulative maximum amount of $25,000, plus 25% of the amount or value of property that should have been but was not reported, paid or delivered as a result of the evasion or failure to perform. [765 ILCS 1026/15-1205(a)]

d) Civil Penalty for Filing a Fraudulent Report. If a holder makes a fraudulent report under the Act, the administrator may require the holder to pay to the administrator, in addition to interest, a civil penalty of $1,000 for each day from the date the report was made until corrected, up to a cumulative maximum of $25,000, plus 25% of the amount or value of any property that should have been reported but was not included in the report or was underreported. [765 ILCS 1026/15-1205(b)]

e) In addition to any other penalty provided by law, any person that violates any provision of Section 760.651 of this Part shall forfeit and pay a civil penalty in an amount determined by the administrator not to exceed $10,000 for each violation. The penalty shall be assessed in proceedings as provided in 74 Ill. Adm. Code 730. [765 ILCS 1026/15-1303(i)(4)]

History

• Source: Amended at 50 Ill. Reg. 778, effective December 31, 2025

Chapter V Treasurer

Part 760 Revised Uniform Unclaimed Property Act

74 Ill. Adm. Code 760.950 Waiver of Interest and Penalties

a) The administrator may waive, in whole or in part, interest under Section 15-1204(a) of the Act and penalties under Section 15-1204(b) [765 ILCS 1026/15-1206(1)].

1. This authority does not provide for waiver of penalties imposed for willful failure or filing a fraudulent report. However, the imposition of penalties under Section 15-1205 is not mandatory.

2. The administrator may agree to reduce or waive interest and penalties as part of an audit resolution agreement (see Section 760.820).

3. Unless the holder willfully failed to report, pay or deliver property within the time prescribed by the Act, the administrator will waive the payment of interest of less than 3 months.

b) The administrator shall waive a penalty under Section 15-1204(b) of the Act if the administrator determines that the holder acted in good faith and without negligence. [765 ILCS 1026/15-1206(2)]

1. Good faith will only apply to situations in which the holder has attempted to comply with the Act.

2. If the holder has failed to file a report, the holder did not act in good faith and without negligence as the holder has not attempted to comply with the Act.

c) A holder who fails to report, pay or deliver property within the time prescribed by the Act shall not be required to pay interest, or be subject to penalties, if the failure to report, pay or deliver the property was due to the lack of knowledge of the death that established the period of abandonment under the Act. [765 ILCS 1026/15-1204(c)]

74 Ill. Adm. Code 760.960 Judicial Enforcement

a) The administrator may commence an action in the Circuit Court of Sangamon County or Cook County, federal court, or an appropriate court of another state to enforce a final determination of liability and secure payment or delivery of past due, unpaid, or undelivered property.

b) An action to enforce a final determination of liability must be brought not later than 5 years after the determination becomes final. [765 ILCS 1026/15-1201(a)]

c) If no court in Illinois has jurisdiction over the defendant, the administrator may commence an action in any court having jurisdiction over the defendant. [765 ILCS 1026/15-1201(b)]

d) The administrator may request that the Attorney General appoint a Special Assistant Attorney General to represent the administrator in any action to enforce a final determination of liability.

74 Ill. Adm. Code 760.970 Action Involving Another State or Foreign Country

a) The administrator may join another state or foreign country to examine and seek enforcement of the Act against a putative holder. [765 ILCS 1026/15-1203(a)]

b) On request of another state or foreign country, the Attorney General may commence an action on behalf of the other state or country to enforce, in Illinois, the law of the other state or country against a putative holder subject to a claim by the other state or country. [765 ILCS 1026/15-1203(b)]

c) The administrator may request the official authorized to enforce the unclaimed property law of another state or foreign country to commence an action to recover property in the other state or country on behalf of the administrator. Illinois may pay the costs, including reasonable attorney's fees and expenses, incurred by the other state or foreign country in an action under this subsection. [765 ILCS 1026/15-1203(c)]

d) The administrator may pursue an action on behalf of Illinois to recover property subject to the Act but delivered to the custody of another state if the administrator believes the property is subject to the custody of the administrator. [765 ILCS 1026/15-1203(d)]

e) At the request of the administrator, the Attorney General may commence an action to recover property on behalf of the administrator in Illinois, another state, or a foreign country. With the written consent of the Attorney General, the administrator may retain an attorney in Illinois, another state, or a foreign country as a special assistant attorney general to recover property on behalf of the administrator in Illinois, another state, or a foreign country and may agree to pay attorney's fees based in whole or in part on a fixed fee, hourly fee, or percentage of the amounts or value of property recovered in the action. [765 ILCS 1026/15-1203(e)]

f) In all actions commenced pursuant to Section 15-1203 of the Act, unless otherwise given permission in writing by the Attorney General, the administrator shall be represented by the Attorney General or a special assistant attorney general appointed by the Attorney General.

g) Expenses incurred by Illinois in an action under Section 15-1203 of the Act may be paid from property received under the Act or the net proceeds of the property. Expenses paid to recover property may not be deducted from the amount that is subject to a claim under the Act by the owner. [765 ILCS 1026/15-1203(f)]

74 Ill. Adm. Code 760.980 Periods of Limitation and Repose

a) An action or proceeding may not be maintained by the administrator to enforce the Act in regard to the reporting, delivery or payment of property more than 10 years after the holder specifically identified the property in a report filed with the administrator or gave express notice to the administrator of a dispute regarding the property. [765 ILCS 1026/15-610(b)]

b) The 10-year period of limitation is tolled:

1. if the holder did not specifically identify the property in a report filed with the administrator or provide other express notice to the administrator;

2. by the filing of a report that is fraudulent [765 ILCS 1026/15-610(b)]; or

3. if the administrator demands that the holder file a verified report pursuant to Section 15-1001 of the Act or issues an official notice of examination letter to the holder pursuant to Section 15-1002 of the Act.

c) Notwithstanding the tolling of the 10-year period of limitation because of a failure of a holder to specifically identify property in a report filed with the administrator or provide other express notice to the administrator, the administrator will not maintain an action in regard to the reporting, delivery or payment of property more than 10 years after that property should have been reported and remitted to the administrator if all of the following apply:

1. the holder has filed reports with the administrator for the past 10 years;

2. the holder agrees in writing to file all reports required by the Act, including providing express notice to the administrator of any future disputes concerning the reporting of property;

3. the total amount of property, excluding any interest or penalties that the administrator could impose under the Act, is less than $2,500 or is otherwise de minimis as reasonably determined by the administrator; and

4. the administrator determines that the holder acted in good faith and without negligence. [765 ILCS 1026/15-1206(2)]

d) If the administrator issues a demand that the holder file a verified report pursuant to Section 15-1001 of the Act or issues an official notice of examination letter to the holder pursuant to Section 15-1002 of the Act within the time permitted by the Act, then the holder has been put on notice that the administrator is commencing a proceeding within the meaning of Section 15-610 of the Act. The commencement of a proceeding within the time period permitted by the Act tolls the 10-year period of limitation for the commencement of an action.

AGENCY NOTE: The language of Section 15-610(b) of the Act comes from Section 19(b) of the 1995 Uniform Unclaimed Property Act promulgated by the Uniform Law Commission (www.uniformlaws.org). The official comments to the 1995 Uniform Unclaimed Property Act note that this provision parallels the Internal Revenue Code (26 U.S.C. 6501(c)). The official comments further note that as "the Unclaimed Property Act is based on a theory of truthful self-reporting, a holder which conceals property, willfully or otherwise, cannot expect the protection of the stated limitations period."

History

• Source: Amended at 48 Ill. Reg. 14162, effective September 10, 2024

74 Ill. Adm. Code 760.1000 Confidentiality

a) Information provided in reports filed pursuant to the Act and the database required by Section 15-503 of the Act are specifically exempt from disclosure under the Freedom of Information Act. [765 ILCS 1026/15-1401(b)] The Freedom of Information Officer for the administrator may deny requests for records containing such information as information specifically prohibited from disclosure by federal or State law or rules and regulations implementing federal or State law. [5 ILCS 140/7(1)(a)]

b) Under the Act "private information" as defined in the Freedom of Information Act and "personal information" as defined in the Personal Information Protection Act continues to be confidential when disclosed or delivered under the Act to the administrator or administrator's agent. [765 ILCS 1026/15-1401(a)]

1. Private Information. The Freedom of Information Officer for the administrator may deny requests for records containing private information as information specifically prohibited from disclosure by federal or State law or rules and regulations implementing federal or State law; or unless disclosure is specifically required by a different State or federal law or a court order. [5 ILCS 140/7(1)(a) and (b)]

2. Personal Information. Personal information as defined in the Personal Information Protection Act is either private information or personal information the disclosure of which would constitute a clearly unwarranted invasion of personal privacy as defined in Section 2(c-5) and 7(1)(c) of the Freedom of Information Act and the Freedom of Information Officer for the administrator may deny requests for records containing personal information as information specifically prohibited from disclosure by federal or State law or rules and regulations implementing federal or State law; or unless disclosure is specifically required by a different State or federal law or a court order. [5 ILCS 140/7(1)(a) and (b)]

74 Ill. Adm. Code 760.1010 Confidentiality of Records Obtained During Examination

a) Records obtained and records, including work papers, compiled by the administrator or administrator's agent in the course of conducting an examination under Section 15-1002 or Section 15-1002.1 of the Act:

1. are subject to the confidentiality and security provisions of Section 760.1000 and are exempt from disclosure under the Freedom of Information Act;

2. may be used by the administrator in an action to collect property or otherwise enforce the Act;

3. may be used in a joint examination conducted with another state, the United States, a foreign country or subordinate unit of a foreign country, or any other governmental entity if the governmental entity conducting the examination is legally bound to maintain the confidentiality and security of information obtained from a person subject to examination in a manner substantially equivalent to Article 14 of the Act;

4. may be disclosed, on request, to the person that administers the unclaimed property law of another state for that state's use in circumstances equivalent to circumstances described in Article 10 of the Act, if the other state is required to maintain the confidentiality and security of information obtained in a manner substantially equivalent to Article 14 of the Act;

5. must be produced by the administrator under an administrative or judicial subpoena or administrative or court order; and

6. must be produced by the administrator on request of the person subject to the examination in an administrative or judicial proceeding relating to the property. [765 ILCS 1026/15-1004]

b) Auditors shall not disclose confidential information obtained during an unclaimed property examination to any person other than the administrator or the administrator's designee and, in the case of a multistate examination, to authorized representatives of a state participating in the examination.

c) Auditors shall not use confidential information obtained from the person subject to an examination for any purpose other than for purposes of the examination. Auditors shall take reasonable steps to ensure that the confidential information provided by the person subject to an examination is securely maintained.

d) Auditors must comply with any applicable federal and State laws and regulations pertaining to unauthorized disclosures of confidential information, including the Personal Information Protection Act.

History

• Source: Amended at 46 Ill. Reg. 16898, effective September 26, 2022

74 Ill. Adm. Code 760.1100 Transition Provisions

a) An initial report filed under the Revised Act for property that was not required to be reported before the effective date of the Revised Act, but that is required to be reported under the Revised Act, must include all items of property that would have been presumed abandoned during the 5-year period preceding the effective date of the Revised Act as if the Revised Act had been in effect during that period. [765 ILCS 1026/15-1503(a)]

AGENCY NOTE: A version of the transitional provision described in Section 15-1500(a) of the Act has been included in every uniform unclaimed property Act promulgated by the ULC [765 ILCS 15-1500(a)]. While the Act has a 5-year look back period, the Uniform Law Commission (ULC, also known as the National Conference of Commissioners on Uniform State Laws) version of RUUPA has a 10-year look back period. This 5-year period is identical to the requirement in the Former Act that the State Treasurer "issue a Notice of Deficiency to a holder or direct the commencement of an examination of a holder with respect to a report required under the Former Act within 5 years after the report is filed." (See the repealed 765 ILCS 1025/23.5(a).) The Former Act, when it was adopted in 1961, had a transitional provision that applied its provisions to any property for which the presumption of abandonment prescribed by the Former Act occurred on or after August 17, 1946. Thus, the look back period in the Former Act was 15 years. (See the repealed 765 ILCS 1025/17.)

1. Property Covered by the Transition Provision

A) As part of its report filed in calendar year 2018, a holder must report all property that would have been reported in 2013 through 2017 as if the Revised Act had been in effect on January 1, 2013.

B) Property that was excluded in 2013 through 2017 under the Former Act (Uniform Disposition of Unclaimed Property Act [765 ILCS 1025]), but that is not excluded under the Revised Act, must be reported in 2018.

EXAMPLE: Property that was excluded from being reported and remitted pursuant to provisions of Section 2a(b) of the Former Act during 2013 through 2017 should be reported in 2018.

C) Which property should be reported under this transitional provision is determined by looking at the applicable period of abandonment in the Revised Act.

EXAMPLE: Section 15-201(5) provides that the debt of a business association is reportable 3 years after the obligation to pay arises. So, a debt owed to another business association that arose in 2010 would have been reportable in 2013 and, therefore, would be reportable in the initial report filed in 2018.

2. Owner Interest

A) The requirement to report property that was previously excluded from being reported under the Former Act is still subject to the indication of apparent owner interest in property provisions of Section 15-210 of the Revised Act.

B) The period of abandonment for property covered by subsection (a) is measured from the later of:

i) the date the property would have been presumed abandoned if the Revised Act had been in effect; or

ii) the date of the latest indication of interest by the apparent owner in the property.

3. Due Diligence Notice Required. A holder reporting property pursuant to subsection (a) is still required to provide notice to an apparent owner of that property pursuant to the applicable provisions of Section 15-501 of the Revised Act.

4. Interest and Penalties

A) If a holder reports property pursuant to subsection (a) in 2018, that property is considered to have been reported at the time prescribed by the Revised Act. As such, the administrator may not impose any interest or penalties under Section 15-1204 of the Revised Act on property reported in 2018 in compliance with subsection (a).

B) If a holder fails to report property in 2018 that should have been reported under subsection (a), but reports that property in 2019, the administrator shall waive any interest or penalties under Section 15-1204 of the Revised Act if the administrator determines that the holder acted in good faith and without negligence.

5. Insufficient Holder Records. The following provisions apply to a holder that has insufficient records to accurately report property that should be reported in 2018 pursuant to subsection (a).

A) The holder:

i) shall report all property for which it has adequate records to file a report under Section 15-401 of the Revised Act; and

ii) may enter into a written agreement with the administrator to report and remit an estimate of any property that would have been reportable to Illinois for which the holder does not have adequate records to file a report under Section 15-401 of the Revised Act.

B) If the holder is domiciled outside of Illinois, any estimate of property that would have been reportable to Illinois will be an estimate of property for which the last-known address of the apparent owner would have been in Illinois.

C) If the holder is domiciled in Illinois, any estimate of property that would have been reportable to Illinois will be an estimate both of property for which the last-known address of the apparent owner would have been in Illinois and of property that would have been reportable to Illinois under Section 15-304 of the Revised Act.

6. If property exempted under the Former Act but not excluded under the Revised Act has been paid to another state, the holder is not required to pay again. In this case, the holder should provide notice to the administrator, so that the administrator can make a determination whether to attempt to reclaim that property from the state first taking possession. To provide the notice, the holder may, but is not required to, provide the administrator with a copy of the report or relevant portions of the report filed with the other state to which the property was reported and remitted. Providing notice to the administrator under this provision is a form of "express notice" as provided in Section 15-610(b) of the Act.

b) The Act does not relieve a holder of a duty that arose before the effective date of the Revised Act to report, pay or deliver property. Subject to Section 15-610(b) of the Act, a holder that did not comply with the law governing unclaimed property before the effective date of the Act is subject to applicable provisions for enforcement and penalties in effect before the effective date of the Revised Act. [765 ILCS 1026/15-1503(b)]

1. Holders are still required to report and remit any property that was reportable under the Former Act prior to January 1, 2018, the effective date of the Revised Act.

A) Property that would not be reportable under the Revised Act, that should have been reported under the Former Act prior to January 1, 2018 will generally still be reportable to the administrator.

B) EXAMPLE: Property that should have been reported under the Former Act on November 1, 2017 because it had been presumed abandoned in the 12 months preceding July 1, 2017, but for whatever reason was not reported and remitted to the administrator by January 1, 2018, would still need to be reported and remitted to the administrator.

C) The statute of limitations in Section 15-610 of the Revised Act, including the tolling provisions in Section 610(b), still applies to the ability of the administrator to bring an enforcement action against a holder.

2. Unclaimed property examinations that were initiated before January 1, 2018, but are still ongoing on or after January 1, 2018, will be based on the presumptions of abandonment from the appropriate Act given the circumstances surrounding the property.

A) Property that would be reportable under the Revised Act will generally be reportable under that Act.

B) Property that would not be reportable under the Revised Act, but should have been reported under the Former Act prior to January 1, 2018 will generally still be reportable to the administrator.

C) When the standard for determining a presumption of abandonment under the Revised Act is materially different from under the Former Act, and it is in the best interests of the owner for the new standard to apply, the Revised Act shall apply.

EXAMPLE: A tax-advantaged nonretirement account that would have been presumed abandoned after 5 years of inactivity under the Former Act, but would not be presumed abandoned until 3 years after the date by which distribution of the property must begin to avoid a tax penalty under the Revised Act, would be a case in which the new standard would be applied.

D) The administrator and the holder may agree in writing how to resolve issues in which both unclaimed property Acts may reasonably be interpreted as applying to property that is the subject of the unclaimed property examination. Under Section 15-608(b) of the Revised Act, the administrator has the authority to accept property early and to waive or reduce interest and penalties.

E) Generally, an examination will toll the statute of limitations in Section 15-610 of the Revised Act unless the holder specifically identified the property in a report filed with the administrator or gave other express notice to the administrator prior to the initiation of the examination, because a person subject to an unclaimed property examination generally does not file reports directly with the administrator during that examination.

74 Ill. Adm. Code 760.APPENDIX A Background Information

a) Section 15-1501 of the Act provides that, when applying and construing the Act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it. [765 ILCS 15-1501]. Given the provisions of Section 15-1501, this Appendix is intended to provide background that will be useful to persons attempting to interpret the Act.

b) Every state has enacted legislation requiring that holders of presumptively abandoned or unclaimed property report and deliver that property to the state. A majority of states have adopted some form of one of the uniform acts promulgated by the Uniform Law Commission (ULC). The problem of "lucrative silence" by holders motivated the ULC to draft and promulgate the original Uniform Disposition of Unclaimed Property Act (UDUPA) in 1954. Illinois passed its version of UDUPA in 1961. Illinois' current law is based on the ULC's Revised Uniform Unclaimed Property Act (RUUPA) that was approved and recommended for enactment in all states in 2016.

c) Various courts have attempted to lay out the purposes of state unclaimed property laws. The Minnesota Supreme Court summarized the four main purposes as:

1. to protect the interests of the owners of unclaimed property;

2. to relieve holders of the annoyance, expense and liability of keeping unclaimed property;

3. to preclude multiple liability; and

4. to give the adopting state use of considerable sums of money that otherwise is a windfall to holders. (State by Lord v. First National Bank, 313 N.W.2d 390, 393 (Minn. 1981))

d) Illinois' Appellate Court noted that Illinois' unclaimed property Act "protects the rights of unknown owners and gives the benefit of the use of the unclaimed property, most of which experience shows will never be claimed, to the State rather than the holders." (People ex rel. Fahner v. Chicago Transit Authority, 127 Ill. App. 3d 405, 408, 468 N.E.2d 1316, 1318 (1st Dist. 1984) citing People ex rel. Callahan v. Marshall Field & Co. (1980), 83 Ill. App. 3d 811, 404 N.E.2d 368; and Douglas Aircraft Co. v. Cranston (1962), 58 Cal. 2d 462, 374 P.2d 819)

e) State unclaimed property Acts prevent the unjust enrichment by holders of property to which they are not legally entitled and establish a process through which unclaimed property may be reunited with its rightful owner. These statutes essentially abolish the common law on abandoned property and remove the escheatment by the state of intangible personal property. The state no longer becomes the legal owner of unclaimed intangible personal property. Instead, it is transferred to a state unclaimed property administrator, typically the State Treasurer, who serves as a perpetual custodian of the unclaimed property.

f) The Uniform Unclaimed Property System

1. The uniform unclaimed property Acts, including Illinois' Act, set up a system for dealing with unclaimed intangible property as well as tangible unclaimed property recovered from safe deposit boxes. Each state's Act establishes rules to determine when different types of property are presumed abandoned. After property is presumptively abandoned, the holder of the property is almost always required to attempt to contact the owner of unclaimed property in writing. This is called a due diligence notice. If the owner does not claim the property from the holder, then the holder is required to report and remit that property to the state unclaimed property administrator as part of an annual unclaimed property report.

2. The administrator once again attempts to contact owners. Historically, this was done through newspaper advertisements; now, however, in addition to print advertising, states maintain searchable online databases, work with other government agencies to update contact information for owners, send direct mail to apparent owners, and perform other types of in-person outreach and media advertising to attempt to reunite owners, or their heirs, with their unclaimed property.

3. Cash remitted to the administrator is deposited into a state fund. Non-cash property is held for a period of time and then sold if the owner has not been located, with the proceeds being deposited into the same state fund. Owners can claim their property from the administrator using online or paper claim forms and, when necessary, by supplying supporting documentation to prove that they are the rightful owner. There is no deadline for an owner to reclaim his or her property from the administrator.

g) The U.S. Supreme Court has established federal common law rules to determine which state is entitled to unclaimed property. The cases of Texas v. New Jersey, 379 U.S. 674 (1965), Pennsylvania v. New York, 407 U.S. 206 (1972), and Delaware v. New York, 507 U.S. 490 (1993) have established the framework to determine which state has priority in claiming unclaimed property.

h) The Act is not identical to the version of RUUPA promulgated by the ULC. The ULC version, including the official comments, is available at www.uniformlaws.org. While the General Assembly chose to adopt great portions of the version of RUUPA promulgated by the ULC, certain provisions from the Former Act were retained, language from prior versions of the uniform Act were used in places, and sometimes provisions were modified or entirely rewritten. However, the Act, Illinois' version of RUUPA, contains all of the elements of modern unclaimed property law discussed in this Appendix.

Part 761 Illinois State Treasurer and Office of Banks and Real Estate Joint Rules Governing the Uniform Disposition of Unclaimed Property

74 Ill. Adm. Code 761.10 Definitions

"Commissioner" means the Commissioner of Banks and Real Estate or any authorized representative.

"OBRE" means the Office of Banks and Real Estate.

"Treasurer" means the Illinois State Treasurer or any authorized representative.

"Act" means the Uniform Disposition of Unclaimed Property Act [765 ILCS 1025].

74 Ill. Adm. Code 761.20 Examination of Property Holders

Examination of property holders by the Office of Banks and Real Estate (OBRE). The following provisions shall govern the examination by OBRE of persons or financial organizations regulated by OBRE pursuant to the Illinois Banking Act [205 ILCS 5], the Corporate Fiduciary Act [205 ILCS 620], the Foreign Banking Office Act [205 ILCS 645], the Savings Bank Act [205 ILCS 205] or the Illinois Savings and Loan Act of 1985 [205 ILCS 105].

a) Primary Point of Contact. The Treasurer and the Commissioner shall each designate in writing an individual to act as their primary point of contact for the purpose of conducting unclaimed property examinations. The primary point of contact shall receive all correspondence regarding unclaimed property examinations. If circumstances require a change of the designated primary point of contact, written notice shall be provided to all parties as soon as reasonably practical, but no later than 14 calendar days after the change.

b) Examination Direction. If the Treasurer has reason to believe, based upon the criteria contained in 38 Ill. Adm. Code 180.90(c), that a holder subject to examination by OBRE has failed to report property that should have been reported, the Treasurer shall direct OBRE in writing to conduct an examination. The direction shall contain sufficient detail to enable OBRE to conduct a thorough examination and shall include, but not be limited to, the Treasurer's reasons for concluding that the property holder has failed to comply with reporting requirements and all information in the Treasurer's possession that could assist OBRE in conducting the examination. Unclaimed property examinations other than those described in subsection (d) shall be conducted during the next regularly scheduled examination of the holder by OBRE. The Treasurer shall make every effort to direct OBRE to make examinations on a periodic basis.

c) OBRE shall provide the Treasurer with the date for the next regularly scheduled examination of the property holder identified in an examination direction within 10 calendar days after the receipt of the direction. The Treasurer will not disclose the scheduled examination date provided by OBRE.

d) Accelerated Examination Direction. If the Treasurer has concluded, based upon the criteria contained in Section 23 of the Act, that an accelerated examination of a property holder regulated by OBRE is necessary to protect the State's interest, the Treasurer shall prepare and deliver a written accelerated examination direction to OBRE. The accelerated examination direction shall contain sufficient detail to enable OBRE to conduct a thorough examination and shall include, but not be limited to, the Treasurer's reasons for concluding the necessity of an accelerated examination, an explanation of why the Treasurer concluded that the examination cannot wait until the next regularly scheduled examination, and all other information in the Treasurer's possession that could assist OBRE in conducting the examination.

e) As soon as reasonably practical after receiving the accelerated examination direction, OBRE shall provide the Treasurer with the accelerated examination date that has been scheduled in accordance with Section 23(b) of the Act. The Treasurer will not disclose the scheduled accelerated examination date provided by OBRE.

f) Examination Report. Upon the completion of an examination by OBRE, OBRE will prepare and deliver an examination report to the Treasurer.

g) Fines and Penalties. The Treasurer shall provide OBRE a copy of any enforcement action authorized pursuant to Sections 25 and 25.5 of the Act that has been entered against any holder regulated or subject to examination pursuant to the Act by OBRE.

h) Compensation. At least once each month, OBRE shall document and certify to the Treasurer the actual expenditures that have been incurred in performing the examinations pursuant to the Act. The Treasurer shall forward a request for reimbursement to the Illinois State Comptroller for the actual cost of any examination performed by OBRE within 45 days after receiving any statement or report certifying the actual costs. Where applicable, the Governor's guidelines on State travel shall govern recoverable sums.

i) Training. When requested by OBRE, the Treasurer shall provide appropriate training to employees or representatives of the Commissioner regarding the examination of property holders. OBRE shall be responsible for all expenses incurred for the training of OBRE employees or representatives.

74 Ill. Adm. Code 790.5 Definitions

"Case Participant" means any individual participating in a court proceeding including, but not limited to, the parties, lawyers, guardians, witnesses, experts, interpreters, court reporters, and the Commissioner presiding over the case.

"Clerk" means the Clerk of the Illinois Court of Claims.

"Court" means the Illinois Court of Claims.

"In-person" means the participation of all or some case participants in a court proceeding by being physically present in the courtroom.

"Remote" or "remotely" means the participation of all or some case participants in a court proceeding by telephone, video conference, or other electronic means. A remote appearance or court proceeding shall be equivalent to an in-person appearance or court proceeding for all purposes.

History

• Source: Added at 50 Ill. Reg. 7241, effective May 1, 2026

74 Ill. Adm. Code 790.10 Terms of Court

The Court shall hold sessions at such places, or remotely, as it deems necessary to expedite the business of the Court. [705 ILCS 505/6]

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.20 Pleadings and Practice

Except as otherwise provided by this Part or by the Court of Claims Act [705 ILCS 505], pleadings and practice shall follow the Civil Practice Law [735 ILCS 5/Art II] and the Rules of the Supreme Court of Illinois.

History

• Source: Amended at 24 Ill. Reg. 8228, effective July 1, 2000

74 Ill. Adm. Code 790.25 Rule References

Sections in this Part may be referred to as Rules. For example, Section 790.10 may be referred to as Rule 10, Section 790.20 may be referred to as Rule 20, and so on.

History

• Source: Added at 24 Ill. Reg. 8228, effective July 1, 2000

74 Ill. Adm. Code 790.30 Pleadings – Forms

a) Electronic Filing. Unless excepted or exempt, all documents to be filed in the Court of Claims shall be electronically filed with the Clerk of the Court using an electronic filing system approved by the Court of Claims. The filer is responsible for the accuracy of data entered in an approved electronic filing system and the accuracy of the content of any document submitted for electronic filing. The Court of Claims and the Clerk of Court are not required to ensure the accuracy of such data and content.

b) Paper Filing. Paper filings received by the Court without an exception granted pursuant to subsection (c) shall be rejected by the Clerk. If an exception to the mandatory filing requirement of subsection (a) is granted by the Clerk pursuant to subsection (c), and the filing is made by paper, four copies of all filings shall be filed with the office of the Clerk. The filings made pursuant to this subsection (b) shall be produced on quality white paper by a typing, printing, duplicating, or copying process that provides a clear image. If photocopies are used, the original must also be filed. In order that the files of the Clerk's office may be kept under the system commonly known as "flat filing", all papers presented to the Clerk shall be flat and unfolded. Such papers need not have a cover.

c) The Clerk may grant an exception from electronic filing requirements, due to circumstances particular to a filer, document, or case. In these instances, the filer must submit the Clerk of the Court of Claims E-File Exemption Request to the Clerk including the reason for the requested exemption.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

74 Ill. Adm. Code 790.40 Procedure

a) Electronic Filing. Cases shall be commenced by the electronic filing of a verified complaint with the Court's electronic filing system. A party filing a case shall be designated as the claimant, and either the State of Illinois or the appropriate State agency (Section 8(d), Court of Claims Act [705 ILCS 505]) shall be designated as the respondent. The electronic filing system will note on the complaint, and each copy, the date of filing. The Attorney General or the legal counsel of the appropriate State agency shall be notified of the electronic filing. Documents filed electronically must conform to the technical specifications contained in the Court's electronic filing system.

b) Paper Filing. In the event an exception is granted pursuant to 790.30(c) and paper filing is allowed, cases shall be commenced by the filing of a verified complaint with the Clerk of the Court. A party filing a case shall be designated as the claimant, and either the State of Illinois or the appropriate State agency, specified in Section 8(d) of the Court of Claims Act [705 ILCS 505/8(d)] shall be designated as the respondent. The Clerk will note on the complaint, and each copy, the date of filing, and deliver one of the copies to the Attorney General or to the legal counsel of the appropriate State agency.

c) Attorney of Record. In all cases filed in this Court, all claimants not appearing pro se must be represented by an attorney of record by a member of the Illinois bar. Permission for an out-of-state attorney to appear will require compliance with Supreme Court Rules 707, 718 and 756, governing out-of-state attorneys' authorization to practice. A corporation, association, limited liability company or partnership must appear by legal counsel, licensed to practice in the State of Illinois or appearing pro hac vice. If the name, address, and telephone number of an attorney appear on a complaint, no written appearance for such attorney need be filed, but withdrawal and substitution of attorneys shall be by written motion, with proof of service upon the claimant, and filed in the case.

d) Complaint-form. The complaint shall be captioned substantially as follows:

IN THE COURT OF CLAIMS OF THE

STATE OF ILLINOIS

A.B.,)

)

Claimant

)

vs.

)

No.

)

$

STATE OF ILLINOIS (or

)

Amount Claimed

the appropriate

)

State Agency),

)

)

Respondent

)

e) Required information. Parties or their attorneys must include on the appearance and all pleadings filed with the Court of Claims an email address to which documents and notices will be served. A self-represented litigant must also include the email address on the appearance and on all pleadings filed with the Court to which documents and notices will be served.

f) Method of Service. Unless otherwise specified by rule or order of the Court, all filings shall be served electronically through the Court's electronic filing system. If service other than electronic service is specified by order of the Court or an exception to the electronic filing requirements has been granted pursuant to Section 790.30(c), service of documents may be made by depositing the filing in a United States post office or post office box, enclosed in an envelope to the party's address, as identified by the party's appearance in the matter, with postage fully prepaid.

g) Notice of Email Rejection. If a party serving a document filing via e-mail receives a rejection message or similar notification suggesting that transmission was not successful, the party serving the document shall take reasonable steps to ensure actual service of the document.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

74 Ill. Adm. Code 790.50 Complaint-Required Provisions

a) General. A complaint shall be verified by the Claimant or counsel and must set forth fully in the following order:

1. Nature of the Claim. A statement of the nature of the claim, its basis (tort, contract, etc.) and each State officer or agency that is alleged to be responsible, in whole or in part, for the liability asserted in the claim; if the claim is against a State employee, the basis upon which liability is claimed against the State must be specifically stated;

2. Jurisdiction. The Section of the Court of Claims Act under which jurisdiction is asserted;

3. Fact Allegations. All allegations of fact required to set forth the claimant's cause of action;

4. History of Claim. Whether the claim has been presented to any State department or officer, or has been the subject of administrative proceedings, and if so:

A) when and to whom or which administrative body the claim was presented;

B) the action taken on behalf of the claim by the State or the appropriate State agency or officer and by each administrative body that has considered the claim;

5. Ownership. What persons are owners of the claim or interested therein, and when and upon what consideration such persons became interested;

6. Assignments. That no assignment or transfer of the claim, or any part thereof or interest therein, has been made except as stated in the complaint;

7. Entitlement. That claimant is justly entitled to the amount claimed from the State of Illinois or the appropriate State agency after allowing all just credits;

8. Verification. That the facts stated in the complaint are true;

9. Whether this claim or any other claim arising out of the same occurrence (against any person, firm or governmental agency other than the State of Illinois or any of its officers or agencies) has been previously presented to any person, firm, court or administrative tribunal other than the State of Illinois, and, if so:

A) when, to whom, and what action was taken by each person, firm, court or administrative tribunal; and

B) what payments or other considerations, if any, have been received. Claimant must file with the Clerk of the Court copies of all instruments evidencing such payment or consideration;

10. Status of Respondent. If a State officer or agency or department of the State is sued in a capacity as holder, administrator or trustee of a fund, or as executor or administrator of a trust or estate, or as a guardian, conservator or any similar capacity, the complaint shall identify:

A) the fund, estate, trust or other entity involved;

B) the statute or principle of law governing the creation of the fund or other entity; and

C) any instrument or order of court or administrative or governmental agency creating such capacity or fund or entity;

11. Damages. A bill of particulars, stating in detail each item of damages, and the amount claimed; and

12. If the claimant is an executor, administrator, guardian or other representative appointed by a judicial tribunal, a duly certified copy of the record of appointment must be filed with the complaint.

b) Personal injuries. Where a complaint alleges damages as a result of personal injuries, claimant shall:

1. Attach to the complaint, as a separate item, copies of the notices served as required by Sec. 22-1 of the Court of Claims Act [705 ILCS 505/22-1], showing how and when the notices were served.

2. Include with the bill of particulars, as required by subsection(a)(11), the names and addresses of all persons providing medical services; if hospitalized, name of hospital and dates of hospitalization; name of claimant's employer, place of employment, and dates of time lost, if any.

c) Contracts. If the claimant bases the complaint upon a contract, or other instrument in writing, a copy shall be attached for reference.

d) Lapsed appropriations. All claims for services or materials furnished to the State of Illinois, payment of which has been denied solely because of a lapsed appropriation, shall be filed with the Clerk of the Court of Claims in the following manner:

1. Claims shall be initiated by filing with the Clerk electronically, or if granted an exception to file by paper four copies of a verified lapsed appropriation claim form online at www.ilsos.gov/publications/courtclaimspub.html.

2. Respondent shall confirm or deny that such sum of money or any sum of money is due the claimant.

3. Claims against no more than one department or State agency shall be included in each complaint.

4. Claimant's name and address, or that of his or her attorney, shall appear at the bottom of the complaint.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.55 Discovery

Discovery shall be conducted in accordance with the Civil Practice Law [735 ILCS 5/Art. II] and the Rules of the Supreme Court of Illinois, except as follows:

a) Discovery requests and responses to discovery requests, including interrogatories and requests for production of documents, shall not be filed with the Clerk of the Court unless ordered by the Court, a Judge thereof, or a Commissioner. Requests for admission and the responses thereto shall be filed with the Clerk of the Court.

b) For claims involving property of inmates incarcerated in Illinois Department of Corrections facilities:

1. The respondent shall forward to the claimant, or, if claimant is represented, claimant's attorney, copies of the following documents in the possession or control of the Department of Corrections within 120 days after the filing of the complaint. The complaint is not deemed filed during the pendency of a petition for leave to proceed in forma pauperis.

A) Grievances and appeals of grievances pertaining to the property in question filed by the claimant, and all responses thereto.

B) Any personal property inventory sheets and property permits or contracts that tend to prove or disprove ownership of the property in question.

C) Incident reports, disciplinary reports, and "shakedown" receipts relevant to the subject of the claim.

2. The deadline for forwarding these documents to claimant is tolled during the consideration of a motion to dismiss or any other motion the granting of which would dispose of the case. No other discovery is permitted in these claims except by order of the Court, a Judge thereof, or a Commissioner.

c) For claims involving personal injury of inmates while incarcerated in Illinois Department of Corrections facilities:

1. The respondent shall forward to claimant or, if claimant is represented, claimant's attorney, copies of the following documents in the possession or control of the Department of Corrections within 120 days after the filing of the complaint:

A) Grievances and appeals of grievances pertaining to the injuries in question filed by the claimant, and all responses thereto.

B) All medical records relevant to the subject of the claim.

C) Incident reports relevant to the subject of the claim.

2. The deadline for forwarding these documents to claimant is tolled during the consideration of a motion to dismiss or any other motion the granting of which would dispose of the case. No other discovery is permitted in these claims except by order of the Court, a Judge thereof, or a Commissioner.

d) When complying with the provisions of this Section, the respondent may redact any information including, but not limited to, confidential information such as social security numbers, home telephone numbers, home addresses, and information the disclosure of which would be violative of federal or State law. In the event any information is redacted by the respondent, the respondent shall, in writing, state the reason for the redaction, and forward the statement to the claimant or his attorney within the time allowed in this Section, or any extension authorized under subsection (f).

e) In the event that the claimant disputes the propriety of redaction of any information, the Court, a Judge thereof, or a Commissioner shall be empowered to examine the material in camera and to enter an order requiring the respondent to forward the redacted material to the claimant or his attorney.

f) The Court, a Judge thereof, or a Commissioner may extend the time for compliance with the provisions of this Section.

History

• Source: Amended at 40 Ill. Reg. 7314, effective April 29, 2016

74 Ill. Adm. Code 790.60 Exhaustion of Remedies

As required by Section 25 of the Court of Claims Act [705 ILCS 505/25], the claimant shall, before seeking final determination of his claim before the Court of Claims, exhaust all other remedies, whether administrative, legal or equitable, against all other sources of recovery for the injury or damages sought to be recovered by the claim, provided that no frivolous or unreasonable action is required to be brought against any third party in order to comply with this exhaustion of remedies requirement.

a) General continuance. Any complaint filed or pending in the Court of Claims shall be continued generally subject to the provisions of Section 790.70 of this Part, until the final disposition of all other claims or proceedings arising from the same occurrence or transaction. Claims continued generally shall not proceed to evidentiary hearing, but, upon order of the Court, a Judge thereof, or a Commissioner, discovery may proceed as permitted by Section 790.55 of this Part. (A general continuance granted by this Court is not to be construed as an opinion on the question of jurisdiction in any other court or tribunal.)

b) Subsequent action or claim. If the claimant shall, subsequent to the filing of a complaint in the Court of Claims, commence a proceeding in another tribunal, or present a claim to any other person or corporation (e.g., insurance carrier, governmental body, etc.) for damages arising out of the same occurrence or transaction, the claimant shall immediately advise the Court of Claims in writing as to when, where and to whom such claim was presented or proceeding commenced.

c) Action against State employees. Failure to file or pursue suits against State employees acting within the scope of their employment shall not be a defense to the respondent.

History

• Source: Amended at 24 Ill. Reg. 8228, effective July 1, 2000

74 Ill. Adm. Code 790.70 General Continuance – Status Report

When a cause of action has been continued generally the claimant shall file annually, between April 1 and May 31, an electronic notice, or if granted an exception pursuant to Section 790.30(c), a notice in duplicate, with the Clerk of the Court of Claims, advising the Court of the following:

a) The status of the action giving rise to the continuance.

b) Whether the claim in the Court of Claims should be further continued, placed back on the active calendar or dismissed.

c) If said action has been disposed of, the date and result of said disposition must be filed within 30 days thereafter, and the Court be advised as to whether the claim should be placed back on the active calendar or dismissed.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.80 Death of Claimant

If the claimant dies pending the suit, the death must be suggested on the record, and the legal representative upon filing a duly certified copy of the record of appointment as executor or administrator, may be admitted to prosecute the suit by special leave of the Court. It is the duty of the claimant's attorney to notify the Court of the death of the claimant when the fact first becomes known to him.

74 Ill. Adm. Code 790.90 Dismissal

Failure to comply with the provisions of Section 790.50, 790.60, 790.70 or 790.80 of this Part shall be grounds for dismissal.

History

• Source: Amended at 24 Ill. Reg. 8228, effective July 1, 2000

74 Ill. Adm. Code 790.100 Answer by Respondent

The respondent shall answer within 60 days after the filing of the complaint, and the claimant may reply within 30 days after the filing of that answer, unless the time for pleadings is extended pursuant to Section 790.55(f); provided however, if the respondent fails to answer, a general denial of the facts set forth in the complaint shall be considered as filed, except as otherwise provided in this Section. Respondent, upon good cause shown, may thereafter, by leave of Court, be permitted to file affirmative pleadings. The Court, a Judge thereof, or a Commissioner may order the respondent to file an answer. Failure to file an answer shall subject the respondent to being held in default and debarred from filing any other pleading or maintaining any defense.

History

• Source: Amended at 24 Ill. Reg. 8228, effective July 1, 2000

74 Ill. Adm. Code 790.110 Hearings – Assignments and Continuances

The Court shall assign the case to a Commissioner who, within a reasonable time, shall set the time and place for hearing, and notify opposing counsel in writing. No continuances shall be granted by the Commissioner except upon good cause shown, supported by affidavit. Any communications between the Commissioner and the Court are deemed preliminary and confidential.

History

• Source: Amended at 40 Ill. Reg. 7314, effective April 29, 2016

74 Ill. Adm. Code 790.115 Electronic Appearance

a) A Commissioner presiding over a case shall have sole discretion in determining whether to require remote or in-person attendance for a court proceeding. A Commissioner may require a case participant to attend a court proceeding in person for reasons particular to the specific case, including the failure of a case participant to follow applicable standards of decorum. When exercising such discretion, the Commissioner shall inform case participants on the record if they are required to attend a future court proceeding in person.

b) When a case participant testifies or otherwise participates in a trial or evidentiary hearing remotely, appropriate safeguards must be in place to ensure accurate identification of the case participant and to protect against inappropriate influences, including, but not limited to: persons communicating with the case participant without the Court's knowledge and the case participant's inappropriate access to materials or information (such as documents or the Internet) during the case proceedings. The Commissioner presiding over the matter shall confirm that such safeguards are available and operational prior to permitting the case participant to participate remotely.

c) All summons and notices for court proceedings that case participants are permitted to attend remotely shall include information necessary for a case participant to appear in person or remotely, including any information necessary for case participants to access the applicable technology platform to appear remotely.

d) No filing fees shall be assessed for electronic filing or remote appearance.

History

• Source: Added at 50 Ill. Reg. 7241, effective May 1, 2026

74 Ill. Adm. Code 790.120 Transcript of Evidence

a) Filing. All evidence shall be taken in writing or subject to the discretion of the Commissioner, by an electronic recording system, and in the manner in which depositions in civil actions are usually taken. When the evidence is taken, and the proofs in a case are closed, the evidence shall be transcribed, and the transcript shall be filed by the court reporter with the clerk within 30 days after the completion of the hearing.

b) Form. The format of the transcript of evidence shall conform to that of court reporters as nearly as practicable. Double spacing shall be used for each question and answer. Letter size paper shall be used, and margins shall be of suitable size.

c) Index – witnesses. An index identifying the names of the witnesses shall be included in the transcript of evidence. The index shall further disclose the pages on which the testimony of each witness appears.

d) Index – exhibits. An index identifying exhibits and reflecting the pages on which the exhibits are marked for identification shall be included in the transcript of evidence. The index shall further disclose the pages on which the exhibits are admitted into evidence or whereon admission thereof is denied.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.130 Costs of Evidence

All costs and expenses of taking evidence required by the claimant shall be borne by the claimant, and the costs and expenses of taking evidence required by the respondent shall be borne by the respondent.

74 Ill. Adm. Code 790.140 Departmental Records and Reports – Prima Facie Evidence

All records and files maintained in the regular course of business by any department, commission, board, agency or authority of the State of Illinois, and all departmental reports made by any officer thereof relating to any matter or case pending before the Court shall be prima facie evidence of the facts set forth therein; provided, a copy thereof shall have been first duly electronically delivered by the Attorney General or the legal counsel of the appropriate State agency to the claimant, or his attorney of record, and electronically filed with the Clerk.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.150 Medical Examination of Claimant

a) Court order. In any case in which the physical condition of a claimant or claimants is in controversy, the Court may order claimant(s) to submit to a physical examination by a physician. The order may be made by the Court on its own motion or on motion for good cause shown, and upon notice to the claimant to be examined, or to his attorney, and to all other claimants, or to their attorneys, if any. Said notice shall specify the time, place, manner, conditions and scope of the examination, and the person or persons by whom it is to be made.

b) Physician's report. If requested by the claimant examined, respondent shall deliver to him a copy of a detailed written report of the examining physician setting out his findings and conclusions. After such request and delivery to the claimant of such detailed written report, respondent shall be entitled, upon request, to receive from the claimant examined a like report of any examination previously or thereafter made of the same physical condition. If the claimant examined refuses to deliver such report or reports, the Court, on motion and notice, may enter an order requiring delivery on such terms as are just, and, if a physician fails or refuses to make such a report, the testimony of such physician may be excluded, if offered at the hearing of the case.

74 Ill. Adm. Code 790.155 Subpoenas

a) The Court may issue subpoenas through the Chief Justice or one of its Judges or Commissioners to require attendance of witnesses for the purpose of testifying before it, any Judge of the Court, any notary public, or any of its Commissioners, and to require the production of any books, records, papers or documents that may be material or relevant as evidence in any matter pending before it. If any person refuses to comply with any subpoenas issued in the name of the Chief Justice, or one of the Judges or Commissioners, attested to by the Clerk, with the seal of the Court attached, and served upon the person named in the subpoena, as a summons in a civil action is served, the circuit court of the proper county, on application of the party at whose instance the subpoena was issued, shall compel obedience by attachment proceedings, as for contempt, as in a case of a disobedience of the requirements of a subpoena from the circuit court on a refusal to testify.

b) The Clerk of the Court of Claims, when an action is pending, shall, from time to time, issue subpoenas on behalf of the Chief Justice, the Judges or Commissioners, for those witnesses and to those counties in the States as may be required by the attorneys or either party.

c) Every subpoena shall:

1. state that it is issued by the Court of Claims; and

2. state the title of the action and its civil action number; and

3. command each person to whom it is directed to attend and give testimony or to produce or permit inspection and copying of designated books, documents or tangible things in the possession, custody or control of that person. A command to produce evidence shall be joined with a command to appear at trial or hearing or at deposition.

d) The Clerk may issue subpoenas on behalf of a party requesting issuance provided that there is a valid request to the Clerk indicating the information to be subpoenaed. An attorney of record may also issue and sign a subpoena on a form provided by the Clerk.

e) Prior notice of any subpoena for production of documents and things before trial shall be served on each party by mailing or delivering written notice to the other parties to the action, or their attorneys, at the last known address of the attorney or party, with proof of service filed with the Clerk.

f) A party or an attorney responsible for the issuance and service of a subpoena shall take reasonable steps to avoid imposing undue burden or expense on a person subject to a subpoena. The Court shall enforce this duty and impose upon the party or attorney in breach of this duty an appropriate sanction, including being held in default, debarred from filing any other pleading or maintaining any claim or defense.

History

• Source: Amended at 40 Ill. Reg. 7314, effective April 29, 2016

74 Ill. Adm. Code 790.160 Excerpts from the Record

In all cases where the transcript of the evidence exceeds 100 pages, the Court, a Judge thereof, or a Commissioner may order that the claimant electronically file excerpts from the record, which shall contain the parts of the record deemed essential for the Judges to read in order to decide the issues presented. The excerpts shall refer to the pages of the record by numerals on the margin. This document (entitled Excerpts from the Record), which is to be filed with the claimant's brief, is in lieu of the abstract formerly required, and shall be prepared in conformity with Supreme Court Rule 342 to the extent that rule may be applicable.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

74 Ill. Adm. Code 790.170 Briefs

The Court, a Judge thereof, or a Commissioner may order the filing of briefs in a case where the filing of briefs may enlighten the Court. If so ordered, each party shall electronically file with the Clerk a brief setting forth the points of law upon which reliance is had, with reference made to the authorities sustaining their contentions. Citation of numerous authorities in support of the same point is not favored. Accompanying the briefs, there shall be a statement of the facts and an argument in support of the briefs. Wherever facts from the record are restated, there shall be a reference to the pages of the record and not to the pages of the excerpts.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.180 Excerpts and Briefs – Time for Filing

The excerpts, if any, brief and argument of the claimant must be filed with the Clerk on or before the date ordered by the Court, a Judge thereof, or a Commissioner. The respondent shall file its excerpts, if any, brief and argument not later than the date ordered by the Court, a Judge thereof, or a Commissioner. Claimant may file a reply brief no later than the date ordered by the Court, a Judge thereof, or a Commissioner. Upon good cause shown, further time to file the abstract or briefs of either party may, upon notice to the other party, be granted by the Commissioner.

History

• Source: Amended at 24 Ill. Reg. 8228, effective July 1, 2000

74 Ill. Adm. Code 790.190 Extension of Time

Where a case has been assigned to a Commissioner, either party, upon notice to the other party, may make application to the Commissioner for an extension of time within which to file any pleadings, documents, abstracts or briefs. A party filing such a motion shall electronically submit a proposed order. In all other cases such application for extension of time shall be made to the Court.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

74 Ill. Adm. Code 790.200 Motions

a) General. All motions and objections shall comply with Section 790.30 of this Part.

b) Motions. All motions shall be made electronically. If an exception is awarded pursuant to Section 790.30(c) and the participant is permitted to file by paper filing, four copies of all motions, and suggestions in support of the motion, shall be filed with the Clerk of the Court and the assigned Commissioner, together with proof of service upon counsel for the other party. When the motion is based upon matter that does not appear of record, it shall be supported by an affidavit. A copy of the motion, suggestions in support of the motion, and affidavit, if any, shall be served upon counsel for the opposing party at the time the motion is filed with the Clerk.

c) Objections. Objections to motions, and suggestions in support of the objection, must be filed electronically, unless an exception has been granted pursuant to Section 790.30(c), within 21 days after the filing of the original motion. Upon the filing, within 21 days after the filing of the motion, of a request for an extension of time supported by an affidavit that an objection will be filed within the extended time, the time shall be automatically extended for an additional 21 days. No other extensions will be allowed except in compelling circumstances. All objections to motions shall be filed electronically with the Clerk, together with proof of service upon counsel for the other party. When motions are filed by either the claimant or the respondent, the moving party shall also submit a proposed order.

d) Rulings by Commissioners. After a case has been assigned to a Commissioner, all motions during the course of the hearings, except motions to dismiss, motions for summary judgment, or other dispositive motions, may be determined by the Commissioner. The Commissioner shall cause to be filed with the Clerk of the Court any order so issued.

e) Oral argument on motions. There shall be no oral argument on motions or objections to motions, except on motions where, in the Court's discretion, oral arguments thereon would be of value to the Court.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.210 Oral Argument of Case

Oral argument on a matter before the Court, including a petition for rehearing, will be permitted only when ordered by the Court. Oral argument may be granted in the discretion of the Court upon request of a party or by Court order.

History

• Source: Amended at 40 Ill. Reg. 7314, effective April 29, 2016

74 Ill. Adm. Code 790.220 Rehearing or New Trial

A party desiring a rehearing or new trial in any case shall, within 30 days after the filing of the opinion or order, file electronically with the Clerk a petition for rehearing, unless an exception has been granted pursuant to Section 790.30(c). The petition shall state briefly the points supposed to have been overlooked or misapprehended by the Court, with authorities and suggestions concisely stated in support of the points. A copy of the petition shall be served on counsel for the other party and proof of service shall be shown in the petition. Any petition violating this Section will be stricken. The opposite party shall have 20 days from the date of filing of the petition for rehearing to answer the petition, and the petitioner shall have 10 days thereafter within which to file a reply. The granting of a petition for rehearing can result in such relief as the Court deems appropriate. Neither the claimant, nor the respondent, shall be permitted to file more than one application or petition for rehearing.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.230 Rehearing – Procedure (repealed)

History

• Source: Repealed at 40 Ill. Reg. 7314, effective April 29, 2016

74 Ill. Adm. Code 790.240 New Trial (repealed)

History

• Source: Repealed at 24 Ill. Reg. 8228, effective July 1, 2000

74 Ill. Adm. Code 790.250 Records – Calendar

a) Records. The Clerk shall record all orders of the Court, including the final disposition of cases. The Clerk shall keep all required dockets in which all claims shall be entered, together with their number, dates of filing, the name of claimants, their attorneys of record and respective addresses.

b) Timely Filing – Paper Filings. As paper filings are received, the Clerk shall stamp the filing date thereon, and forthwith mail to opposing counsel a copy of all orders entered, pleadings, motions, notices and briefs as filed. Such mailing shall constitute due notice and service thereof.

c) Timely Filing − Electronic Filings. Unless a statute, rule or court order requires that a document be filed by a certain time of day, a document electronically filed is considered timely if submitted before midnight (Central Time Zone) on or before the date on which the document is due. A document electronically filed on a day when the Clerk's office is not open for business will, unless rejected, be file stamped as filed on the next day the Clerk's office is open for business. The electronically filed document shall be endorsed with the Clerk's electronic file mark setting forth, at a minimum, the date, and the time of filing. If a corrected version of the rejected document is filed, but would be deemed untimely as a result of the earlier rejection, the filing party may file a motion for original submission date as follows:

1. Rejection.

A) If a document is rejected for any reason, the electronically filing party may, within five court days of the notice of rejection, electronically file a motion requesting that the later-filed document be deemed to have been electronically filed on the original submission date. The motions shall set forth the following:

i) The date of the original submission;

ii) The date of the rejection;

iii) The reason for the rejection; and

iv) The document to be deemed electronically filed on the date of the failed submission, attached as an exhibit. The document shall contain no changes from the original except to correct the error identified by the Clerk as the reason for the rejection, if applicable.

B) The Court shall grant a timely motion for original submission date that satisfies subsection (c)(1)(A) and enter an order establishing that the effective date of filing of the corrected document shall be the date of the original submission. If the filer establishes that the original file was rejected for reasons not in conformity with those permitted under this Section, the corrected document need not vary from the original submission.

2. Technical Failure.

A) If a document is untimely due to a technical failure of the Court-approved electronic filing system, the filing party may request that the later-filed document be deemed filed as of the date of the technical failure by filing a motion within five business days after the date of the technical failure that includes:

i) The date of the technical failure;

ii) The circumstances of the technical failure; and

iii) The documents to be deemed filed on the date of the technical failure, attached as an exhibit.

B) Upon a showing that the technical failure prevented the timely filing of the document, the court shall grant a timely motion for original submission date and enter an order establishing that the effective date of filing of the corrected document shall be the date of the failed submission attempt.

d) The Court shall have jurisdiction to rule on any timely motion for original submission date.

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.260 Dismissal for Want of Prosecution

A case may be dismissed for want of prosecution where the Court determines that the claimant has made no attempt in good faith to proceed.

74 Ill. Adm. Code 790.270 Fees and Costs

a) In claims based upon lapsed appropriations, lost warrant, recoupment, medical assistance program medical vendors, certificate of innocence, Line of Duty Compensation Act [820 ILCS 315], Illinois National Guardsman's Compensation Act [20 ILCS 1825], and Crime Victim's Compensation Act [740 ILCS 45], no filing fee shall be required. In all other claims the following fees shall apply:

Filing of complaint in which amount of claim is less than $1,000........................................................................

$15

Filing of complaint in which amount of claim is $1,000 or more..............................................................................

$35

b) Filing fees may be waived for an indigent person upon application provided and approved by the Court of Claims.

c) Filing fees shall be paid electronically unless the Court has granted an exception to the electronic filing requirement pursuant to Section 790.30(c).

d) Certified copies of documents filed in the Court of Claims may be obtained from the Secretary of State pursuant to the Illinois Freedom of Information Act [5 ILCS 140] and payment of any fees prescribed within that act .

History

• Source: Amended at 50 Ill. Reg. 7241, effective May 1, 2026

Chapter VI Court of Claims

Part 790 Court of Claims Regulations

74 Ill. Adm. Code 790.280 Adoption and Effective Dates

The above and foregoing rules, as amended, were adopted as rules, as amended, of the Court of Claims of the State of Illinois on the 6th day of June, 1975, to be in full force and effect from and after the 1st day of July, 1975.

Chapter VII Illinois State Board of Investment

Part 800 Rules and Regulations of the Board

74 Ill. Adm. Code 800.5 Authority

In accordance with Article 22A of the Illinois Pension Code[40 ILCS 5/Art. 22A] creating the Illinois State Board of Investment, effective October 10, 1969, with authority to manage, invest and reinvest, the reserves, funds, assets, securities and moneys of any pension fund, as provided in this Article, and to perform such other duties as may from time to time be authorized by the General Assembly (Section 22A-101 of the Code) and that the Board may adopt such rules and regulations (not inconsistent with Article 22A) as in its judgment are desirable to implement and properly administer Article 22A (Section 22A-110 of the Code), the Illinois State Board of Investment, with the objective of investing for a total return over the long term, establishes this Part for the direction and administration of its affairs and for the effective operation of the Board.

History

• Source: Amended at 32 Ill. Reg. 360, effective December 26, 2007

74 Ill. Adm. Code 800.110 Offices of the Board

General office. The general office of the Board shall be maintained at 180 N. LaSalle St., Suite 2015, Chicago IL 60601. At that office, all accounts, records, files, books, reports, correspondence and other data or documents relating to the operations of the Board and the agency under its jurisdiction shall be kept and all administrative matters shall be processed under the direction and authority of the Director assisted by adequate administrative personnel.

History

• Source: Amended at 42 Ill. Reg. 19060, effective October 3, 2018

74 Ill. Adm. Code 800.120 Meetings

a) Regular meetings. Meetings of the Board shall be held at least once each calendar quarter, on a date and at a time specified by the Chair.

b) Special meetings. Special meetings may be called at any time by the Chair or Vice Chair of the Board or by any three members of the Board.

c) Place and hour of meetings. Meetings of the Board shall be held at the general office of the Board or at any other place selected by the Chair or agreed upon by the Board, at the hour fixed by the Chair or by the members calling a special meeting.

d) Annual meeting. The annual meeting of the Board shall be held in the month of September, unless otherwise specified by the Chair or agreed upon by the Board.

e) Quorum. A majority of all members of the Board or Committee appointed and serving on the Board or Committee shall constitute a quorum for the transaction of business at any regular or special meeting of the Board or Committee.

f) Meetings. All meetings of the Board and any subsidiary body, including without limitation any committee, shall be subject to and conducted in accordance with the Open Meetings Act [5 ILCS 120].

g) Attendance by a means other than physical presence

If a quorum of the members of the Board or any Committee is physically present, a majority of those physically present, as required by Section 2.01 of the Open Meetings Act, may allow a member of the Board to attend the meeting by other means (video or audio conference) if the member is prevented from physically attending because of:

1. personal illness or disability;

2. employment purposes or the business of the Board; or

3. a family or other emergency. [5 ILCS 120/7]

h) Voting. Each member shall have one vote on any question coming before the Board/Committee at any regular or special meeting at which that member is in attendance. Concurring votes by a majority of the members at the meeting shall be necessary for the adoption of any resolution or action by the Board/Committee.

i) Roll calls. The Chair or any member may request a roll call on any motion or resolution involving an expenditure of moneys or the creation of a liability for the Board or on any other motions. The vote of each member present shall then be recorded in the minutes of the meeting.

j) Reconsideration. A motion for the reconsideration of any vote shall be in order only if made at the meeting at which the vote sought to be reconsidered is taken or at the next regular meeting.

k) Deferral of reports. Upon request of any two members of the Board, the consideration of any report presented by any committee shall be deferred for one meeting, and a copy of the report of the committee shall be provided each member of the Board.

l) Record of proceedings. The Board shall keep a full record of all its proceedings in which all of its transactions is recorded. All resolutions approved by the Board shall be signed by the Chair and Recording Secretary and shall be filed with the minutes of the meeting at which adopted. At least five days before the date of the next scheduled meeting, the Board's General Counsel shall supply each Board member with a copy of the minutes of the last meeting.

History

• Source: Amended at 42 Ill. Reg. 19060, effective October 3, 2018

74 Ill. Adm. Code 800.130 Officers and Their Duties

a) Elective officers. The following named officers shall be elected by the Board biennially at the annual meeting in each odd-numbered year from among the members of the Board: Chair, Vice Chair, Recording Secretary, and Member at Large. Any vacancy occurring during a biennial period shall be filled in like manner for the unexpired term of office.

b) Officers ex officio. The State Treasurer shall be Treasurer of the Board.

c) Chair. The Chair shall be the chief executive officer of the Board; shall preside at all meetings; announce the business before the Board; announce the question under consideration and the result of the vote taken; request a roll call upon any action or resolution as herein provided. He or she shall appoint all necessary committees and see that they perform their assigned duties. The Chair shall exercise general supervision over the operations of the agency.

d) Vice Chair

1. In the absence of the Chair, the Vice Chair shall act as Chair at any regular or special meeting and shall serve in the Chair's stead if the Chair is temporarily unable or unwilling to act.

2. If the Chair or Vice Chair is not available to preside at a meeting, any member selected by a majority vote of those present may act as presiding officer, pro tempore.

e) Recording Secretary. The Recording Secretary shall authenticate with his or her signature any resolutions of the Board and shall perform such other duties as may be prescribed by the rules, orders or resolutions of the Board.

f) Executive Director

The Executive Director shall administer the affairs of the Board pursuant to the provisions of the statute governing the Board, subject to and under supervision of the Board.

History

• Source: Amended at 42 Ill. Reg. 19060, effective October 3, 2018

74 Ill. Adm. Code 800.140 Committees

a) Investment Policy Committee

1. There shall be an Investment Policy Committee of the Board, consisting of such members of the Board as the Chair of the Board shall appoint, who shall serve a term to end at the time of the next annual meeting of the Board following the election of officers. The Board shall determine delegation of Committee responsibilities. (Examples of such delegation include interviewing investment management firms that are finalists in the Board's competitive bidding process and recommending policies pertaining to the Board's investments, such as the Board's asset allocation study.)

2. It shall be the responsibility of the Committee:

A) to recommend investment policy to the Board, both at its regularly scheduled meetings and whenever recommendations appear, in the judgment of the Committee, to be necessary or desirable;

B) for the ongoing and specific supervision of the internal investment process, including but not limited to advance approval of all long-term investment transactions not falling within certain delegatory guidelines established by Board action; and

C) for ongoing liaison with external investment advisors, together with recommendations concerning the tenure, compensation, fund direction, and retention of the advisors.

3. The Committee shall elect a Chair by vote of a majority of its members.

b) Emerging Manager Committee

1. There shall be an Emerging Manager Committee of the Board, consisting of such members of the Board as the Chair of the Board shall appoint, who shall serve a term to end at the next annual meeting of the Board following the election of officers. The Board shall determine the Committee's responsibilities. (Examples of such delegation include interviewing emerging managers and recommending policies pertaining to the Board's investments, such as the Board's Emerging and Minority Investment Manager and Minority and Illinois Brokerage Policy.)

2. It shall be the policy of the Committee:

A) to increase access to and business with emerging managers;

B) to maximize utilization of minority-owned broker/dealers by the Board's investment managers; and

C) to monitor the utilization of emerging managers, minority-owned, women-owned and person with a disability owned business enterprises and broker dealers and report that utilization to the Board.

3. The committee shall elect a Chair by vote of a majority of its members.

c) Defined Contribution Committee

1. There shall be a Defined Contribution Committee of the Board, consisting of such members of the Board as the Chair of the Board shall appoint, who shall serve a term to end at the time of the next annual meeting of the Board following the election of officers. The Board shall determine delegation of Committee responsibilities. (Examples of such delegation include monitoring and evaluating investment performance and determining benchmarks used in the evaluation of investment options.)

2. It shall be the responsibility of the Committee to:

A) oversee the administration of the Deferred Compensation Plan, evaluate the adequacy of the Plan's investment options, and attempt to ensure that the Plan offers participants information and tools necessary in selecting their investments;

B) monitor and evaluate the performance of the Plan's investment managers and all Plan fees;

C) review and respond to recommendations from ISBI staff and the consultant regarding investment options, fees, Plan design, participant communications, and other matters; and

D) determine, through periodic review, whether an action of participant re-enrollment supports the goal of improving participant outcomes.

3. The Committee shall elect a Chair by vote of a majority of its members.

History

• Source: Amended at 44 Ill. Reg. 17452, effective October 13, 2020

74 Ill. Adm. Code 800.210 Functions

a) The functions of the Board are limited to investment management and such other duties and responsibilities as are directed or permitted by statute. With respect to investment management more specifically:

To invest, reinvest, exchange and perform all investment functions with regard to reserves, funds, assets, securities and moneys which the Board is authorized to invest, and to preserve and protect such reserves, funds, assets, securities and moneys, including, but not limited to, authority to vote any stocks, bonds or other securities and to give general or special proxies or powers of attorney with or without power of substitution [40 ILCS 5/22A-106].

1. The Board shall manage investments by executing procedures that include, but are not limited to:

A) Performing due diligence on the investment portfolio. (Examples of due diligence include monitoring the performance of current investment portfolios, selecting new investment portfolios, determining the asset allocation per portfolio and selecting investment managers to invest portfolio assets.)

B) Adopting an asset allocation policy to achieve efficiently the Board's long-term investment objective. (Examples of policy considerations include examining all asset classes and their appropriate benchmarks and allocating specific percentages of assets to specific asset classes.)

C) Managing Board expenses. (Examples of such management include negotiating competitive asset management fees with investment managers and monitoring the Board's operating budget.)

D) Complying with the Illinois Pension Code [40 ILCS 5]. (Examples of compliance include adhering to statutory directives such as the prudent utilization of emerging investment managers in managing assets (see 40 ILCS 5/1-109.1(4)) and refraining from prohibited transactions.)

2. The Board's general policy governing investments shall require that, as fiduciaries, the Board discharge its duties, with respect to pension fund assets it manages, solely in the interest of the participants and beneficiaries. (Examples of general investment policy include maintaining the long-term investment objective established by the Board; investing with the care, skill, prudence and diligence that a prudent person would use in the conduct of an enterprise of like character with like aims; and diversifying investments to reduce risk, enhance returns and commit meaningful investment positions.)

b) State Employees Deferred Compensation Plan (Plan)

1. The Board shall be responsible for developing and establishing the Plan (see 40 ILCS 5/24-104).

2. With respect to developing and establishing the Plan, the Board shall:

A) Review investment offerings and offer acceptable investment offerings as investment options for the Plan; and

B) Supervise the Department of Central Management Services' administration of the Plan.

3. Further explanation regarding the Board's responsibilities with respect to the development and establishment of the Plan are found in the following Board regulations: 80 Ill. Adm. Code 2700: Subpart A (Introduction and Purpose of Plan); Subpart B (Definitions); Subpart C (the Board's general supervision of the administration of the Plan); Subpart G (distributions in the event of an unforeseeable emergency); Subpart I (ability to amend or terminate Plan).

c) These functions shall not encompass any duties or responsibilities related to the operation and administration of the pension funds in any other area than that of investments.

History

• Source: Amended at 42 Ill. Reg. 19060, effective October 3, 2018

74 Ill. Adm. Code 800.220 Fiduciary Aspects

The Board shall have a fiduciary identity and trust aspects. By the name of "Illinois State Board of Investment," or its designated nominee, all its business shall be transacted, all funds coming under its custody and control shall be invested, and all securities and other property which it acquires shall be held in trust for the specific purposes set forth in the governing statute.

74 Ill. Adm. Code 800.230 Delegation of Authority

The Board shall manage the investments of any pension fund for the purpose of obtaining a total return on investments for the long term. It also shall perform other functions as may be assigned or directed by the General Assembly. The Board may not delegate its management functions. For the purpose of seeking a broad spectrum of advice and fostering competitive performance, and to assist the Board in fully implementing the provisions of the applicable law, the Board may contract, for compensation, advisory investment service providers as authorized by Section 22A-111 of the Illinois Pension Code and consistent with the requirements of that Code, including but not limited to, utilizing a competitive process, when required, that is substantially similar to the process required for the procurement of professional and artistic services under Article 35 of the Illinois Procurement Code [30 ILCS 500], as required by Section 1-113.14 of the Illinois Pension Code.

History

• Source: Amended at 42 Ill. Reg. 19060, effective October 3, 2018

74 Ill. Adm. Code 800.240 Budget (repealed)

History

• Source: Repealed at 42 Ill. Reg. 19060, effective October 3, 2018

74 Ill. Adm. Code 800.310 Investment Account

a) For the purpose of achieving the maximum advantages of investment management, the invested assets for any fund under the jurisdiction and authority of the Board may be commingled and maintained in one or more investment accounts, to the extent dictated by basic investment considerations, with a distribution made according to types of securities as may be dictated by practical investment procedure. The distribution of assets shall be dictated by the Board in accordance with its asset allocation policy. The commingling of investment assets shall allow:

1. Control over the Board's investment policies through increased flexibility in asset allocation; and

2. Simplified accounting and reporting procedures.

b) Unless the Board directs otherwise, fixed income investments shall be carried at amortized book value according to established accounting practices and actuarial requirements. (Governmental entities, including governmental external pools, shall report investments at fair value on the balance sheet, rather than at amortized book value or cost. Fair value shall be defined as the amount at which an investment could be exchanged in a current transaction between willing parties, other than a forced sale or liquidation (Governmental Accounting Standards Board, 401 Merritt 7, P.O. Box 5116, Norwalk CT 06856-5116, GASB Statement No. 31, "Accounting and Financial Reporting for Certain Investments and for External Investment Pools", June 15, 1997, no subsequent dates or editions).) Equity investments shall be carried at original cost. Investments initially transferred to the Board shall be valued for its books of account on the foregoing basis.

History

• Source: Amended at 37 Ill. Reg. 2720, effective February 25, 2013

74 Ill. Adm. Code 800.320 Fund Credits

a) Each fund transferring invested assets to the Board shall receive credit in an appropriate reserve account in the amounts established by the Board. The credit shall constitute the initial value of the investment account of the particular fund. As new investments are made from additional moneys made available to the Board for that purpose, proper credit in the established reserve account shall be given to each fund for the proportionate amount applicable to each fund according to the amounts of moneys creditable to each fund. Reserve amounts shall be determined by:

1. Allocating expenses and advances on an equitable, proportional basis, taking into account the net asset values of each member retirement system, or any other fund under the jurisdiction and authority of the Board;

2. Allocating the net change in realized and unrealized gains and losses to each member retirement system, or any other fund under the jurisdiction and authority of the Board, on the 15th of each calendar month, based on the final percentage of ownership of each member retirement system, or any other fund under the jurisdiction and authority of the Board, for the prior calendar month; and

3. Allocating the net change in income and expenses for the calendar month to each member retirement system, or any other fund under the jurisdiction and authority of the Board, on the 30th of each calendar month, taking into account any purchases or redemptions in ownership shares from each member retirement system, or any other fund under the jurisdiction and authority of the Board, during that calendar month.

b) Periodic interest collections on fixed investments and dividend payments on equities shall be credited to each fund directly on the initial investments transferred to the Board if applicable to those investments, except in the case of commingled investments on which a proportionate amount shall be credited. New investments may be commingled on a proportionate basis beginning July 1, 1970, with income from the investments distributed accordingly.

History

• Source: Amended at 37 Ill. Reg. 2720, effective February 25, 2013

74 Ill. Adm. Code 800.330 Fund Charges

a) Each fund shall be charged with its share of all expenses of the Board, including the amount repayable to the State of the initial appropriation made to meet organization expenses, at quarter-yearly periods, on a pro-rata basis, according to the value of the investments held for the respective fund at the beginning of each quarter-yearly period, or on any other equitable basis as may be determined by the Board.

b) A statement setting forth the amount of the expense charge made by the Board shall be provided to each pension fund as prescribed by Section 22A-114 of the Pension Code.

History

• Source: Amended at 37 Ill. Reg. 2720, effective February 25, 2013

74 Ill. Adm. Code 800.340 Reserve Balances

This Subpart is specifically designed to establish and maintain for each fund a reserve representing an equitable share of the net assets of the Board to the end that each fund shall, at all times, receive full credit for all moneys creditable to that fund in the form of invested assets or free cash balances or any other applicable assets that may exist at any given date.

History

• Source: Amended at 37 Ill. Reg. 2720, effective February 25, 2013

74 Ill. Adm. Code 800.410 Fiscal Reporting

An annual report shall be made by the Board following the close of each fiscal year. The Board shall approve the report and direct that it be filed by the Executive Director with the Department of Insurance or any other regulatory body as provided by law. The report shall embody a review of investment operations for the year, including a listing of all invested assets showing their book values and market values, the balances applicable to the several funds under the jurisdiction and authority of the Board, comment on the policies and procedures maintained by the Board during the year, and recommendations on any possible future changes in the governing statute or Board policies.

History

• Source: Amended at 42 Ill. Reg. 19060, effective October 3, 2018

74 Ill. Adm. Code 800.420 Audits

In accordance with established State policy, the books and accounts of the Board shall be audited at least annually by a certified public accountant designated by the Auditor General of the State of Illinois. The scope of the audit may, upon suggestion of the Board, extend beyond the limitations prescribed by the Auditor General. The results of the audit shall be reported in the annual report of the Board. Copies of the audit report shall be made available to the several funds under the jurisdiction and authority of the Board.

History

• Source: Amended at 37 Ill. Reg. 2720, effective February 25, 2013

74 Ill. Adm. Code 800.510 Amendments

Amendments to this Part may be proposed by any member of the Board, shall be submitted to the Board's General Counsel in writing, and shall be acted upon in the following manner:

a) Upon receipt of a proposal for an amendment, the Board's General Counsel shall distribute a copy to each member of the Board setting forth in full the proposed amendment at least 10 days prior to the date of any regular or special meeting at which the proposal will be submitted for consideration.

b) At the next regular or special meeting following the distribution of the notice, or at any meeting thereafter to which consideration of the amendment has been postponed, the amendment may be adopted by a vote of at least a majority of all members of the Board. At the meeting, the proposed amendment may be modified before being acted upon, without the necessity of any further notice to the members, provided that the amendment as modified shall be applicable only to those Sections or subsections to which the notice specifically referred, and provided further that any modification shall be approved by at least a majority of all members of the Board.

c) When the Board has approved a proposal to amend this Part, the amendment shall be proposed and adopted as required by the Illinois Administrative Procedure Act [5 ILCS 100].

History

• Source: Amended at 42 Ill. Reg. 19060, effective October 3, 2018

Chapter VIII Department of Central Management Services

Part 900 Joint Rules of the Comptroller and the Department of Central Management Services: Prompt Payment

74 Ill. Adm. Code 900.10 Scope

a) These rules are applicable to all State agencies as defined in the Illinois State Auditing Act [30 ILCS 5] and shall be followed in determining whether and to what extent late payment interest is due.

b) These rules apply to any bill for Goods or Services payable from funds appropriated by the General Assembly for periods on and after July 1, 2002, and do not affect bills payable from funds appropriated for prior periods.

History

• Source: Amended at 26 Ill. Reg. 14666, effective September 19, 2002

74 Ill. Adm. Code 900.20 Definitions

Except as otherwise defined in Section 900.130, the following definitions shall be used in interpreting these rules:

"Act" shall be defined as: the State Prompt Payment Act [30 ILCS 540].

"Agency Head" shall be defined as: those persons given authority to approve payments for the various State officials and agencies as specified in the Act and Section 10 of the State Finance Act [30 ILCS 105/10].

"Bill" shall be defined as: the Vendor's standard bill or invoice for goods or services. For purposes of this Part, bill shall include a State employee's travel voucher submitted when the State employee has paid for the travel and will be reimbursed by the State.

"DCMS" shall be defined as: the Department of Central Management Services.

"Date of Approval of the Vendor's Bill" shall be defined as: the date on which the Agency Head or designee signs the voucher requesting the Comptroller's Office to pay the bill. For agencies whose computer systems automatically record an approval date as a voucher is prepared, the "Date of Approval" shall be defined as the approval date recorded by the computer system.

"Date of Payment" shall be defined as: the date of issuance of the payment by the Comptroller's office.

"Goods and Services" and "Goods or Services" shall be defined as: items of merchandise, supplies, raw materials, finished goods and duty, duties or labor rendered by one or more persons to a State official or agency for monetary or other consideration.

"Month" shall be defined as: any 30-day period.

"Proper Bill" shall be defined as: a bill or invoice containing sufficient and correct information necessary to process the payment for a liability of a State agency as provided in this Part, the Comptroller's Statewide Accounting Management System (SAMS) manual, or as otherwise specified by the State agency responsible for payment.

"Vendor" shall be defined as: seller of goods or services. For purposes of this Part, Vendor shall include State employees who submit a travel voucher for reimbursement to the employees for travel.

History

• Source: Amended at 26 Ill. Reg. 14666, effective September 19, 2002

74 Ill. Adm. Code 900.30 General Duties of State Agencies

a) It is the duty and responsibility of each State agency to develop and implement internal procedures that will permit full compliance with the provisions of the Act, this Part and the Comptroller's SAMS manual.

b) All State agencies must maintain written or electronic records reflecting the date or dates on which:

1. the Goods were received and accepted or the Services were rendered;

2. the Proper Bill was received by the State agency;

3. approval for payment of a bill was given by the Agency;

4. a Vendor bill was disapproved, in whole or in part, based upon a defect or what the State agency believes to be a defeat; and

5. the payment was issued by the Comptroller's Office.

History

• Source: Amended at 26 Ill. Reg. 14666, effective September 19, 2002

74 Ill. Adm. Code 900.35 Duties of State Agencies: Interest Payments

a) Interest penalty payments must be processed on a voucher, separate from the voucher the State agency submits for payment of the bill, payable to the Vendor. The voucher submitted for payment of the interest penalty shall include the date from which the interest penalty is calculated, the date of payment of the bill, and the voucher number of the voucher submitted by the Agency for payment of the bill.

b) Interest penalty payments must be charged to the same expenditure authority account to which the related Goods or Services were charged, and indicate the detail object code for interest payable under the Act as specified in the SAMS manual. If the payment for Goods or Services was charged to an appropriation that has since been reappropriated, the interest penalty payment must be charged to the reappropriation.

c) In the event the appropriation originally charged for the Goods or Services is exhausted and not reappropriated, the State agency shall, if authorized by law, transfer and obligate funds into the proper appropriation pursuant to 30 ILCS 105/13.2 for payment of the interest penalty.

d) In the event the appropriation originally charged with the Goods or Services is exhausted and the State agency has exhausted its transfer of funds authority pursuant to 30 ILCS 105/13.2, the appropriation has lapsed or the agency has improperly refused to pay interest, Vendors may have recourse before the Court of Claims for payment of interest penalties.

e) An interest penalty payment shall be deemed an outstanding liability of the fiscal year during which the contract for the Goods or Services giving rise to the interest penalty was entered.

f) Upon receipt of a Vendor's written request or statement for the interest penalty, the State agency must respond to the Vendor's request within 60 days if the interest penalty is not appropriate under the Act, this Part, or the Comptroller's SAMS manual, along with the reason why the interest penalty will not be paid. If requests for interest should be presented to the Court of Claims, that requirement should be communicated to the Vendor.

History

• Source: Added at 26 Ill. Reg. 14666, effective September 19, 2002

74 Ill. Adm. Code 900.40 Statement Indicating That Interest Penalty May Be Available

a) The remittance advice of each commercial payment must contain the following statement or words of similar meaning:

"Payment of interest may be available if the State fails to comply with the State Prompt Payment Act [30 ILCS 540]."

b) In the case of electronic payments, the statement may be transmitted electronically or otherwise reflected within the information authorizing electronic payments.

History

• Source: Amended at 26 Ill. Reg. 14666, effective September 19, 2002

74 Ill. Adm. Code 900.50 Other Interest Provisions

No agency may enter into a contract with a late payment interest provision more generous to the vendor than that provided in this Part.

74 Ill. Adm. Code 900.60 When a Payment Is Late

For bills payable from funds appropriated prior to FY03, a payment is late if the Date of Payment is not within 60 days after the Date of Approval of the Vendor's bill. For bills payable from funds appropriated on and after July 1, 2002, a payment is late if the Date of Payment is not within 60 days after the receipt of a Proper Bill. For bills payable from funds appropriated on and after December 28, 2012, a payment is late if the Date of Payment is not within 90 days after the receipt of a Proper Bill.

History

• Source: Amended at 40 Ill. Reg. 13831, effective September 26, 2016

74 Ill. Adm. Code 900.70 Approval by the State

a) A State agency shall review in a timely manner each bill after its receipt to determine if the bill is a Proper Bill. A bill is not a Proper Bill if it contains one of the following defects:

1. lacks sufficient and/or correct information required by the agency to process the bill;

2. lacks the Vendor's taxpayer identification number or a completed Internal Revenue Service Form W-9 or Form 147C certifying that the Vendor's taxpayer identification number has been applied for but not received and the Vendor is not subject to backup withholding due to underreporting; or

3. is directed to an address or person other than the one designated in written instructions from the State.

b) An agency shall approve Proper Bills or deny bills with defects, in whole or in part, within 30 days after receipt. Vendor bills denied during this 30 day period shall be assigned a new Date of Receipt when a corresponding Proper Bill is subsequently received.

c) The State agency shall notify the Vendor upon the discovery of a defect, as soon as possible. The notification shall indicate the nature of the defect and any additional information necessary to correct the defect. The notification may be verbal or in writing, as the agency may determine is appropriate given the circumstances surrounding the payment and the nature of the defect in the bill. The State agency shall maintain adequate documentation of all such notifications and subsequent agency and Vendor actions so as to determine when and from what date late payment interest is due and to resolve any related Vendor disputes.

d) If a Vendor bill is approved, in whole or in part, after the required 30 day period to approve or deny bills, late payment interest shall be due for the approved portion of the bill if the Date of Payment is not within 90 days after receipt of the Proper Bill or part of the bill, except as to bills payable from funds appropriated prior to December 28, 2012, in which case late payment interest shall be due for the approved portion of the bill if the Date of Payment is not within 60 days after receipt of the Proper Bill or part of the bill.

e) If a Vendor bill is denied, in whole or in part, after the required 30 day period to approve or deny bills and the denied bill or part of bill is subsequently approved for payment as originally submitted and denied, late payment interest shall be due for the approved portion of the bill if the Date of Payment is not within 90 days after original receipt of the Proper Bill or part of the bill, except as to bills payable from funds appropriated prior to December 28, 2012, in which case late payment interest shall be due for the approved portion of the bill if the Date of Payment is not within 60 days after receipt of the Proper Bill or part of the bill. Vendor bills denied, in whole or in part, and not subsequently approved for payment as originally submitted and denied shall be assigned a new Date of Receipt when a Proper Bill is subsequently received.

f) If the agency and the Vendor have not formally executed a contract and State law requires a written contract, any bills submitted before the formal execution shall be deemed to be received when the contract is executed. State law allows payments to be made only after the formal contract is executed for Supplies or Services over $10,000 or Professional and Artistic Services over $5,000.

History

• Source: Amended at 40 Ill. Reg. 13831, effective September 26, 2016

74 Ill. Adm. Code 900.80 Submission and Receipt of Bills

a) A bill submitted, lacking sufficient and/or correct information required by the State agency to process the bill, lacking taxpayer identification number, or to an address or person other than one designated in written instructions from the State shall not be considered a Proper Bill until it is completed, additional information provided, or it reaches the proper address or person.

b) A bill submitted lacking the Vendor's federal taxpayer identification number shall not be considered a Proper Bill until the Vendor provides the taxpayer identification number or a completed Internal Revenue Service Form W-9 or Form 147C certifying that the Vendor's taxpayer identification number has been applied for but not received and that the Vendor is not subject to backup withholding due to underreporting.

c) A bill received prior to acceptance of Goods or Services by the State shall be considered a Proper Bill no earlier than the date of acceptance. Acceptance means the date on which the State, to the best of its ability at that time, determines contract requirements have been met. Acceptance for late payment calculation shall not be used by any Vendor to show acceptance of the Goods or Services for any other purpose.

d) A bill received after acceptance of Goods or Services may be considered a Proper Bill no earlier than the date of receipt of the bill.

e) A Vendor may submit bills for future performance, such as to make lease or installment purchase payments, in advance of scheduled due dates, but such bills for purposes of this Part shall not be considered received by the State any earlier than when the future performance by the vendor begins.

f) When the parties do not contemplate submission of a physical bill to the State, such as to make scheduled payments per the terms of a contract, the date of final receipt or acceptance, whichever is later, of the Goods or Services shall be considered the date of the bill.

g) State employees who are reimbursed by the State for their travel may receive late payment interest in accordance with this Part.

History

• Source: Amended at 26 Ill. Reg. 14666, effective September 19, 2002

74 Ill. Adm. Code 900.90 When and How Vendors Must Request Interest

a) Interest amounting to $50 or more need not be requested by a Vendor. Agencies are responsible for calculating and paying such interest and are to do so within a reasonable time.

b) Interest amounting to $5 but less than $50 must be requested by the Vendor.

1. The Vendor must submit a written statement to the appropriate State agency specifically requesting the State agency to pay an interest penalty to the Vendor.

2. The statement must include a description of the original transaction, the Vendor's taxpayer identification number, the date of the Vendor's invoice, the invoice amount and the date the bill was presented to the Agency.

3. The statement should, if possible, include the Vendor's invoice number, the voucher number, the appropriation account code, the obligation number, the exact name of the Vendor or payee as the name appeared on the payment warrant, an estimate of the date upon which the interest penalty begins to accrue and any other information reasonably needed by the State agency to verify the interest penalty payment.

4. A request for the late payment interest penalty should be submitted within 90 days after the Date of Payment.

5. Agencies are responsible for paying such interest and are to do so within a reasonable time.

6. Upon written request by the Vendor, an agency must disclose to the Vendor the date upon which an interest penalty begins to accrue.

c) Interest amounting to less than $5 will not be paid by the State, except in relation to a request that results from the application of the provisions of this Part to claims for prescription services submitted pursuant to Article V of the Public Aid Code [305 ILCS 5/Art. V], covering ALL KIDS Health Insurance Act [215 ILCS 170] and the Children's Health Insurance Program Act [215 ILCS 106] by a pharmacy to the Department of Healthcare and Family Services.

d) Interest is to be calculated for each individual Vendor bill received. A determination of whether an interest penalty is owed is to be made for each individual bill and may not be based upon summing interest from two or more bills together. If a State agency divides a Vendor bill into parts for payment from multiple funding sources, interest is to be calculated for each individual part in order to determine if interest is owed for that part of that bill.

History

• Source: Amended at 31 Ill. Reg. 5751, effective March 29, 2007

74 Ill. Adm. Code 900.100 Calculation of Interest

a) Interest is calculated at the rate of 1% per month. This results in a daily interest factor of .00033 (01/30).

b) For each day payment is late, the amount late shall be multiplied by the daily interest factor to determine the late payment charge.

c) The interest penalty shall be simple interest and not compound interest, meaning that the interest penalty is computed on the amount of the bill only and shall not include previously accrued interest.

d) For bills payable from funds appropriated on and after December 28, 2012, interest shall begin accruing on the 91st day after receipt of a Proper Bill and shall continue to accrue until the bill is paid by the Comptroller's Office. For bills payable from funds appropriated prior to December 28, 2012, interest shall begin accruing on the 61st day after receipt of a Proper Bill and shall continue to accrue until the bill is paid by the Comptroller's Office.

e) Interest shall not accrue on the Date of Payment. In the event the Date of Payment is the same date that interest begins to accrue, there shall be no interest payable by the State for purposes of efficiency to the State.

History

• Source: Amended at 40 Ill. Reg. 13831, effective September 26, 2016

74 Ill. Adm. Code 900.110 No Interest on Interest

A request for payment of interest under this Act is not considered a bill and, therefore, not subject to the provisions of the Act; interest is not paid on an interest payment.

History

• Source: Amended at 26 Ill. Reg. 14666, effective September 19, 2002

74 Ill. Adm. Code 900.120 Exclusions

The following non-exhaustive list represents the types of payments that are excluded from the Act and consequently do not qualify for interest penalties:

a) Inter- and intra-agency payments. This includes transfers and payments to revolving funds, reimbursement of petty cash funds and imprest accounts, inter-fund transfers and inter-fund payments in which an agency or department serves as the Vendor of Goods or Services.

b) Payments to State employees for personal services (salary only and not including health insurance benefits).

c) Awards and grants, as defined by the Comptroller's Office in SAMS Manual Procedure 15, including pass-through grants and distributive payments and refunds.

d) Contract retainers associated with construction contracts.

e) State Board of Education categorical grants.

f) Community College Board grants.

g) Illinois Student Assistance Commission grants.

h) Payments to local government entities, including school districts.

i) Payments of interest penalties.

j) Payments made to contractual employees (these payments are generally made via a Contractual Services Payroll Voucher).

k) Payments from accounts or funds not appropriated by the General Assembly.

l) Gratuitous payments made to induce a business to remain in or to locate in this State.

m) Any type of payment to a Vendor assigned or sold by that Vendor to a different payee (including any assignments or sales made by the vendors to the Department of Healthcare and Family Services), except for assignments or sales made pursuant to a vendor payment program approved by the Department of Central Management Services and the Comptroller.

n) Barter transactions.

o) Payments made by a State agency comprised of federal funds only and no State or local funds.

p) Medical and claims payments under the Workers' Compensation [820 ILCS 305] and Workers' Occupational Diseases [820 ILCS 310] Acts.

q) Tax refunds.

r) State Employee's Group Insurance Program payments covered by late payment interest provisions in Sections 368a and 370a of the Illinois Insurance Code [215 ILCS 5].

History

• Source: Amended at 40 Ill. Reg. 13831, effective September 26, 2016

74 Ill. Adm. Code 900.125 Vendor Payment Program

The requirements set forth in this Section establish the criteria for participation by participating vendors and qualified purchasers in a vendor payment program. Information regarding the program may be found at http://www.payments.illinois.gov.

a) Authority. The State Comptroller and the Department are authorized to establish and implement the program pursuant to Section 3-3 of the Prompt Payment Act.

b) Applicability. This Section applies to all qualified accounts receivable not otherwise excluded from receiving prompt payment interest pursuant to Section 900.120. Section 900.125 shall not apply to the purchase of any accounts receivable related to payments made under a medical assistance program, including Medicaid payments, or any other purchase of accounts receivable that is otherwise prohibited by law.

c) Definitions

"Applicant" is any entity seeking to be designated as a qualified purchaser.

"Application Period" is the time period when the program is accepting applications as determined by the Department.

"Assigned Penalties" are penalties payable by the State in accordance with the Prompt Payment Act and this Part that are assigned to the qualified purchaser of an assigned receivable.

"Assigned Receivable" is the base invoice amount of a qualified account receivable and any associated assigned penalties due, currently and in the future, in accordance with the Prompt Payment Act.

"Assignment Agreement" is an agreement executed and delivered by a participating vendor and a qualified purchaser pursuant to which the participating vendor will assign one or more qualified accounts receivable to the qualified purchaser and make certain representations and warranties in respect thereof.

"Base Invoice Amount" is the unpaid principal amount of the invoice associated with an assigned receivable.

"Department" is the Department of Central Management Services.

"Medical Assistance Program" is any program which provides medical assistance pursuant to Article V of the Illinois Public Aid Code [305 ILCS 5/5], including Medicaid.

"Participating Vendor" is a vendor whose application for the sale of a qualified account receivable is accepted for purchase by a qualified purchaser pursuant to the program terms.

"Program" is a vendor payment program.

"Prompt Payment Act" is the State Prompt Payment Act [30 ILCS 540].

"Prompt Payment Penalties" are penalties payable by the State in accordance with the Prompt Payment Act and this Part.

"Purchase Price" is 100% of the base invoice amount associated with an assigned receivable minus:

• any deductions against the assigned receivable arising from State offsets; and

• if and to the extent exercised by a qualified purchaser, other deductions for amounts owed by the participating vendor to the qualified purchaser for State offsets applied against other accounts receivable assigned by the participating vendor to the qualified purchaser pursuant to the program.

"Qualified Account Receivable" is an account receivable due and payable by the State that is outstanding for 90 days or more, is eligible to accrue prompt payment penalties under the Prompt Payment Act and is verified by the relevant State agency. A qualified account receivable shall not include any account receivable related to medical assistance program (including Medicaid) payments or any other accounts receivable, the transfer or assignment of which is prohibited by, or otherwise prevented by, applicable law.

"Qualified Purchaser" is any entity that, during any application period, is approved by the Department to participate in the program on the basis of certain qualifying criteria as determined by the Department.

"State" is the State of Illinois.

"State Comptroller" is the Illinois Office of the Comptroller.

"State Offsets" is any amount deducted from payments made by the State in respect of any qualified account receivable due to the State's exercise of any offset or other contractual rights against a participating vendor. For the purpose of this Section, State offsets include statutorily required administrative fees imposed pursuant to the State Comptroller Act [15 ILCS 405].

"Sub-Participant" is any individual or entity that intends to purchase assigned receivables, directly or indirectly, by or through an applicant or qualified purchaser for the purposes of the program.

"Sub-Participant Certification" is an instrument executed and delivered to the Department by a sub-participant pursuant to which the sub-participant certifies its agreement, among others, to be bound by the terms and conditions of the program as a condition to its participation in the program as a sub-participant.

d) Criteria for a vendor payment program.

1. Under the program, qualified purchasers may purchase from participating vendors certain qualified accounts receivable owed by the State to the participating vendors. A participating vendor shall not simultaneously apply to sell the same qualified account receivable to more than one qualified purchaser.

2. In consideration of the payment of the purchase price, a participating vendor shall assign to the qualified purchaser all of its rights to payment of the qualified account receivable, including all current and future prompt payment penalties due relating to that qualified account receivable in accordance with the Prompt Payment Act.

e) Criteria for vendor participation. A vendor may apply to participate in the program if:

1. the vendor is owed an account receivable by the State for which prompt payment penalties have commenced accruing;

2. the vendor's account receivable is eligible to accrue prompt payment penalty interest under the Prompt Payment Act;

3. the vendor's account receivable is not for payments under a medical assistance program; and

4. the vendor's account receivable is not prohibited by, or otherwise prevented by, applicable law from being transferred or assigned pursuant to this Section.

f) Criteria for qualified purchasers. Factors to be considered by the Department in determining qualification to be a qualified purchaser shall include but are not limited to:

1. the qualified purchaser's agreement to commit a minimum purchase amount as established from time to time by the Department based upon the current needs of the program and the qualified purchaser's demonstrated ability to fund its commitment;

2. the demonstrated ability of a qualified purchaser's sub-participants to fund their portions of a qualified purchaser's minimum purchase commitment;

3. the ability of a qualified purchaser and its sub-participants to meet standards of responsibility substantially in accordance with the requirements of the Standards of Responsibility found in 44 Ill. Adm. Code 1.2046(b) (Government Contracts, Procurement, and Property Management);

4. the agreement of each qualified purchaser, at its sole cost and expense, to administer and facilitate the operation of the program with respect to that qualified purchaser, including without limitation, assisting potential participating vendors with the application and assignment process;

5. the agreement of each qualified purchaser, at its sole cost and expense, to establish a website that is determined by the Department to be sufficient to administer the program in accordance with the terms and conditions of the program;

6. the agreement of each qualified purchaser, at its sole cost and expense, to market the program to potential participating vendors;

7. the agreement of each qualified purchaser, at its sole cost and expense, to educate participating vendors about the benefits and risks associated with participation in the program;

8. the agreement of each qualified purchaser, at its sole cost and expense, to deposit funds into, release funds from, and otherwise maintain all required accounts in accordance with the terms and conditions of the program. Subject to the program terms, all required accounts shall be maintained and controlled by the qualified purchaser at the qualified purchaser's sole cost and at no cost, whether in the form of fees or otherwise, to the participating vendors;

9. the agreement of each qualified purchaser, at its sole cost and expense, to submit a monthly written report, in both hard copy and Excel format, to the State Comptroller or its designee and the Department or its designee, within 10 days after the end of each month, which, unless otherwise specified by the Department, at a minimum, shall contain:

A) a listing of each assigned receivable purchased by that qualified purchaser during the month, specifying the base invoice amount and invoice date of that assigned receivable and the name of the participating vendor, State contract number, voucher number and State agency associated with that assigned receivable;

B) a listing of each assigned receivable with respect to which the qualified purchaser has received payment of the base invoice amount from the State during that month, including the amount of and date on which that payment was made and the name of the participating vendor, State contract number, voucher number, and State agency associated with the assigned receivable, and identifying the relevant application period for each assigned receivable;

C) a listing of any payments of assigned penalties received from the State during the month, including the amount of and date on which the payment was made, the name of the participating vendor, the voucher number for the assigned penalty receivable, and the associated assigned receivable, including the State contract number, voucher number and State agency associated with the assigned receivable and identifying the relevant application period for each assigned receivable;

D) the aggregate number and dollar value of assigned receivables purchased by the qualified purchaser from the date on which such qualified purchaser commenced participating in the program through the last day of the month;

E) the aggregate number and dollar value of assigned receivables purchased by the qualified purchaser for which no payment by the State of the base invoice amount has yet been received, from the date on which the qualified purchaser commenced participating in the program through the last day of the month; and

F) such other data as the State Comptroller and the Department may reasonably request from time to time.

10. the agreement of each qualified purchaser to use its reasonable best efforts, and for any sub-participant to cause a qualified purchaser to use its reasonable best efforts, to diligently pursue receipt of assigned penalties associated with the assigned receivables, including, without limitation, by promptly notifying the relevant State agency that an assigned penalty is due and, if necessary, seeking payment of assigned penalties through the Illinois Court of Claims; and

11. the agreement of each qualified purchaser and any sub-participant to use their reasonable best efforts to implement the program terms and to perform their obligations under the program in a timely fashion.

g) Right to review performance of qualified purchaser's obligations.

Each qualified purchaser's performance and implementation of its obligations under subsection (f) shall be subject to review by the Department and the State Comptroller at any time to confirm that the qualified purchaser is undertaking such obligations in a manner consistent with the terms and conditions of the program. A qualified purchaser's failure to so perform its obligations including, without limitation, its obligations to diligently pursue receipt of assigned penalties associated with assigned receivables, shall be grounds for the Department and the State Comptroller to terminate the qualified purchaser's participation in the program in accordance with subsection (i) of this Section. Any such termination shall be without prejudice to any rights a participating vendor may have against that qualified purchaser, in law or in equity, including without limitation, the right to enforce the terms of the assignment agreement and of the program against the qualified purchaser.

h) Right to Review Sub-Participants.

1. In determining whether any applicant shall be designated as a qualified purchaser, the Department shall have the right to review or approve sub-participants that intend to purchase assigned receivables, directly or indirectly, by or through the applicant.

2. The Department reserves the right to reject or terminate the designation of any applicant as a qualified purchaser or require an applicant to exclude a proposed sub-participant in order to become or remain a qualified purchaser on the basis of a review, whether prior to or after the designation.

3. Each applicant and each qualified purchaser has an affirmative obligation to promptly notify the Department of any change or proposed change in the identity of the sub-participants that it disclosed to the Department no later than 3 business days after that change.

4. Each sub-participant shall be required to execute a sub-participant certification that will be attached to the corresponding qualified purchaser designation.

5. Sub-participants shall meet, at a minimum, the requirements of subsections (f)(2), (3), (10), and (11).

i) Term and termination.

1. The program shall commence in March 2011 and shall continue until terminated:

A) by the State Comptroller, after consulting with the Department, by giving 10 days prior written notice to the Department and the qualified purchasers in the program;

B) by the Department, after consulting with the State Comptroller, by giving 10 days prior written notice to the State Comptroller and the qualified purchasers in the program.

2. In the event a qualified purchaser or sub-participant breaches or fails to meet any of the terms or conditions of the program, that qualified purchaser or sub-participant may be terminated from the program:

A) by the State Comptroller, after consulting with the Department. The termination shall be effective immediately upon the State Comptroller giving written notice to the Department and the qualified purchaser or sub-participant; or

B) by the Department, after consulting with the State Comptroller. The termination shall be effective immediately upon the Department giving written notice to the State Comptroller and the qualified purchaser or sub-participant.

3. A qualified purchaser or sub-participant may terminate its participation in the program, solely with respect to its own participation in the program, in the event of any change to the Prompt Payment Act or this Part from the form that existed on the date that the qualified purchaser or the sub-participant, as applicable, submitted the necessary documentation for admission into the program if the change materially and adversely affects the qualified purchaser's or the sub-participant's ability to purchase and receive payment on receivables on the terms described in this Section.

4. If the program, a qualified purchaser, or a sub-participant is terminated under subsection (i)(1) or (2), the program, qualified purchaser, or sub-participant may be reinstated only by written agreement of the State Comptroller and the Department.

5. No termination under subsections (i)(1), (2), or (3) shall alter or affect the qualified purchaser's or sub-participant's obligations with respect to assigned receivables purchased by or through the qualified purchaser prior to the termination.

History

• Source: Amended at 40 Ill. Reg. 13831, effective September 26, 2016

74 Ill. Adm. Code 900.130 Special Rules and Procedures Regarding the Application of the Act to the State Employee's Group Insurance Program

For claims for payment related to the State Employee's Group Insurance Program the following applies:

a) Late payment interest pertaining to health care payments may be made to and requested by a:

1. Member – any person who receives benefits through the State Employees Group Insurance Act program and whose benefits are paid through the Health Insurance Reserve Fund.

2. Vendor – any provider of health care to a member.

b) The Date of Approval shall be the date the Department of Central Management Services approves the bill. The approval date given by an Administrative Services Organization (ASO) is not approval for purposes of determining whether a payment is late.

c) The Date of Payment of the claim to the member or Vendor shall be the later of the date on the check or the date DCMS instructs a claims administrator to make the payment; ordinarily, this date is referred to as the date the payment has been released.

d) A request for interest must contain the following information to be processed:

1. An Explanation of Benefits Form from the State's Administrative Services Organization. A duplicate is available from the ASO if needed; or

2. Name of employee/member and claimant

Social Security number

Date of Service

Amount of claim

Claim control number

e) Interest shall be payable only to the designated payee indicated on the claim. Ordinarily, the payee is the Vendor; however:

1. if the payment of the claim has not been assigned to the Vendor by the member, interest may be requested by and paid to the member;

2. if the Vendor is designated as the payee on the claim, the Vendor is entitled to any interest penalty due by the Act and the Vendor shall not charge the member interest on any unpaid balance of the claim;

3. if payment of the claim is to be paid directly to the Vendor, and the member has paid any or all of the claim in advance of payment to the Vendor, the Vendor shall not charge the State or the member any late payment interest after the date the member made payment and shall so certify on its request for interest.

74 Ill. Adm. Code 900.140 Resolution of Disputes

In the event a situation arises which is not covered by this Part or the proper course of action is unclear, the Comptroller and the Director of the Department of Central Management Services or their designees shall meet to make determinations and, if necessary, suggest modifications to the rules to be adopted pursuant to Sections 5-40, 5-45 or 5-50 of the IAPA. In any such determination, the interested parties will be given an opportunity to make their views known as a part of the decision making process. The Comptroller and the Director of the Department of Central Management Services shall employ the following standards in making interpretations of this Part:

a) fairness to the Vendor and to the State.

b) avoidance of litigation.

c) efficiency to the State.

74 Ill. Adm. Code 1000.10 Scope

This Part applies to each of the Internal Service Funds administered by the Department of Central Management Services, herein referred to as the Department.

History

• Source: Amended at 50 Ill. Reg. 2489, effective February 6, 2026

Chapter IX Central Management Services

Part 1000 Internal Service Funds

74 Ill. Adm. Code 1000.20 Advance Billings Based Upon Estimated Charges

a) The Department shall make reasonable efforts to bill and collect Internal Service Fund receivables in the fiscal year in which the user agency's account liability was incurred.

b) During the lapse period, the Department may bill user agencies based on estimated charges for goods and services received by user agencies when unbilled fiscal year receivables have been identified and it is unlikely that sufficient documentation will be received by the Department in time to allow both the Department billing process and user agency payment process to be completed during the lapse period. Computation of advance billing amounts will be based upon remaining unprocessed open work orders, authorizations without vendor invoices, and/or other similar sources. Advance billing amounts shall be based upon the best information available to the Department at the time the advance billing is prepared.

c) The Department may enter into agreements with user agencies for advance billings at other times during the fiscal year based on estimated charges for goods and services to be received by the user agency during the fiscal year.

d) The Department shall not issue undocumented advance billings for the purpose of intentionally expending a user agency's remaining appropriation balances.

e) The Department shall not issue advance billings for the purpose of creating undocumented credit balances which intentionally transfer a user agency's unexpended appropriation balances to the following fiscal year through the credit process described in Section 1000.40.

74 Ill. Adm. Code 1000.30 Credits Issued for Prior Fiscal Year Overpayments

a) The Department shall issue credits for application in the subsequent fiscal year for those user agency accounts which show an accounts receivable credit balance for the prior fiscal year. Credits for prior fiscal year accounts receivable credit balances will be issued when the Internal Service Fund is reasonably certain that:

1. All prior fiscal year billing activity has been posted;

2. All agency payments related to prior year billing activity have been posted; and

3. No activity remains in process related to prior fiscal year accounts receivable.

b) Credits for accounts receivable credit balances for prior fiscal year overpayments will be issued to user agencies after November 1st in the subsequent fiscal year.

c) The Department shall not use the advance billing process in Section 1000.20 with this credit process to intentionally circumvent fiscal year budgetary controls.

74 Ill. Adm. Code 1000.40 Catch-Up Billings for Prior Fiscal Year Amounts Due

a) The Department shall issue catch-up billings in the subsequent fiscal year for those user agency accounts which show an accounts receivable debit balance for the prior fiscal year. Catch-up billings for prior fiscal year account balances due will be issued when the Internal Service Fund is reasonably certain that:

1. All prior fiscal year billing activity has been posted;

2. All agency payments related to prior year billing activity have been posted; and

3. No activity remains in process related to prior fiscal year accounts receivable.

b) When the Department did not have adequate information to bill a user agency for goods and services received during the prior fiscal year, the Department shall issue catch-up billings in the subsequent fiscal year once adequate documentation is received.

c) The Department shall clearly identify catch-up billings in order to avoid confusion with regular billings.

d) The Department shall make reasonable efforts to issue catch-up billings to user agencies as soon as billing information is known. Catch-up billings will be sent to agencies on a monthly basis beginning in November of the subsequent fiscal year.

e) User agencies shall reimburse the Department for catch-up billings by vouchers drawn against their appropriations for the fiscal year in which the catch-up billing is issued by the Department.

f) The Department shall not use catch-up billings as a substitute for the lapse period billing process.

74 Ill. Adm. Code 1000.50 User Agency Payments

a) User agencies shall process payments within 30 days after physical receipt of Internal Service Fund bills. User agencies shall immediately notify the Department of any additional information that is necessary to review an Internal Service Fund bill.

b) User agencies shall make reasonable efforts to review, approve, and pay all Internal Service Fund bills in the fiscal year in which the liability was incurred or within the fiscal year that the Department issues a catch-up billing. User agencies shall not leave Internal Service Fund bills unpaid in order to circumvent fiscal year budgetary controls.

Chapter VIII Illinois Finance Authority

Part 1100 Illinois Finance Authority

74 Ill. Adm. Code 1100.50 Definitions

The following definitions shall apply in this Part:

"Act" means the Illinois Finance Authority Act [20 ILCS 3501].

"Application" means a potential borrower application to issue bonds through the Authority pursuant to this Part.

"Application Fee" means the fee required to be paid to the Authority by the potential borrower at the time the application is filed.

"Authority" or "IFA" means the Illinois Finance Authority created by Section 801-15 of the Act.

"Board" means the members of the Authority, gathered in a meeting to transact Authority business.

"Bond Counsel" means an attorney at law or firm of attorneys of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on, and the validity of, bonds issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States of America or of the District of Columbia. The Authority relies on a list of bond counsels published quarterly by the Bond Buyer in the "Directory of Municipal Bond Dealers". The bond counsel or firm must have rendered a sole legal opinion in connection with the sale of State or municipal bonds (short-term issues excluded) within the two year period preceding submission of the borrower's application to the Authority. The legal opinion rendered may have been on either publicly offered or privately placed bond issues. Attorneys acting only as counsel to an underwriter or placement agent do not qualify.

"Bondholder" or "Holder" or "Noteholder" or any similar term when used with reference to a bond or note of the Authority means any person who is the bearer of any outstanding bond or note of the Authority registered to bearer or not registered, or the registered owner of any outstanding bond of the Authority which at the time is registered other than to bearer.

"Bonds" means and shall include bonds, notes, certificates, bond grant or revenue anticipation notes or any other evidence of indebtedness representing an obligation to pay money. (Section 801-10 of the Act)

"Borrower" means any governmental unit which submits an application and is accepted to issue bonds through the Authority.

"Chairman" means the Chairman of the Authority Board.

"Final Resolution" means a resolution adopted by the Authority approving the final terms of a financing by the Authority.

"Fiscal Year" means the fiscal year of the Authority, beginning on July 1 and ending on June 30.

"Fully Marketable Form" means a local governmental security duly executed and accompanied by an approving legal opinion of bond counsel. The local governmental security so executed need not be printed or lithographed, nor be in more than one denomination.

"Governmental Unit" means a unit of local government as defined in Section 820-10(b) of the Act.

"Local Governmental Security" means a bond or note or evidence of debt issued by a governmental unit and payable from taxes or from rates, charges or assessments.

"Notes" means any notes of the Authority issued under the Act.

"Person" means, unless limited to a natural person by the context in which it is used, a person, corporation, association, trust, partnership or cooperative. (Section 801-10 of the Act)

"Reserve Fund" means the Reserve Fund established as provided in Section 820-15 of the Act.

"Revenues" means all fees, charges, moneys, profits, payments of principal of or interest on local governmental securities and other investments, gifts, grants, contributions, appropriations and all other income derived or to be derived by the Authority under the Act.

"Volume Cap" means the aggregate principal amount of private activity bonds which can be issued in any given calendar year by the State and its political subdivisions (including the Authority) as obligations the interest on which is exempt from federal income taxation. Volume cap is determined under Section 147 of the Tax Code, or its successor section in any subsequent United States Internal Revenue Code; and by the Private Activity Bond Allocation Act [30 ILCS 345].

History

• Source: Recodified from 8 Ill. Adm. Code 1400.10, 14 Ill. Adm. Code 1220.110 and 47 Ill. Adm. Code 400.102 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.100 Composition, Appointment and Terms of Office

a) The Board of the Authority shall be composed of 15 members as specified in Section 801-15 of the Act.

b) Members shall be appointed and confirmed in the manner provided in Section 801-15 of the Act, and for such terms as provided in Section 801-15 of the Act and shall serve until their successors are appointed and have qualified.

c) The Board may declare a vacancy for a member when it shall determine that a member has resigned, no longer resides within the State of Illinois, or has become incapacitated and rendered incapable of serving or performing duties as a member.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.20 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.105 Board Chairman

a) Pursuant to Section 801-15 of the Act, the Governor shall appoint a Chairman of the Board for a 2 year term.

b) The Chairman shall preside at all meetings of the Authority and perform such other duties as are set forth in this Part.

c) The Board Chairman may establish such standing, ad hoc or other special committees as he deems necessary. The composition, Chairmen, and duties of such committees shall be specified by the Board Chairman.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.30 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.110 Executive Director

a) Employment of Executive Director. The Executive Director shall be employed by the Authority in accordance with the provisions of Section 801-15 of the Act.

b) Qualifications. The Executive Director shall be a person who, by reason of education and experience, shall have demonstrated professional ability and knowledge in public administration, supervision of staff, policy formulation, agriculture and finance.

c) Chief Operating Officer. The Executive Director shall be the chief operating officer of the Authority, responsible to the Board for the execution of its policies and procedures.

d) Duties

1. The Executive Director shall develop the duties of the staff, direct its activities from its principal office and perform such other duties and functions as may be required by the Authority and as are expressed in the operating rules and procedures adopted and as amended from time to time by the Authority.

2. The Executive Director shall also have chief responsibility for primary external liaison to all other units or branches of government and businesses in Illinois, particularly as such activity relates directly to the implementation of the Act and the policies of the Authority.

3. The Executive Director is responsible for all administrative matters within the Authority: personnel, budgeting and fiscal planning, financial statements, purchasing, fee collection, annual financial reports, annual goals and objectives statements, and compliance with all State government operational requirements.

4. In particular, the Executive Director shall, on behalf of the Authority, have responsibility and commensurate authority to perform duties, including but not limited to, the following:

A) provide staff and administrative services, either directly or through the use of outside contractors, for the Authority; provided, however, that the Board must approve all contracts and the appointment of candidates for all staff positions. Responsibility for dismissal of Authority staff is that of the Executive Director;

B) prepare annual operating budgets for Board approval;

C) report periodically to the Board, both at and between meetings, on all aspects of the operation of the Authority, including the following:

i) Key matters relating to relations with outside consulting firms and the status of legislative and State agency relations;

ii) Updating Board members on progress toward its major objectives and staff progress/evaluation;

iii) Providing regular briefings of Board members on agenda items prior to scheduled public meetings.

D) recommend to the Board those policy and procedural options necessary to implement the provisions of the Act;

E) plan, with the Chairman, all meetings of the Authority;

F) maintain all records, files and reports required by the Authority;

G) prepare and submit for review by the Board the reports required of the Authority, including the annual report to the Governor and members of the General Assembly;

H) prepare and, as needed, revise and amend, with approval of the Board, such forms as necessary for administration of Authority programs. The number and type of forms shall be sufficient to safeguard the interests of the Authority;

I) represent the Authority whenever necessary; and

J) perform other duties and exercise other authorities as directed by the Board.

e) Delegation. In order to carry out the duties and functions vested in him under the Act and the Rules of the Authority, the Executive Director may delegate to and vest in the staff of the Authority the authority to perform such duties and functions as he may deem necessary or appropriate.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.40 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.115 Meetings

a) Open Meetings Act. It is the public policy of the Authority that it exists to aid in the conduct of the business of the people of the State. It is the Authority's intent that its actions shall be taken and its deliberations be conducted openly. The Authority shall conduct all its meetings in conformity with the provisions of the Open Meetings Act [5 ILCS 120.

b) Closed Sessions. The Authority may hold closed sessions only for the purposes permitted by the Open Meetings Act, including sessions where:

1. the Board is negotiating matters with its employees or representatives;

2. the Board is considering the acquisition of real property or a court proceeding against or on behalf of the Authority, but no other portion of such meetings may be closed to the public;

3. the Board is considering information regarding appointment, employment or dismissal or an employee or officer or hearing testimony on a complaint lodged against an employee or officer to determine its validity, but no final action shall be taken at closed session;

4. where federal regulation requires closed sessions;

5. an advisory committee appointed to provide the Board with professional consultation on matters germane to its field of competence considers matters of professional ethics or performance;

6. the Board meets to establish reserves or to settle claims as provided in the Local Governmental and Governmental Employees Tort Immunity Act [745 ILCS 10] if otherwise the disposition of a claim or potential claim might be prejudiced.

c) Notice to Members. Notice of the time and place of every meeting shall be given to each member at least 24 hours before such meeting.

d) Meeting Schedule. At the beginning of each fiscal year, the Authority shall prepare, make available and give public notice of a schedule of all regular meetings for such fiscal year, listing the regular dates, times and places of such meetings. Public notice of any special meetings, or of any rescheduled or reconvened regular or special meeting, shall be given at least 24 hours before such meeting. Public notice of reconvened meetings need not be given where the meeting is to be reconvened within 24 hours nor where announcement of the time and place of the reconvened meeting was made at the original meeting and there is no change in the agenda.

e) Public Notice. Public notice shall be given by posting a copy of the notice at the principal office of the Authority. The Authority shall supply copies of the notice of its regular meetings, and give notice of any special, reconvened or rescheduled meeting, to any local newspaper of general circulation or any local radio or television station that has filed an annual request for such notice. Any such news media shall also be given the same notice of all special, rescheduled or reconvened meetings in the same manner such notice is given to members of the Board. If a change is made in the schedule of regular meeting dates, at least 10 days' notice of such change shall be given by publication in a local newspaper of general circulation. Notice of such change shall also be posted at the principal office of the Authority, and shall be given to those news media which have filed an annual request for notice as set forth in this section.

f) Agenda. The Executive Director shall provide the agenda for each meeting to all members at least 24 hours before such meeting. Such agenda shall include all matters to be considered at the meeting, except that any matter may be placed on the agenda with less notice with the unanimous consent of all voting members.

g) Recording of Meetings. Meetings, required to be open under the Open Meetings Act, may be recorded by tape, film, or other means by any representative of any news medium as defined in the Code of Civil Procedure [735 ILCS 5/8-701]. Installation of recording equipment must be done at such time and in such manner so as not to delay or obstruct the meeting. Recording equipment must be operated in such manner so as not to interfere with the overall decorum and proceeding of the meeting. If any witness refuses to testify at such meeting on the grounds that he may not be compelled under applicable law to testify if any portion of his testimony is to be broadcast or televised or if motion pictures are to be taken of him while he is testifying, no recording may be made during such witness' testimony. Each witness shall be informed of this right prior to his testimony and shall be asked whether he intends to exercise this right.

h) Quorum. Four members of the Board shall constitute a quorum. The affirmative vote of four of the members of the Board shall be necessary for any action requiring a vote to be taken by the Board. A vacancy in the membership of the Board shall not impair the right of a quorum to exercise all the rights and perform all the duties of the Board as provided for in the Act.

i) Reimbursement of Board Members and Staff

1. Members of the Board and approved staff, upon condition of making application, shall be reimbursed for travel and subsistence expenses incurred in the performance of their duties as provided by law or by this Part. Such reimbursement shall be in accordance with the official travel regulations approved by the Governor's Travel Control Board.

2. All claims for reimbursement of travel and subsistence expenses shall be submitted on State of Illinois Travel Vouchers (Form C-10). Submissions of Travel Vouchers may be made subsequent to each meeting of the Board or may be held for submission at the conclusion of each month. The Executive Director shall be the recipient of such vouchers for administrative processing and approval.

3. For the purpose of travel expense reimbursement, expenses incurred by the Authority members participating singly, or as a unit of the whole, or as a total Authority, shall be considered to be official business of the State and of the Authority when such expenses are incurred in the following activities:

A) Regular and special Authority meetings called by the Chairman through the Executive Director.

B) Participation in investigations, hearings, judicial proceedings, or the like, in connection with any matter properly before the Authority.

C) Participation in standing, ad hoc or other special committees prescribed by the Chairman of the Board.

D) Attendance, as a representative of the Authority, at meetings conducted by agencies of the State and federal governments, and by national, State and local organizations, concerning loan programs of a similar nature except the attendance at meetings held outside the State shall have the prior approval of the Chairman and of the Executive Director.

j) Rules of Order. Meetings of the Board, and actions considered, shall be according to generally-accepted principles of parliamentary procedure. In the event of question, Robert's Rules of Order shall govern.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.50, 60, 70 and 80 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.120 Records and Reports

The Authority shall maintain files available to the public containing all information declared public in the Act, the regulations issued under the Act, and in the Open Meetings Act [5 ILCS 120]. All such files shall be open to reasonable public inspection and copying at the principal office of the Authority.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.90 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.125 Public Participation

a) Public Participation at Open Meetings. Members of the public who wish to present their views at a Board meeting shall contact the Executive Director in writing. Requests shall outline the subject to be addressed at the meeting. A presentation shall be placed on the agenda of a Board meeting if the request is received by the Executive Director at least one week prior to that meeting. Requests received by the Executive Director less than one week prior to a Board meeting shall be deferred to the following meeting. At the Board meeting, ten minutes shall generally be scheduled for each presentation. At the discretion of the Board, more time may be allowed. Additional time will be allowed if the complexity of the background data so requires, or if the proposed use of the proceeds of an Authority loan must be closely scrutinized to determine that it meets the programmatic guidelines that have been set out in the applicable rules and regulations. The Executive Director, or a designee, shall notify the requesting party of the exact time and place for the presentation before the Board. This notification shall be by phone call, and followed up by a confirming letter. On the date of the Board presentation, each person scheduled to make a presentation, or each member of a delegation, shall sign a registration sheet located at the reception desk.

b) Petition to Promulgate, Amend, or Repeal a Rule

1. An interested person or legal entity may petition the Authority requesting promulgation, amendment or repeal of a rule. The petition shall be in writing, signed by or on the behalf of the petitioner and shall contain a statement of:

A) The rule sought to be promulgated, amended or repealed. A rule proposed to be amended shall be stated in full with proposed deletion enclosed in brackets, and proposed additions underlined.

B) Factual rationale for the proposed action.

C) Any propositions of law to be asserted.

D) Factual account of impact on petitioner, of proposed action.

E) Name and address of petitioner and any other person or entity known to be interested in the rule sought to be adopted, amended, or repealed.

2. The petition should be typed or printed, and captioned BEFORE THE ILLINOIS FINANCE AUTHORITY, and shall be deemed filed when received by the Executive Director. Upon receipt of the petition, the Executive Director shall:

A) Within ten days, mail a copy of the petition to any parties named therein. The petition shall be deemed served on the date of mailing to the last known address of the party being served.

B) Submit the petition to the Board at the next regularly scheduled meeting, with recommended action.

3. Within sixty days of the date on which the petition was submitted to the Board by the Executive Director, the Board shall either deny the petition or initiate rulemaking procedures pursuant to Section 1100.130 of this Part. If the petition is denied, the Board shall issue an order setting forth the reasons in detail for denial of the petition. The order shall be mailed to the petitioner and all other persons upon whom a copy of the petition was served.

c) Declaratory Rulings. The Board shall provide declaratory rulings as to applicability of any statutory provision, rule or other written statement of law or policy, decision or order when petitioned to do so by the public where, in the judgment of the Board, it is necessary or helpful for them to conduct their affairs in accordance with the law. Requests for declaratory rulings shall be made to the Executive Director in writing. Within thirty to sixty days after submission of a request for declaratory ruling, the Board shall issue a ruling on the rule, statute or policy in question. Such ruling shall be in writing, shall be filed in the public records of the Authority, and shall be maintained in the Authority's office for public inspection and copying. The Board may decline to rule when, in the judgment of the Board, the ruling would be beyond the statutory jurisdiction of the Board, when no clear answer is determinable, or when the issue presented is pending resolution by a court of Illinois or by the attorney general.

History

• Source: Amended at 8 Ill. Reg. 8489, effective May 31, 1984; recodified from 8 Ill. Adm. Code 1400.100 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.130 Rulemaking Procedures

The Authority has authority to adopt and promulgate rules pursuant to the Illinois Finance Authority Act [20 ILCS 3501] and the Illinois Administrative Procedure Act [5 ILCS 100]. The Authority shall follow the following procedure in the adoption of rules:

a) The Authority may at any time and in any manner direct the Executive Director to recommend a proposed rule to the Board for its review. Such directive may specify the policy to be implemented by such proposed rule or may allow the Executive Director to recommend a policy to be implemented by such proposed rule.

b) At the meeting specified by the Board or the Chairman, the Executive Director shall submit the recommended proposed rule to the Board. Upon consideration of such submission, the Board may, upon a vote in accordance with this Part, either direct the Executive Director to revise such recommended proposed rule or approve the proposed rule as submitted or as modified by the Authority.

1. Upon such approval of a rule as a proposed rule, the Authority shall:

A) give at least 45 days' notice to the general public of its intent to adopt a final rule. This period (hereinafter the "First Notice Period") shall commence on the first day the notice appears in the Illinois Register. The notice shall be in the form prescribed by the Secretary of State and shall be submitted for publication in the Illinois Register in accordance with the rules promulgated by the Secretary of State. The notice shall include a text of the proposed rule, or the old and new materials of a proposed amendment, or the text of the provision to be repealed; the specific statutory citation upon which the proposed rule or proposed amendment or proposed repealer is based and is authorized; a complete description of the subjects and issues involved; and the time, place and manner in which interested persons may present their views and comments concerning the intended action (see 5 ILCS 100/ 5-40(b)).

B) afford all interested persons reasonable opportunity to submit data, views, arguments or comments, which may, in the discretion of the Authority, be submitted either orally or in writing or both. The notice published in the Illinois Register shall indicate the manner selected by the Authority for such submissions. The Authority shall consider fully all submissions respecting the proposed rule (see 5 ILCS 100/5-40(b)).

2. The Executive Director may, within five days of the commencement of the First Notice Period, request in writing that the Joint Committee on Administrative Rules conduct a preliminary review of the proposed rulemaking. The Executive Director shall thereafter cooperate with the Joint Committee on Administrative Rules in its review of the proposed rulemaking during the First Notice Period. (See 1 Ill. Adm. Code 220, Review of Proposed Rulemaking, and the Illinois Administrative Procedure Act [5 ILCS 100].)

3. Upon fulfilling the requirements specified in Section 1100.130(b)(1), the Authority may modify the proposed rule in light of the submitted comments.

4. The Authority shall, after taking the action prescribed in Section 1100.130(b)(3), provide up to 45 days additional notice (hereinafter the "Second Notice Period") of its intended action to the Joint Committee on Administrative Rules. The Second Notice Period shall commence on the day written notice is received by the Joint Committee on Administrative Rules, and shall expire 45 days thereafter unless prior to that time the Authority shall have received a statement of objection from the Joint Committee on Administrative Rules or notification from the Joint Committee on Administrative Rules that no objection will be issued. The written notice to the Joint Committee on Administrative Rules shall include the text and location of any changes made to the proposed rule during the First Notice Period, and, if written request has been made by the Joint Committee on Administrative Rules within 30 days after initial notice appears in the Illinois Register, shall include an analysis of the economic and budgetary effects of the proposed rule. The Executive Director shall thereafter cooperate with the Joint Committee on Administrative Rules in its review of the proposed rule. After commencement of the Second Notice Period, no substantive change may be made to a proposed rule unless it is made in response to an objection or suggestion of the Joint Committee on Administrative Rules. (See 5 ILCS 100/5-40(c).)

5. Response to JCAR Objection

A) If the Joint Committee on Administrative Rules objects to the proposed rulemaking, the Executive Director shall promptly notify the Board of such objection. The Executive Director shall also recommend that the Board respond to the objection by:

i) modifying the proposed rulemaking to meet all specific objections of the Joint Committee on Administrative Rules;

ii) withdrawing the proposed rulemaking; or

iii) refusing to modify or withdraw the proposed rulemaking.

B) After considering the objection of the Joint Committee on Administrative Rules and the Executive Director's recommended response, the Board shall determine what response it will make with respect to the objection of the Joint Committee on Administrative Rules. The Executive Director shall promptly, and no later in any event than ninety days after the Board's receipt of the statement of objection by the Joint Committee on Administrative Rules, notify the Joint Committee on Administrative Rules of the Authority's response and rationale for such response. (See 1 Ill. Adm. Code 220, Review of Proposed Rulemaking.)

c) After the expiration of the forty-five day Second Notice Period, after notification from the Joint Committee on Administrative Rules that no objection will be issued, or after response to a statement of objections issued by the Joint Committee on Administrative Rules, whichever is applicable, the Authority shall file in its principal office and in the Office of the Secretary of State a certified copy of each rule and modification or repeal of any rule adopted by it; such filing and certification shall be accomplished in the manner specified by the Secretary of State. Each rule hereafter adopted is effective upon such filing, unless a later effective date is required by statute or is specified in the rule. At the same time as such filing, the Authority shall submit to the Secretary of State, in the manner prescribed by the Secretary of State, for publication in the next available issue of the Illinois Register, a notice of rulemaking which presents:

1. if the material is a new rule, the full text of the new rule; or

2. if the material is an amendment to a rule or rules, the full text of the rule or rules as amended; or

3. if the material is a repealer, such notice or repeal shall be published (see 5 ILCS 100/5-40(d) and 5-65) .

d) The following exceptions exist with respect to the foregoing provisions:

1. The provisions of this Section do not apply to any action of the Authority which does not constitute the adoption, amendment, or repeal or a statement of general applicability that implements, applies, interprets, or prescribes law or policy; statements concerning only the internal management of an agency and not affecting private rights or procedures available to persons or entities outside the agency; informal advisory rulings; intra-agency memoranda; and the prescription of standardized forms (see 5 ILCS 100/1-70).

2. The notice and publication requirements of this Section do not apply to a matter relating solely to agency management, personnel practices, or to public property. In such instances, the Authority may proceed without prior notice or hearing or upon any abbreviated notice and hearing that it finds practicable to adopt a rule at a meeting and upon a vote in conformance with this Part. (See 5 ILCS 100/5-40(d).)

3. Emergency Rules

A) For purposes of this subsection (d)(3), "emergency" means the existence of any situation which the Authority finds reasonably constitutes a threat to the public interest, safety or welfare. Where the Authority finds that an emergency exists which requires adoption of a rule upon fewer days than is required herein, and states in writing its reasons for that finding, the Authority may adopt an emergency rule without prior notice or hearing, upon filing the required notice of emergency rulemaking with the Secretary of State. Such notice shall include the text of the emergency rule and shall be published in the Illinois Register. Subject to applicable constitutional or statutory provisions, an emergency rule becomes effective immediately upon filing, or at a stated date less than 10 days thereafter. The Authority's finding and a statement of the specific reasons therefor shall be filed with the rule. The Authority shall take reasonable and appropriate measures to make emergency rules known to the persons who may be affected by them. Emergency rulemaking shall not be effective for a period of more than 150 days, and no emergency rule shall be adopted more than once in a 24 month period. (See 5 ILCS 100/5-45.)

B) The Executive Director shall cooperate with the Joint Committee on Administrative Rules in its review of the Authority's emergency rule. If the Joint Committee objects to the emergency rulemaking, the Executive Director shall promptly notify the Authority of such objection and the Executive Director shall also recommend that the Authority respond to the objection by modifying the emergency rulemaking to meet all specific objections of the Joint Committee on Administrative Rules, withdrawing the emergency rulemaking, or refusing to modify or withdraw the emergency rulemaking. After considering the objection of the Joint Committee on Administrative Rules and the Executive Director's recommended response, the Authority shall determine what response it will make with respect to the objection of the Joint Committee on Administrative Rules. The Executive Director shall promptly, and in no event later than ninety days after the Authority's receipt of the statement of objection by the Joint Committee on Administrative Rules, notify the Joint Committee on Administrative Rules of the Authority's Response and rationale for such response. (See 1 Ill. Adm. Code 230, Review of Emergency Rules.)

4. Peremptory Rulemaking

A) For purposes of this subsection (d)(4), "peremptory rulemaking" means any rulemaking which is required as a result of federal law, federal rules and regulations, or an order of a court, under conditions which preclude compliance with general rulemaking requirements imposed herein and which preclude the exercise of discretion by the agency as to the content of the rule it is required to adopt. Where the Authority finds that peremptory rulemaking is necessary and states in writing its reasons for that finding, the Authority may adopt peremptory rulemaking upon filing the required notice of rulemaking with the Secretary of State. Such notice shall be published in the Illinois Register. A rule adopted under the peremptory rulemaking provisions of this Section becomes effective immediately upon filing with the Secretary of State and in the Authority's principal office, or at a date required or authorized by the relevant federal law, federal rules and regulations, or court order, as stated in the notice of rulemaking. Notice of rulemaking under this Section shall be published in the Illinois Register, and shall specifically refer to the appropriate State or federal court order or federal law, rules and regulations, and shall be in such form as the Secretary of State may reasonably prescribed by rule. The Authority shall file the notice of peremptory rulemaking within 30 days after a change in rules is required. (See 5 ILCS 5/5-50.)

B) On the same day the notice of peremptory rulemaking is filed with the Secretary of State, the Executive Director shall submit to the Joint Committee on Administrative Rules a copy of the court order or specific citation of federal law requiring the peremptory rulemaking. The Executive Director shall thereafter cooperate with the Joint Committee on Administrative Rules in its review of the Authority's peremptory rulemaking. If the Joint Committee on Administrative Rules objects to the peremptory rulemaking, the Executive Director shall promptly notify the Authority of such objection and the Executive Director shall also recommend that the Authority respond to the objection by modifying the peremptory rulemaking to meet all specific objections of the Joint Committee on Administrative Rules, withdrawing the peremptory rulemaking, or refusing to modify or withdraw the peremptory rulemaking. After considering the objection of the Joint Committee on Administrative Rules and the Executive Director's recommended response, the Authority shall determine what response it will make with respect to the objection of the Joint Committee on Administrative Rules. The Executive Director shall promptly, and in no event later than ninety days after the Authority's receipt of the statement of objection by the Joint Committee on Administrative Rules, notify the Joint Committee on Administrative Rules of the Authority's response and rationale for such response. (See 1 Ill. Adm. Code 240, Review of Peremptory Rulemaking.)

History

• Source: Recodified from 8 Ill. Adm. Code 1400.110 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.135 Purchasing Rules and Regulations

a) Policy. Recognizing the necessity for economy in governmental expenditure, the Authority is committed to the practices of competitive bidding and centralized purchasing.

b) Centralized Purchasing. Certain agencies have been charged with the responsibility for the central procurement of specified goods and services. Accordingly, the Authority will obtain such goods and services as prescribed by law through such agencies, including the Department of Central Management Services and such agencies as may be designated by law. Such goods and services shall include but not be limited to the following: paper, stationery, envelopes, insurance, vehicle maintenance and repairs, telecommunications equipment and services, electronic data processing equipment and services and construction materials and services.

c) Acquisition of Services not elsewhere provided for in this Section. The Authority will enter into service agreements in accordance with the Illinois Procurement Code [30 ILCS 500].

d) Procurement Rules. The procurement rules of the Department of Central Management Services shall govern all procurements by the Authority.

e) Governing Provision. This Section is subject to the provisions of the Illinois Procurement Code and all other applicable laws of the State of Illinois.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.120 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.140 Seal

The Executive Director is empowered to adopt an official seal for the Authority.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.150 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.145 Principal Office

The principal office of the Authority shall be: 233 S. Wacker Dr., Suite 4000, Chicago IL 60606.

History

• Source: Amended at 12 Ill. Reg. 11219, effective June 20, 1988; recodified from 8 Ill. Adm. Code 1400.160 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.150 Revision

This Part may be amended by the affirmative vote of four or more members of the Board, such amendment to be effectuated as provided by law.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.170 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.155 Construction; Waiver; Severability

a) Action Consistent with Act. Nothing in this Part or any other rule of the Authority shall be construed as prohibiting the Authority from taking any action consistent with the Act.

b) Cases Not Covered by Rules. In any case not explicitly provided for by any rule of the Authority, the Authority may take such action as it deems necessary or appropriate to carry out the purposes of the Act.

c) Extension of Time. The Authority or the Executive Director, may, upon a showing of good cause and if time permits, extend the time allowed for the performance of any function or duty required by the provisions of any rule of the Authority. In making any determination with respect to good cause, the Authority and the Executive Director shall give due regard to all relevant facts and circumstances, including such considerations as the complexity of the issues or the existence of extraordinary circumstances or unforeseen events which have led to the request for an extension of time.

d) Severability. If any Section or provision of this Part or any other rule of the Authority is declared unconstitutional or void by a court of competent jurisdiction, or its applicability to any person or circumstances is held invalid, the constitutionality or validity of the remainder of this Part or any other rule of the Authority and the applicability to other persons and circumstances shall not be affected, and to this end, the Sections and provisions of this Part are declared to be severable.

History

• Source: Recodified from 8 Ill. Adm. Code 1400.180 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.200 Summary and Purpose

The Authority operates several loan programs utilizing revenue bonds and available program capital. Some or all of these programs are available to businesses, local government, and not-for-profit institutions. The purpose of the Authority is to utilize its statutory powers to increase jobs, retain existing jobs, assist local government in accessing affordable financing, facilitate capital financing of businesses and other eligible organizations and generally to strengthen the economy and infastructure of the State. This Subpart describes the policies of the Authority governing access to its programs.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.100 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.202 Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Application" means an application for revenue bond or loan financing in the form provided by the Authority. The form of application may be amended from time to time.

"Bond purchase commitment" means a letter, bond purchase agreement or other document from a bond purchaser, underwriter or placement agent indicating that the terms of a financing have been finalized and that the parties are prepared to execute the documents pertaining to the financing in their present form. A bond purchase commitment will not be regarded as complete unless it specifies the aggregate principal amount of the bond issue, the maximum interest rate or interest rate formula, the term of the issue, the maximum and minimum prices at which the bonds will be purchased, and an amortization schedule.

"Borrower" means the obligor on a loan made by the Authority, whether from the proceeds of a revenue bond issue or program capital.

"Enterprise Zone" means an enterprise zone as defined in the Illinois Enterprise Zone Act [20 ILCS 655].

"Environmental Act" means the Illinois Environmental Facilities Financing Act [20 ILCS 3515].

"Environmental Project" means any project which constitutes an environmental facility or facilities, as those terms are used in the Environmental Act.

"Inducement Resolution" or "Loan Commitment Resolution" means a resolution adopted by the Authority with respect to a project indicating the Authority's willingness to provide financing for the project, subject to the conditions specified in the resolution.

"Tax Code" means the Internal Revenue Code, as amended, codified in Title 26, United States Code.

"Tax Increment Financing (TIF) District" means an area designated for redevelopment through tax increment allocation financing as provided in the Tax Increment Allocation Redevelopment Act [65 ILCS 5/11-74.4-1].

History

• Source: Recodified from 14 Ill. Adm. Code 1220.110 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.204 Application Forms

a) Persons seeking financing assistance for their project through one of the Authority's financing programs must submit information to enable the members to determine the nature of the project, the likelihood of repayment of a loan, the security structure needed for a loan, and the extent to which a project meets the applicable statutory requirements and purposes.

b) Each application for industrial, business, local government, not-for-profit organization or environmental projects must include to the extent applicable to the entity submitting the application and the particular facts of the project itself:

1. The legal name and address of the borrower;

2. The name(s) and address(es) of the principal occupant(s) or user(s), if different from the borrower;

3. A statement of the type of project (i.e., whether industrial, business, local government, not-for-profit organization or environmental);

4. A description of the type of business of the borrower;

5. The standard industrial classification code and category for the borrower's business;

6. The borrower's federal tax identification number or social security number;

7. The form of organization of the borrower;

8. A description of other businesses, if any, which have ownership interests in the borrower;

9. The names and addresses of shareholders holding more than 10% of stock in the borrower and/or all general partners if the borrower is a partnership; or, if the owner or any property financed would be a land trust, an identification of the trust and all beneficiaries of the trust including the percentage of beneficial interest of each beneficiary of the trust;

10. A listing of the names, positions, percent ownership and employment starting date, if any, of persons responsible for the management of the company;

11. A description of the history and background of the business of the borrower;

12. A complete description of the project including its proposed location, street address, legal description, elements of the proposed project (such as land acquisition, building construction, renovation, equipment purchases and installation, estimated project commencement and completion dates and information on tenants, if any, to whom any portion or portions of the project may be leased; and a copy of any real estate sales contract and/or any lease agreement pertaining to the project;

13. A description of the products to be produced at the proposed facility;

14. A description of the machinery and equipment to be acquired with proceeds of the bond issue, including acquisition lead time, the cost of the equipment and whether it is new or used;

15. A statement of whether the project is located in an enterprise zone;

16. Information relating to the project site, its size, access roads, railroad access and utilities;

17. Site improvements existing on the land (e.g., parking lots, driveways, landscaping);

18. A statement of the United States Congressional, Illinois House of Representatives, and Illinois Senate Districts in which the project is located;

19. A description of the buildings existing and to be built and their intended uses;

20. The amount of the proposed financing;

21. A summary of project costs including:

A) a breakdown of project expenditures, the total costs of project elements, and the sources of funds for payment of such costs including sources other than bond proceeds; and

B) evidence of construction and/or renovation cost estimates provided by an architect, contractor or engineer, which may be in the form of a letter from the estimator;

22. A description of sources and amounts of working capital available to the borrower, including lines of credit;

23. An identification of the proposed bond purchaser or purchasers, the interest rate and term of the bonds, and a copy of the letter of intent or commitment letter from such purchaser, which letter must be addressed to the borrower;

24. A statement of whether the bonds will be publicly sold or privately placed;

25. A statement of whether guarantees or other forms of credit enhancement, such as letters of credit, fund escrows or debt reserve with respect to payment of the bonds, will be part of the transaction;

26. For commercial projects, a statement of whether the project is located in a tax increment financing district, slum or blighted area as defined in Section 3(i) of the Urban Renewal Consolidation Act of 1961 [315 ILCS 30/3(i)], commercial district or targeted redevelopment area (an area designated by local authorities and to which local authorities or other persons have committed funds to redevelop that area, to include, but not be limited to, enterprise zones, TIF districts and slum and blighted areas);

27. For environmental projects, copies of orders, complaints, decrees and other official action to which the project is a response;

28. Information on current or projected employment for the two years subsequent to completion of the project, and, for commercial projects, a listing of the proposed tenants, lease type, rental amounts, areas rented and the term of the leases;

29. An estimate of the number of construction jobs to be created as a result of the project;

30. A statement as to the effect of the project on the community, including such examples as increased traffic, generation of retail sales and real estate taxes, environmental effect, employment opportunities and quality of life;

31. A statement as to the economic feasibility or marketing analysis for the project;

32. The names, addresses and telephone numbers of the borrower's general counsel, bond counsel, accountant, and consultant, if any;

33. The name and address of the municipality or other unit of government that exercises planning and subdivision control over the project site. See Section 1100.206.

34. A certification by the borrower that the site for the project is not located in a special flood hazard area as designated by the Illinois Department of Natural Resources, Division of Waterways, and that the borrower has made an investigation which determined that it is not in such an area. The borrower must also certify that all information in the application is true to the best knowledge and belief of the borrower.

c) Each application for a project for which the borrower is not an existing company or any project which is to be financed on a non-recourse, mortgage basis, and each application for a commercial project must include:

1. A projected cash flow analysis for the project.

2. An operating pro forma financial statement covering the construction period and the succeeding ten-year period giving the base year's revenues, maintenance and operating costs. Explanatory footnotes shall be written describing the assumptions used in forecasting income and expenses. Debt service expenses should be separated by lending source, and method of depreciation must be noted.

d) Unless the project is to be financed in a non-recourse, mortgage basis, each borrower for a project must:

1. If the application is for an existing company, submit financial statements for the previous three (3) years of operation, plus an interim financial statement not more than 90 days old at the time the application is submitted. Audited statements are preferred if available.

2. Submit a comparative summary balance sheet and a summary profit and loss statement for the previous three (3) years.

3. Provide sales and earnings projections for a three (3) year period.

4. If the borrower is not the operating company, but an individual, provide a personal history of the borrower and personal financial statements. Partnership borrowers must include personal statements for each partner, if the principals are to guarantee the bonds, and must indicate the party with legal authority to sign documents.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.120 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.206 Notice to Municipalities

a) The Authority shall not issue any bonds relating to the financing of an industrial project located within the planning and subdivision control jurisdiction of any municipality unless:

1. Notice of the proposed project, including a description of the proposed financing, is submitted to the corporate authorities of such municipality; and

2. Such corporate authorities, within 45 days after mailing of the notice, have failed to notify the Authority that the municipality has adopted a resolution disapproving the project, or have notified the Authority that the municipality has adopted a resolution approving the project. [20 ILCS 3505/6.1]

b) The Authority will submit notice to the municipalities designated by the borrower after adoption of the inducement resolution. It is the responsibility of each borrower and its counsel to properly identify to the Authority at the time of application any municipality having planning and subdivision control jurisdiction over any portion of the project. The Authority will incorporate into the notice the project description and approximate financing amount provided by the borrower in the application.

c) During the months of November and December, and during the two months preceding the effective date of any tax legislation changes affecting bonds, the Authority will forward the required 45-day notice to municipalities prior to adoption of an inducement resolution, if requested by the borrower.

d) Changes in the project, the legal entity who will become the borrower in the financing, or the financing amount or structure shall require additional or corrected notices to be sent. Notice to the Authority of such changes are the responsibility of the borrower. The Authority assumes no responsibility for any delays in completing the financing arising out of a need to comply with this Section.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.130 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.208 Changes in Information and Additional Information

a) Borrowers are responsible for notifying the Authority in writing within 30 days of any subsequent material changes in the nature or description of the project, the financial condition of the proposed borrower, and the proposed structure or participation in the financing.

b) Prior to the Board meeting at which project financing will be considered, the borrower must submit a disclosure statement which will disclose the ownership of any trust, estate, corporate and partnership entities who will be in the role of borrower or guarantor in the financing. A form for this purpose may be provided by the Authority.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.140 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.210 Meetings of the Authority

Regular meetings of the Authority are held in accordance with a schedule adopted by the Authority at its annual meeting in July. The schedule of meetings for the current fiscal year of the Authority is available on request. The schedule of meetings is subject to change. The Authority may schedule special meetings in a manner consistent with the by-laws of the Authority. Notice of the time and place of all regular and special meetings will be published in accordance with the Illinois Open Meetings Act [5 ILCS 120].

History

• Source: Recodified from 14 Ill. Adm. Code 1220.150 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.212 Eligible Projects

a) Projects, other than environmental or public purpose projects, must be located in an area of Critical Labor Surplus.

b) All projects to be financed on a federal tax-exempt basis must meet eligibility requirements imposed under the Tax Code.

c) Borrowers may seek financing for capital projects, which include but are not limited to, the acquisition, construction, refurbishment, creation, development or redevelopment of any facility, equipment, machinery, real property, or personal property for use by an entity whether public or private, for profit or not for profit. Project costs also include the associated expenses of a capital project, such as expenses relating to engineering and legal services, plans, specifications, surveys, estimates of costs, and determining the feasibility or practicability of the project. Projects which are structured to receive the benefits of tax exempt status under Sections 103 and 141-147 of the Tax Code shall adhere to the expenditure regulations regarding the use of the exempt proceeds.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.160 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.215 Scheduling of Project Consideration

a) The Authority shall consider the adoption of an inducement resolution or a loan commitment resolution for a project at the next regularly scheduled meeting of the Authority following the receipt of a completed application, provided that the application is received not later than four weeks preceding such meeting. If the application is received less than four weeks prior to the meeting date, the Authority may, at its option, consider the resolution at either that meeting or the next regularly scheduled meeting. Borrowers will be notified by letter of the project number assigned to their transaction and of the time and place of the meeting at which their application will be considered. The Authority recommends that borrowers attend such meeting in order to answer any questions posed by the Board.

b) In case of a loan commitment resolution, the Authority resolution shall continue as a valid commitment for a period of time not later than the end of the sixth month following the date of the resolution. The Authority may extend the resolution for an additional six months by motion adopted by the Board if requested by the Authority staff or borrower because of a need for additional time to conclude the project.

c) Any material change in the financing structure or the financial condition of the borrower between the date of adoption of a resolution and closing of the transaction shall require reconsideration by the Board.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.200 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.220 Staff Review

The staff of the Authority will review each complete application and place it on the agenda for consideration by the Board. The staff will make a recommendation for Board action with respect to each project based upon the criteria set forth in Sections 1100.230 and 1100.235. The recommendations of the staff are not binding on the Board.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.210 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.225 Authority Action

a) The Board, using the criteria set forth in Sections 1100.230 and 1100.235 will review each application for issuance of its revenue bonds to finance a project and take any one of the following actions:

1. Adopt an inducement or loan commitment resolution.

2. Decline to adopt an inducement or loan commitment resolution with respect to the project.

3. Table consideration of the project to allow further time for consideration by the Board or for submission of additional information by the borrower.

b) The Authority may reconsider applications which have not received inducement resolutions if requested by the borrower and if a motion to so reconsider is made by a member of the Authority who was either absent or voted "no" at the time the application was originally considered.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.220 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.230 General Criteria for Approval

In determining whether to recommend an application for financing under Section 1100.225, the Authority staff shall take into account the following criteria:

a) The financial responsibility of the borrower and user of the project, including:

1. The readiness of the project to proceed;

2. In the case of a revenue bond of the Authority, the nature of the commitment of the proposed purchaser, the nature of the bond security, and the likelihood that the bond purchaser will be repaid based on an evaluation of the borrower's credit worthiness as evidenced in the application;

3. The likelihood that the project would not proceed without the benefit of Authority financing;

4. Whether the project is one of several projects to be financed through a pooled bond issue; and

5. In the case of a loan or other use of Authority's funds, the ability of the borrower to repay the Authority and the sufficiency of available collateral based on an evaluation of the borrower's credit worthiness as evidenced in the application.

b) The relationship between the amount of funds to be provided by the Authority and each of the following representations made by the borrower in the application:

1. The number and type of jobs produced or retained by the project, including jobs in the construction industry;

2. The contribution the project will make to the economic development of the area in which it is located and the need for such development;

3. The need or demand for the goods and services to be provided by the project;

4. Whether the project will result in the retention of businesses and jobs in the State which would otherwise be lost to the State; and

5. In the case of an environmental project, the environmental benefits of the project.

c) Such other evidence which the borrower makes available to demonstrate that the project advances the objectives of the Act or the Environmental Act, as the case may be.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.230 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.235 Additional Criteria for Commercial Projects

In addition to the criteria established in Section 1100.230, in the case of commercial projects the Authority shall consider whether and to what extent any of the following conditions exists:

a) The project will be occupied in whole or in substantial part by the owner of the project who is expanding his or her business and increasing employment, or whether all or a substantial part of the project has been leased to a tenant or tenants who are expanding their businesses and increasing employment.

b) The project has special features which are designed to attract start-up companies, and the owner can demonstrate the likelihood of success for the project; for example, incubator facilities and projects which provide shared or low-cost services to small businesses.

c) The project demonstrates a likelihood of occupancy and is located in:

1. an enterprises zone;

2. a Tax Increment Financing District;

3. an officially designated slum or blighted area under State law; or

4. any other district specifically designated for economic development by the municipality in which the project is located.

d) The owner can demonstrate a reasonable expectation of increased employment from the project based upon his or her past experience in developing and leasing similar projects or upon the market for similar projects in the area.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.240 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.240 Submission of Documents

In order for a bond financing to be considered for final resolution at the monthly meeting of the Authority, a bond purchase commitment and copies of all major financing documents, including any official statement or offering memorandum in substantially final form must be submitted to the Authority not less than 12 calendar days in advance of the applicable meeting date. Documents will be regarded as in substantially final form when submitted with a bond purchase commitment and a letter from bond counsel which states that fact. In addition, any public hearings required under the Tax Code must be held prior to the adoption of a final resolution. Bond counsel should notify the Authority at least 7 calendar days prior to the date of the meeting if the amount of the bonds to be issued has changed from the amount set forth in the inducement resolution. During December, and within the calendar month preceding the effective date of any tax legislation passed by either house of the United States Congress, the Authority may shorten the foregoing deadlines for projects pending at such time.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.250 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.245 Public Hearing Procedures and Responsibilities

In the case of a project which is to be financed as a private activity bond, as that term is used in the Tax Code, bond counsel and borrowers are responsible for ensuring compliance with the public notice and hearing requirements of the Tax Code. The Authority has established the following procedures in this Subpart to assist in meeting these requirements.

a) Public hearings will be held on Monday immediately preceding each regular meeting of the Authority. If that Monday is a public holiday, however, the public hearing will be held on the next day. Bond counsel for the project must request the Authority to hold a public hearing for a project prior to the meeting of the Authority at which the final resolution for such project will be adopted. Public hearings will be held by a designated officer or employee of the Authority commencing on the hearing date at the offices of the Illinois Finance Authority, or such other location designated by the Authority from time to time. Bond counsel should select a proposed date for the public hearing and notify the Authority and Authority counsel of it in writing at least three weeks prior to the date selected. Bond counsel should include with this notification a copy of the proposed notice of public hearing.

b) During the two months preceding the effective date of any tax legislation passed by either house of the United States Congress, the Authority may revise its schedule of public hearings to increase the number of public hearings to be held. Bond counsel should consult with Authority staff to assure that the needs of the project are able to be accommodated.

c) The borrower and its bond counsel are responsible for publication of public notice of any hearing required under Section 147 of the Tax Code not less than two weeks prior to the date selected for such hearing. Public notice must be published in the State Journal-Register in Springfield, Illinois and in a newspaper of general circulation available to residents of the locality of the facility to be financed.

d) Bond counsel should arrange for affidavits of publication evidencing the required publication of public notice of any hearing required under Section 147 of the Tax Code to be sent to and received by the Authority at least two business days before the public hearing.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.300 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.250 Final Public Approval

The Governor of the State serves as the applicable elected representative for purposes of the public approval requirement of the Tax Code. The Authority will not submit requests for approval to the Governor until the public hearing has been held and the Authority has adopted a final resolution authorizing the issuance and sale of the bonds.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.310 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.255 Requests for Allocation

a) The Authority will not allocate volume cap or request an allocation of volume cap from the Governor's office until all basic documents for the transaction have been submitted to the Authority in substantially final form, a public hearing with request to the financing has been duly held and the Authority has adopted a final resolution authorizing the issuance and confirming the sale of bonds. However, during the two months preceding the effective date of any tax legislation passed by either house of the United States Congress, the Authority may waive the requirements that a final resolution be passed prior to submission by the Authority of a request for allocation for all projects pending at the time of such waiver.

b) During the calendar year, the Authority may receive cessions of bonding volume. Such ceded bonding volume may be restricted or unrestricted, depending on the resolution of the municipality pursuant to which it is ceded. If restricted, the Authority will use such amount of ceded bonding volume in conformity with such restrictions.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.320 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.260 Amendatory Resolutions

If material changes are made to a project or the terms of the financing, an amendatory resolution shall be required. Borrowers are required to notify the Authority in writing and consult bond counsel and counsel to the Authority if material changes are to be made to the project or the terms of the financing which would require the adoption of such an amendatory resolution. Such an amendatory resolution will be considered at the next regular meeting of the Authority occurring not sooner than two weeks following receipt by the Authority of such written notice.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.330 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.265 Bond Counsel on Pooled Bond Issues

The Authority will select bond counsel to be used on all pooled financings. Such bond counsel may be paid from bond proceeds. Each borrower in a pooled financing must be represented by its own general counsel.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.400 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.270 Program Requirements; Standardized Documents

The Authority will prescribe program requirements for each pooled financing on an issue by issue basis. Such program requirements will relate primarily to the individual deal structure and may relate to such matters as minimum and maximum loan sizes, and requirements to maintain the tax-exempt status of a pooled financing. In addition, on all pooled financings borrowers and participating banks may be required to use standardized forms of certain documents prepared by bond counsel or counsel to the Authority.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.410 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.275 Transcripts

a) The Authority must receive after the bond closing one unbound set or originally executed counterparts of all closing documents and one bound volume containing copies of all closing documents, the cost of which shall be borne by the borrower. Both the unbound transcript and the bound volume should include an index of closing documents or closing memorandum incorporating such index. The Authority should receive the unbound transcript within one month of the closing and the bound volume within three months after the closing.

b) Each document in the unbound transcript should be filed in a separate pocket, envelope or folder.

c) The bound volume must be permanently bound with library binding, with a dark blue or black cover in buckram (or its equivalent) and gold lettering.

d) The spine of the bound volume should contain the following information:

1. The name of the project;

2. The amount of the bond issue;

3. The type of bond issue (i.e., IRB or Pollution Control);

4. The name "Illinois Finance Authority";

5. The final maturity date of the bonds; and

6. The series designation, if any (i.e., Series 198X).

e) The cover of the bound volume should contain the following information:

1. The name of the project;

2. The amount of the bond issue;

3. The type of bond issue; and

4. The name "Illinois Finance Authority."

f) If the documents are bound in more than one volume, each volume should specify which documents are contained in that volume (i.e., Vol. I − closing documents 1-7; Vol. II − closing documents 8-45).

g) If the unbound transcript or bound volume does not meet these specifications, it will be returned and another bound volume or unbound transcript meeting these specifications will be required.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.500 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.280 Authority Fees

a) Authority is statutorily required to support itself through charging fees to borrowers, interest on its loans and making investments.

b) The Authority shall establish appropriate fees from time to time, and shall publish such fees applicable to each of its program. The Authority will provide borrowers with detailed information concerning the fees applicable to the particular project.

c) Borrowers are advised that the Authority fees do not include any other party involved in the financing unless specifically stated. Borrowers should consult their counsel or financial advisor as to the fees of other parties.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.510 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.285 Noncompliance and Waiver

Noncompliance by the Authority with any provisions of this Subpart will not invalidate any action taken by the Authority pursuant to a duly adopted resolution of the Authority within the powers delegated to the Authority under the Act. The Authority may, by a vote of ten (10) members, waive any technical, non-substantive provision of this Subpart. In any resolution of the Authority waiving a provision of this Subpart, the Authority will make findings of fact inducing it to waive the provision in question.

History

• Source: Recodified from 14 Ill. Adm. Code 1220.520 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.300 Purposes and Objectives; Compliance with Federal Law; Forms for Program

a) This Subpart is established to accomplish the general purposes of Article 820 of the Act and in particular the purchasing of governmental units bonds in accordance with the program to achieve the following objectives:

1. To foster and promote by all reasonable means the provision of adequate capital markets and facilities for borrowing money by rural units of local government, and for the financing of their respective public improvements and other governmental purposes within the State from proceeds of bonds or notes issued by those governmental units;

2. To assist rural governmental units in fulfilling their needs for those purposes by use of creation of indebtedness;

3. To the extent possible, to reduce the costs of indebtedness to taxpayers and residents of this State and to encourage continued investor interest in the purchase of bonds or notes of rural governmental units as sound and preferred securities for investment; and

4. To encourage rural governmental units to continue their independent undertakings of public improvements and other governmental purposes and the financing thereof, and to assist them in those activities by making funds available at reduced interest costs for orderly financing of those purposes, especially during periods of restricted credit or money supply, and particularly for those rural governmental units not otherwise able to borrow for those purposes.

b) This Subpart shall be construed in conformity and compliance with applicable federal law, including without limits Section 103A of the Internal Revenue Code (26 USC 103).

c) The Executive Director shall prepare, use, supplement and amend such forms, agreements and other documents as may be necessary to implement the program.

History

• Source: Recodified from 47 Ill. Adm. Code 400.103, 400.104 and 400.105 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.305 Applicant Eligibility

Any "governmental unit," meaning any rural county; or any municipality or township having a population less than 25,000, school district, community college district, special district, or other unit designated as a rural unit of local government by the Governor's Executive Order No. 1986-6, effective October 17, 1986, creating the Rural Fair Share Initiative located in a rural county who wishes to sell bonds, may apply to participate in selling bonds to the Illinois Finance Authority.

History

• Source: Recodified from 47 Ill. Adm. Code 410.102 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.310 Pre-Filing Stage

Prior to the preparation or submission of any application for assistance, each governmental unit is requested to contact the Authority's Executive Director. The Executive Director will arrange for a meeting or meetings, with the unit and the Authority's Executive Director and financial advisor. The purpose of the meeting or meetings is to provide information to the unit of local government in order to assist in the application process under the Act and this Part.

History

• Source: Recodified from 47 Ill. Adm. Code 410.103 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.315 Filing of Application

a) When a loan application is submitted to the Authority, the Executive Director shall review the loan application to determine whether it is complete (all information is fully filled out), and whether the criteria established by the Act and this Part have been satisfied. If the Executive Director determines that the loan application is incomplete, he shall, within five days of such determination, inform the applicant and shall detail the information or material which is necessary to complete the application. For the purpose of this Part, no application shall be deemed complete until the applicant has provided additional information or material as requested by the Executive Director.

b) Once the application is completed, the application shall be filed with the Authority. (The applicant unit is to submit its application fee with the application).

c) The Authority's Executive Director shall submit this filed application to the Authority for its consideration at its next meeting once the financial advisor's initial financial review is completed.

d) At the next meeting, the Authority will determine if it shall accept the submitted application. In reaching this conclusion, the Authority will consider:

1. The application itself;

2. Comments and presentations by representatives of the applicant unit; and

3. The financial advisor's initial review.

e) If the Authority accepts the application, it shall authorize the following tasks:

1. Bond counsel shall be directed to undertake a preliminary investigation of legal feasibility of the project; and

2. The Board of the Illinois Finance Authority, in order to accomplish the purposes of the Act, in concert with the financial advisor, establishes the credit policy of the Authority. Applications of local governmental units are analyzed to determine their ability to repay such loans without diminishing or diluting the credit quality and obligations of the State of Illinois. The following criteria are taken into account in the financial review process:

A) The economic base and financial status of the local government.

B) Population trends.

C) Employer, income level and unemployment statistics.

D) Debt of the governmental unit and maturity structure.

E) Security of contemplated debt.

F) Trends in debt retirement, budgetary sufficiency and historical debt coverage.

G) Revenue and tax collection data and trends.

H) Major employers.

I) Tax rate limitations.

J) Debt per acre.

K) Assessed valuation trend.

L) Pension liabilities.

M) Major users/revenue contribution.

N) General Financial condition.

f) Upon acceptance of the application by the Authority, the application fee shall be deemed non-refundable and shall be deposited by the Authority.

History

• Source: Recodified from 47 Ill. Adm. Code 410.104 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.320 Approval of Application

a) The Authority shall decide whether or not to approve an accepted application, based upon the criteria stated in Section 1100.310(d) and (e), once the financial advisor and bond counsel have completed their reviews of the project.

b) If the accepted application is approved, the financial advisor, Executive Director and bond counsel will be authorized and directed to prepare all necessary financial and legal documentation incident to a bond or note offering, e.g., a certified financial statement of the unit of local government.

c) "Approval" of an application by the Authority is not, nor should be, construed as any form of a commitment or guarantee, on the part of the Authority to the applicant unit that the proposed financing will be successfully completed and sold. Rather, approval of an application indicates the Authority's desire to work with the applicant in the attempt to bring its issue to sale.

d) In the event that the applicant's issue is sold, the applicant shall reimburse the financial advisor and bond counsel for their services rendered. Such costs may be funded out of bond proceeds. Further, in the event that the applicant's issue is sold, the applicant shall be obligated to pay the Authority the Administrative Charge and Annual Fee.

History

• Source: Recodified from 47 Ill. Adm. Code 410.105 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.325 Denial of Application

If the application is denied and service is made upon the applicant about the grounds for the denial, then within 21 days of denial, the applicant may file with the Authority a Request for Reconsideration, stating reasons why the Authority should withdraw its denial of the application and approve the loan. The Request for Reconsideration may be accompanied by supporting documents and information not previously considered by the Authority. The Authority shall review the Request for Reconsideration. A denial of a Request for Reconsideration shall be final. While a Request for Reconsideration is pending, the application that is the subject of the Request for Reconsideration shall be deemed complete for the purposes of this Subpart. An application which has been denied by the Authority might be reconsidered under the following circumstances:

a) The governmental unit exhibits an improving financial condition as evidenced by empirical data and ratio analysis.

b) The creditworthiness of the project is enhanced by collateral and/or more attractive terms and conditions proffered by the applicant.

c) Additional information is supplied which will significantly and positively impact the economic viability of the local government unit (i.e., new plant(s) opening(s), expansion of existent businesses, significant commercial and residential regentrification, etc.)."

History

• Source: Recodified from 47 Ill. Adm. Code 410.106 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.330 Priority of Application

Applications shall be processed by the Authority on a first-come, first-served basis, based upon the receipt of all completed documents by the Authority. The Authority may deviate from the first-come, first-served rule.

History

• Source: Recodified from 47 Ill. Adm. Code 410.107 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.335 Source of Payment and Nature of Obligation

The principal and interest on the bond is a limited obligation payable solely out of the revenues derived from the governmental unit and the underlying collateral or other security furnished by or on behalf of the governmental unit.

History

• Source: Recodified from 47 Ill. Adm. Code 410.108 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.340 Fees

a) The Authority shall, by resolution, establish the schedule of fees and charges of the Authority.

b) Fees of the Authority are designed to cover the operating expenses of the Authority.

c) The total amount to be charged for Costs of Issuance and Annual Fee for a bond issue shall not exceed the limits established by the Authority. Cost of Issuance − the total amount to be charged a local government for Cost of Issuance for a bond issue shall not exceed 3% of the local government debt.

History

• Source: Amended at 16 Ill. Reg. 19206, effective November 25, 1992; recodified from 47 Ill. Adm. Code 410.109 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.345 Purchase of Governmental Unit Bonds

If its application is accepted, a governmental unit may contract to pay interest on, or an interest cost per year for, money borrowed from the Authority and evidenced by its securities purchased by the Authority. Every governmental unit may contract with the Authority concerning the terms and conditions of the loan or purchase, without limitation as to denomination. As provided in the ordinance of the governing body of the governmental unit under which the bonds and notes are authorized to be issued, those bonds and notes may:

a) Be fully registered, registerable as to principal only, or in bearer form;

b) Bear interest in compliance with Section 820-40 of the Act [20 ILCS 3501/820-40];

c) Be evidenced in any manner by the governing instrument determining the debt;

d) Contain other provisions not inconsistent with this Section; and

e) Be sold to the Authority without advertisement at any price or prices.

History

• Source: Recodified from 47 Ill. Adm. Code 420.101 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.400 Purpose; Definitions; Incorporation by Reference

a) The Illinois Development Action Grant Program provides financial assistance to municipalities experiencing severe economic distress in order to stimulate economic development activities needed to aid in economic recovery. Under this program, grants are made to municipalities to support housing, commercial, and industrial projects which have as their primary objective the development of viable urban communities. Private investment in proposed projects is required. The creation or retention of employment and other economic opportunities for low and moderate income persons and the revitalization of distressed areas are principal goals of the program.

b) Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Application" means the application for the use of program funds for a particular project.

"Corporate Authorities" means the city council or similar body when the reference is to cities, the board of trustees or similar body when the reference is to villages or incorporated towns, and the council when the reference is to municipalities under the commission form of municipal government.

"Grant" means a grant awarded to a municipality under this program.

"Leveraging Ratio" means the number resulting from the division of the total amount of private sector commitments or other non-program commitments generated by the project by the amount of the grant requested for the project. Funds to be counted toward the private sector commitment include all types of capital investment to be expended as a direct result of the grant, including private investment (equity participation, internally generated funds, conventional financing, Small Business Administration guaranteed loans, tax exempt revenue bonds, etc.) and loans or grants made by units or agencies of municipal, state, or federal government, other than the Authority. Examples of commitments include written commitments of a financial institution or other entity to make a loan or grant for a particular project, or executed loan contracts or grant agreements.

"Low Income" means income of persons whose annual income does not exceed 50% of the median income for the metropolitan statistical area in which the project is located, with adjustments for larger and smaller families, as specified in Table A of this Part.

"Metropolitan Statistical Area" means a metropolitan statistical area as determined by the United States Office of Management and Budget as of June 30, 1985, and published in the 1986 Statistical Abstract of the United States, United States Department of Commerce, Bureau of the Census.

"Moderate Income" means income of persons whose annual income does not exceed 80% of the median income for the metropolitan statistical area in which the project is located, with adjustments for larger and smaller families, as specified in Table A of this Part.

"Municipality" means a city, village or incorporated town in the State of Illinois.

"Primary Developer" means the non-governmental project participant who has primary responsibility for the planning, organization, development and completion of the project.

"Program" means the Illinois Development Action Grant Program.

"Project" means the group of integrally related activities which are to be carried out by all public and private participating parties, as listed in the agreement relating to the project.

c) Incorporation by Reference

All materials incorporation by reference in this Subpart are incorporated as of the date specified and include no later amendments or editions.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.100, 110 and 120 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.405 Eligible Applicants; Eligible Projects

a) Only municipalities are eligible to apply for and receive grants from the Authority under the program. Subject to appropriation of funds for such purpose by the General Assembly, all municipalities in Illinois are eligible for grants under the program. The project site must be within the corporate limits of the municipality applying for the grant.

b) All projects, the primary objectives of which are the development of viable urban communities and expansion of economic opportunity, principally for persons of low and moderate incomes, are eligible for funding. The Authority will consider grants to municipalities for broad range of housing, industrial, and commercial projects. The Authority will select from among eligible projects on the basis of the criteria for selection set forth in Section 1100.435.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.200 and 210 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.410 Municipal Approval

No application for program funds shall be reviewed by the member of the Authority until the corporate authorities of the municipality have by resolution approved the project. No such resolution shall be adopted until a public hearing has been held on the proposed project at a location convenient to the project site. Notice of the public hearing shall be published once at least 14 calendar days prior to the date of the hearing in at least one newspaper of general circulation in the municipality.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.220 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.415 Application Requirements

Each application must be submitted on forms provided by the Authority. All applications submitted to the Authority must be accompanied by a cover letter signed by the chief executive officer of the municipality indicating the names of the projects for which applications are being submitted. The completed application must designate the primary developer and include a copy of the public notice together with an affidavit of publication of such notice, a certified copy of the municipality's resolution approving the project, and evidence with respect to the program objectives described in Sections 1100.430 through 1100.450. Applications must also include disclosure of the names and functions of participants in the project in addition to the primary developer, including entities providing financing, contractors, architects, engineers, attorneys, accountants and other professional advisors, to the extent that the various participants are known at the time of application. Full disclosure of the various participants is required prior to the disbursement of any grant funds. Applications shall also include where appropriate:

a) A description of the project to be undertaken, and of the controlling interests in the property (e.g. fee title, lease, option to purchase, beneficial interest). The applicant must substantiate the market and economic feasibility of the proposed project, must analyze the economic benefits which the activities are expected to produce, and must show how the proposed activities will take advantage of opportunities to attract private investment. Economic feasibility may be substantiated by a variety of means calculated to demonstrate that the revenues expected to be generated by a project will be sufficient to pay the cost of capital and operating expenses of the project. Market feasibility may be substantiated by a variety of means calculated to demonstrate that the projected revenues and expenses of the project are realistic in light of market factors. The applicant must identify the public and private participating parties in the proposed project, the respective activities to be performed by each and the amount of program funds to be allocated to each activity. Information provided shall include projected costs and methods of financing.

b) A clear description of the use of program funds and a justification of the amount, which amount must be the least amount necessary to make the project feasible. Also, the application must demonstrate that without program funds, the project would not be undertaken. The applicant may demonstrate the need for the grant by a variety of means calculated to show that the funding applied for fills a gap in the financing for the project for which other funds are not available. Examples of the means to demonstrate such matters include a table of sources and uses of funds for the particular project, sets of pro forma financial statements for the project prepared both with and without the use of grant funds or a certificate of the owner or the developer that the project would not go forward without program funds.

c) Documentation of private and public commitments which are necessary for completing the project. This document shall be in the form of agreement to complete or to provide financing for the project. Examples of private commitments include an executed contract or a letter of intent furnished by a financial institution. No application will be considered unless there is evidence of at least a private commitment and, if necessary, a public commitment. Public commitments relate to activities necessary to the completion of the project which must be performed by a governmental body or agency. Examples of such public commitments include furnishing of infrastructure items to a particular project site or rezoning.

d) A statement analyzing the impact of the project on the surrounding area, including the impact on low and moderate income persons.

e) A summary of all proposed expenditures to be undertaken to complete the project and a breakdown of the individual public and private expenditures.

f) A detailed schedule for accomplishing each part of the proposed project.

g) A survey of the project site and maps, aerial photos, site plans or other graphic descriptions of the project showing the availability of transportation and utility service, and surrounding land uses.

h) A summary of the new tax revenues to be generated by the project.

i) Data specifying the number and types of jobs to be created by the project, the skill levels or experience required to fill such jobs and estimates of salaries to be paid for such jobs.

History

• Source: Amended at 11 Ill. Reg. 10895, effective May 27, 1987; recodified from 14 Ill. Adm. Code 1200.230 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.420 Technical Assistance

If requested in the application, the Authority will arrange for technical assistance to applicants during the project review process. For example, the Authority might assist applicants in accurately estimating the number of jobs a particular project will create, or determining whether a particular item is an eligible cost under the program. In all cases, however, the responsibility for completing an application rests with the applicant.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.240 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.425 On-Site Inspection

During the period in which the application is being reviewed, project participants shall provide full and free access to the project site to the officers, agents and employees of the Authority.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.250 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.430 Selection Criteria

a) The Authority will review those projects for which completed applications have been submitted within the deadlines established under this Subpart. By vote of its members, subject to the availability of funds, the Authority will select for grants those projects which advance the objectives of the Act. In making its selection under this Subpart, the Authority shall take into account the following selection criteria, giving greatest weight to subsections (a)(1), (a)(2), (a)(3) and (a)(5):

1. The level of economic distress within the municipality or the project area. The level of distress of an area may be evidenced by a number of factors, including:

A) Age and condition of buildings, structures, and public infrastructure in the area;

B) Population growth or decline;

C) Level of unemployment in the area; and

D) Percentage of community residents with low or moderate income;

2. Extent of economic or social benefits of the project on adjacent areas and persons residing therein, including benefits to persons of low and moderate income;

3. Number of construction jobs and permanent full-time job equivalents created; jobs will be weighted more heavily if those jobs are to be filled by persons eligible for assistance under the federal Workforce Investment Act of 1998 (29 USC 2801);

4. The number and type of housing units provided for persons of low and moderate income;

5. The relative size of the leveraging ratio, including the sources of non-program funds used to leverage the project;

6. The projected impact of the project on the tax revenues (income, property, sales, utility) of the State, the applicant municipality, and other units of government;

7. The nature of the commitment from the participants;

8. The readiness of the project to proceed;

9. Evidence of the project's economic and financial feasibility;

10. The physical design of the project (e.g. functional suitability, aesthetic design, energy efficiency); and,

11. Evidence of the municipality's and private participants' capacity to undertake the project (e.g. credit history, past performance in similar projects).

b) Upon the request of the municipality, the Authority may determine that certain criteria are not relevant to the nature of the project proposed for funding.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.300 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.435 Deadlines

a) At the beginning of each fiscal year, the Authority will adopt a schedule or schedules by which applications must be received and grant awards will be made. In adopting such schedule or schedules the Authority will take into account the amount of funds appropriated and available for expenditure for the program, the number and size of municipalities eligible to receive grants under law and the need for efficient decision making.

b) The application must state the funding round for which it is submitted. Grants, if any, will be made before the next deadline for applications.

c) For fiscal year 1986 only, round 1 applications shall be received on or before February 1, 1986 to be eligible for an award before April 1, 1986. Round 2 applications shall be received on or before April 1, 1986 to be eligible for an award before July 1, 1986.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.310 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.440 Funding Restrictions and Eligible Costs

a) No more than $1,000,000 in program funds may be awarded in any fiscal year to a single project.

b) No more than $2,000,000 in aggregated program funds may be awarded in any fiscal year to projects developed or initiated by any single private sector developer.

c) No program grant may be less than $30,000 in amount.

d) Program funds shall be used only to pay for eligible project costs. Eligible project costs will be defined in the grant agreement.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.320 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.445 Grant Agreement

Upon approval of the application the Authority and the municipality shall enter into a grant agreement containing terms and provisions relating to the project. The Authority shall provide the form of the grant agreement.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.330 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.450 Disbursement of Grants

Funds shall be disbursed by the Authority after a grant has been awarded and a grant agreement has been executed, pursuant to a disbursement schedule agreed to by the parties. In determining a grant disbursement schedule under this section, the Authority will be guided by the availability of grant funds for disbursement, the timing of receipt of private sources of funding for a project and the expenditure schedule proposed by the primary developer for the project.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.340 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.455 Recordkeeping and Access to Information

Any municipality which receives program funds and its project participants shall:

a) maintain separate, accurate accounts, records, and books with respect to the project in accordance with generally accepted principles of accounting consistently applied, such as the Codification of Governmental Accounting and Financial Reporting Standards (Governmental Accounting Standards Board, November 1, 1984);

b) grant to the employees of the State or representatives of the Authority at all times during normal business hours and as often as the Authority may require, full and free access to the project and to its accounts, records, and books;

c) permit the Authority or any accountants or auditors approved by the Authority to make periodic audits, excerpts or transcripts of the project accounts, statements and documents; and

d) at the request of the Authority, furnish copies of documents or instruments related to the project in the possession of the municipality or the primary developer as the Authority may from time to time require.

History

• Source: Amended at 11 Ill. Reg. 10895, effective May 27, 1987; recodified from 14 Ill. Adm. Code 1200.400 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.460 Progress Reports

Recipient municipalities shall submit progress reports during the term of the grant agreement to the Authority. Such reports shall include, but need not be limited to a statement indicating expenditures and disbursements of program funds during the previous six month period and cumulatively and a statement on the progress and status of activities performed in relation to the project schedule and program objectives.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.410 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.465 Audit Requirements

Recipient municipalities shall cause to be prepared an audit of the uses of grant funds. The audit shall be conducted in accordance with generally accepted standards of auditing for State and local government programs, such as the Standards for Audit of Government Organizations, Programs, Activities, and Functions (Comptroller General of the United States, 1981 Revision). The audit shall be undertaken and completed within 150 days from the completion of the project, and within 15 days following the date such audit is completed, the municipality shall transmit a copy of the audit to the Authority.

History

• Source: Amended at 11 Ill. Reg. 10895, effective May 27, 1987; recodified from 14 Ill. Adm. Code 1200.420 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.470 Grant Monitoring and Recovery

The Authority retains the right to rescind program grants and require the repayment of grants already disbursed if it finds that the municipality or other project participant is misusing program funds or is not complying with the terms of these regulations, the grant agreement, or applicable law all as provided in the grant agreement. Grant recoveries shall be conducted in accordance with the Illinois Grant Funds Recovery Act.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.430 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.475 Project Completion Notice

Each municipality shall notify the Authority within sixty (60) days after completion of the project that all portions of the project have been fully completed in accordance with the plans and specifications for the project. Within 180 days each municipality shall also be required to certify that all portions of the project have been fully paid for and that no claim or claims exist against the project out of which a lien based on the furnishing of labor or material exists or might ripen.

History

• Source: Recodified from 14 Ill. Adm. Code 1200.440 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.500 Purpose; Definitions; Incorporation by Reference

a) The purpose of the Illinois Housing Partnership Program is to assist the financing of projects for the rehabilitation of affordable multi-family housing for low and moderate income residents. Under this program, the Illinois Finance Authority may provide zero-interest loans to municipalities to facilitate housing rehabilitation.

b) Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Application" means the application for the use of program funds for a particular project.

"Corporate authorities" means the city council or similar body when the reference is to cities, the board of trustees or similar body when the reference is to villages or incorporated towns, and the council when the reference is to municipalities under the commission form of municipal government.

"Loan" means a loan from the Authority under this program.

"Low Income" means income of persons whose annual income does not exceed 50% of the median income for the metropolitan statistical area in which the project is located, with adjustments for larger and smaller families, as specified in Table A of this Part.

"Moderate Income" means income of persons whose annual income does not exceed 80% of the median income for the metropolitan statistical area in which the project is located, with adjustments for larger and smaller families, as specified in Table A of this Part.

"Multi-family Housing" means buildings with at least four (4) separate residential units, with each unit containing separate and complete facilities for living, sleeping, eating, cooking and sanitation, and containing at least three (3) rooms. Studio units are not considered units under this definition.

"Municipality" means a city, village or incorporated town in the State of Illinois.

"Primary Developer" means the non-governmental project participant who has primary responsibility for the planning, organization, development and completion of the project.

"Program" means the Illinois Housing Partnership Program.

"Project" means the group of integrally related activities which are to be carried out by all public and private participating parties, as listed in the agreement relating to the project.

c) Incorporation by Reference

All materials incorporation by reference in this Subpart are incorporated as of the date specified and include no later amendments or editions.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.100, 110 and 120 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.505 Eligible Applicants; Eligible Projects

a) Eligible Applicants

Only municipalities are eligible to apply for and receive loans from the Authority under the program. Subject to appropriation of funds for such purpose by the General Assembly, all municipalities in Illinois are eligible for loans under the program. The project site must be within the corporate limits of the municipality applying for the loan.

b) Eligible Projects

1. All projects, the objectives of which are the rehabilitation of affordable, multi-family housing, principally for persons of low and moderate incomes, are eligible for funding. The Authority will select from among eligible projects on the basis of the criteria for selection set forth in Section 1100.525.

2. In order to be eligible for selection on the basis of the criteria set forth in Section 1100.525, a project must provide multi-family housing, at least 51% of the units being available at affordable rents for persons of low and moderate income, and involve rehabilitation of an existing structure or structures. "Affordable rents" means a rental charge which is not greater than one-third (⅓) of the gross income of the low or moderate income persons as defined in Section 1100.500.

3. Upon the request of the applicant, the Authority will consider for selection under Section 1100.525, a project in which less than 51% of the units are intended to be available at affordable rents to persons of low and moderate income, provided that the project is located in a census tract in which the median income is no greater than the 80% of the median income for the metropolitan statistical area.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.200 and 210 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.510 Municipal Approval

No application for program funds shall be reviewed by the members of the Authority until the corporate authorities of the municipality have by resolution approved the project. No such resolution shall be adopted until a public hearing on the proposed project has been held at a location convenient to the project site. Notice of the public hearing shall be published once at least 14 calendar days prior to the date of the hearing in at least one newspaper of general circulation in the municipality.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.220 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.515 Application Requirements

Each application must be submitted on forms provided by the Authority. The completed application must designate the primary developer and include a copy of the public notice together with an affidavit of publication of such notice, a certified copy of the municipality's resolution approving the project, and evidence with respect to the program objectives described in Sections 1100.525-550. Applications shall also include where appropriate:

a) A description of the project to be undertaken, and the controlling interests in the property (e.g. fee title, lease, option to purchase, beneficial interest). The applicant must substantiate the market and economic feasibility of the proposed project, and must analyze the economic benefits which the activities are expected to produce. Economic feasibility may be substantiated by a variety of means calculated to demonstrate that expected revenues of the project will be sufficient to pay the costs of capital and operating expenses of the project. Market feasibility may be demonstrated by a variety of means calculated to demonstrate that the projected revenues and expenses of the project are realistic in light of market factors. The applicant must identify the public and private participating parties in the proposed project, the respective activities to be performed by each, and the amount of program funds to be allocated to each activity. Information provided shall include projected costs and methods of financing.

b) A clear description of the use of program funds and a justification of the amount of program funds requested. The amount of program funds must be the least amount necessary to make the project feasible. Also, the application must demonstrate that without program funds, the project would not be undertaken. The applicant may demonstrate the need for the loan by a variety of means calculated to show that the funding applied for fills a gap in the financing for the project for which other funds are not available. Examples of the means to demonstrate such matters include a table of sources and uses of funds for the particular project or a certificate of the owner or developer that the project would not go forward without program funds.

c) Documentation of private and public commitments which are necessary for completing the project. This documentation shall be in the form of agreements by the project participants to complete or to provide financing for the project. Public commitments relate to activities necessary to the completion of the project which must be performed by a governmental body or agency. Examples of such public commitments include the furnishing of infrastructure items to a particular project site or rezoning. No application will be considered unless there is evidence of at least a private commitment and, if necessary, a firm public commitment.

d) A summary of all proposed expenditures to be undertaken to complete the project and a breakdown of the individual public and private expenditures.

e) A detailed schedule for accomplishing each part of the proposed project.

f) A survey of the project site, site plans and maps or other graphic descriptions showing the project and surrounding land uses.

g) A summary of the new tax revenues to be generated by the project.

h) The number and type of housing units to be provided for low and moderate income persons and families.

i) The estimated rent schedule for all units in the project.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.230 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.520 On-Site Inspection

During the period in which the application is being reviewed, project participants shall provide full and free access to the project site to the officers, agents and employees of the Authority.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.240 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.525 Selection Criteria

The Authority will review those projects for which completed applications have been submitted within the deadlines established under this Subpart. By vote of its members, subject to the availability of funds, the Authority will select for loans those projects which advance the objectives of the Act. In making its selection under this Subpart, the Authority shall take into account the following selection criteria, giving greatest weight to subsections (a)(1), (a)(2) and (a)(3):

a) The level of economic distress within the municipality or the project area. The level of distress of an area may be evidenced by a number of factors, including:

1. Age and condition of buildings in the area;

2. Population growth or decline;

3. Level of unemployment in the area; and

4. Percentage of community residents with low or moderate income;

b) Extent of economic or social benefits of the project on persons residing in the area, including benefits to persons of low and moderate income. Examples of economic or social benefits of a project may include the attraction of new residents to an area that has suffered a population decline or the retention of long term residents in the project area;

c) Number and type of housing units to be provided to low and moderate income persons and families;

d) The projected impact of the project on the tax revenues (income, property, sales, utility) of the State, the applicant municipality, and other units of government;

e) The nature of the commitment from the participants;

f) The readiness of the project to proceed;

g) Evidence of the project's economic and financial feasibility;

h) The physical design of the project (e.g. functional suitability, aesthetic design, energy efficiency); and

i) Evidence of the municipality's and private participants' capacity to undertake the project (e.g., credit history, past performance in similar projects).

History

• Source: Recodified from 14 Ill. Adm. Code 1210.300 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.530 Deadlines

a) At the beginning of each fiscal year, the Authority will adopt a schedule or schedules by which applications must be received and awards will be made. In adopting such schedule or schedules the Authority will take into account the amount of funds appropriated and available for expenditure for the program, the number and size of municipalities eligible to receive loans under law and the need for efficient decisionmaking.

b) The application must state the funding round for which it is submitted. Loans, if any, will be made before the next deadline for applications.

c) For fiscal year 1986 only, round 1 applications shall be received on or before February 1, 1986 to be eligible for an award before April 1, 1986. Round 2 applications shall be received on or before April 1, 1986 to be eligible for an award before July 1, 1986.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.310 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.535 Funding Restrictions and Eligible Costs

a) No more than 3 dollars of program funds may be provided for every 7 dollars obtained by the municipality from private sources.

b) No more than $1,000,000 in program funds may be awarded in any fiscal year to a single project.

c) No more than $2,000,000 in aggregate program funds may be awarded in any fiscal year to projects developed or initiated by any single private sector developer.

d) No program loan may be less than $30,000 in amount.

e) Program funds shall be used only for rehabilitation of existing housing. Program funds shall be used only to pay for eligible project costs. Eligible project costs will be defined in the loan agreement.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.320 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.540 Loan Agreement

Upon approval of the application, the Authority and the municipality shall enter into a loan agreement containing terms and provisions relating to the loan. The Authority shall provide the form of the loan agreement.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.330 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.545 Disbursement and Repayment of Loans

Funds shall be disbursed after commencement of the project pursuant to a disbursement schedule contained in the loan agreement. Repayment of the loan principal shall be made according to the loan agreement. The interest rate on all loans shall be zero (0) percent.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.340 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.550 Loan Terms

The loan may mature at such time or times, may be in such form, may be payable under such terms, may be secured by such security, and may contain such terms and covenants, all as may be provided by the Authority in the loan agreement, provided the principal of a loan made with respect to a project shall be repaid upon sale by the owner to a non-participating party or upon final payment of any funds provided to a project from private sources and secured by a first mortgage. All loans made by the Authority under this program shall be repaid upon the sale or transfer of the property rehabilitated.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.350 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.555 Recordkeeping and Access to Information

Any municipality which receives program funds and its project participants shall:

a) maintain separate, accurate accounts, records, and books relative to the project in such manner and detail as the Authority may prescribe in the loan agreement;

b) grant to the employees of the State or representatives of the Authority at all times during normal business hours and as often as the Authority may require, full and free access to the project and to its accounts, records, and books;

c) permit the Authority or any accountants or auditors approved by the Authority to make periodic audits, excerpts or transcripts of the project accounts, statements and documents; and

d) at the request of the Authority, furnish copies of documents or instruments related to the project in the possession of the municipality or the primary developer as the Authority may from time to time require.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.400 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.560 Progress Reports

Recipient municipalities shall submit semi-annual progress reports to the Authority. Such reports shall include, but need not be limited to a statement indicating expenditures and disbursements of program funds during the previous six month period and cumulatively and a statement on the progress and status of activities performed in relation to the project schedule and program objectives.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.410 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.565 Audit Requirements

Recipient municipalities shall cause to be prepared an audit of the uses of loan funds. The audit shall be conducted in accordance with generally accepted standards of accounting for State and local governments, such as the Codification of Governmental Accounting and Financial Reporting Standards (Governmental Accounting Standards Board, November 1, 1984). The audit shall be undertaken and completed within 150 days from the completion of the project, and within 15 days following the date such audit is completed, the corporate authorities of the municipality shall transmit a copy of the audit to the Authority.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.420 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.570 Loan Monitoring and Recovery

The Authority retains the right to rescind program loans and require the immediate repayment of loans already disbursed if it finds that the municipality or other project participant is misusing program funds or is not complying with the terms of these regulations, the loan agreement, or applicable law, all as provided in the loan agreement.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.430 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.575 Project Completion Notice

Each municipality shall notify the Authority within sixty (60) days after completion of the project that all portions of the project have been fully completed in accordance with the plans and specifications for the project. Within 180 days, each municipality shall also be required to certify that all portions of the project have been fully paid for and that no claim or claims exist against the project out of which a lien based on the furnishing of labor or material exists or might ripen.

History

• Source: Recodified from 14 Ill. Adm. Code 1210.440 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.600 Introduction

a) The Illinois Finance Authority is a State agency which engages in the financing of educational facilities for private colleges, universities, and academic institutions in Illinois, and the financing of cultural facilities for private cultural institutions in Illinois, by issuing tax-exempt revenue bonds. The tax-exempt status of the Authority's bonds results in considerable savings in interest costs to the participating institutions.

b) The Illinois Finance Authority Act [20 ILCS 3501] (the "Act"), under which the Authority operates, was recently amended to make it possible for the Authority to engage in a broader range of financing than was previously the case. The Authority has accordingly prepared these Guidelines for the purpose of advising Illinois colleges, universities, academic institutions and cultural institutions as to what now can be financed under the Act. The Authority encourages interested institutions to apply for financing, but must, of course, reserve the right to accept or reject any application.

History

• Source: Amended at 11 Ill. Reg. 9106, effective April 28, 1987; recodified from 23 Ill. Adm. Code 2310.5 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.610 Who May Apply for Financing

a) The Act provides that any private institution of higher education may apply to the Authority for the financing of an educational facility. A private institution of higher education is defined to mean any not-for-profit educational institution which is not owned by the State or any political subdivision, agency, instrumentality, district, or municipality thereof, which is authorized by law to provide a program of education beyond the high school level, and which:

1. admits as regular students only individuals having a certificate of graduation from a high school, or the recognized equivalent of such a certificate;

2. provides an educational program for which it awards a bachelor's degree, or provides an educational program, admission into which is conditioned upon the prior attainment of a bachelor's degree or its equivalent, for which it awards a post-graduate degree, or provides not less than a two year program in engineering, mathematics, or the physical or biological sciences which is designed to prepare the student to work as a technician and at a semi-professional level in engineering, scientific, or other technological fields which require the understanding and application of basic engineering, scientific, or mathematical principles or knowledge;

3. is an institution that:

A) is accredited by a nationally recognized accrediting agency or association or, if not so accredited, be an institution whose credits are accepted, on transfer, by not less than three institutions which are so accredited, for credit on the same basis as if transferred from an institution so accredited, and holds an unrevoked certificate or approval from the Board of Higher Education under the Private College Act [110 ILCS 1005/121], or

B) is qualified and approved as a "degree granting institution" under the Academic Degree Act [110 ILCS 1010]; and

4. does not discriminate in the admission of students on the basis of race, color or creed.

b) Subject to the foregoing, the fact that a not-for-profit educational institution is affiliated with or controlled by a religious order or denomination – unless it is a divinity school – does not necessarily prevent it from being eligible for Authority financing.

c) In addition to the foregoing, an academic institution is now deemed to be a private institution of higher education within the meaning of the Act and may also apply to the Authority for financing of an educational facility. An academic institution is defined to be any not-for-profit institution which is not owned by the State or any political subdivision, agency, instrumentality, district, or municipality thereof, which institution engages in, or facilitates academic, scientific, educational or professional research or learning in a field or fields of study taught at a private institution of higher education. Academic institutions include without limitation, libraries, archives, academic, scientific, educational or professional societies, institutions, associations or foundations. Such institutions do not include any school or institution primarily engaged in religious or sectarian activities.

d) The Act was recently amended to provide that any cultural institution may apply to the Authority for the financing of a cultural facility. A cultural institution is defined to mean any not-for-profit institution which is not owned by the State or any political subdivision, agency, instrumentality, district or municipality thereof, which institution engages in the cultural, intellectual, scientific, educational or artistic enrichment of the people of the State. Cultural institutions include, without limitation, aquaria, botanical societies, historical societies, libraries, museums, performing arts associations or societies, scientific societies and zoological societies. Cultural institution does not include any institution primarily engaged in religious or sectarian activities.

e) Secular Projects

1. Pursuant to decisions by the Illinois Supreme Court and the United States Supreme Court, the Authority may finance a secular project under the Act for a religiously affiliated or controlled private institution of higher education or cultural institution unless that institution is so pervasively religious that a substantial portion of its functions are subsumed in the religious mission. Determination of whether an institution is so pervasively religious as to be disqualified from Authority financing involves a detailed examination of the character and method of operation of the institution. Factors considered by the Authority in making such a determination with respect to a private institution of higher education include, but are not limited to, the following:

A) Whether the institution imposes religious restrictions on the admission of students;

B) Whether the institution requires attendance of students at religious activities;

C) Whether the institution requires obedience by students to the doctrines and dogmas of a particular faith;

D) Whether the institution requires students to attend instruction in the theology or doctrine of a particular faith;

E) Whether the institution is an integral part of the religious mission of the church sponsoring it;

F) Whether the institution has as a substantial purpose the inculcation of religious values;

G) Whether the institution imposes religious restrictions on faculty appointments; and

H) Whether the institution imposes religious restrictions on what or how the faculty may teach.

2. It is not necessary for an institution to exhibit all, or even a majority, of these characteristics to be considered pervasively religious and, accordingly, to be disqualified from Authority financing. Analogous factors will be considered by the Authority for cultural institutions. Future Illinois or United States Supreme Court cases may require the Authority to modify or refine the above factors or to add additional factors for consideration.

History

• Source: Amended at 11 Ill. Reg. 9106, effective April 28, 1987; recodified from 23 Ill. Adm. Code 2310.10 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.620 Types of Educational and Cultural Facilities That Can Be Financed

a) The Act broadly defines an educational facility as any property within the State, constructed or acquired before or after the effective date of this Act, which is suitable for the instruction, feeding, recreation or housing of students, the conducting of research or other work of a private institution of higher education, the use by a private institution of higher education in connection with any educational, research or related or incidental activities then being or to be conducted by it, or any combination of the foregoing.

b) The Act also provides specific examples of the types of educational facilities that may be financed, which are as follows: an academic facility, administrative facility, agricultural facility, assembly hall, athletic facility, auditorium, boating facility, campus, communication facility, computer facility, continuing education facility, classroom, dining hall, dormitory, exhibition hall, fire fighting facility, fire prevention facility, food service and preparation facility, gymnasium, greenhouse, health care facility, hospital, housing, instructional facility, laboratory, library, maintenance facility, medical facility, museum, offices, parking area, physical education facility, recreational facility, research facility, stadium, storage facility, student union, study facility, theatre or utility.

c) All of these specific examples must, however, fulfill one of the general educational functions quoted above. For example, a hospital which was not primarily a teaching hospital could not be financed under the Act. In addition, it should be noted that divinity school facilities, chapels or other facilities used for sectarian instruction, worship or devotional activities cannot be financed under the Act.

d) The Act broadly defines a cultural facility as any property located within the State constructed or acquired before or after the effective date of this Act which is suitable for the particular purposes of a cultural institution.

e) The Act also provides specific examples of the types of cultural facilities that may be financed, which are as follows:. any such property suitable for use as or in connection with any one or more of the following: an administrative facility, aquarium, assembly hall, auditorium, botanical garden, exhibition hall, gallery, greenhouse, library, museum, scientific laboratory, theater or zoological facility, and shall also include, without limitation, books, works of art or music, animal, plant or aquatic life or other items for display, exhibition or performance and buildings on the National Register of Historic Places which are owned or operated by non-profit entities.

f) A cultural facility does not include any property used or to be used for sectarian instruction or study or as a place for devotional activities or religious worship nor any property which is used or to be used primarily in connection with any part of the program of a school or department of divinity for any religious denomination.

History

• Source: Amended at 11 Ill. Reg. 9106, effective April 28, 1987; recodified from 23 Ill. Adm. Code 2310.20 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.630 Types of Costs That Can Be Financed: Outstanding Debt

Generally speaking, all costs connected with the acquisition or construction of an educational or cultural facility can be financed through an Authority bond issue, including the costs of refunding or refinancing debt previously incurred by a private institution of higher education or a cultural institution to finance an educational or cultural facility and the costs of remodeling or adding to an existing facility. Equipment to be used in an educational or cultural facility may also be financed.

History

• Source: Amended at 11 Ill. Reg. 9106, effective April 28, 1987; recodified from 23 Ill. Adm. Code 2310.30 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.640 Application Guidelines

a) Introduction. Each applicant institution is encouraged to review the following procedures incident to the preparation of any application for assistance.

b) Pre-filing Stage. Prior to the preparation or submission of any application for assistance, each institution is requested to contact the Authority's Executive Director. The Executive Director will arrange for a meeting, or meetings, with the institution and the Authority's Executive Director, financial advisor, and bond counsel. The purpose of these meetings is two-fold:

1. A preliminary evaluation of the proposed project by the institution and the Authority's staff in order to determine, in the first instance, whether or not an application should be submitted to the Authority for its consideration. (In the event that it is the opinion of the Authority's staff that an application should not be prepared and submitted, this recommendation will be rendered to the Authority for its consideration prior to any further work with respect to the proposed project); and

2. Where prior Authority authorization is not deemed necessary, the Authority staff shall at once assist the institution in the development of its application for the Authority's information and review. Additionally, the financial advisor will prepare an initial financial advisory review for the Authority's consideration. (This initial review consists of a description of the proposed project and a description of the economic background of the applicant institution.)

c) Filing and Acceptance of Application

1. Once the application is completed the application will be filed with the Authority. (The applicant institution is to submit its application fee with the application.)

2. The Authority's Executive Director will submit this filed application to the Authority for its consideration at its next meeting once the financial advisor's initial financial review is completed.

3. At the meeting referred to above, the Authority will determine if it will accept the submitted application. In reaching this conclusion, the Authority will consider:

A) the application itself;

B) comments and presentations by representatives of the applicant institution;

C) the financial advisor's initial review; and

D) additional observations by the Authority's Executive Director and bond counsel.

4. If the Authority accepts the application, it will authorize the following tasks:

A) Bond counsel will be directed to undertake a preliminary investigation of legal feasibility of the project. (This investigation will not consist, however, in the preparation or drafting of documents incident to the proposed issue itself; rather, this study will address itself to an appraisal of the appropriations and needs of the issue itself); and

B) Financial advisor will be directed to prepare a detailed financial study of the proposed application. Upon completion of this study, the financial advisor will submit to the Authority its specific recommendation or recommendations.

5. Upon acceptance of the application by the Authority, the application fee shall be deemed non-refundable and shall be deposited by the Authority.

6. Neither the work of the bond counsel or financial advisor, with respect to a given project, is paid by the Authority. In the event that the proposed project does not come to issue, the applicant institution shall pay both the financial advisor and bond counsel their reasonable fees incurred for all work so performed on behalf of the institution subsequent to the Authority's acceptance of the application. It shall be the duty of the institution and the financial advisor and bond counsel, respectively, to determine and agree upon the reasonableness of fees involved.

d) Approval of Application

1. The Authority will decide whether or not to approve an accepted application once the financial advisor and bond counsel have completed their reviews of the project.

2. If the accepted application is approved, the financial advisor, Executive Director, and bond counsel will be authorized and directed to prepare all documents and showings necessary and incident to issuance of bonds for the applicant institution.

3. "Approval" of an application by the Authority is not, nor should be, construed as any form of a commitment or guarantee, on the part of the Authority to the applicant institution that the proposed financing will be successfully completed and sold. Rather, approval of an application indicates the Authority's desire to work with the applicant in the attempt to bring its issue to sale.

4. In the event that the applicant institution's issue is sold, the applicant institution shall reimburse the financial advisor and bond counsel for their services rendered in accordance with compensation schedules approved by the Authority. Such costs may be funded out of bond proceeds. Such schedules are available upon request from the Executive Director. Further, in the event that the applicant institution's issue is sold, the applicant institution shall be obligated to pay the Authority the Administrative Charge and Annual Fee referred to on page 2 of the Application Form.

History

• Source: Recodified from 23 Ill. Adm. Code 2320.5, 2320.10, 2320.20 and 2320.30 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.650 Interest Rate on the Authority's Bonds

There is no legal limit on the interest rate for the Authority's Bonds under this Subpart. As a matter of policy, however, the Authority may decide in certain cases to limit the rate for a particular Bond issue, after consulting with its financial advisor and the institution which is applying for financing.

History

• Source: Amended at 11 Ill. Reg. 9106, effective April 28, 1987; recodified from 23 Ill. Adm. Code 2310.40 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.660 Method of Financing

Three methods of financing are now available:

a) Lease Method. Under this method the Authority acquires title to the educational or cultural facility to be financed, issues bonds to finance its cost and leases the facility to the participating institution under a lease with a term equal to the final maturity of the Authority's bonds and with rental equal to principal and interest on the bonds. At the end of the lease term, the Authority is required to reconvey title to the facility to the participating institution.

b) Ground Lease Method. This method, which the Authority does not encourage, is a variant on the Lease Method. Here the participating institution retains title to the facility and leases it to the Authority for a nominal rental with a Sublease back to the participation institution for a term equal to the maturity of the bonds and at rentals equal to principal and interest. A mortgage of the facility by the Authority is possible under both these Methods (subject, of course, to the rights of the participating institution under the Lease or Sublease) and may be recommended in some instances to reduce interest costs. Both of these Methods also contemplate that the participating institution will guaranty the bonds.

c) Secured Note Pass Through Method. Under this Method the participating institution issues a secured note to the Authority, secured by a first mortgage lien on the facility to be financed or by a first mortgage lien on or security interest in other real or personal property acceptable to the Authority. The determination of what real or personal property is acceptable to the Authority for security purposes in each instance is based on a variety of factors that include, but are not limited to, the following: the credit worthiness of the participating institution; the requirements of the particular market in which the related bonds are proposed to be offered for sale; the preferences of the participating institution, including the availability to it of various types of real and personal property for use as collateral; the requirements or suggestions of any rating agency that is providing a rating of the related bonds; and the legality of the proposed collateral structure, particularly insofar as it relates to the federal tax-exempt status of interest on the related bonds. In reviewing the foregoing factors and determining the acceptability of a proposed security arrangement, the Authority relies to a significant extent upon advice provided by its financial advisor, insofar as financial matters are concerned, and its bond counsel, insofar as legal matters are concerned. The Authority, in turn, issues its own bonds to purchase the participating institution's note and pledges it as security for those bonds. Here, again, title to the facility never leaves the participating institution unless, of course, the participating institution defaults in payment.

History

• Source: Amended at 11 Ill. Reg. 9106, effective April 28, 1987; recodified from 23 Ill. Adm. Code 2310.50 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.670 Length of Bond Issue

The Act limits the life of an Authority bond issue under this Subpart to 40 years. The Authority will, in consultation with its fiscal advisor and the applying institution, determine the length of any given issue.

History

• Source: Amended at 11 Ill. Reg. 9106, effective April 28, 1987; recodified from 23 Ill. Adm. Code 2310.60 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.680 Type of Bond Issue

The Act permits bonds under this Subpart to be sold at a private or public sale and the method to be followed will be determined on a case by case basis.

History

• Source: Amended at 11 Ill. Reg. 9106, effective April 28, 1987; recodified from 23 Ill. Adm. Code 2310.70 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.690 Fees

a) The Authority charges the following fees to participating institutions for the services it provides:

1. Application Fee – for processing an Application for Assistance. – An "Application Fee", based upon the following schedule, is payable upon submission of an application and is not refundable:

A) $250 on issues up to but not including $1,000,000 principal amount;

B) $500 on issues of $1,000,000 up to but not including $5,000,000 principal amount; and

C) $1,000 on issues of $5,000,000 principal amount and over.

AGENCY NOTE: This fee will be credited to the Administrative Charge upon completion of the related bond financing.

2. Administrative Charge – for completing a bond financing. – An "Administrative Charge" equal to ¼ of 1% of the principal amount of bonds issued or $10,000, whichever is less minus the Application Fee paid, will be assessed at the closing of a financing.

AGENCY NOTE: The Administrative Charge includes the Annual Fee for the fiscal year in which the bonds are issued.

3. Annual Fee – for servicing a bond financing during a fiscal year. – An "Annual Fee" will be assessed for each bond issue outstanding on July 1 of each year. For Annual Fees coming due on or after July 1, 1999, the Annual Fee shall be 1/100 of 1% of the original amount of the financing or $7,500, whichever is less. The Annual Fee is payable in advance and is not refundable. (The Annual Fee coming due on July 1, 2003 shall be abated based on the Authority's projection of having sufficient reserves to meet its operating expenses for Fiscal Year 2003-2004.)

b) These fees are designed to cover the operating expenses of the Authority. In addition, the participating institutions will be expected to bear all other costs of the financing, including trustee's fees, printing expenses, the financial advisor's fee, and the fee and disbursements of bond counsel. These fees may be financed with bond proceeds.

History

• Source: Amended at 27 Ill. Reg. 10224, effective June 27, 2003; recodified from 23 Ill. Adm. Code 2310.80 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.700 Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Affiliate" means, with respect to any lender, any person, firm or corporation controlled by, or under common control with, such lender, and any person, firm or corporation controlling such lender. (Section 801-10 of the Act)

"Agribusiness" means any sole proprietorship, limited partnership, co-partnership, joint venture, corporation or cooperative which operates or will operate a facility located within the State of Illinois that is related to the processing of agricultural commodities (including without limitation, the products of aquaculture, hydroponics and silviculture) or the manufacturing, production or construction of agricultural building, structure, equipment, implements, and supplies or any other facilities or processes used in agricultural production. Agribusiness includes but is not limited to the following:

grain handling and processing, including grain storage, drying, treatment, conditioning, milling and packaging;

seed and feed grain development and processing;

fruit and vegetable processing, including preparation, canning and packaging;

processing of livestock and livestock products, dairy products, poultry and poultry products, fish or apiarian products, including slaughter, shearing, collecting, preparation, canning and packaging;

fertilizer and agricultural chemical manufacturing, processing, application and supplying;

farm machinery, equipment and implement manufacturing and supplying;

manufacturing and supplying of agricultural commodity processing machinery and equipment, including machinery and equipment used in slaughter, treatment, handling, collecting, preparation, canning or packaging of agricultural commodities;

farm building and farm structure manufacturing, construction and supplying;

construction, manufacturing, implementation, supplying or servicing of irrigation, drainage and soil and water conservation devices or equipment;

fuel processing and development facilities that produce fuel from agricultural commodities or by-products;

facilities and equipment for processing and packaging agricultural commodities specifically for export;

facilities and equipment for forestry product processing and supplying, including sawmilling operations, wood chip operations, timber harvesting operations, and manufacturing of prefabricated buildings, paper, furniture or other goods from forestry products;

facilities and equipment for research and development of products, processes and equipment for the production, processing, preparation or packaging of agricultural commodities and by-products. (Section 801-10 of the Act)

"Agricultural Facility" means land, any building or other improvement thereon or thereto, and any personal properties deemed necessary or suitable for use, whether or not now in existence, in farming, ranching, the production of agricultural commodities (including, without limitation, the products of aquaculture, hydroponics and silviculture) or the treating, processing or storing of such agricultural commodities when such activities are customarily engaged in by farmers as a part of farming. (Section 801-10 of the Act)

"Agricultural Improvements" means any improvements, buildings, structures or fixtures suitable for use in farming which are located on agricultural land.

"Agricultural Land" means land suitable for use in farming and which is or will be operated as a farm.

"Depreciable Agricultural Property" means personal property suitable for use in farming for which an income tax deduction for depreciation is allowable in computing federal income tax under the Internal Revenue Code (26 USC 1-9042). Examples include but are not limited to the following: breeding livestock and poultry, farm machinery, trucks, etc. Feeder livestock, seed, feed, and fertilizer do not qualify as depreciable agricultural property.

"Lender" means any federal or State chartered bank, Federal Land Bank, Production Credit Association, Bank for Cooperatives, federal or State chartered savings and loan association or building and loan association, Small Business Investment Company or any other institution qualified within this State to originate and service loans, including, but without limitation to, insurance companies, credit unions and mortgage loan companies. "Lender" also means a wholly owned subsidiary of a manufacturer, seller or distributor of goods or services that makes loans to businesses or individuals, commonly known as a "captive finance company". (Section 801-10 of the Act)

"Soil or Water Conservation District" means a public body corporate and politic, organized in accordance with the Soil and Water Conservation Districts Act. [70 ILCS 405/3.01]

History

• Source: Amended at 13 Ill. Reg. 14376, effective August 30, 1989; recodified from 8 Ill. Adm. Code 1400.10 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.705 Rules and Guidelines Applicable to Bond Programs Under This Subpart

a) General Description of Programs. The bond programs are intended to allow farmers to obtain lower interest rate loans for qualified purposes by obtaining loan funds from the proceeds of a tax-free bond issued by the Authority. The Authority shall establish, from time to time, particular bond programs to implement the policies and purposes of the Act. The Authority may modify or discontinue any such program, in a manner consistent with this Part, if it determines that the public interest would be served by so doing.

b) Applicant Eligibility

1. Unless otherwise provided in this Part, the eligible applicant must be a permanent resident of Illinois at the time the bond is issued.

2. The land and improvements or depreciable farm property the applicant proposes to purchase will be located within Illinois.

3. The applicant must be at least 18 years of age at the time of application.

4. The applicant may be required to document to the satisfaction of the lender and the Authority, sufficient education, training or experience in the type of project for which the loan is sought.

5. If the loan is sought for the acquisition of land, the applicant may be required to document, to the satisfaction of the lender, that he will have access to adequate working capital, farm equipment, machinery or livestock. If the loan is sought for acquisition of depreciable agricultural property, the applicant should document access to adequate working capital or agricultural land.

6. The Authority may, from time to time, and through formal rulemaking procedures, establish rules requiring that a determination be made that the applicant is unable to secure financing from nongovernmental sources upon terms and conditions which the applicant reasonably could be expected to fulfill.

7. The land and improvements which are financed by the loan made by the Authority must be used by the applicant. Any improvements or depreciable property which is to become a fixture or an integral part of real estate may be financed by the Authority only if the applicant owns or leases the real estate on which it is to be located.

8. The applicant must state the particular program for which he or she is applying and must satisfy all the eligibility requirements of that program.

c) Qualified Purposes

1. Eligible loan activities under all programs consist of financing purchases of depreciable property or real estate, and powers granted in Article 830 of the Act.

2. Ineligible loan activities under all programs consist of the following:

A) Refinancing an existing debt incurred by the applicant.

B) Financing working capital to purchase feed, seed, fertilizer, fuel, feeder cattle, pigs, lambs, etc.

C) Financing the previously commenced acquisition or construction of any part of the project for which the loan is sought if such commencement by the applicant or any related person occurred more than 60 days prior to the Authority's action on the application and sale of bond to finance the loan. This prohibition includes, but is not limited to, entering into a contract or purchase agreement, installment or otherwise, in connection with the construction of the project or any part thereof, or off-site fabrication or acquisition of any portion of the project. This prohibition does not apply, however, if such contract or purchase order, for example, states that the purchase is subject to the approval of the Authority, the risk of loss remains with the seller and the Authority's approval is obtained prior to the applicant taking possession of the property.

d) Participating Lenders. Any bank, trust company, mortgage company, national banking association, savings and loan association, life insurance company, any State or federal governmental agency or instrumentality, or any other financial institution or entity authorized to make mortgage loans or secured loans in this State may be a participating lender. A financial institution may become a participating lender at any time.

e) Application Procedures and Review

1. The farmer may apply (on forms approved by the Authority) for an Authority loan with any participating lender. Any loan approved will be assigned to that Participating lender. Authority loan eligibility is determined by the requirements of the Act and this Part. If a farmer meets the loan eligibility requirements, the decision on whether to enter into the loan agreement is between the farmer and the participating lender. They must agree on terms of the loan such as interest rates, length of loan, down payment, service fees, origination charges, and repayment schedule, which may not be any more onerous than that charged to similar customers for similar loans, but taking into account the tax exempt nature of interest on the loan.

2. Following completion of the loan application by the farmer and approval by the participating lender, the loan application must be submitted to the Authority for its review and approval. The Authority's review will include, but not be limited to whether the loan applicant is an eligible farmer, the loan proceeds will be used for a qualified purpose under the Act and this Part and the Internal Revenue Code and IRS regulations relating to industrial development revenue bonds, and the terms of the loan comply with this Part.

3. When a loan application is submitted to the Authority, the Executive Director shall review the loan application to determine whether it is complete, and whether the criteria established by the Act and this Part have been satisfied.

A) If the Executive Director determines that the loan application is incomplete, he shall, within five days after such determination, inform the applicant and the participating lender of such determination, and shall detail the information or material which is necessary to complete the application. For the purposes of subsection (g) of this Section, no application shall be deemed complete until the applicant or participating lender has provided additional information or material as requested by the Executive Director.

B) When the Executive Director has completed his review of the loan application, he shall present the loan application, with a statement of recommended action, to the Board at its next regularly scheduled meeting.

4. The Board shall review each loan application presented by the Executive Director in accordance with the provisions of the Act and this Part, and the Board shall:

A) approve the loan and issue the bond, pursuant to the Act and this Part; or

B) deny the application and serve upon the applicant and participating lender a written statement of the grounds for the denial.

5. Within 21 days after of a denial, the applicant and the participating lender may file with the Authority a Request for Reconsideration, stating reasons why the Board should withdraw its denial of the application and approve the loan. The Request for Reconsideration may be accompanied by supporting documents and information not previously considered by the Board. The Board shall review the Request for Reconsideration within 45 days after receiving it, and shall either approve the loan and issue the bond, or deny the Request for Reconsideration. A denial of a Request for Reconsideration shall be final. While a Request for Reconsideration is pending, the application that is the subject of the Request for Reconsideration shall be deemed complete for the purposes of subsection (g) of this Section.

f) Source of Payment and Nature of Obligation. The principal and interest on the bond is a limited obligation payable solely out of the revenues derived from the loan to the farmer and the underlying collateral or other security furnished by or on behalf of the farmer. The participating lender shall have no other recourse against the Authority. The principal and interest on the bond does not constitute an indebtedness of the Authority or a charge against its general credit or general fund.

g) Priority of Applications. Applications shall be processed by the Authority on a first-come, first-served basis, based upon the receipt of all completed documents by the Authority. The Authority may deviate from the first-come, first-served rule to the extent necessary to comply with federal income tax laws and regulations, to fully utilize the proceeds of any series of bonds or allocations of bond proceeds to participating lenders, or to meet emergency needs of farmers as determined from time to time by appropriate resolution of the Authority.

h) Post Issuance Certification. No bond proceeds may be used for a nonqualified purpose or by a noneligible user. Following disbursement of the bond proceeds, the participating lender and farmer shall certify to the Authority that the proceeds were used by an eligible farmer for a qualified purpose.

i) Assumption of Loans, Substitution of Collateral and Transfer of Property. Loans may not be assumed without the prior approval of the Authority, and then only if the purchaser of the property is an eligible applicant for an Authority loan. Equipment and other depreciable property may be exchanged or traded in for similar property, and other property such as breeding livestock may be added or substituted as collateral at the discretion of the lender without the prior approval of the Authority. The benefits of the loan made at the tax-free rate from the proceeds of an Authority bond must remain with the qualified farmer, and no person to whom property is traded or otherwise transferred may obtain the benefits of the Authority loan.

j) Right to Audit. The Authority shall have at any time the right to audit the records of the participating lender and the farmer relating to this loan and bond and ensure that bond proceeds were used for qualified purpose by a qualified user.

History

• Source: Amended at 24 Ill. Reg. 16656, effective October 24, 2000; recodified from 8 Ill. Adm. Code 1400.130 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.710 Bond Programs and Rules Applicable to Each

a) Beginning Farmer Bond and Contract Bond Programs

1. Purpose. The purpose of the Beginning Farmer Bond and Contract Bond Programs is to provide affordable financing to new, low net worth farmers for financing capital purchases. IFA works with the applicant's local lender or contract seller to provide this financing. IFA issues a tax-exempt bond for the amount and with the terms of the loan. Because the interest income to the lender or contract seller is exempt from federal income tax, the lender or contract seller is able to charge a lower rate to the applicant. The loan and the bond are secured solely by the collateral required by the lender or contract seller and are not obligations of IFA or of the State of Illinois. Because the lender or contract seller assumes all credit risk, the lender or contract seller makes all credit decisions.

2. Eligible Applicants

A) The applicant must have net worth of not more than $250,000 at the time of application. Net worth means total assets less total liabilities of the individual and the individual's spouse and minor children, if any.

i) Total assets shall include, but not be limited to, the following: cash crops or feed on hand; livestock held for sale; breeding stock; marketable bonds and securities; securities (not readily marketable); accounts receivable; notes receivable; cash invested in growing crops; net cash value of life insurance; machinery and equipment; cars and trucks; farm and other real estate including life estates and personal residence; value of beneficial interests in trusts; government payments or grants; and all other assets. [20 ILCS 3501/801-10] Total assets shall not include items used for personal, family or household purposes by the applicant, but in no event shall such property be excluded to the extent that a deduction for depreciation is allowable for federal income tax purposes. All assets shall be valued at fair market value by the participating lender. Such value shall be what a willing buyer would pay a willing seller in the locality. A deduction of ten percent may be made from fair market value of farm and other real estate.

ii) Total liabilities shall include, but not be limited to, the following: accounts payable; notes or other indebtedness owed to any source; taxes; rent; amounts owed on real estate contracts or real estate mortgages; judgments; accrued interest payable; and all other liabilities. [20 ILCS 3501/801-10]

B) The applicant must be an individual, not a corporation, partnership, trust, or any other legal entity.

C) The applicant must be the sole owner and principal user of the project.

D) The applicant must not have had any prior direct or indirect ownership interest in a substantial amount of land. A substantial amount of land is a parcel that exceeds 30% of the median farm size in the county in which the land is located, or which had at any time during ownership a fair market value in excess of $125,000. An individual with prior ownership of land may still be eligible if the individual did not participate in the operation of the farm. Ownership or material participation by an individual's spouse or minor child shall be treated as ownership or material participation by an individual.

3. Loan Amount. The maximum loan amount is $250,000 per person.

4. Eligible Purchases. Loan proceeds may be used for the following capital purchases only:

A) Land located in the State of Illinois that is suitable for use in farming and that is or will be operated as a farm.

B) Agricultural Improvements. Any improvements, buildings, structures or fixtures suitable for use in farming that are located on agricultural land. IFA will finance the purchase of new improvements on agricultural land. IFA can finance used agricultural improvements only in situations in which:

i) the improvements are purchased in conjunction with agricultural land and used in the operation of a farm to be operated on the agricultural land being purchased; or

ii) a sufficient amount of qualified rehabilitation expenditures are incurred by the borrower with respect to the agricultural improvements within two years from the date of the issue of the bond.

C) Depreciable Agricultural Property. Personal property suitable for use in farming for which an income tax deduction for depreciation is allowable in computing federal income tax under the Internal Revenue Code. Examples include, but are not limited to, farm machinery and trucks. Feeder livestock, seed, feed, fertilizer, and other types of inventory or supplies do not qualify as depreciable agricultural property. IFA will finance the purchase of any new depreciable agricultural property. IFA can also finance used depreciable agricultural property if it is purchased in conjunction with agricultural land and used in the operation of a farm to be operated on the agricultural land being purchased. The total loan proceeds allocated to the purchase price of used equipment may not exceed $62,500.

D) No portion of the loan proceeds may be used for the purchase of a residence. If the project includes a residence, the applicant must make a down payment or obtain conventional financing for the value of the residence.

5. Purchase from Related Persons. The IRS states that the following, among others, are deemed to be "related persons" of any individual: grandfather, grandmother, father, mother, brother, sister (whether whole or half blood), child grandchild, or spouse. In addition, a partnership and each of its partners (and their spouses and minor children) are related persons, as are an S corporation and each of its shareholders (and their spouses and minor children). Related persons also include certain related corporations and partnerships. It should be pointed out that the foregoing list is not all-inclusive. There are certain other entities and individuals that could also be considered related persons. It should also be noted that certain individuals are not related persons. For example, an uncle, aunt, nephew, niece, brother-in-law or sister-in-law would not be treated as a related person. IFA loan proceeds may be used to purchase property from a related person in some circumstances:

A) The Beginning Farmer Bond Program may be used to purchase eligible property from a related person if the following conditions are met:

i) The applicant must certify and provide supporting documentation that the purchase price of the project is equal to the market value of the project.

ii) The applicant must certify that the seller will have no continuing financial interest in the project and will not be a principal user of the project, and will have no other direct or indirect ownership or use of the project.

B) The Beginning Farmer Contract Bond Program may never be used to purchase property from a related person.

6. Security for the Loan. To facilitate the making of the loan, the Lender Loan Agreement or Contract Seller Agreement provides that the lender or contract seller will act as agent and fiduciary for IFA in connection with the loan. The principal and interest of the bond are payable solely out of the revenue derived from the Borrower's Promissory Note, which is secured by collateral furnished by the borrower. Please note that cash and cash equivalents may not be used as collateral. The bond that is issued by IFA and purchased by the lender or contract seller is a non-recourse obligation. The principal and interest on the bond do not constitute an indebtedness of IFA or a charge against its general credit or general fund.

7. Fees. The Authority charges a non-refundable application fee of $100 that must be submitted with the application. There is also a closing fee of one and one-half percent of the loan amount, less the $100 application fee, due when the loan is closed. The lender under the Beginning Farmer Bond Program may charge a closing fee of up to one-half of one percent of the loan amount. No other fees may be charged. However, the lender may pass on to the borrower any recording or filing fees associated with the loan. The contract seller under the Beginning Farmer Contract Bond Program may charge no fees. However, the contract seller may pass on to the borrower any recording or filing fees associated with the loan.

8. This program takes effect upon adoption pursuant to this Part.

b) Agricultural Manufacturing Bond Program

1. Purpose. This program is designed to encourage the development and expansion of agribusiness manufacturing operations in Illinois. The intention of this program is to enhance economic growth in Illinois by creating and saving jobs in the rural areas of the State.

2. Eligibility Requirements Particular to the Agricultural Manufacturing Bond Program.

A) The applicant must be an agribusiness as defined in the Act and in Section 1100.700 of this Part. The applicant must also be a "manufacturing facility" as defined in section 144(a)(12)(C) of the Internal Revenue Code of 1986. This means any facility which is used in the manufacturing or production of tangible personal property (including the processing resulting in a change in the condition of such property).

B) The applicant, including all affiliates and subsidiaries, must have no more than 100 employees at the time of application or have had gross income of no more than $2 million for the calendar year preceding the date of application. "Gross income" for this purpose means the amount of gross income properly reportable for federal income tax purposes for the taxable year under the provisions of the Internal Revenue Code.

C) The IFA shall waive the requirements of subsection (b)(2)(B) for any Agricultural Manufacturing Facility which at the time of application does not operate a facility within the State of Illinois.

3. The amount of a loan authorized herein to any agricultural manufacturing facility shall be limited by section 144(a)(4)(A) of the Internal Revenue Code with respect to the issuance of small issue industrial development bonds. In no event shall any loan to any one agricultural manufacturing facility exceed $10 million.

4. Issuance of Bond. Following approval of the loan, the Authority shall issue a bond, in the amount of and fitting the terms of the loan, to be purchased by the participating lender.

5. This program takes effect upon adoption pursuant to this Part.

6. The applicant must pay a $100 fee at the time of application.

History

• Source: Amended at 26 Ill. Reg. 7084, effective May 10, 2002; recodified from 8 Ill. Adm. Code 1400.140 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.715 Rules and Guidelines Applicable to the Interest Buy Down Program

a) General Description of Program

1. The Interest Buy Down Program (IBD), which is used in conjunction with the State Guarantee Program for Restructuring Agricultural Debt (SGP), is designed to subsidize the interest cost on loans made to pork producers.

2. The State shall pay a portion of the interest on qualifying loans under the SGP:

A) The maximum principal amount on which the State will pay interest is $100,000.

B) The State will pay the interest calculated at a rate of 2.0% up to the maximum principal amount.

C) Payments will be made to the Lender annually.

b) Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Applicant" means a hog farmer whose application for an Interest Buy Down in conjunction with a State Guarantee for Restructuring Agricultural Debt has been submitted to the Authority by a lender.

"Fund" means the General Revenue Fund, which will be used for Interest Buy Down payments.

"IBD" is a payment from the State of Illinois to the lender of a portion of the borrower's interest on a loan.

"Loan" is a loan made under the State Guarantee Program for Restructuring Agricultural Debt for which the State of Illinois is providing an Interest Buy Down.

c) Eligible Farmers. To qualify for participation in the IBD, the applicant must:

1. be a resident of Illinois;

2. be a principal operator of a farm that produces hogs;

3. derive at least 50% of annual gross income from farming;

4. have a net worth of at least $10,000;

5. meet all other requirements of the State Guarantee Program for Restructuring Agricultural Debt as defined in Section 1100.725 of this Part.

d) Eligible Lenders. To qualify for participation in the IBD, the Lender must:

1. agree to fix the interest rate on the loan for at least five years;

2. agree not to penalize Borrower on account of receipt of an IBD from the State after the applicable anniversary date of the loan.

e) Limitations

1. The IBD shall last for five years. However, depending on the collateral, the loan may have a maturity of more than five years.

2. The IBD shall be allowed on a maximum of $100,000 of the loan balance.

3. The IBD shall be available until the earlier of June 30, 1999 or when $50 million of loans have been approved.

f) Application Procedures and Review

1. Lenders shall apply for the Interest Buy Down in conjunction with an application for the State Guarantee for Restructuring Agricultural Debt on forms provided by the Authority and shall certify that the application and any other documents submitted are true and correct. Applications shall be processed by the Authority on a first-come, first-served basis, based upon the receipt of all completed application documents by the Authority.

2. Review of applications and the approval process shall be in accordance with Section 1100.725 of this Part.

3. Upon approval of an application and receipt of the documentation necessary to prepare closing documents for the loan, a closing documents package, which includes the document to execute for the IBD, shall be prepared by the Authority and sent to the lender. Upon completion of all such forms and documents by the applicant, lender and Authority and after satisfaction of all closing requirements for the loan, the Interest Buy Down will be in effect.

g) Payment of Interest Buy Down to Lender. After the Borrower makes his anniversary payment, the Lender shall notify the Authority of the amount due on the IBD. The Authority shall direct payment to the Lender from the Fund.

History

• Source: Added at 23 Ill. Reg. 11703, effective September 3, 1999; recodified from 8 Ill. Adm. Code 1400.145 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.720 Rules and Guidelines Applicable to the Young Farmer Guarantee Program

a) General Description of Program. The Young Farmer Guarantee Program (YFG) is designed to enhance credit availability to younger farmers who are purchasing capital assets. Loan funds may be used for new purchases of capital assets such as land, buildings, machinery, equipment, breeding livestock, soil and water conservation projects, etc. In some cases, loan proceeds may be used to refinance existing debt as needed to improve lien positions or improve financial structure. The provisions of this Section are applicable only to the YFG.

b) Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Applicant" means a farmer whose application for a Young Farmer Guarantee has been submitted to the Authority by a lender.

"Asset" includes, but is not limited to, the following: crops or feed on hand; livestock held for sale; breeding stock; cash; marketable bonds and securities; securities not readily marketable; accounts receivable; notes receivable; cash invested in growing crops; net cash value of life insurance; machinery and equipment; cars and trucks; farm and other real estate including life estates and personal residence; value of beneficial interest in trusts; government payments or grants; capitalized leases; retirement accounts and all other assets. [20 ILCS 3501/801-10(aa)]

"Debt to Asset Ratio" means total outstanding liabilities, including any debt to be financed or refinanced under this Section, divided by total outstanding assets. [20 ILCS 3501/830-45(a)]

"Fund" means the Illinois Farmer and Agribusiness Loan Guarantee Fund (see 20 ILCS 3501/830-35(c)), which is the State's fund to cover losses resulting from defaults on young farmer guarantee loans.

"Gross Annual Income" means income as defined in Section 61 of the Internal Revenue Code (26 USC 61).

"Liability" includes, but is not limited to, the following: accounts payable; notes or other indebtedness owed to any source; taxes; rent; amounts owed on real estate contracts or real estate mortgages; judgments; accrued interest payable; indebtedness under capitalized leases; and all any other liabilities. [20 ILCS 3501/801-10(bb)]

"YFG Loan" means an installment note for which the State of Illinois shall be liable for 85% of the total principal and interest as determined by the Authority.

"Young Farmer" means a resident of Illinois who is at least 18 years of age, who is a principal operator of a farm or land, who derives or will derive at least 50% of gross annual income from farming, who has a net worth of not less than $10,000 and whose debt to asset ratio is not less than 40%. [20 ILCS 3501/830-45(a)]

c) Eligible Farmers. To qualify for participation in the YFG, each farmer must:

1. be at least 18 years of age and maintain his principal residence in the State [20 ILCS 3501/830-45(a)];

2. be the principal operator of a farm who derives or will derive at least 50% of annual gross income from farming [20 ILCS 3501/830-45(a)];

3. have a debt to asset ratio of not less than 40% and not greater than 70% after purchase of the capital item and have a net worth of not less than $10,000 [20 ILCS 3501/830-45(a)];

4. demonstrate the ability to adequately service the proposed debt. If this ability is not adequately demonstrated, he can have a guarantor sign the note with him and/or pledge additional collateral for the loan;

5. provide sufficient collateral to secure the YFG loan and agree to keep it adequately collateralized in the future. All real estate and depreciable property which is to be used as collateral on a YFG loan must be evaluated by IFA staff or appraised by a qualified appraiser. All real estate appraisals must meet federal regulatory requirements and meet the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation. Auctioneers and machinery and equipment dealers are qualified to appraise depreciable property. The applicant is liable for all appraisal fees connected with the YFG Loan;

6. certify that all of his debts will be current at the time the YFG loan is closed. (See 20 ILCS 3501/830-45.)

d) Limitations

1. YFG loans shall not exceed $500,000 per young farmer. A young farmer may use this program more than once provided the aggregated principal amount of YFG loans to that young farmer does not exceed $500,000. [20 ILCS 3501/830-45(a)]

2. Each YFG loan shall be set up on a payment schedule not to exceed 30 years, but shall be no longer than 15 years in duration. [20 ILCS 3501/830-45(a)] The payment schedule for the loan will be tailored to the applicant's collateral and cash flow. Real estate loans may be amortized up to 25 years with a 15 year balloon. Loans with depreciable property as collateral will be amortized over a shorter period.

3. The YFG loan can be fully or partially paid at any time while the loan is outstanding as long as the loan is held in the lender's portfolio and not sold into a secondary market. YFG loans may not be assumed.

e) Application Procedures and Review

1. Lenders shall apply for the YFG loans on forms provided by the Authority. The application shall at a minimum contain the young farmer's name, address, present credit and financial information, including cash flow statements, financial statements, balance sheets, and any other information pertinent to the application, and the collateral to be used to secure the State guarantee. [20 ILCS 3501/830-45(a)] Applications shall be processed by the Authority on a first-come, first-served basis, based upon the receipt of all completed documents by the Authority.

2. Lenders shall certify that the application and any other documents submitted are true and correct. [20 ILCS 3501/830-45]

3. Each applicant shall pay a $300 application fee which will be submitted to the Authority at the time of the application. At the time the loan is closed, the applicant will be required to pay a closing fee of 1% of the YFG loan amount less the $300 application fee. Of this 1% closing fee, the Authority shall receive ¾% and the lender shall receive ¼% to cover administrative expenses in completing the application packet and closing documents. The 1% closing fee may be included in the State Guarantee loan amount. The lender shall charge no fees or points in addition to those outlined herein. The applicant shall be responsible for paying any fee or charge involved in recording mortgages, releases, financing statements, insurance for secondary market issues, and any other similar fee or charge that the Authority may require. [20 ILCS 3501/830-45(a)]

4. When a State Guarantee application is submitted to the Authority, the Authority shall review the application to determine whether it is complete and whether it meets the criteria established by the Act and this Section. When the Authority has completed the review of the Guarantee application, the application shall be presented, along with a statement of recommended action, to the Board for review at its next regularly scheduled meeting. The review shall include whether the applicant and lender are in compliance with the requirements of the program. The review shall also include an evaluation of collateral, percentage of loan, debt to asset ratio, cash flow, etc.

5. The Board shall approve the application and provide the Guarantee, pursuant to the Act and this Section; or, deny the application and serve upon the lender and applicant a written statement of the grounds for the denial.

6. If the application is denied, the applicant and the lender may request reconsideration stating reasons why the Board should withdraw its denial of the application and approve the State Guarantee. The request should be accompanied by supporting documents and/or information not previously considered by the Board. The Board shall review the request at its next scheduled meeting, and shall either approve or deny the application. A denial of a request for reconsideration shall be final.

7. Upon approval of an application and receipt of the documentation necessary to prepare loan closing documents, a YFG Loan Closing Documents package, which contains all the appropriate forms and documents to execute, shall be prepared by the Authority and sent to the lender. Upon completion of all such forms and documents by the applicant, lender and Authority and after satisfaction of all loan closing requirements, the YFG loan guarantee will be considered in force.

f) Provision or Renewal of State Guarantees. The Authority shall provide or renew a State Guarantee to any lender if, in addition to meeting the other criteria described in the Act and this Section, the lender:

1. charges a fixed or adjustable interest rate that the Authority determines to be below the market rate of interest generally available to the borrower. If both the lender and applicant agree, the interest rate on the YFG loan can be converted to a fixed interest rate at any time during the term of the loan [20 ILCS 3501/830-45];

2. pays a fee equal to 25 basis points on the loan to the Authority on annual basis [20 ILCS 3501/830-45(a)];

3. agrees to complete and certify that, to the best of the lender's knowledge, all information is true and correct on the application, balance sheets, security analysis, cash flow projection and any other documents that the Authority may request [20 ILCS 3501/830-45(a)];

4. identifies collateral acceptable to the Authority in accordance with subsection (h) that is at least equal to the State Guarantee loan request [20 ILCS 3501/830-45(a)];

5. assumes all responsibility and costs for pursuing legal action on collecting any loan that is delinquent or in default subject to consulting the Authority [20 ILCS 3501/830-45(b)(iii)];

6. is at risk for the first 15% of the outstanding principal of the note for which the State Guarantee is provided [20 ILCS 3501/830-45(b)(iv)];

7. assumes responsibility for the timely collection and disposition of collateral on a YFG loan that is in default; provided, however, that the lender shall not collect or dispose of collateral on the YFG loan without the express written prior approval of the Authority. Approval shall be granted if the collateral is disposed of in a commercial manner, which nets an amount closely approximating the value of the collateral;

8. agrees that the Authority has final approval on the sale of all collateral for the YFG loan. After the sale of collateral, the State shall be reimbursed its 85% guaranteed portion of the principal balance at default. If funds from the sale of collateral remain after this payment, the lender shall be reimbursed its 15% of the principal balance at default. If excess funds remain after paying the principal to the State and lender, then the State and lender shall be repaid interest on a prorated basis; 85% of such excess funds shall be allocated to the State's portion and 15% shall be allocated to the lender's portion.

g) The YFG loan shall be subject to an annual review and renewal by the lender and the Authority [20 ILCS 3501/830-45(a)] for adequacy of collateral and performance by the applicant. The applicant is required to provide the lender with a current financial statement annually.

1. If it is determined that there is not sufficient collateral to adequately secure the YFG loan, additional collateral may be required. If the applicant is unwilling or unable to pledge additional collateral, the YFG loan may be called due and payable.

2. If a YFG loan is going to be called for any reason, written notice which specifies the reasons for said action must be served to all parties (IFA, lender, and borrower) not less than 90 days prior to call of the loan.

3. Failure of the applicant to make any payment on or before its due date shall render the loan delinquent. Notice of this delinquency shall immediately be sent to all parties. If the loan remains delinquent for a period of 90 days, the total outstanding principal and interest shall become due and payable immediately on the entire YFG loan. The YFG loan cannot be reinstated after the 90-day delinquency period.

h) In the event of default that is not cured within 90 days or in the event a loan is called for any reason, the Authority shall make payment of the guaranteed portion of the YFG loan to the holder of the guarantee. This payment shall be equal to the sum of:

1. 85% of the principal balance as of the date of default or date of call less any proceeds received from sales of collateral;

2. 85% of the interest balance as of the date of default or call; and

3. 85% of the interest accrued from the date of default or call until the date payment is made up to a maximum of 120 days.

i) The Illinois Farmer and Agribusiness Loan Guarantee Fund shall be used to secure State Guarantee on YFG loans. [20 ILCS 3501/830-45(c)]

1. The Authority shall guarantee up to $50,000,000 in loans through the State Livestock Guarantee Program (SLP), YFG and State Guarantee Program for Agri-Industries (SGPAI). The Illinois Farmer and Agribusiness Loan Guarantee Fund shall be funded with $15,000,000 to cover any losses under these programs.

2. The Authority shall direct payments from this fund to guarantee holders as described in subsection (h).

3. Monies returned to the State on the disposition of collateral as described in subsection (f) shall be deposited to this fund.

History

• Source: Amended at 26 Ill. Reg. 7084, effective May 10, 2002; recodified from 8 Ill. Adm. Code 1400.146 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.725 Rules and Guidelines Applicable to the State Guarantee Program for Restructuring Agricultural Debt

a) General Description of Program. The State Guarantee Program (SGP) is intended to provide farmers who are experiencing financial difficulties caused by high interest rates and low commodity prices with a debt restructuring schedule to consolidate and spread out existing debt over a longer term at a reduced interest rate so that farmers will be able to continue existing farming operations. The provisions of this Section are applicable only to the SGP, and the provisions of Sections 1100.705 and 1100.710 of this Part are inapplicable to the SGP and procedures provided for pursuant to this Section.

b) Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Applicant" means a farmer whose application for a State Guarantee has been submitted to the Authority by a lender.

"Asset" includes, but is not limited to, the following: crops or feed on hand; livestock held for sale; breeding stock; cash; marketable bonds and securities; securities not readily marketable; accounts receivable; notes receivable; cash invested in growing crops; net cash value of life insurance; machinery and equipment; cars and trucks; farm and other real estate including life estates, personal residence, and value of beneficial interests in trusts; government payments or grants; capitalized leases; retirement accounts; and all other property and assets.

"Current Outstanding" means on the date of the application for any State Guarantee.

"Current Status" means the absence of any arrearages in any previously incurred debt for which a State Guarantee is sought.

"Debt to Asset Ratio" means the current outstanding liabilities of the farmer divided by the current outstanding assets of the farmer. [20 ILCS 3501/830-30]

"Farmer" means a resident of Illinois, who is a principal operator of a farm or land, at least 50% of whose gross annual income is derived from farming and whose debt to asset ratio shall not be less than 40%, except in those cases where the applicant has previously used the Guarantee Program there shall be no debt to asset ratio or income restriction. [20 ILCS 3501/830-30]

"Fund" means the Illinois Agricultural Loan Guarantee Fund, which is the State's fund to cover losses resulting from defaults on State Guarantee loans. [20 ILCS 3501/830-30]

"Gross Annual Income" means income as defined in Section 61 of the Internal Revenue Code (26 USC 61).

"Liability" includes, but is not limited to, the following: accounts payable; notes or other indebtedness owed to any source; taxes; rent; amounts owed on real estate contracts or real estate mortgages; judgments; accrued interest payable; indebtedness under capitalized leases; and all other liabilities. [20 ILCS 3501/801-10]

"State Guarantee" means a note for which the State of Illinois shall be liable for 85% of the total principal and interest of the note as determined by the Authority.

c) Eligible Farmers. To qualify for participation in the SGP, each farmer must:

1. maintain his principal residence in the State;

2. be at least 18 years of age at the time of application;

3. be the principal operator of the farming business for which the funds guaranteed by the SGP are contemplated to be used;

4. be able to show, based upon his/her most recent Federal Income Tax Return and current data, that at least 50% of his/her annual gross income is derived from farming, unless the loan is a renewal of an existing guarantee;

5. have a debt to asset ratio of not less than 40% and not greater than 65%, unless the loan is a renewal of an existing guarantee;

6. provide sufficient collateral to secure the State Guarantee and agree to keep the State Guarantee adequately collateralized in the future;

7. certify and agree that he/she will only use the State Guarantee to consolidate and restructure existing farming debts.

d) Limitations

1. No State Guarantee shall exceed $500,000 per farmer or farming operation. [20 ILCS 3501/830-30]

2. Each State Guarantee shall be set up on a payment schedule not to exceed 30 years, and shall be no longer than 30 years in duration. [20 ILCS 3501/830-30]

3. Only one State Guarantee shall be outstanding per farmer at any one time. [20 ILCS 3501/830-30]

4. Only one State Guarantee shall be outstanding at any one time for any one farming operation. If applicants file separate Schedule Fs for their Federal Income Tax Returns, then they will be considered to operate separate farming operations.

e) Application Procedures and Review

1. Lenders interested in the SGP must complete a Letter of Interest and return it to the Authority's office. After the Letter of Interest has been received by the Authority, the lender will be placed on the mailing list for the SGP.

2. The lenders shall apply for State Guarantees on forms approved and provided by the Authority. The application shall, at a minimum, contain the farmer's name, address, present credit and financial information, including cash flow statements, financial statements, balance sheets, and any other information pertinent to the State Guarantee. [20 ILCS 3501/830-30]

3. After approval of the application and receipt of the documentation necessary prior to closing the loan, the Authority shall send a State Guarantee Closing Documents package to the lender containing all the appropriate forms and documents to execute. Upon completion of all such forms and documents by the applicant, lender and Authority, the State Guarantee loan will be considered closed.

4. The lender shall certify that all the information contained on the application and other submitted documents is correct, and shall be liable to the Authority for any damages suffered by any incorrect or untrue statement contained in any certified application.

5. The application period for the SGP shall commence July 15, 1982 and end when the Authority has issued State Guarantees equal to $160,000,000 or at any later time as may be set from time to time by legislative extension.

6. Following submission of the Guarantee application by the lender, the Authority shall review the application. The Authority's review shall include, but will not be limited to, whether the applicant is an eligible farmer and whether the lender has complied with the requirements of subsection (f) of this Section. The Authority will base its evaluation on collateral, percentage of loan, debt to asset ratio, cash flow, etc.

7. When a State Guarantee application is submitted to the Authority, the Executive Director shall review the application to determine whether it is complete and whether it meets the criteria established by the Act and this Part:

A) If the Executive Director determines that the loan application is incomplete, he or she shall, within 14 days of such determination, inform the lender and the applicant of such determination, and detail the information or material that is necessary to complete the application. For the purposes of subsection (j) of this Section, no application shall be deemed complete until the lender or applicant has provided the additional information or material requested by the Executive Director.

B) When the Executive Director has completed his or her review of the Guarantee application, he or she shall present the application, with a statement of recommended action to the Authority at its next regularly scheduled meeting. The Executive Director will base the review on collateral, percentage of loan, debt to asset ratio, cash flow, etc.

8. The Authority shall review each loan application presented by the Executive Director in accordance with the provision of the Act and this Part, and the Authority shall:

A) approve the application and provide the Guarantee, pursuant to the Act and this Part; or

B) deny the application and serve upon the lender and applicant a written statement of the grounds of the denial.

9. Each applicant shall pay a $300 application fee which will be submitted to the lender at the time of the application. At the time the loan is made, the applicant may be required to pay a closing fee not greater than ¾ of 1% of the State Guarantee which may be used to pay for administrative expenses incurred by the lender and the Authority. Of this ¾ of 1% closing fee, the Authority shall receive ½% to cover administrative and legal expenses and the lender shall receive ¼% to cover administrative expenses in completing the application packet and closing documents. The ¾ of 1% closing fee may be included in the State Guarantee Loan amount. The Authority shall credit the $300 application fee against the closing fee. The lender shall charge no fees or points in addition to those outlined herein. The applicant shall be responsible for paying any fees or charges involved in recording mortgages, releases, financing statements, insurance for secondary market issues and any similar fees necessary for closing and maintaining the State Guarantee or selling into the secondary market. [20 ILCS 3501/830-30]

10. If the application is denied, the applicant and the lender may file a Request for Reconsideration stating reasons why the Authority should withdraw its denial of the application and approve the State Guarantee. This Request for Reconsideration must be filed with the Authority not later than 21 days after such denial. The Request for Reconsideration should be accompanied by supporting documents and/or information not previously considered by the Authority. The Authority shall review the Request for Reconsideration at its next scheduled meeting, and shall either approve the application or deny the Request for Reconsideration. The applicant will have the opportunity to present new relevant facts on his previous denial to the Authority, and if such facts will establish eligibility, the Request will be granted. A denial of a Request for Reconsideration shall be final. While a Request for Reconsideration is pending, the application shall be deemed complete for the purposes of subsection (j) of this Section.

f) Provision or Renewal of State Guarantees. The Authority shall provide or renew a State Guarantee to any lender if, in addition to meeting the other criteria described in the Act and this Part, the lender:

1. agrees to bring the farmer's debt to a current status at the time the State Guarantee is provided; [20 ILCS 3501/830-30]

2. charges a fixed or adjustable interest rate which is below the market rate of interest generally available to the borrower. The market rate of interest is that rate which would be charged by the same lender for the same project without the State Guarantee. If both the lender and the applicant agree, the interest rate on the State Guarantee loan can be converted to a fixed interest rate at any time during the term of the loan; [20 ILCS 3501/830-30]

3. agrees to pay to the Authority an annual fee equal to 25 basis points on the loan and any other necessary and ordinary administrative expenses in excess of the 25 basis points as determined from time to time pursuant to the Act and this Part;

4. agrees to complete and certify that, to the best of the lender's knowledge, all information is true and correct on the application, balance sheets, security analysis, cash flow projection and any other documents that the Authority may request; [20 ILCS 3501/830-30]

5. identifies collateral acceptable to the Authority in accordance with subsection (h) that is at least equal to the State Guarantee loan request; [20 ILCS 3501/830-30]

6. assumes all responsibility and costs for pursuing legal action on collecting any loan that is delinquent or in default subject to consulting the Authority; [20 ILCS 3501/830-30]

7. is at risk for the first 15% of the outstanding principal of the note for which the State Guarantee is provided; [20 ILCS 3501/830-30]

8. assumes responsibility for proceeding with the collecting and disposing of collateral on the State Guarantee within 14 months of the date that the loan is declared delinquent; provided, however, that the lender shall not collect or dispose of collateral on the State Guarantee without the express written prior approval of the Authority. [20 ILCS 3501/830-30] Approval shall be granted if the collateral is disposed of in a reasonably commercial manner, based on the manner, time and place of the sale, the purchase price and the purchaser. In the event that the lender fails to dispose of the collateral within 14 months, the lender shall repay to the State interest on the State Guarantee equal to the same rate which the lender charges on the loan; provided, however, that the Authority shall extend the 14-month period for a lender in the case of bankruptcy or extenuating circumstances which prevent the lender from liquidating the collateral. The lender shall repay this interest to the State until the collateral for the State Guarantee has been liquidated and the State has been reimbursed. [20 ILCS 3501/830-30] If the lender fails to repay the State the interest as outlined in this subsection (f), the Authority shall turn the matter over to the Attorney General's office for appropriate legal action;

9. agrees that the Authority has final approval on the sale of all collateral for the State Guarantee. After the sale of collateral, the State shall be reimbursed 85% of the remaining principal amount of the State Guarantee loan. If the funds from the sale of collateral remain after this payment, the lender shall be reimbursed 15% of the remaining principal amount of the loan. If excess funds remain after paying the remaining principal to the State and lender, then the State and lender shall be repaid interest on a prorated basis; 85% of such excess funds shall be allocated to the State's portion and 15% shall be allocated to the lender's portion. If excess funds exist after repaying both the State and the lender, they shall be paid back to the farmer. [20 ILCS 3501/830-45]

g) Annual Review

1. The lender and the Authority shall each, on an annual basis, review State Guarantees for any purpose including, but not limited to, present collateral value; timeliness of payments made by the farmer or any other purposes reasonably calculated to aid in determining the farmer's present and projected repayment capacity. If the Authority determines that the existing collateral is insufficient to cover the State's liability, additional collateral may be required. If the applicant fails to pledge such additional collateral, the State Guarantee loan may be called.

2. In those cases where the borrower has not previously used the guarantee program, no State Guarantee shall be called by the lender or Authority during the first 3 years of the date on which the application is closed for any reason except defaults on payments or insufficient collateral. [20 ILCS 3501/830-30]

3. Except as otherwise provided in the Act or this Subpart, a State Guarantee may be called by the lender or Authority upon a 90-day written notice to all parties specifying the reasons for such call (e.g., submission of false documentation, changing loan documents, and change of state residency).

4. The lender can review and withdraw or continue with the State Guarantee on an annual basis after the first three years of the loan provided a 90 day notice, in writing, to all parties has been given. [20 ILCS 3501/830-30] Such notification must be provided on or before the date on which payment is due.

5. The applicant must make all payments on the State Guarantee within 90 days of the stated payment date. Failure to make payments on or before their due date shall render the loan delinquent. Notice of this delinquency shall immediately be sent to all parties. If the loan remains delinquent for a period of 90 days, the total outstanding principal and interest shall become due and payable immediately on the entire State Guarantee Loan. The State Guarantee cannot be reinstated after the 90-day delinquency period.

h) Valuation of Collateral. All collateral shall be evaluated by IFA staff or appraised by a qualified appraiser. A qualified appraiser is one who is qualified by virtue of membership in the Illinois Society of Farm Managers and Appraisers, or one whose qualifications have been reviewed by the Authority. The Authority shall have final authority to determine whether the collateral is sufficient to cover the State's liability and may appoint an independent appraiser to aid in its determination on the sufficiency of collateral. The Authority will view real estate as the primary collateral on SGP loans, with machinery and equipment and breeding livestock to be used as secondary collateral, except where no real estate is available. Collateral value may be reviewed each year by the lender or an independent appraiser appointed by the Authority. The Authority may, among other things, take a mortgage or lien on land or other assets to cover the State's liability. Collateral may be transferred only upon written approval by the Authority and the lender.

i) Fund. To implement and carry out the objectives of the SGPAI, the Fund has been created as a special Fund outside of the State Treasury.

1. The Authority is authorized to transfer no more than $45,000,000 to the Fund during the duration of the State Guarantee program, to secure State Guarantees issued pursuant to this Section. Any amounts transferred from the Illinois Agricultural Loan Guarantee Fund to the General Revenue Fund under powers granted to the Governor by Public Act 87-14 shall not be considered in determining if the maximum of $45,000,000 has been transferred into the Illinois Agricultural Loan Guarantee Fund. [20 ILCS 3501/830-30]

2. The State shall not be liable for more than $45,000,000 to secure State Guarantees issued pursuant to this Section. [20 ILCS 3501/830-30]

3. In the event of default by the farmer, the lender shall be entitled to, and the Authority shall direct payment on, the State Guarantee after 90 days of delinquency. All payments by the Authority shall be made from the Illinois Agricultural Loan Guarantee Fund to satisfy claims against the State Guarantee. The Illinois Agricultural Loan Guarantee Fund shall guarantee receipt of payment of the 85% of the principal and interest owed on the State Guarantee loan by the farmer to the guarantee holder. [20 ILCS 3501/830-30] In no event shall the interest amount guaranteed by the Authority include interest accruing beyond 120 days from the date of default.

4. The Fund shall be reimbursed for any amount paid under this subsection (i) upon liquidation of collateral which the lender shall seize and convert to cash in a reasonably commercial manner. [20 ILCS 3501/830-30]

j) Priority of Applications. Applications shall be processed by the Authority on a first-come, first-served basis, based upon the receipt of all completed documents by the Authority.

k) Guarantors and Additional Collateral. An applicant for a State Guarantee Loan may have a guarantor co-sign the note and/or pledge additional collateral for the State Guarantee Loan if the lender and Authority determine that the applicant alone cannot provide sufficient collateral for the State Guarantee.

l) The State Guarantee. In the event of default, the Authority shall make payment on the State Guarantee of 85% of the outstanding principal and interest owed on the State Guarantee Loan to the holder of the State Guarantee. The payment shall be made by the Authority to the holder of the State Guarantee within 30 days after an appropriate request by a lender certifying that the 90-day delinquency period has elapsed. The payment shall include 85% of past due interest and 85% of the remaining principal.

m) Prepayment of Loans. Each loan shall be paid at least on an annual basis with one payment due each year on the date on which the loan was closed for a period of ten years or until the loan is repaid, whichever occurs first. The State Guarantee Loan may be prepaid in full or in part at any time the loan is outstanding without penalty.

n) Assumption of Loans. No State Guarantee loan may be assumed by any entity unless specifically authorized by the Authority. Such authorization will be granted only in extraordinary cases (e.g., death or serious illness of the applicant with assumption by an immediate family member).

o) Total Obligations through the SGP. The Authority shall have outstanding guarantees in an aggregate principal amount up to $160,000,000 through the SGP. The Illinois Agriculture Loan Guarantee Fund shall be funded with $45,000,000 to cover any losses.

History

• Source: Amended at 26 Ill. Reg. 7084, effective May 10, 2002; recodified from 8 Ill. Adm. Code 1400.147 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.730 Rules and Guidelines Applicable to the Specialized Livestock Guarantee Program

a) General Description of Program. The Specialized Livestock Guarantee Program (SLP) is designed to enhance opportunities for many Illinois farmers who want to position themselves for success in the changing livestock industry. This program targets specialized, family sized livestock operations, including swine and dairy and beef cattle operations. Loan funds may be used primarily for construction, purchase, and/or remodeling of facilities, and also for purchases of equipment, breeding livestock or other capital assets. In some cases, loan proceeds may be used to refinance existing debt as needed to improve lien positions or improve financial structure. The provisions of this Section are applicable only to the SLP.

b) Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Applicant" means a farmer whose application for a Specialized Livestock Guarantee has been submitted to the Authority by a lender.

"Asset" includes, but is not limited to, the following: crops or feed on hand; livestock held for sale; breeding stock; cash; marketable bonds and securities; securities not readily marketable; accounts receivable; notes receivable; cash invested in growing crops; net cash value of life insurance; machinery and equipment; cars and trucks; farm and other real estate including life estates and personal residence; value of beneficial interest in trusts; government payments or grants; capitalized leases; retirement accounts; and any other assets.

"Debt to Asset Ratio" means total outstanding liabilities, including any debt to be financed or refinanced under this Section, divided by total assets.

"Fund" means the Illinois Farmer and Agribusiness Loan Guarantee Fund, which is the State's fund to cover losses resulting from defaults on Specialized Livestock Guarantee loans.

"Liability" includes, but is not limited to, the following: accounts payable; notes or other indebtedness owed to any source; taxes; rent; amounts owed on real estate contracts or real estate mortgages; judgments accrued; interest payable; indebtedness under capitalized leases; and any other liability.

"SLP Loan" means an installment note for which the State of Illinois shall be liable for 85% of the total principal and interest as determined by the Authority.

c) Eligible Farmers. To qualify for participation in the SLP, the applicant must:

1. be a resident of the State of Illinois. In the case of entities other than sole proprietorships, the owners of such entity must be Illinois residents.

2. be the principal operator and/or materially involved in the operation.

3. have adequate cash flow and collateral.

4. certify to the Authority that, at the time the State Guarantee is provided, the borrower will not be delinquent in the repayment of any debt. [20 ILCS 3501/830-50]

d) Limitations

1. SLP loans shall not exceed $1,000,000 per applicant. An applicant may use this program more than once, provided the aggregated principal of SLP loans to that applicant does not exceed $1,000,000. [20 ILCS 3501/830-50]

2. Each SLP loan shall be no longer than 15 years in duration. [20 ILCS 3501/830-50] The payment schedule for the loan will be tailored to the applicant's collateral and cash flow.

3. The SLP Loan can be fully or partially paid at any time while the loan is outstanding as long as the loan is held in the lender's portfolio and not sold into a secondary market. SLP Loans may not be assumed.

e) Application Procedures and Review

1. Lenders shall apply for the State Guarantees on forms provided by the Authority and certify that the application and any other documents submitted are true and correct. The application shall, at a minimum, contain the farmer's name, address, present credit and financial information, including cash flow statements, financial statements, balance sheets, and any other information pertinent to the application, and the collateral to be used to secure the State Guarantee. [20 ILCS 3501/830-50] Applications shall be processed by the Authority on a first-come, first-served basis, based upon the receipt of all completed documents by the Authority.

2. Each applicant shall pay a $300 application fee which will be submitted to the Authority at the time of the application. At the time the loan is closed, the applicant will be required to pay a closing fee of 1% of the SLP Loan amount less the $300 application fee. Of this 1% closing fee, the Authority shall receive ¾% and the lender shall receive ¼% to cover administrative expenses in completing the application packet and closing documents. The 1% closing fee may be included in the State Guarantee Loan amount. The lender shall charge no fees or points in addition to those outlined herein. The applicant shall be responsible for paying any fee or charge involved in recording mortgages, releases, financing statements, insurance for secondary market issues, and any other similar fee or charge that the Authority may require. [20 ILCS 3501/830-50]

3. The lender must agree to charge a fixed or adjustable interest rate that the Authority determines to be below the market rate of interest generally available to the borrower. If both the lender and applicant agree, the interest rate on the State guaranteed loan can be converted to a fixed interest rate at any time during the term of the loan. [20 ILCS 3501/830-50]

4. When a State Guarantee application is submitted to the Authority, the Authority shall review the application to determine whether it is complete and whether it meets the criteria established by the Act and this Section. When the Authority has completed the review of the Guarantee application, the application shall be presented, along with a statement of recommended action, to the Board for review at its next regularly scheduled meeting. The review shall include whether the applicant and lender are in compliance with the requirements of the program. The review shall also include an evaluation of collateral, percentage of loan, debt to asset ratio, cash flow, etc.

5. The Board shall approve the application and provide the Guarantee, pursuant to the Act and this Section; or, deny the application and serve upon the lender and applicant a written statement of the grounds for the denial.

6. If the application is denied, the applicant and the lender may request reconsideration stating reasons why the Board should withdraw its denial of the application and approve the State Guarantee. The request should be accompanied by supporting documents and/or information not previously considered by the Board. The Board shall review the request at its next scheduled meeting, and shall either approve or deny the application. A denial of a request for reconsideration shall be final.

7. Upon approval of an application and receipt of the documentation necessary to prepare loan closing documents, an SLP Loan Closing Documents package, which contains all the appropriate forms and documents to execute, shall be prepared by the Authority and sent to the lender. Upon completion of all such forms and documents by the applicant, lender and Authority and after satisfaction of all loan closing requirements, the SLP Loan guarantee will be considered in force.

f) Provision of Renewal of State Guarantees. The Authority shall provide or renew a State Guarantee to any lender if:

1. the lender pays a fee equal to 25 basis points on the loan to the Authority on an annual basis [20 ILCS 3501/830-50];

2. the applicant provides collateral acceptable to the Authority that is at least equal to the State Guarantee [20 ILCS 3501/830-50];

3. the lender certifies that, to the best of the lender's knowledge, all information is true and correct on the application, balance sheets, security analysis, cash flow projection and any other documents submitted;

4. the lender assumes all responsibility and costs for pursuing legal action on collecting any loan that is delinquent or in default [20 ILCS 3501/830-50];

5. the lender is at risk for the first 15% of the outstanding principal of the note for which the State Guarantee is provided [20 ILCS 3501/830-50];

6. the lender assumes responsibility for the timely collection and disposition of collateral on an SLP Loan that is in default; provided, however, that the lender shall not collect or dispose of collateral on the SLP loan without the express written prior approval of the Authority. Approval shall be granted if the collateral is disposed of in a commercial manner, which nets an amount closely approximating the value of the collateral;

7. the lender agrees that the Authority has final approval on the sale of all collateral for the SLP loan. After the sale of collateral, the State shall be reimbursed its 85% guaranteed portion of the principal balance at default. If funds from the sale of collateral remain after this payment, the lender shall be reimbursed its 15% of the principal balance at default. If excess funds remain after paying the principal to the State and lender, then the State and lender shall be repaid interest on a prorated basis; 85% of such excess funds shall be allocated to the State's portion and 15% shall be allocated to the lender's portion.

g) The SLP Loan shall be reviewed annually by the lender and IFA for adequacy of collateral and performance by the applicant. The applicant is required to provide the lender with a current financial statement annually.

1. If it is determined that there is not sufficient collateral to adequately secure the SLP Loan, additional collateral may be required. If the applicant is unwilling or unable to pledge additional collateral, the SLP Loan may be called due and payable.

2. If an SLP Loan is going to be called for any reason, written notice which specifies the reasons for said action must be served to all parties (IFA, lender, and borrower) not less than 90 days prior to call of the loan.

3. Failure of the applicant to make any payment on or before its due date shall render the loan delinquent. Notice of this delinquency shall immediately be sent to all parties. If the loan remains delinquent for a period of 90 days, the total outstanding principal and interest shall become due and payable immediately on the entire SLP Loan. The SLP Loan cannot be reinstated after the 90-day delinquency period.

h) In the event of default that is not cured within 90 days or in the event a loan is called for any reason, the Authority shall make payment of the guaranteed portion of the SLP Loan to the holder of the guarantee. This payment shall be equal to the sum of:

1. 85% of the principal balance as of the date of default or date of call less any proceeds received from sales of collateral;

2. 85% of the interest balance as of the date of default or call; and

3. 85% of the interest accrued from the date of default or call until the date payment is made, up to a maximum of 120 days.

i) The Illinois Farmer and Agribusiness Loan Guarantee Fund shall be used to secure State Guarantees on SLP Loans. [20 ILCS 3501/830-50]

1. The Authority shall guarantee up to $50,000,000 in loans through the SLP, YFG and SGPAI. The Illinois Farmer and Agribusiness Loan Guarantee Fund shall be funded with $15,000,000 to cover any losses under these programs.

2. The Authority shall direct payments from this fund to guarantee holders as described in subsection (h).

3. Monies returned to the State on the disposition of collateral as described in subsection (f) shall be deposited to this fund.

History

• Source: Amended at 25 Ill. Reg. 6886, effective May 30, 2001; recodified from 8 Ill. Adm. Code 1400.148 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.735 Rules and Guidelines Applicable to the State Guarantee Program for Agri-Industries

a) General Description of Program. The State Guarantee Program for Agri-Industries (SGPAI) was created to encourage diversification and vertical integration of Illinois agriculture. The provisions of this Section are applicable only to the SGPAI, and the provisions of Sections 1100.705, 1100.710, 1100.725 and 1100.730 of this Part are inapplicable to the SGPAI and procedures provided for pursuant to this Section.

b) Definitions

Words defined in the Illinois Finance Authority Act and in Section 1100.50 have the same meaning when used in this Subpart unless a more specific definition is prescribed in this Section. This Section establishes additional definitions for use in this Subpart only.

"Agribusiness" means any sole proprietorship, limited partnership, co-partnership, joint venture, corporation or cooperative which operates or will operate a facility located within the State of Illinois that is related to the processing of agricultural commodities (including, without limitation, the products of agriculture, hydroponics and silviculture) or the manufacturing, production or construction of agricultural buildings, structures, equipment, implements, and supplies, or any other facilities or processes used in agricultural production. [20 ILCS 3501/801-10(z)]

"Applicant" means a farmer/agribusiness whose application for a State Guarantee has been submitted to the Authority by a lender.

"Farmer" means a resident of Illinois who is a principal operator of farm or land, at least 50% of whose annual gross income is derived from farming, whose annual total sales of agricultural products, commodities or livestock exceeds $20,000 and whose net worth does not exceed $500,000. [20 ILCS 3501/830-35]

"Fund" means the Illinois Farmer and Agribusiness Loan Guarantee Fund, which is the State's fund to cover losses resulting from defaults on SGPAI loans.

"Gross Annual Income" means income as defined in Section 61 of the Internal Revenue Code (26 USC 61).

"State Guarantee" means a note for which the State of Illinois shall be liable for 85% of the total principal and interest of the note as described by the Authority.

c) Applicant Eligibility Requirements

1. Farmer. To qualify for participation each farmer must:

A) be a resident of Illinois [20 ILCS 3501/830-35];

B) be at least 18 years of age at the time of application;

C) be the principal operator of a farm or land for which the funds guaranteed by the State Guarantee are to be used [20 ILCS 3501/830-35];

D) be able to show, based upon his/her most recent federal income tax return and/or current data, that at least 50% of his/her gross income is derived from farming [20 ILCS 3501/830-35];

E) be able to show, based upon his/her most recent federal income tax return and/or current data, that his/her total sales of agricultural products, commodities, or livestock exceeds $20,000 [20 ILCS 3501/830-35];

F) be able to show that his/her net worth does not exceed $500,000 [20 ILCS 3501/830-35].

2. Agribusiness. To qualify for participation each agribusiness must:

A) be located in Illinois;

B) use agricultural products which are now grown or raised in Illinois, or which will be grown or raised in Illinois.

3. Joint Requirements. To qualify for participation each applicant must:

A) Promote diversification of the farm economy of this State through the growth and development of new crops or livestock not customarily grown or produced in this State or that emphasize a vertical integration of grain or livestock produced or raised in this State into a finished agricultural product for consumption or use. "New crops or livestock not customarily grown or produced in this State" shall not include corn, soybeans, wheat, swine or beef or dairy cattle. "Vertical integration of grain or livestock produced or raised in this State" shall include any new or existing grain or livestock grown or produced in this State; [20 ILCS 3501/830-35];

B) provide sufficient collateral to secure the entire loan at the time of application and agree to keep the loan collateralized in the future;

C) agree to make all payments on the State Guarantee within 90 days of the stated payment date. If any payment is not made within said 90 day period, then the total outstanding principal and interest on the entire State Guarantee loan are due and payable immediately. The State Guarantee loan cannot be reinstated after the 90 day delinquency period.

d) Any State Guarantees provided under this Section:

1. shall not exceed $500,000 per farmer or an amount as determined by the Authority on a case-by-case basis for an agribusiness;

2. shall not exceed a term of 15 years;

3. shall be subject to an annual review and renewal by the lender and the Authority. [20 ILCS 3501/830-35]

e) Application Procedures and Review

1. Lenders shall apply for the State Guarantees on forms provided by the Authority, certify that the application and any other documents submitted, such as balance sheets, security analyses, cash flow projections and feasibility studies are true and correct, and shall be liable to the Authority for any damages suffered because of an incorrect or untrue statement contained in any certified application. The application shall at a minimum contain the farmer's or agribusiness' name, address, present credit and financial information, including cash flow statements, financial statements, balance sheets and any other information pertinent to the application and the collateral to be used to secure the State Guarantee, such as feasibility studies, purchase contracts or sales contracts. [20 ILCS 3501/830-35]

2. After approval of the application and receipt of the documentation necessary prior to closing the loan, the Authority shall send a State Guarantee Closing Documents package to the lender containing all the appropriate forms and documents to execute; upon completion of all such forms and documents by the applicant, lender and Authority, the State Guarantee loan will be considered closed.

3. The application period for the SGPAI shall commence immediately upon the determination that these Rules are properly filed with the Office of the Secretary of State and end when the Authority has issued State Guarantees equal to $50,000,000 through this SGPAI program and the YFG and SLP programs, or at any later time as may be set from time to time by legislative extension.

4. Following submission of the Guarantee application by the lender, the Authority shall review the application. The Authority's review will include whether the applicant is an eligible farmer or agribusiness and whether the lender has complied with the requirements of subsection (f) of this Section. The Authority's review will also include evaluation of such factors as collateral, percentage of loan, debt to asset ratio, cash flow, and other information submitted by the applicant.

5. When a State Guarantee application is submitted to the Authority, the Executive Director shall review the application to determine whether it is complete pursuant to subsection (e)(1), and whether it meets the criteria established by the Act and this Subpart:

A) If the Executive Director determines that the loan application is incomplete, he/she shall within 14 days of such determination inform the lender and the applicant of such determination and detail the information or material that is necessary to complete the application. For the purpose of subsection (j) of this Section no application shall be deemed complete until the lender or applicants have provided the additional information or material requested by the Executive Director.

B) When the Executive Director has completed his/her review of the Guarantee application, he/she shall present the application with a statement of recommended action to the Board at its next regularly scheduled meeting. The Executive Director will base the review on such factors as collateral, percentage of loan, debt to asset ratio, cash flow and other information submitted by the applicant.

8. The Board shall review each loan application presented by the Executive Director using the criteria in subsection (e)(6), and the Board shall:

A) approve the application and provide the Guarantee pursuant to the Act and this Part; or

B) deny the application and serve upon the lender and applicant a written statement of the grounds of the denial.

9. Each applicant shall pay a $300 application fee which will be submitted to the Authority at the time of the application. At the time the loan is made, the applicant may be required to pay a closing fee not greater than ¾ of 1% of the State Guarantee loan amount. Of this ¾ of 1% closing fee, the Authority shall receive ½% to cover administrative and legal expenses and the lender shall receive ¼% to cover administrative expenses incurred in completing the application packet and closing documents. The ¾ of 1% closing fee may be included in the State Guarantee loan amount. The Authority shall credit the $300 application fee against the closing fee. The lender shall charge no fees or points in addition to those outlined herein. The applicant shall be responsible for paying any fees or charges involved in recording mortgages, releases, financing statements, insurance for secondary market issues and any other similar fees or charges necessary for closing and maintaining the State Guarantee or selling it into the secondary market. [20 ILCS 3501/830-35]

10. If the application is denied, the applicant and the lender may file a Request for Reconsideration stating reasons why the Board should withdraw its denial of the application. This Request for Reconsideration must be filed with the Authority not later than 21 days after denial and should be accompanied by supporting documents and/or information not previously considered by the Board. The Board shall review the Request at its next scheduled meeting. The review will be based on the criteria established in subsection (e)(4). Based on the review, the Board shall approve or deny the Request for Reconsideration. A denial of a Request for Reconsideration shall be final. While a Request for Reconsideration is pending, the application that is the subject of the Request shall be deemed complete for the purposes of the subsection (j) of this Section.

f) Provision or Renewal of State Guarantees. The Authority shall provide or renew a State Guarantee to a lender if, in addition to meeting the other criteria described in the Act and this Section:

1. a fee equal to 25 basis points on the loan is paid to the Authority on an annual basis by the lender, along with any other necessary expenses for maintaining the State Guarantee [20 ILCS 3501/830-35];

2. the application provides collateral acceptable to the Authority that is at least equal to the State's portion of the Guarantee to be provided [20 ILCS 3501/830-35];

3. the lender assumes all responsibility and costs for pursuing legal action on collecting any loan that is delinquent or in default subject to consulting with the Authority [20 ILCS 3501/830-35];

4. the lender agrees that it is responsible for the first 15% of the outstanding principal of the note for which the State Guarantee has been applied [20 ILCS 3501/830-35];

5. the lender assumes responsibility for proceeding with the collecting and disposing of collateral on the State Guarantee within 14 months of the date the State Guarantee is declared delinquent; provided, however, that the lender shall not collect or dispose of collateral on the State Guarantee without the express written prior approval of the Authority. Approval will be granted if the collateral is disposed of in a reasonably commercial manner based on the manner, time and place of the sale, the purchase price and the purchaser. In the event the lender does not dispose of the collateral within 14 months, the lender shall be liable to repay to the State interest on the State Guarantee equal to the same rate that the lender charges on the State Guarantee; provided that the Authority shall have the authority to extend the 14 month period for a lender in the case of bankruptcy or extenuating circumstances that prevent the lender from liquidating the collateral. [20 ILCS 3501/830-35] The lender shall repay this interest to the State until the collateral for the State Guarantee has been liquidated and the State has been reimbursed. If the lender fails to repay the State the interest as outlined herein, the Authority shall turn the matter over to the Attorney General's office for appropriate legal action;

6. agrees that after the sale of collateral, the State shall be reimbursed 85% of the remaining principal amount of the State Guarantee loan. If funds from the sale of the collateral remain after this payment, the lender shall be reimbursed 15% of the remaining principal amount of the loan. If excess funds remain after paying the remaining principal to the State and lender, then the State and lender shall be repaid interest on a pro-rated basis; 85% of such excess funds shall be allocated to the State's portion and 15% to the lender's portion. If excess funds exist after repaying both the State and the lender, these funds shall be paid to the borrower.

g) Review and Revocation

1. The SGPAI loan shall be reviewed annually by the lender and the Authority for review of collateral value and performance by the borrower. If the Authority determines that the existing collateral is insufficient to cover the State's liability, additional collateral will be requested. If the borrower fails to pledge such additional collateral, the State Guarantee may be revoked. The determination of whether to revoke the State Guarantee will be based on the borrower's ability to service the debt. If the Authority calls the State Guarantee, the holder of the Guarantee will be paid 85% of the outstanding principal and interest balance and the borrower will be liable to reimburse the State.

2. A State Guarantee may be revoked by the lender or the Authority upon a 90-day written notice to all parties specifying the reasons for such revocation (e.g., submission of false documents, changing loan documents or change of State residency).

3. If an interest rate is variable, a lender may not withdraw from a SGPAI loan for any reason except for lack of performance on the borrower's part, insufficient collateral, or maturity. [20 ILCS 3501/830-35]

4. A lender may review and withdraw or continue with a State Guarantee on an annual basis after the first five years following closing of the loan application if the loan contract provides for an interest rate that shall not vary. [20 ILCS 3501/830-35] If a lender undertakes such a review, it must provide written notification of its decision whether to withdraw or continue. Such notification must be provided on or before the date on which payment is due.

5. The applicant must make all payments within 90 days after the stated payment date. Failure to make any payments on or before its due date shall render the loan delinquent. Notice of this delinquency shall immediately be sent to all parties. If the loan remains delinquent for a period of 90 days, the total outstanding principal and interest balances on the SGPAI loan shall become due and payable. The State Guarantee cannot be reinstated after the 90-day delinquency period.

h) Valuation of Collateral. All collateral shall be evaluated by IFA staff or appraised by a qualified appraiser. A qualified appraiser is one who is qualified by virtue of membership in the Illinois Society of Farm Managers and Appraisers or one whose qualifications have been reviewed by the Authority. The Authority will consider an appraiser qualified who has at least three years experience appraising farmland. The Authority shall have final authority to determine whether the collateral is sufficient to cover the State Guarantee loan and may appoint an independent appraiser to aid in its determination. The Authority will view real estate as the primary collateral on SGPAI loans. Machinery and equipment and breeding livestock will be used only as secondary collateral except where no real estate is available. Collateral value may be reviewed each year by the lender or an independent appraiser appointed by the Authority. The applicant shall be liable to pay for all appraisal fees which are incurred when the value of the collateral is established.

i) Fund. To implement and carry out the objectives of the SGPAI, there is created outside of the State's Treasury a special fund to be known as the Illinois Farmer and Agribusiness Loan Guarantee Fund. [20 ILCS 3501/830-35]

1. The Authority is authorized to transfer an amount not to exceed $15,000,000 to the fund during the SGPAI, Young Farmer Guarantee, and Specialized Livestock Guarantee.

2. The State will not be liable for more than $15,000,000 to secure State Guarantees issued under this Section, Young Farmer Guarantees under Section 1100.720, and Specialized Livestock Guarantees under Section 1100.730.

3. In the event of default by the farmer or agribusiness on State Guarantee Loans, the lender shall be entitled to, and the Authority shall direct payment on, the State Guarantee after 90 days of delinquency. [20 ILCS 3501/830-35] The Authority shall direct a single payment equal to 85% of the outstanding principal plus interest accrued since the date payment was due.

4. The fund shall be reimbursed for any amount paid under this subsection (i) upon liquidation of the collateral. [20 ILCS 3501/830-35]

j) Priority of Applications. Applications shall be processed by the Authority on a first-come, first-served basis, based upon the receipt of all completed documents.

k) Guarantors and Additional Collateral. An applicant for a State Guarantee loan may have a guarantor co-sign the note and/or pledge additional collateral for the State Guarantee loan if the lender and the Authority determine that the applicant alone cannot provide sufficient collateral.

l) The State Guarantee. In the event of default, the Authority shall make payment on the State Guarantee of 85% of the outstanding principal and interest owned on the State Guarantee to the holder of the State Guarantee within 30 days after receiving an appropriate request from the lender certifying that the 90-day delinquency period has elapsed.

m) Prepayment of Loan. The frequency of payments due on a SGPAI loan shall be determined on a case by case basis. Payment schedules will be tailored to match the operation's income. The loan may be prepaid in full or in part without penalty at any time during the term of the loan.

n) Assumption of Loans. State Guarantee loans may not be assumed except with the approval of the Board. Approval will be granted only in unusual circumstances such as death of the borrower with assumption by a family member.

o) Total Obligations Through the SGPAI. The Authority shall guarantee up to $50,000,000 in loans through the SGPAI, the Young Farmer Guarantee, and the Specialized Livestock Guarantee. The Illinois Farmer and Agribusiness Loan Guarantee Fund shall be funded with $15,000,000 to cover any losses.

History

• Source: Amended at 26 Ill. Reg. 7084, effective May 10, 2002; recodified from 8 Ill. Adm. Code 1400.149 at 31 Ill. Reg. 12104

74 Ill. Adm. Code 1100.800 Definitions

The following definitions apply in this Subpart:

"Applicant" means a unit of local government, including any municipality, township, township fire department, or special district such as a fire protection district that operates a fire department or provides fire suppression services itself without contracting those services from another entity.

"Authority" means the Illinois Finance Authority created by the Illinois Finance Authority Act [20 ILCS 3501] or its successor agency.

"Board" means the governing body of the entity receiving the loan.

"Brush Truck" means a pickup chassis with or equipped with a flatbed or a pickup box. The brush truck must be rated by the manufacturer as between three-fourths of a ton and one ton and outfitted with a fire or rescue apparatus.

"Fire Department" means a fire department, fire protection district, or township fire department that is a unit of local government (as defined in Article VII, Section 1 of the Illinois Constitution of 1970 and in 5 ILCS 70/1.28) in Illinois that provides fire suppression within a geographical area. For purposes of this Part, "Fire Department" is defined to include volunteer fire departments and volunteer fire protection districts (that are units of local government).

"Fire Truck" means an emergency vehicle identified as a pumper, ladder, truck, elevating platform, rescue truck, tanker, or squad truck.

"Fund" means the Fire Truck Revolving Loan Fund.

"Funding Date" means the date on which a zero-interest loan or low-interest loan is closed and funded.

"Low-Interest Loan" means a loan with a fixed rate of interest lower than commercially available.

"OSFM" means the Office of the State Fire Marshal.

"Program" means the Illinois Fire Truck Revolving Loan Program.

"Recipient" means an applicant that has successfully applied for and received all required approvals from OSFM and the Authority, agreed to and executed loan documentation prepared by the Authority, and closed and funded its fire truck or brush truck loan.

"Zero-Interest Loan" means a loan bearing a zero percent rate of interest for the duration of the loan.

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.803 Severability

If any Section, subsection, sentence or clause of this Subpart shall be held by a court of competent jurisdiction to be invalid, that holding shall not affect the remaining portions of this Subpart.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.805 Purpose

a) OSFM and the Authority may jointly administer a Program to provide zero‑interest loans or low-interest loans to eligible applicants to finance or reimburse all or a portion of the cost of purchasing fire trucks or brush trucks, subject to availability of funds.

b) For-profit entities, nonprofit entities, associations and/or not-for-profit corporations are not eligible to apply for a loan under this program. Units of local government that do not operate fire departments are similarly not eligible (e.g., a municipality that contracts for fire suppression from another municipality or fire protection district would be ineligible).

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.810 Eligible Expenditures

a) Subject to the availability of funds, loans are available to be made under the Program for zero-interest loans or low-interest loans to applicants for the purchase of fire trucks or brush trucks as deemed eligible under OSFM's administrative rules at 41 Ill. Adm. Code 290.20 and 290.30.

b) Loan proceeds may be used to pay off a loan that was obtained no more than one year prior to the program application deadline posted by OSFM if the loan being paid off was obtained to purchase the fire truck or brush truck that is the subject of the application that was approved under this Program.

History

• Source: Amended at 49 Ill. Reg. 5271, effective April 3, 2025

74 Ill. Adm. Code 1100.815 Loan Application Review

a) Applications for loans to be made pursuant to the Program shall be submitted to OSFM on forms provided by, and following the procedures established by, OSFM and the Authority. Each application shall be reviewed by OSFM. OSFM will determine, based on equipment needs, financial need, and how recently the applicant has received a previous loan under this Program, which eligible applicant or applicants shall be recommended to the Authority for further consideration to receive a loan under this Program to finance the purchase of a fire truck or brush truck.

b) Applications approved by OSFM will be forwarded to the Authority. The Authority will review the loan application and any supplemental information provided in connection with each loan application, including, without limitation, financial statements and certifications and assurances provided by officers of the applicant, and any related Board-approved ordinances, resolutions, tax levies, budgets or other pertinent documents necessary to evaluate legal authorization and determine creditworthiness of the applicant.

c) The Authority, after completion of its review, will notify OSFM of which loan applications have been approved. OSFM will notify each applicant of the approval or disapproval of its application. Applicants who are not approved may request reconsideration of the determination of OSFM or the Authority by following the Request for Reconsideration procedures established by OSFM (see 41 Ill. Adm. Code 290.60).

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.817 Funding Criteria and Credit Review Process

In addition to the loan application review criteria developed by OSFM (see 41 Ill. Adm. Code 290.55), the credit review process and funding criteria approved by the Authority for this Program are as follows:

a) The Authority's Executive Director, or their designee will review submitted application documentation to ensure that all documents necessary for the Authority to initiate its credit and due diligence review are present (see 41 Ill. Adm. Code 290.40).

b) If an applicant is delinquent on a previous loan funded by the Authority, the applicant shall be automatically disqualified from funding under this Program until any loan repayment delinquency has been cured.

c) The applicant must demonstrate its ability to meet at least one of the following minimum debt service coverage requirements:

1. General fund revenues or specified revenue stream: 1.25x; or

2. State intercept revenues: 1.25x; or

3. Direct property levy for the loan: 1.00x.

d) The applicant must submit supporting documentation for the source of repayment as follows:

1. For general fund or specified revenues, submit a current board-approved budget that reflects the identified revenue source and amount (or, as applicable, beginning in the first fiscal year for which a scheduled loan payment will be due); or

2. For direct property tax levy (i.e., general obligation), submit a copy of the levy and the ordinance authorizing the levy prior to the funding date or in advance of the fiscal year during which the initial loan payment will be due.

e) If the applicant's repayment source is property tax receipts, the applicant's actual property tax collections over the past three fiscal years must exceed 95% of the total possible tax collection.

f) The applicant must provide a resolution or ordinance approved by the applicant's governing board that authorizes approval of the following:

1. Loan Application;

2. Loan Agreement;

3. Sources and amounts of repayment;

4. Consent to a State intercept of state-sourced revenues, as applicable; and

5. Lien on the fire truck or brush truck purchased, if required by the Authority.

g) Each loan must be secured by the applicant's:

1. General funds or, if available, a direct property tax levy or State revenue intercept; and

2. If the Authority in its sole discretion determines it is necessary, possession of the title to the property or an Authority lien on the equipment purchased.

History

• Source: Amended at 49 Ill. Reg. 5271, effective April 3, 2025

74 Ill. Adm. Code 1100.820 Loan Documents and Servicing

a) Loan applications approved by OSFM and the Authority will be submitted to the Authority to prepare loan documentation and funding. Subject to the availability of funds, the Authority will prepare the loan documentation, including, without limitation, a Loan Agreement to evidence the loan.

b) The loan documentation will be provided to the applicant for execution. Upon execution of the loan documentation, subject to the availability of funds, the Authority will execute the loan documentation and cause the loan to be funded.

c) The Authority will retain the executed loan documents and will service funded loans.

d) The Authority reserves the right to charge an origination/processing fee of up to $500 per applicant that receives an approved loan. The amounts attributable to this origination/processing fee shall be deducted from the loan proceeds released upon closing and funding of the loan.

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.825 Repayment Procedures

a) Loans shall be repaid within 20 years, except that loans to finance acquisition of brush trucks shall be repaid within 10 years.

b) For the purchase of brush trucks by a fire department, the Program shall provide loans at a 2% rate of simple interest per year if both the brush truck chassis and the apparatus are built outside of Illinois; a 1% rate of simple interest per year if either the brush truck chassis or the apparatus is built in Illinois; or a 0% rate if both the brush truck chassis and the apparatus are built in Illinois. The applicable interest rate shall be fixed and remain in effect for the term of the loan.

c) The rate of interest on loans under the Program, except for brush trucks, will be a 0% fixed interest rate (and remain in effect until the final maturity date of the loan) unless the applicant has one or more investment grade credit ratings (i.e., at or above "Baa3" or "BBB-" or the equivalent) from any nationally recognized municipal credit rating agency. The applicable interest rate shall be fixed and remain in effect until the final maturity date of the loan.

d) For applicants that do not qualify for 0% loans pursuant to subsection (c), the interest rate shall be determined as follows:

1. Effective January 1, 2025, the interest rate will be set as of January 1 for applications received during such calendar year irrespective of the calendar year when any loan closes and funds;

2. The interest rate will be equivalent to 50% of the mean of the Bond Buyer's 20-Bond General Obligation Index for the 12 month period that ended September 30 of the prior calendar year; and

3. The loans will bear interest on a simple interest basis. The applicable interest rate shall be fixed and remain in effect until the final maturity date of the loan.

e) Payments on the loan (principal and accrued interest, if any) shall be made on an annual basis in equal installments as provided in the Loan Agreement with the Authority, subject to the applicable minimum annual amortization requirement set forth in the Act. [20 ILCS 3501/825-80(d)] The Authority shall deposit the payments received into the Fire Truck Revolving Loan Fund in accordance with the Act, if required by law.

1. Loan payments shall be due on November 1 of each year, with the initial payment due based on the loan funding date, as follows:

A) If the time period between loan funding date and the immediately following November 1 is 180 days or more, the first payment shall be due on November 1 immediately following the loan funding date; or

B) If the time period between the loan funding date and the immediately following November 1 is less than 180 days, the first payment shall be due on the second November 1.

2. After the first payment is made, succeeding payments shall be due on each November 1 thereafter until repaid in full.

3. Payments shall be made payable to the "Illinois Finance Authority – Fire Truck Revolving Loan Fund", with payments submitted by wire transfer, by electronic funds transfer (automated clearing house), or by check pursuant to instructions provided in the annual invoice on each loan.

4. Payments not received within 15 calendar days after the due date shall be assessed a penalty of 5% of the payment amount due. Nevertheless, this late payment penalty shall be waived whenever the postmark date on an envelope used to submit a payment by check is dated a minimum of five days or more before the end of the 15 calendar day grace period. Payments remitted via wire transfer shall not be assessed late payment penalty if the wire transfer payment is received before the end of the 15-day grace period.

5. A recipient may prepay all or a portion of the balance due on the loan, without penalty, on any date, provided that the recipient initiates contact with the Authority to obtain the total amount of the principal and accrued interest, if any, due on the repayment date.

History

• Source: Amended at 49 Ill. Reg. 5271, effective April 3, 2025

74 Ill. Adm. Code 1100.830 Terms and Conditions of Loan Agreement

A loan application approved by OSFM and the Authority is subject to the following terms:

a) Loan proceeds under this Program shall be used exclusively for the eligible expenditures listed in Section 1100.810 and shall be expended in accordance with the approved application and the recipient's policies and procedures related to those expenditures. In the event that the loan proceeds are not expended in the manner approved, the recipient, upon written notification from the Authority, shall be required to submit, by the next payment due date, payment of the outstanding principal and accrued interest, if any, of the loan.

b) Loan proceeds shall be obligated no later than six months following the loan funding date.

c) Proof of use of loan proceeds for the funded zero-interest loan or low-interest loan shall be provided to the Authority and OSFM in writing pursuant to terms specified in the Loan Agreement.

d) Loan proceeds shall be included in the recipient's budget.

e) If a payment delinquency or default is not cured within 90 calendar days by payment of the amount owed to the Authority, the Authority shall notify the Office of the Comptroller to deduct the amount owed from any payments by the State to the recipient. OSFM and/or the Authority may avail themselves of all remedies, rights and provisions of law applicable in these circumstances. Failure to exercise any rights or remedies provided by law may not be used as a defense by the recipient in any proceeding brought against it by OSFM or the Authority.

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.900 Definitions

The following definitions apply in this Subpart:

"Ambulance" means an on-road vehicle that is specifically designed, constructed or modified and equipped and is intended to be used for and is maintained or operated for the emergency transportation of persons who are sick, injured, wounded or otherwise incapacitated or helpless.

"Applicant" means a unit of local government, including any municipality (i.e., city, village or town), township, township fire department, or special district (including but not limited to those described in 55 ILCS 100/1001 and 60 ILCS 1/195-5 and 200-13) such as a fire protection district or special ambulance service district that operates a fire department or provides fire suppression services itself without contracting those services from another entity, or an entity that provides ambulance services or emergency medical services that does not earn and distribute taxable business earnings to shareholders or principals of the business and is in good standing as a not-for-profit business with the Illinois Secretary of State.

"Authority" means the Illinois Finance Authority created by the Illinois Finance Authority Act [20 ILCS 3501] or its successor agency.

"Board" means the governing body of the entity receiving the loan.

"Fire Department" means a fire department, fire protection district, or township fire department that is a unit of local government (as defined in Article VII, Section 1 of the Illinois Constitution of 1970 and in 5 ILCS 70/1.28) in Illinois that provides fire suppression within a geographical area. For purposes of this Part, "Fire Department" is defined to include volunteer fire departments and volunteer fire protection districts (that are units of local government).

"Fund" means the Ambulance Revolving Loan Fund.

"Funding Date" means the date on which a zero-interest loan or low-interest loan is closed and funded.

"Low-Interest Loan" means a loan with a fixed rate of interest lower than commercially available.

"OSFM" means the Office of the State Fire Marshal.

"Program" means the Illinois Ambulance Revolving Loan Program.

"Recipient" means an applicant that has successfully applied for and received all required approvals from OSFM and the Authority, agreed to and executed loan documentation prepared by the Authority, and closed and funded its ambulance loan.

"Zero-Interest Loan" means a loan bearing a zero percent rate of interest for the duration of the loan.

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.903 Severability

If any Section, subsection, sentence or clause of this Subpart shall be held by a court of competent jurisdiction to be invalid, that holding shall not affect the remaining portions of this Subpart.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.905 Purpose

a) OSFM and the Authority may jointly administer a Program to provide zero‑interest loans or low-interest loans to eligible applicants to finance or reimburse all or a portion of the cost of purchasing ambulances subject to availability of funds.

b) For-profit entities are not eligible to apply for a loan under this Program. Units of local government that do not operate fire departments are similarly not eligible (e.g., a municipality that contracts for ambulance services from another municipality or fire protection district is ineligible).

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.910 Eligible Expenditures

a) Subject to the availability of funds, loans are available to be made under the Program for zero-interest loans and low-interest loans to applicants for the purchase of ambulances as deemed eligible under OSFM's administrative rules at 41 Ill. Adm. Code 292.20 and 292.30.

b) Loan proceeds may be used to pay off a loan that was obtained no more than one year prior to the program application deadline posted by OSFM if the loan being paid off was obtained to purchase the ambulance that is the subject of the application that was approved under this Program.

History

• Source: Amended at 49 Ill. Reg. 5271, effective April 3, 2025

74 Ill. Adm. Code 1100.915 Loan Application Review

a) Applications for loans to be made pursuant to the Program shall be submitted to OSFM on forms provided by, and following the procedures established by, OSFM and the Authority. Each application shall be reviewed by OSFM. OSFM will determine, based on equipment needs, financial need, and how recently the applicant has received a previous loan under this Program, which eligible applicant or applicants shall be recommended to the Authority to receive a loan under this Program for the purchase of an ambulance.

b) Applications approved by OSFM will be forwarded to the Authority. The Authority will review the loan application and any information provided in connection with the loan application, including, without limitation, financial statements and certifications and assurances provided by officers of the applicant, and any related Board-approved ordinances, resolutions, tax levies, budgets or other pertinent documents necessary to evaluate legal authorization and creditworthiness of the applicant.

c) The Authority, after completion of its review, will notify OSFM of which loan applications have been approved. OSFM will notify each applicant of the approval or disapproval of its application. Applicants who are not approved may request reconsideration of the determination of OSFM or the Authority by following the Request for Reconsideration procedure established by OSFM (see 41 Ill. Adm. Code 292.70).

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.917 Funding Criteria and Credit Review Process

In addition to the Criteria for Review of Loan Applications developed by OSFM (see 41 Ill. Adm. Code 292.60), the credit review process and funding criteria approved by the Authority for this Program are as follows:

a) The Authority's Executive Director, or his or her designee will review submitted application documentation to ensure that all documents necessary for the Authority to initiate its credit and due diligence review are present (see 41 Ill. Adm. Code 292.40).

b) If an applicant is delinquent on a previous loan funded by the Authority, the applicant shall be automatically disqualified from funding under this Program until any loan repayment delinquency has been cured.

c) The applicant must demonstrate its ability to meet at least one of the following minimum debt service coverage requirements:

1. General fund revenues or specified revenue stream: 1.25x; or

2. State intercept revenues: 1.25x; or

3. Direct property levy for the loan: 1.00x.

d) The applicant must submit supporting documentation for the source of repayment as follows:

1. For general fund or specified revenues, submit a current Board-approved budget that reflects the identified revenue sources and amounts (or, as applicable, beginning in the first fiscal year for which a scheduled loan payment will be due); or

2. For direct property tax levy (i.e., general obligation), submit a copy of the levy and the ordinance authorizing the levy prior to the funding date or in advance of the fiscal year during which the initial loan payment will be due.

e) If the applicant's repayment source is property tax receipts, the applicant's actual property tax collections over the past three fiscal years must exceed 95% of the total possible tax collection.

f) The applicant must provide a resolution or ordinance approved by the applicant's governing board that authorizes approval of the following:

1. Loan Application;

2. Loan Agreement;

3. Sources and amounts of repayment;

4. Consent to a State intercept of state-sourced revenues, as applicable; and

5. Lien on the ambulance purchased, if required by the Authority.

g) Each loan must be secured by the applicant's:

1. General funds or, if available, a direct property tax levy or State revenue intercept; and

2. If the Authority in its sole discretion determines it is necessary, possession of the title to the property or an Authority lien on the equipment purchased.

History

• Source: Amended at 49 Ill. Reg. 5271, effective April 3, 2025

74 Ill. Adm. Code 1100.920 Loan Documents and Servicing

a) Loan applications approved by OSFM and the Authority will be submitted to the Authority to prepare loan documentation and funding. Subject to the availability of funds, the Authority will prepare the loan documentation, including, without limitation, the Loan Agreement to evidence the loan.

b) The loan documentation will be provided to the applicant for execution. Upon execution of the loan documentation, subject to the availability of funds, the Authority will execute the loan documentation and cause the loan to be funded.

c) The Authority will retain the executed loan documents and will service funded loans.

d) The Authority reserves the right to charge an origination/processing fee of up to $500 per applicant that receives an approved loan. The amounts attributable to this origination/processing fee shall be deducted from the loan proceeds released upon closing and funding of the loan.

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.925 Repayment Procedures

a) Loans shall be repaid within 10 years.

b) The rate of interest on loans under the Program will be a 0% fixed interest rate (and remain in effect for the duration of the loan) unless the applicant has one or more investment grade credit ratings (i.e., at or above "Baa3" or "BBB-" or the equivalent) from any nationally recognized municipal credit rating agency.

c) For applicants that do not qualify for zero-percent loans pursuant to subsection (b), the interest rate shall be determined as follows:

1. Effective January 1, 2025, the interest rate will be set as of January 1 for applications received during such calendar year irrespective of the calendar year when any loan closes and funds;

2. The interest rate will be equivalent to 50% of the mean of the Bond Buyer's 20-Bond General Obligation Index for the 12 month period that ended September 30 of the prior calendar year;

3. The loans will bear a fixed interest rate on a simple interest basis. The applicable interest rate shall be in effect for the duration of the loan.

d) Payments on the loan (principal and accrued interest, if any) shall be made on an annual basis in equal installments as provided in the Loan Agreement with the Authority, subject to the applicable minimum annual amortization requirement set forth in the Act. The Authority shall deposit the payments received into the Ambulance Revolving Loan Fund in accordance with the Act, if required by law.

1. Loan payments shall be due on November 1 of each year with the initial payment due based on the loan funding date as follows:

A) If the time period between the loan funding date and the immediately following November 1 is 180 days or more, the first payment shall be due on November 1 immediately following the loan funding date; or

B) If the time period between the loan funding date and the immediately following November 1 is less than 180 days, the first payment shall be due on the second November 1 immediately following the loan funding date.

2. After the first payment is made, succeeding payments shall be due on each November 1 thereafter until repaid in full.

3. Payments shall be made payable to the "Illinois Finance Authority − Ambulance Revolving Loan Fund" with payments submitted by wire transfer, by electronic funds transfer (automated clearing house), or by check pursuant to instructions provided in the annual invoice on each loan.

4. Payments not received within 15 calendar days after the due date shall be assessed a penalty of 5% of the payment amount due. Nevertheless, this late payment penalty shall be waived whenever the postmark date on the envelope used to submit the payment is dated five days or more before the end of the 15-day grace period. Payments remitted via wire transfer shall not be assessed late payment penalty if the wire transfer payment is received before the end of the 15-day grace period.

5. Recipient may prepay all or a portion of the balance due on the loan, without penalty, on any date, provided that the recipient first contacts the Authority to obtain the total amount of the principal and accrued interest, if any, due on the repayment date.

History

• Source: Amended at 49 Ill. Reg. 5271, effective April 3, 2025

74 Ill. Adm. Code 1100.930 Terms and Conditions of Loan Agreement

A loan application approved by OSFM and the Authority is subject to the following terms:

a) Loan proceeds under this Program shall be used exclusively for the purposes listed in Section 1100.910 and shall be expended in accordance with the approved application and the recipient's policies and procedures related to those expenditures. In the event that the loan proceeds are not expended in the manner approved, the recipient, upon written notification from the Authority, shall be required to submit, by the next payment due date, payment of the outstanding principal and accrued interest, if any, of the loan.

b) Loan proceeds shall be obligated no later than six months following the loan funding date.

c) Proof of use of loan proceeds for the funded zero-interest or low-interest loan shall be provided to the Authority and OSFM in writing pursuant to terms specified in the Loan Agreement.

d) Loan proceeds shall be included in the recipient's budget.

e) If a payment delinquency or default is not cured within 90 calendar days by payment of the amount owed to the Authority, the Authority shall notify the Office of the Comptroller to deduct the amount owed from any payments by the State to the recipient. OSFM and/or the Authority may avail themselves of all remedies, rights and provisions of law applicable in these circumstances. Failure to exercise any rights or remedies provided by law may not be used as a defense by the recipient in any proceeding brought against it by OSFM or the Authority.

History

• Source: Amended at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1000 Definitions

The following definitions apply in this Subpart:

"Act" means the Fire Sprinkler Dormitory Act [110 ILCS 47].

"Applicant" means a post-secondary educational institution applying to OSFM and the Authority for a low interest loan under the Program.

"Authority" means the Illinois Finance Authority created by the Illinois Finance Authority Act [20 ILCS 3501] or its successor agency.

"Fire Sprinkler System" means a fire sprinkler system located in an existing or newly constructed dormitory or residence hall of a post-secondary educational institution that has received the permits, certifications and inspections required by federal, State and local law, rule, guideline or ordinance.

"Fund" means the Fire Sprinkler Dormitory Revolving Loan Fund.

"Low Interest Loan" means a loan with a rate of interest to be charged under the Program as determined by the Board of the Authority at the time of the loan approval, at a rate lower than current market rates.

"OSFM" means the Office of the State Fire Marshal.

"Post-Secondary Educational Institution" means an Illinois public or private college or university offering degrees and instruction above the high school level. This term does not include:

any public or private college or university that does not provide on-campus housing for its students in dormitories or equivalent facilities that are owned, operated or maintained by the public or private college or university;

any public or private junior college or community college; or

any institution offering degrees and instruction that uses correspondence as its primary mode of student instruction.

"Program" means the Illinois Fire Sprinkler Dormitory Revolving Loan Program authorized by the Act and outlined in this Subpart.

History

• Source: Added at 34 Ill. Reg. 3272, effective February 23, 2010

74 Ill. Adm. Code 1100.1005 Purpose

OSFM and the Authority will jointly administer a Program to provide low interest loans to post-secondary educational institutions, the proceeds of which shall be used to pay all or any portion of the costs associated with planning, purchasing, installing, upgrading, altering, modifying, fixing or repairing a fire sprinkler system. OSFM will determine loan awards based on system needs, financial need and how recently the applicant has received a previous loan under this Program, supplemented by recommendations from the Authority based on creditworthiness. Low interest loans for the purchase of fire sprinkler systems shall not exceed $1,000,000 in any single fiscal year to any post-secondary educational institution.

History

• Source: Added at 34 Ill. Reg. 3272, effective February 23, 2010

74 Ill. Adm. Code 1100.1010 Eligible Expenditures

Subject to the availability of monies in the Fund, low interest loans to post-secondary educational institutions will be available for the purpose of paying all or a portion of the costs associated with planning, purchasing, installing, upgrading, altering, modifying, fixing or repairing a fire sprinkler system.

History

• Source: Added at 34 Ill. Reg. 3272, effective February 23, 2010

74 Ill. Adm. Code 1100.1015 Loan Application Review

a) Applications by post-secondary educational institutions for low interest loans to be made pursuant to the Program shall be submitted to OSFM on forms provided by, and following the procedures established by, OSFM. Each application shall be reviewed by OSFM. OSFM will determine, based on system needs, financial need and how recently the applicant has received a previous loan under this Program, which eligible post-secondary educational institution will be recommended to the Authority to receive a low interest loan under this Program.

b) Applications approved by OSFM will be forwarded to the Authority. The Authority will review the low interest loan application and any information provided in connection with the application, including, without limitation, financial statements, certifications and assurances provided by officers of the post-secondary educational institution to determine the creditworthiness of the institution.

c) The Authority, after completion of its review of the applicant's creditworthiness, will notify OSFM of which loan applications have been approved. OSFM will notify each applicant of the approval or disapproval of its application. Applicants who are not approved may appeal the determination of OSFM by following the appeal process established by OSFM.

d) In the event that applications for low interest loans exceed available funds, OSFM and the Authority will jointly determine criteria for the award based on the financial need of the applicant and other criteria that may be deemed appropriate by OSFM and the Authority.

History

• Source: Added at 34 Ill. Reg. 3272, effective February 23, 2010

74 Ill. Adm. Code 1100.1017 Funding Criteria and Credit Review Process

In addition to the criteria developed by OSFM, the credit review process and funding criteria approved by the Authority for this Program are as follows:

a) If an applicant is delinquent on a previous loan under the Program, the applicant is automatically disqualified for an additional low interest loan from the Program until it is current on its loan repayment.

b) Applicants are eligible for only one loan under the Program within any fiscal year.

c) The applicant must demonstrate its ability to meet at least one of the following minimum debt service coverage requirements:

1. General fund revenues or specified revenue stream: 1.25x; or

2. State intercept revenues: 1.25x.

d) Prior to funding, the applicant must submit supporting documentation for the source of repayment of the low interest loan as follows:

1. For general fund or specified revenues, submit a current board-approved budget that reflects the identified revenue source and amount; or

2. For direct property tax levy, submit a copy of the levy and the ordinance or resolution authorizing the levy.

e) If the applicant's repayment source is property tax receipts, the applicant's actual property tax collections over the past three fiscal years must exceed 95% of the total possible tax collection.

f) The applicant must provide a resolution or ordinance approved by the applicant's Board that includes the following approvals:

1. Loan application, approved by OSFM and the Authority in the fiscal year in which the low interest loan is to be awarded;

2. Loan Agreement;

3. Source and amount of repayment; and

4. State intercept agreement.

g) Each loan must be secured by the applicant's:

1. General funds or, if available, a direct property tax levy; and/or

2. State revenue intercept agreement; and/or

3. A mortgage on the real property on which the fire sprinkler system is located.

h) The Authority Board will approve loans made under the Program by resolution.

History

• Source: Added at 34 Ill. Reg. 3272, effective February 23, 2010

74 Ill. Adm. Code 1100.1020 Loan Documents and Servicing

a) Approved loan applications will be submitted to the Authority for documentation and funding. Subject to the availability of monies in the Fund, the Authority will prepare a loan agreement, evidencing the loan to the post-secondary educational institution.

b) The loan documents will be provided to the post-secondary educational institution for execution. Upon execution of the loan documents, subject to the availability of monies in the Fund, the Authority will execute the loan documents and cause the loan to be funded.

c) The Authority will retain the executed loan documents, as well as evidence of security supporting the loan, and will service funded loans under the Program.

d) The Authority reserves the right to charge an origination/processing fee of up to $5,000 per applicant that receives an approved loan.

History

• Source: Added at 34 Ill. Reg. 3272, effective February 23, 2010

74 Ill. Adm. Code 1100.1025 Repayment Procedures

a) The maturity date of the loans shall be determined by OSFM and the Authority, but shall not exceed 20 years.

b) Payments of principal and interest on the loan shall be made according to the schedule determined by OSFM and the Authority. The Authority will provide invoices to loan recipients for those payments. Payments shall be made to the Illinois Finance Authority. Payments not received within 15 calendar days after the due date shall be assessed a penalty of 5 percent of the payment due; however, the late payment penalty will be waived when the postmark date on the envelope used to submit the payment is five days or more before the end of the 15-day grace period.

c) A post-secondary educational institution may prepay the balance due on the loan in its entirety, or a portion of the balance, on any scheduled payment date, provided that the post-secondary educational institution first contacts the Authority to obtain the total amount of the principal due at that time.

History

• Source: Added at 34 Ill. Reg. 3272, effective February 23, 2010

74 Ill. Adm. Code 1100.1030 Terms and Conditions of Loan Agreement

An approved loan is subject to the following terms:

a) Loan proceeds under this Program shall be used exclusively for the purposes listed in Section 1100.1005 and shall be expended in accordance with the approved application and the applicant's policies and procedures related to the expenditures. In the event the loan proceeds are not expended in the manner approved, then the post-secondary educational institution, upon written notification from OSFM, shall, within 90 calendar days after the date of the notification, submit payment of the outstanding principal of the loan.

b) Loan proceeds shall be spent no later than six months following the receipt of the loan.

c) Use of loan proceeds shall be accounted for in accordance with standard accounting practices. Loan recipients shall submit to OSFM a report detailing how the loan proceeds were used. This expenditure report, to be submitted on a form supplied by OSFM, shall be due not later than nine months following receipt of the loan.

d) In the event of default that is not cured within 90 calendar days, OSFM shall notify the Office of the Comptroller to deduct the amount owed from any payments from other State agencies, if any, and the post-secondary educational institution shall be ineligible for additional loans until good standing has been restored. In addition, OSFM and/or the Authority may avail itself of all remedies, rights and provisions of law applicable in the circumstances, and the failure to exercise or exert any rights or remedies provided by law may not be raised as defense by the post-secondary educational institution in default.

History

• Source: Added at 34 Ill. Reg. 3272, effective February 23, 2010

74 Ill. Adm. Code 1100.1100 Definitions

The following definitions apply in this Subpart:

"Applicant" means a unit of local government, including any municipality, township, township fire department, or special district such as a fire protection district that operates a fire department or provides fire suppression services itself without contracting those services from another entity.

"Authority" means the Illinois Finance Authority created by the Illinois Finance Authority Act [20 ILCS 3501] or its successor agency.

"Board" means the governing body of the entity receiving the loan.

"Fire Department" means a fire department, fire protection district, or township fire department that is a unit of local government (as defined in Article VII, Section 1 of the Illinois Constitution of 1970 and in Section 1.28 of the Statute on Statutes [5 ILCS 70/1.28] in Illinois that provides fire suppression within a geographical area. For purposes of this Part, "Fire Department" is defined to include volunteer fire departments and volunteer fire protection districts (that are units of local government.

"Fire Station" means a building or structure set aside for storage of firefighting apparatus, personal protective equipment, fire hose, and other fire extinguishing equipment. It may also include dormitory living facilities and work areas such as offices, meeting rooms, workshops, kitchens or laundry facilities. The term includes additions to existing buildings as well as new construction.

"Fund" means the Fire Station Revolving Loan Fund.

"Funding Date" means the date on which a zero-interest or low-interest loan is closed and funded.

"Low Interest Loan" means a loan with a fixed rate of interest lower than commercially available.

"OSFM" means the Office of the State Fire Marshal.

"Program" means the Illinois Fire Station Revolving Loan Program.

"Recipient" means an applicant that has successfully applied for and received all required approvals from OSFM and the Authority, agreed to and executed loan documentation prepared by the Authority, and closed and funded its fire station loan.

"Zero-Interest Loan" means a loan bearing a zero percent rate of interest for the duration of the loan.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1103 Severability

If any Section, subsection, sentence or clause this Subpart shall be held by a court of competent jurisdiction to be invalid, that holding shall not affect the remaining portions of this Subpart.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1105 Purpose

a) OSFM and the Authority may jointly administer a program to provide zero‑interest or low-interest loans to eligible applicants to finance or reimburse all or a portion of the costs associated with the construction, rehabilitation, remodeling or expansion of a fire station or acquisition of land for the construction or expansion of a fire station, subject to the availability of funds. Loans for the purpose of a fire station shall not exceed $2,000,000 per fire department.

b) For-profit entities, nonprofit entities, associations and/or not-for-profit corporations are not eligible to apply for a loan under this Program. Units of local government that do not operate fire departments are similarly not eligible (e.g., a municipality that contracts for fire suppression from another municipality or fire protection district).

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1110 Eligible Expenditures

Subject to availability of funds, loans are available to be made under the Program for zero‑interest or low-interest loans to applicants for the construction, rehabilitation, remodeling or expansion of a fire station or acquisition of land for the construction or expansion of a fire station.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1115 Loan Application Review

a) Applications for loans to be made pursuant to the Program shall be submitted to OSFM on forms provided by, and following the procedures established by, OSFM and the Authority. Each application shall be reviewed by OSFM. OSFM will determine, based on equipment needs, financial need, and how recently the applicant has received a previous loan under this Program, which eligible applicant or applicants shall be recommended to the Authority for further consideration to receive a loan under this Program to finance the construction, rehabilitation, remodeling or expansion of a fire station or acquisition of land for the construction or expansion of a fire station.

b) Applications approved by OSFM will be forwarded to the Authority. The Authority will review the loan application and any supplemental information provided in connection with the loan application, including, without limitation, financial statements and certifications and assurances provided by officers of the applicant, and any related Board-approved ordinances, resolutions, tax levies, budgets, or other pertinent documents to evaluate legal authorization and creditworthiness of the applicant.

c) The Authority, after completion of its review, will notify OSFM of which loan applications have been approved. OSFM will notify each applicant of the approval or disapproval of its application. Applicants who are not approved may request reconsideration of the determination of OSFM or the Authority by following the request for reconsideration process established by OSFM (see 41 Ill. Adm. Code 294.170).

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1117 Funding Criteria and Credit Review Process

In addition to the loan application review criteria developed by OSFM (see 41 Ill. Adm. Code 294.160), the credit review process and funding criteria approved by the Authority for this Program are as follows:

a) The Authority's Chief Financial Officer, or his or her designee, will serve as an ex officio, non-voting member of the OSFM's Loan Application Review Committee for the purpose of reviewing submitted loan documentation to ensure that all documents necessary for the Authority to initiate its credit and due diligence review are present (see 41 Ill. Adm. Code 294.140).

b) If an applicant is delinquent on a previous loan funded by the Authority, the applicant shall be automatically disqualified from funding under this Program until any loan repayment delinquency has been cured.

c) The applicant must demonstrate its ability to meet at least one of the following minimum debt service coverage requirements:

1. General fund revenues or specified revenue stream: 1.25x; or

2. State tax intercept revenues: 1.25x; or

3. Direct property levy for the loan: 1.00x.

d) The applicant must submit supporting documentation for the sources of repayment as follows:

1. For general fund or specified revenues, submit a current Board-approved budget that reflects the identified revenue sources and amounts; or

2. For direct property tax levy (i.e., general obligation), submit a copy of the levy and the ordinance authorizing the levy prior to the funding date.

e) If the applicant's repayment source is property tax receipts, the applicant's average actual property tax collections over the past three fiscal years must exceed 95% of the total possible tax collection.

f) The applicant must provide a resolution or ordinance approved by the applicant's Board that includes the following approvals:

1. Loan Application;

2. Loan Agreement;

3. Sources and amounts of repayment;

4. State tax revenue intercept agreement; and

5. Mortgage on the fire station constructed, rehabilitated, remodeled or expanded, or mortgage on the land acquired for the construction or expansion of a fire station, if required by the Authority.

g) Each loan must be secured by the applicant's:

1. General funds or, if available, a direct property tax levy or State tax revenue intercept; and

2. Possession of a mortgage to the subject real estate, if the Authority, in its sole discretion, decides to accept such a mortgage.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1120 Loan Documents and Servicing

a) Loan applications approved by OSFM and the Authority will be submitted to the Authority to prepare loan documentation and funding. Subject to the availability of funds, the Authority will prepare the loan documentation, including, without limitation, a Loan Agreement to evidence the loan.

b) The loan documentation will be provided to the applicant for execution. Upon execution of the loan documentation, subject to the availability of funds, the Authority will execute the loan documentation and cause the loan to be funded.

c) The Authority will retain the executed loan documents and will service funded loans.

d) The Authority reserves the right to charge an origination/processing fee of up to $500 per applicant that receives an approved loan. The amounts shall be deducted from the loan proceeds released upon closing and funding of the loan.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1125 Repayment Procedures

a) Loans shall be repaid within 25 years.

b) The rate of interest on loans under the Program will be 0% unless the applicant has one or more investment grade credit ratings (i.e., at or above "Baa3" or "BBB‑" or the equivalent) from any nationally recognized municipal credit rating agency.

c) For applicants that do not qualify for a 0% fixed interest rate loan pursuant to subsection (b), the interest rate shall be determined as follows:

1. The interest rate will be set each January 1 for loans that are documented and funded during that calendar year;

2. The interest rate will be equivalent to 50% of the mean of the Bond Buyer's 20-Bond General Obligation Index for the 12 month period that ended September 30 of the prior calendar year (and will represent the interest rates in effect as of October 1 of each year under the Illinois Environmental Protection Agency's State Revolving Fund/Clean Water Initiative Programs);

3. The loans will bear interest on a simple interest basis. The applicable interest rate shall be fixed and remain in effect for the duration of the loan.

d) Payments on the loan (principal and accrued interest, if any) shall be made on an annual basis in equal installments as provided in the Loan Agreement with the Authority. The Authority will provide invoices to loan recipients on an annual basis. The Authority shall deposit the payments received into the Fire Station Revolving Loan Fund in accordance with the Act, if required by law.

e) Loan payments shall be due on November 1 of each year.

1. The first payment shall be due as follows:

A) If the time period between the loan funding date and the immediately following November 1 is 180 days or more, the first payment shall be due on November 1 immediately following the loan funding date; or

B) If the time period between the loan funding date and the immediately following November 1 is less than 180 days, the first payment shall be due on the second November 1 immediately following the loan funding date.

2. After the first payment is made, succeeding payments shall be due on each November 1 until repaid in full.

f) Payments shall be made payable to the "Illinois Finance Authority − Fire Station Revolving Loan Fund" with payments submitted either by wire transfer, by electronic funds transfer (automated clearing house), or by check pursuant to instructions provided in the annual invoice on each loan.

g) Payments not received within 15 calendar days after the due date shall be assessed a penalty of 5% of the payment due. Nevertheless, the late payment penalty shall be waived whenever the postmark date on an envelope used to submit a payment by check is dated five days or more before the end of the 15 calendar day grace period. Payments remitted via wire transfer shall not be assessed late payment penalty if the wire transfer payment is received before the end of the 15-day grace period.

h) A recipient may prepay all or a portion of the balance due on the loan, without penalty, on any date, provided that the recipient initiates contact with the Authority to obtain the total amount of the principal and accrued interest, if any, due on the repayment date.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.1130 Terms and Conditions of Loan Agreement

A loan application approved by OSFM and the Authority is subject to the following terms:

a) Loan proceeds under this Program shall be used exclusively for the purposes listed in Section 1100.1110 and shall be expended in accordance with the approved application and the recipient's policies and procedures related to those expenditures. In the event that the loan proceeds are not expended in the manner approved, the recipient, upon written notification from the Authority, shall be required to submit, by the next payment due date, payment of the outstanding principal and accrued interest, if any, of the loan.

b) Loan proceeds shall be obligated no later than 12 months following the loan funding date.

c) Proof of use of loan proceeds for the funded zero-interest or low-interest loan shall be provided to the Authority and OSFM in writing pursuant to terms specified in the Loan Agreement.

d) Loan proceeds shall be reflected in the recipient's budget.

e) If a loan payment delinquency or default is not cured within 90 calendar days by payment of the amount owed to the Authority, the Authority shall notify the Office of the Comptroller to deduct the amount owed from any payments by the State to the recipient. OSFM and/or the Authority may avail themselves of all remedies, rights and provisions of law applicable in these circumstances. Failure to exercise any rights or remedies provided by law may not be used as a defense by the recipient in any proceeding brought against it by OSFM or the Authority.

History

• Source: Added at 39 Ill. Reg. 4924, effective March 19, 2015

74 Ill. Adm. Code 1100.TABLE A Income Limits

Table of low and moderate income with adjustments for larger and smaller families.

Income Limits Per Family Size

---

INCOME LIMITS

---

1 PERSON

2 PERSON

3 PERSON

4

PERSON

5 PERSON

6 PERSON

7 PERSON

8 PERSON

MODERATE

19250

22000

24750

27500

29200

30950

32650

34400

LOW

12100

13850

15550

17300

18700

20050

21450

22850

History

• Source: Recodified from 14 Ill. Adm. Code 1200.Table A at 31 Ill. Reg. 12104

Chapter XI Department of Revenue

Part 1200 Debt Collection Bureau

74 Ill. Adm. Code 1200.10 Title

This Part may be cited as the Debt Collection Bureau Rules.

74 Ill. Adm. Code 1200.20 Policy

It is the public policy of this State to aggressively pursue the collection of accounts or claims due and payable to the State of Illinois through all reasonable means. [30 ILCS 210/3]

74 Ill. Adm. Code 1200.30 Purpose and Implementation

a) Pursuant to Public Act 93-0570, the Department of Revenue's Debt Collection Bureau shall serve as the primary debt collecting entity for the State and in that role shall collect debts on behalf of agencies of the State. All debts owed the State of Illinois shall be referred to the Bureau, subject to such limitations established in this Part or otherwise imposed by law. [30 ILCS 210/2]

b) This Part establishes rules necessary and appropriate to implement Public Act 93-0570 and sets forth when and how the Bureau assumes responsibility under the Illinois State Collection Act of 1986 [30 ILCS 210] for the collection of the delinquent debt of State agencies.

74 Ill. Adm. Code 1200.40 Application

a) This Part applies to all debt collection by the Bureau pursuant to the authority granted it under the Act.

b) To the extent that some other statute prescribes procedures for collection of particular types of accounts or claims owed to State agencies in conflict with the provisions of the Act, such other statute shall continue in full force and effect, and the debt collection provisions of the Act and this Part shall not apply. [30 ILCS 210/2]

c) This Part does not apply to the Illinois Student Assistance Commission in the administration of its student loan programs. [30 ILCS 210/2]

d) This Part does not apply to the Department of Public Aid with regard to child support debts, the collection of which is governed by the requirements of Title IV, Part D of the federal Social Security Act, except as provided in Section 1200.60(c). [30 ILCS 210/5(h)]

e) This Part does not apply to the Department of Employment Security with regard to debts to any federal account, including but not limited to the Unemployment Trust Fund, and penalties and interest assessed under the Unemployment Insurance Act, except as provided in Section 1200.60(d). [30 ILCS 210/5(h-1)]

74 Ill. Adm. Code 1200.50 Definitions

As used throughout this Part, each term defined in this Section shall have the meaning set forth in this Section, unless its use clearly requires a different meaning.

"Accounts receivable", "receivables", or "State agency accounts receivable" shall mean amounts due a State agency that are legally enforceable, that have not been lawfully certified as uncollectible, and for which there is no legal barrier to referral to the Bureau.

"Act" shall mean the Illinois State Collection Act of 1986 [30 ILCS 210].

"Bureau" shall mean the Debt Collection Bureau of the Illinois Department of Revenue.

"Certified collection specialist" or "collection specialist" shall mean an individual who has provided to the Bureau adequate documentation of training, experience, and expertise in the field of collection of public debt and has been certified by the Bureau as a collection specialist. A certified collection specialist may be an individual employed directly by the Bureau or one employed by a private collection firm.

"Certified debt" shall mean delinquent debt that has been certified by the referring agency and accepted for collection by the Bureau, as provided in this Part.

"Delinquent debt" shall mean a debt to the State or any of its agencies that is owed by any person or entity, that is $10 or more, and that is more than 90 days past due. The following debts shall not be considered delinquent for purposes of this definition:

debts that are the subject of pending administrative or judicial review;

debts that are covered by an informal or formal payment agreement, so long as the debtor is current in payments under the terms of the payment agreement.

"Referring agency" shall mean the State agency that refers delinquent debt to the Bureau for collection.

"State agency" shall have the meaning found in the Illinois State Auditing Act [30 ILCS 5/1-7].

74 Ill. Adm. Code 1200.60 Referral of Delinquent Debt

a) Beginning July 1, 2004 for the Departments of Public Aid and Employment Security and July 1, 2005 for universities and other State agencies, State agencies shall refer to the Bureau all debt owed to the State, provided that the debt satisfies the requirements for referral of delinquent debt as established in this Part. [30 ILCS 210/3] This Part shall apply to all such debt referrals.

b) The debt collection provisions of the Act and this Part may be utilized by the General Assembly, the Supreme Court and the several courts of this State, and the constitutionally elected State Officers, at their discretion, provided that the debt satisfies the requirements for referral of delinquent debt as established in this Part. [30 ILCS 210/2]

c) While this Part does not apply to the Department of Public Aid with regard to child support debts, the collection of which is governed by the requirements of Title IV, Part D of the federal Social Security Act, the Department of Public Aid may refer child support debts to the Bureau, provided that the debt satisfies the requirements for referral of delinquent debt as provided in this Section. All such referred debt shall remain an obligation under the Department of Public Aid's Child Support Enforcement Program subject to the requirements of Title IV, Part D of the federal Social Security Act, including the continued use of federally mandated enforcement remedies and techniques by the Department of Public Aid. [30 ILCS 210/5(h), 10(g)]

d) While this Part does not apply to the Department of Employment Security with regard to debts to any federal account, including but not limited to the Unemployment Trust Fund, and penalties and interest assessed under the Unemployment Insurance Act, the Department of Employment Security may refer those debts to the Bureau, provided that the debt satisfies the requirements for referral of delinquent debt as provided in this Part. [30 ILCS 210/5(h-1), 10(g-1)]

e) Prior to referring delinquent debt to the Bureau, and anytime thereafter upon the request of the Bureau, the referring agency shall collect and provide to the Bureau the following information:

1. about the debt:

A) the amount of the delinquent debt (including fees, penalties, and interest);

B) the date the debt was incurred;

C) a brief description of the type of the debt;

D) a summary of all action taken to collect the debt to date; and

E) any other information concerning the debt within its possession needed by the Bureau to perform its responsibilities under the Act and this Part, as requested by the Bureau.

2. about the debtor:

A) for individuals, the identity of the debtor, including name, address, and social security number;

B) for business debtors, the name and type of business organization, the business address, the federal employers identification number, and the names, addresses, and social security numbers of the owners and officers of the business; and

C) any other information concerning the debtor within its possession needed by the Bureau to perform its responsibilities under the Act and this Part, as requested by the Bureau.

f) Upon the request of the Bureau, the referring agency shall promptly deliver to the Bureau a copy of all records relating to the debt, with a status report describing all collection action taken by the referring agency.

g) Upon acceptance by the Bureau of delinquent debt from a referring agency, the provisions of Section 7 of the Illinois State Collection Act shall be rendered null and void as to that debt, and the Debt Collection Board (Board) shall promptly deliver to the Bureau a copy of all records in its possession relating to that debt, with a status report describing all collection action taken by the Board and an accounting of all payments received. [30 ILCS 210/8]

h) For each debt referred to the Bureau, the referring agency shall retain all documents and records relating to or supporting the existence of the debt. The debtor shall have no right to a hearing before the Bureau to contest the validity of the debt. In the event a debtor would raise a reasonable doubt as to the validity of the debt, the Bureau may in its discretion refer the debt back to the referring agency for further review and recommendation. [30 ILCS 210/10(f)]

i) All debt referred to the Bureau for collection shall remain the property of the referring agency and an obligation to the account owed. [30 ILCS 210/5(i)]

74 Ill. Adm. Code 1200.70 Debt Accepted for Collection

The Bureau will accept for collection delinquent debt that meets the following criteria, unless the debt is otherwise excluded from collection by the Bureau under the Act or this Part:

a) The debt has been certified to the Bureau by the referring agency as provided in Section 1200.90;

b) The referring agency has notified the debtor of the amount and basis for the debt, the potential for referral of the debt to the Bureau, and the procedure and time limitations for contesting to the referring agency the validity of the debt;

c) The debtor did not contest the debt in writing within 90 days from the date the referring agency provided notice of the debt to the debtor;

d) The debt has been transmitted to the Bureau in a format approved by it; and

e) The debt is not of the type listed in Section 1200.80.

74 Ill. Adm. Code 1200.80 Debt Not Accepted for Collection

The Bureau will not accept for collection the following types of debt:

a) debt secured by an interest in real property [30 ILCS 210/5(j)];

b) receivables currently the subject of an ongoing wage levy, whether that levy is the result of a judgment entered in circuit court or an administrative levy issued without judgment;

c) receivables currently the subject of litigation being pursued in the State of Illinois through the Office of the Attorney General, State's Attorneys' Offices or, where authorized by the Attorney General, by private counsel retained on behalf of the agency;

d) debt that has been discharged in bankruptcy or that is currently in bankruptcy proceedings;

e) receivables not reported on the Illinois Office of the Comptroller Receivables Report;

f) debt owed to any federal account, including, but not limited to, federally regulated pension trust funds, unless otherwise provided under this Part;

g) deferred receivables, as defined in the Comptroller's Receivables Report;

h) loans, contracts, and agreements of any kind with other governmental entities;

i) debt that was referred to a private collection firm by the referring agency prior to July 1, 2005, and that has been with that firm for 90 days or less;

j) debt that has been deemed uncollectible, absent factual assertions by the referring agency that, due to circumstances not known at the time the delinquent debt was deemed uncollectible, additional collection efforts are warranted [30 ILCS 210/10(e)];

k) debt for which it would not be in the State's best economic interest for the Bureau to assume collection responsibility, as determined by the Bureau.

74 Ill. Adm. Code 1200.90 Certification of Debt

a) The Bureau shall not accept debt for collection unless that debt has been certified by the referring agency as provided in this Section.

b) The referring agency shall provide to the Bureau for each delinquent debt that it refers for collection a certification that contains the following:

1. a statement that the debt qualifies for referral to, and collection by, the Bureau, as provided by the Act and this Part;

2. a statement that there are no legal restrictions relating to collection of the debt by the Bureau;

3. a statement that the referring agency has notified the debtor of the amount and basis for the debt, the procedure and time limitations for contesting the validity of the debt to the referring agency, and the potential for referral of the debt to the Bureau; and

4. a statement that the debtor did not dispute the debt in writing to the referring agency within 90 days after the date of notice of the debt by the referring agency.

c) The certification shall be executed by a person who is authorized to issue, certify, and approve vouchers for the agency under Sections 10 and 11 of the State Finance Act [30 ILCS 105/10 and 11]. Such person may delegate to a responsible person or persons the authority to execute the certification required by this Section.

74 Ill. Adm. Code 1200.100 Collection of Certified Debt

a) Once the certified debt is accepted for collection, the Bureau shall make every reasonable effort to collect the debt using all collection tools available, including, but not limited to, the Comptroller's Offset System and the employment of private collection agencies, as well as its own collections personnel. [30 ILCS 210/10(a)] As part of its collection efforts, the Bureau may direct the referring agency to place the certified debt with the Comptroller's Offset System or to enter into a repayment plan with the debtor.

b) The Bureau shall have the sole authority to let contracts with private collection agencies for the collection of debt referred to and accepted by the Bureau under this Part. [30 ILCS 210/10(b)]

1. Any contract with a private collection firm for the collection of debt referred to and accepted by the Bureau under this Part shall be let pursuant to the provisions of the Illinois Procurement Code [30 ILCS 500] and the Standard Procurement Rules (44 Ill. Adm. Code 1). Selection of private collection firms by the Bureau shall be made through the Procurement Code's request for proposal process.

2. Any such contract shall specify that the private collection agency's fee shall be on a contingency basis and that the private collection agency shall not be entitled to collect a contingency fee for any debt collected through the efforts of any State or federal offset system. [30 ILCS 210/10(b)]

3. Any such contract let after the effective date of this rulemaking should provide that debt referred to the firm for which there have been no payments or other activity must be returned to the agency after 180 days.

4. The referring agency shall be responsible for working directly with the private collection firm in the placement of its certified debt and for providing to the private collection firm information in its possession concerning the certified debt and the debtor, as provided in Section 1200.60(e) of this Part, or as directed by the Bureau.

5. The Bureau shall be responsible for managing and monitoring the collection performance of the private collection firms in regard to debt collected on its behalf.

c) The Bureau may employ individuals who are certified as collection specialists to perform the requirements of this Part, subject to funding by the General Assembly.

d) Private collection firms and individuals employed by the Bureau must demonstrate that they are qualified by training and experience to undertake these collection efforts. In the case of an employment agency, the individuals who would perform the collection services must be so qualified. Upon determination by the Bureau that the individuals are so qualified, the Bureau shall certify the individuals as collection specialists.

e) Upon agreement of the Attorney General, the Bureau may contract for legal assistance in collecting past due accounts. Any contract entered into under this Section before August 20, 2003, shall remain valid but may not be renewed. [30 ILCS 210/7]

f) The Attorney General and the State Comptroller may assist in the debt collection efforts of the Bureau, as requested by the Department of Revenue. [30 ILCS 210/10(i)]

g) Collection methods employed by the Bureau may vary with the size and nature of the debt.

h) If reasonable collection efforts prove unavailing, the Bureau may declare the delinquent debt uncollectible and return it to the referring agency as provided in Section 1200.110.

74 Ill. Adm. Code 1200.110 Uncollectible Debt

a) The Bureau shall deem delinquent debt, which it has accepted for collection, uncollectible when it has exhausted all reasonable collection efforts.

b) Prior to deeming any delinquent debt uncollectible, the Bureau shall document efforts to accomplish the following collection objectives:

1. confirm the current location of the debtor;

2. locate evidence of the debtor's assets; and

3. use all reasonable and available collections tools to collect the delinquent debt.

c) Once a debt is deemed by the Bureau to be uncollectible, the Bureau shall return the debt to the referring agency, which shall then write the debt off as uncollectible or return the debt to the Bureau for additional collection efforts. [30 ILCS 210/10(e)]

d) The Bureau shall refuse to accept debt that has been deemed uncollectible by the Debt Collection Board, the Office of the Comptroller, or the Bureau, absent factual assertions from the referring agency that, due to circumstances not known at the time the debt was deemed uncollectible, the debt is worthy of additional collection efforts. [30 ILCS 210/10(d)]

74 Ill. Adm. Code 1200.120 Deposit of Amounts Collected

a) Any amounts collected under this Part, including amounts collected by outside collection firms under contract with the Bureau, and including any amount that results in overpayment of the delinquent debt, shall be deposited in, or transferred to the appropriate funds, as specified by statute.

1. Allocation of the amounts collected and deposited in the appropriate funds shall be the responsibility of the referring agency.

2. The referring agency shall bear the responsibility for adjusting overpayments.

b) After payment of fees pursuant to the Bureau's contracts with private collection agencies, 20% of all amounts collected by the Bureau, excluding amounts collected on behalf of the Departments of Public Aid and Revenue, shall be deposited into the Debt Collection Fund. All remaining amounts collected shall be deposited into the General Revenue Fund unless the amounts are owed to any State fund or funds other than the General Revenue Fund. [30 ILCS 210/10(h)]

c) Collections arising from referrals from the Department of Public Aid

under Section 1200.60(c) shall be deposited into such fund or funds as the Department of Public Aid shall direct, in accordance with the requirements of Title IV, Part D of the federal Social Security Act, applicable provisions of State law, and the rules of the Department of Public Aid. [30 ILCS 210/10(h)]

d) Collections arising from referrals from the Department of Employment Security under Section 1200.60(d) shall be deposited into the fund or funds that the Department of Employment Security shall direct, in accordance with the requirements of Section 3304(a)(3) of the federal Unemployment Tax Act, Section 303(a)(4) of the federal Social Security Act, and the Unemployment Insurance Act. [30 ILCS 210/10(h)]

74 Ill. Adm. Code 1200.130 Appropriations from Debt Collection Fund

Moneys in the Debt Collection Fund shall be appropriated only for the administrative costs of the Bureau. On the last day of each fiscal year, unappropriated moneys and moneys otherwise deemed unneeded for the next fiscal year remaining in the Debt Collection Fund may be transferred into the General Revenue Fund at the Governor's reasonable discretion. [30 ILCS 210/10(h)]

74 Ill. Adm. Code 1200.140 Obligations Subject to Appropriation

The Bureau's obligations under this Part shall be subject to appropriation by the General Assembly. [30 ILCS 210/10(l)]

74 Ill. Adm. Code 1200.150 Recordkeeping and Reporting

a) The Bureau shall notify the referring agency within 60 days after the collection of a delinquent debt, or any portion thereof, collected by the Bureau's own collection specialists.

b) The Bureau shall maintain documentation of the efforts undertaken to collect certified debt and the results of those efforts for a period of three years after its collection efforts on that debt ceased.

c) The Director of the Department of Revenue shall report annually to the General Assembly and State Comptroller upon the debt collection efforts of the Bureau. Each report shall include an analysis of the overdue debts owed to the State. [30 ILCS 210/10(j)]

d) The reporting requirements of this Part are in addition to any reporting required by the Comptroller, and the debt reporting requirements established by the Comptroller shall be followed by all State agencies. [30 ILCS 210/2]

74 Ill. Adm. Code 1400.10 Scope

This Part applies to each of the Internal Service Funds administered by the Department of Innovation and Technology, herein referred to as DoIT.

74 Ill. Adm. Code 1400.20 Advanced Billings Based Upon Estimated Charges

a) DoIT shall make reasonable efforts to bill and collect Internal Service Fund receivables in the fiscal year in which the State agency's account liability was incurred.

b) During the lapse period, DoIT may bill State agencies in advance based on estimated charges for goods and services received by State agency when unbilled fiscal year receivables have been identified and it is unlikely that sufficient documentation will be received by DoIT in time to allow both DoIT billing process and State agency payment process to be completed during the lapse period. Computation of advance billing amounts will be based upon remaining unprocessed open work orders, authorizations without vendor invoices, and/or other similar sources. Advance billing amounts shall be based upon the best information available to DoIT at the time the advance billing is prepared.

c) DoIT may enter into agreements with State agencies for advance billings at other times during the fiscal year based on estimated charges for goods and services to be received by the State agency during the fiscal year.

d) DoIT shall not issue undocumented advance billings for the purpose of intentionally expending a State agency's remaining appropriation balances.

e) DoIT shall not issue advance billings for the purpose of creating undocumented credit balances which internally transfer a State agency's unexpended appropriation balances to the following fiscal year through the credit process described in Section 1400.40.

74 Ill. Adm. Code 1400.30 Credits Issued For Prior Fiscal Year Overpayments

a) DoIT shall issue credits for application in the subsequent fiscal year for those State agency accounts that show an accounts receivable credit balance for the prior fiscal year. Credits for prior fiscal year accounts receivable credit balances will be issued when the Internal Service Fund is reasonably certain that:

1. All prior fiscal year billing activity has been posted;

2. All agency payments related to prior year billing activity have been posted; and

3. No activity remains in process related to prior fiscal year accounts receivable.

b) Credits for accounts receivable credit balances for fiscal year overpayments will be issued to State agencies after November 1st in the prior fiscal year.

c) DoIT shall not use the advance billing process in Section 1400.20 with this credit process to intentionally circumvent fiscal year budgetary controls.

74 Ill. Adm. Code 1400.40 Catch-Up Billings For Prior Fiscal Year Amounts Due

a) DoIT shall issue catch-up billings in the subsequent fiscal year for those State agency accounts that show an accounts receivable debit balance for the prior fiscal year. Catch-up billings for prior fiscal year account balances due will be issued when the Internal Service Funds is reasonably certain that:

1. All prior fiscal year billings activity has been posted;

2. All agency payments related to prior year billing activity have been posted; and

3. No activity remains in process related to prior fiscal year accounts receivable.

b) When DoIT does not have adequate information to bill a State agency for goods and services received during the prior fiscal year, DoIT shall issue catch-up billings in the subsequent fiscal year once adequate documentation is received.

c) DoIT shall clearly identify catch-up billings in order to avoid confusion with regular billings.

d) DoIT shall make reasonable efforts to issue catch-up billings to State agencies as soon as billing information is known. Catch-up billings will be sent to agencies on a monthly basis beginning in November of the subsequent fiscal year.

e) State agencies shall reimburse DoIT for catch-up billings by vouchers drawn against their appropriations for the fiscal year in which the catch-up billing is issued by DoIT.

f) DoIT shall not use catch-up billings as a substitute for the lapse period billing process.

74 Ill. Adm. Code 1400.50 State Agency Payments

a) State agencies shall process payments within 30 days after the physical receipt of Internal Service Fund bills. State agencies shall immediately notify DoIT of any additional information that is necessary to review an Internal Service Fund bill.

b) State agencies shall make reasonable efforts to review, approve, and pay all Internal Service Fund bills in the fiscal year in which the liability was incurred or within the fiscal year that DoIT issues a catch-up billing. State agencies shall not leave Internal Service Fund bills unpaid in order to circumvent fiscal year budgetary controls.