093_HB0089

 
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 1        AN ACT concerning State collection of debts.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The State Finance Act is  amended  by  adding
 5    Section 5.595 as follows:

 6        (30 ILCS 105/5.595 new)
 7        Sec. 5.595.  The Debt Collection Fund.

 8        Section 10.  The Illinois State Collection Act of 1986 is
 9    amended  by changing Sections 2, 4, 5, 6, 7, and 8 and adding
10    Section 10 as follows:

11        (30 ILCS 210/2) (from Ch. 15, par. 152)
12        Sec. 2.  This Act applies to all accounts or claims  owed
13    to  "State agencies", as that term is defined in the Illinois
14    State Auditing Act,  except  that  the  debt  collection  and
15    write-off  provisions  of  this  Act  shall  not apply to the
16    Illinois State Scholarship Commission in  the  administration
17    of  its student loan programs.  To the extent that some other
18    statute prescribes procedures for  collection  of  particular
19    types  of  accounts  or  claims  owed  to  State  agencies in
20    conflict with the provisions of this Act, such other  statute
21    shall continue in full force and effect.  The debt collection
22    and  write-off  provisions of this Act may be utilized by the
23    General Assembly, the Supreme Court and the several courts of
24    this State, and the constitutionally elected State  Officers,
25    at  their  discretion,  except that Section 10 applies to all
26    State agencies unless otherwise specified  in  that  Section.
27    However reporting requirements established by the comptroller
28    shall  be followed by all State agencies.  The provisions  of
29    this Act shall be utilized at all times by  all  departments,
 
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 1    agencies,  divisions,  and  offices under the jurisdiction of
 2    the Governor.
 3    (Source: P.A. 85-814.)

 4        (30 ILCS 210/4) (from Ch. 15, par. 154)
 5        Sec. 4.   (a)  The  Comptroller  shall  provide  by  rule
 6    appropriate  procedures  for  State  agencies  to  follow  in
 7    establishing and recording within the State accounting system
 8    records  of amounts owed to the State of Illinois.  The rules
 9    of the Comptroller shall include, but are not limited to:
10        (1)  the manner by which State agencies  shall  recognize
11    debts;
12        (2)  systems   to   age   accounts  receivable  of  State
13    agencies;
14        (3)  standards by which State  agencies'  claims  may  be
15    entered  and  removed  from  the  Comptroller's Offset System
16    authorized by Section 10.05 of the State Comptroller Act;
17        (4)  accounting procedures for estimating the  amount  of
18    uncollectible receivables of State agencies; and
19        (5)  accounting  procedures for writing off bad debts and
20    uncollectible claims, subject to the requirement  of  Section
21    10 that debts more than 90 days overdue be turned over to the
22    Debt Collection Unit of the Auditor General's Office.
23        (b)  State  agencies  shall  report  to  the  Comptroller
24    information   concerning   their   accounts   receivable  and
25    uncollectible claims in accordance  with  the  rules  of  the
26    Comptroller, which may provide for summary reporting.
27        (c)  The  rules  of  the  Comptroller  authorized by this
28    Section may specify varying procedures and forms of reporting
29    dependent  upon  the  nature  and  amount  of   the   account
30    receivable  or  uncollectible claim, the age of the debt, the
31    probability of collection and such other  factors  that  will
32    increase  the  net  benefit  to  the  State of the collection
33    effort.
 
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 1        (d)  The Comptroller shall report annually by  March  14,
 2    to  the  Governor and the General Assembly, the amount of all
 3    delinquent debt owed to each State agency as of  December  31
 4    of the previous calendar year.
 5    (Source: P.A. 86-515.)

 6        (30 ILCS 210/5) (from Ch. 15, par. 155)
 7        Sec. 5.  Rules; payment plans; offsets.
 8        (a)  State agencies shall adopt rules establishing formal
 9    due  dates  for amounts owing to the State and, until July 1,
10    2004, for the referral of  seriously  past  due  accounts  to
11    private   collection  agencies,  unless  otherwise  expressly
12    provided  by  law  or  rule.   Such   procedures   shall   be
13    established in accord with sound business practices.
14        (b)  Until  July  1,  2004,  agencies  may enter deferred
15    payment plans for debtors of the agency and documentation  of
16    this  fact retained by the agency, where the deferred payment
17    plan is likely to increase the net amount  collected  by  the
18    State.
19        (c)  State  agencies  may  use  the  Comptroller's Offset
20    System provided in Section 10.05 of the State Comptroller Act
21    for the collection of debts owed to the agency.   Until  July
22    1,  2004,  all  debts that exceed $1,000 and are more than 90
23    days past due shall be placed  in  the  Comptroller's  Offset
24    System,  unless  the  State  agency shall have entered into a
25    deferred payment plan or demonstrates  to  the  Comptroller's
26    satisfaction that referral for offset is not cost effective.
27        (d)  State  agencies  shall  develop  internal procedures
28    whereby agency initiated  payments  to  its  debtors  may  be
29    offset without referral to the Comptroller's Offset System.
30        (e)  State  agencies or the Comptroller may remove claims
31    from the Comptroller's Offset System, where such claims  have
32    been inactive for more than one year.
33        (f)  State  agencies  may  use  the  Comptroller's Offset
 
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 1    System to determine if any  State  agency  is  attempting  to
 2    collect  debt  from  a  contractor, bidder, or other proposed
 3    contracting party.
 4        (g)  Beginning July 1, 2004, State  agencies  other  than
 5    universities  shall determine that a debt is uncollectible in
 6    accordance with rules adopted by the  Auditor  General  under
 7    Section 10 and shall turn over to the Debt Collection Unit of
 8    the  Auditor  General's  Office any debt that is more than 90
 9    days  overdue  to  the  State.   Beginning  July   1,   2004,
10    universities  may  determine  that a debt is uncollectible in
11    accordance with rules adopted by the  Auditor  General  under
12    Section  10  and may turn over to the Debt Collection Unit of
13    the Auditor General's Office any debt that is  more  than  90
14    days  overdue  to  the  State.  The  Department of Revenue is
15    exempt  from  this  subsection  with  regard  to  debts   the
16    confidentiality   of  which  the  Department  of  Revenue  is
17    required by law to maintain.  The Department of Public Aid is
18    exempt from the requirements of this subsection  with  regard
19    to  child  support debts, the collection of which is governed
20    by the requirements of Title IV, Part D of the federal Social
21    Security Act.  The Department of Public Aid may  refer  child
22    support  debts  more than 90 days overdue to the State to the
23    Unit.  In the event a child support debt is  referred to  the
24    Unit,  the Unit must use any appropriate means for collection
25    of the debt that are normally available  to  the  Unit  under
26    State  law.   The  debt,  however, remains an obligation owed
27    under  the  Department  of   Public   Aid's   Child   Support
28    Enforcement  Program subject to the requirements of Title IV,
29    Part D of the federal  Social  Security  Act,  including  the
30    continued  use of federally mandated enforcement remedies and
31    techniques by the Department of Public Aid.
32    (Source: P.A. 92-404, eff. 7-1-02.)

33        (30 ILCS 210/6) (from Ch. 15, par. 156)
 
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 1        Sec.  6.   The  Comptroller  with  the  approval  of  the
 2    Governor may provide by rule and regulation for the  creation
 3    of  a  special  fund  or  funds for the deposit of designated
 4    receipts by designated agencies to be known as  the  Accounts
 5    Receivable  Fund  or  Funds.  Deposits shall be segregated by
 6    the creditor agency.  No deposit shall  be  made  unless  the
 7    collection  is  of  an  account receivable more than 120 days
 8    past due.
 9        Seventy-five  percent  of  the  amounts  deposited   each
10    quarter  into such a special fund shall be transferred to the
11    General Revenue Fund or  such  other  fund  that  would  have
12    originally  received the receipts.  The remaining amounts may
13    be  used  by  the  creditor  agency  for  collecting  overdue
14    accounts pursuant to appropriation by the General Assembly.
15        An agency, with the  approval  of  the  Comptroller,  may
16    deposit  all  receipts into the General Revenue Fund or other
17    such fund that would have originally received  the  receipts.
18    Twenty-five  percent  of  such deposits made each quarter for
19    accounts receivable more than 120  days  past  due  shall  be
20    transferred  to  the  Accounts Receivable Fund or Funds.  The
21    transferred amounts may be used by the  creditor  agency  for
22    collecting  overdue accounts pursuant to appropriation by the
23    General Assembly.
24        In determining the types  of  receipts  to  be  deposited
25    pursuant  to  this  Section  the Comptroller and the Governor
26    shall consider the following factors:
27        (1)  The percentage of  such  receipts  estimated  to  be
28    uncollectible by the creditor agency;
29        (2)  The   percentage   of  such  receipts  certified  as
30    uncollectible by the Attorney General;
31        (3)  The  potential  increase  in  future  receipts,   as
32    estimated by the creditor agency, if 25% of amounts collected
33    are retained for collection efforts;
34        (4)  The  impact  of  the retention of 25% of receipts on
 
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 1    the relevant fund balances; and
 2        (5)  Such  other  factors  as  the  Comptroller  and  the
 3    Governor deem relevant.
 4        This Section shall not apply to the Department of Revenue
 5    nor the Department of Employment Security.
 6        This Section is repealed July 1, 2004.  On that date  any
 7    moneys  in  the  Accounts Receivable Funds created under this
 8    Section shall be transferred into the General Revenue Fund.
 9    (Source: P.A. 86-194.)

10        (30 ILCS 210/7) (from Ch. 15, par. 157)
11        Sec. 7.  Upon agreement of the Attorney General, agencies
12    may contract for legal  assistance  in  collecting  past  due
13    accounts.   In addition, agencies may contract for collection
14    assistance where such assistance is determined by the  agency
15    to  be  in the best economic interest of the State.  Agencies
16    may utilize monies in the Accounts Receivable Fund to pay for
17    such legal and collection assistance; provided, however, that
18    no more than 20% of collections on an  account  may  be  paid
19    from  the  Accounts Receivable Fund as compensation for legal
20    and collection assistance on that  account.   If  the  amount
21    available  for  expenditure from the Accounts Receivable Fund
22    is insufficient  to  pay  the  cost  of  such  services,  the
23    difference,  up  to 40% of the total collections per account,
24    may be paid from other monies which may be available  to  the
25    Agency.
26        This  Section  is  repealed  July  1, 2004.  Any contract
27    entered into under this Section before that date shall remain
28    valid but may not be renewed.
29    (Source: P.A. 85-814.)

30        (30 ILCS 210/8) (from Ch. 15, par. 158)
31        Sec. 8.  Debt Collection Board.   There is created a Debt
32    Collection  Board  consisting  of  the  Director  of  Central
 
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 1    Management Services as chairman, the State  Comptroller,  and
 2    the  Attorney  General,  or  their respective designees.  The
 3    Board shall establish a centralized  collections  service  to
 4    undertake  further  collection efforts on delinquent accounts
 5    or claims of the State which have not been collected  through
 6    the  reasonable  efforts  of  the  respective State agencies.
 7    The Board shall promulgate rules and regulations pursuant  to
 8    the  Illinois Administrative Procedure Act with regard to the
 9    establishment   of   timetables   and   the   assumption   of
10    responsibility for agency accounts receivable that  have  not
11    been  collected  by  the agency, are not subject to a current
12    repayment plan, or have not been certified  as  uncollectible
13    as  of the date specified by the Board.  The Board shall make
14    a final evaluation of those accounts and either (i) direct or
15    conduct further collection activities when further collection
16    efforts are in the best economic interest  of  the  State  or
17    (ii)  in  accordance  with Section 2 of the Uncollected State
18    Claims Act, certify the receivable as uncollectible or submit
19    the account to the Attorney General for that certification.
20        The Board is empowered to  adopt  rules  and  regulations
21    subject  to  the  provisions  of  the Illinois Administrative
22    Procedure Act.
23        The  Board  is  empowered  to  enter  into  one  or  more
24    contracts with outside vendors with demonstrated capabilities
25    in the area of account collection.  The  contracts  shall  be
26    let  on  the  basis  of  competitive  proposals  secured from
27    responsible proposers.  The Board may require that vendors be
28    prequalified.  All contracts shall provide for  a  contingent
29    fee  based  on the age, nature, amount and type of delinquent
30    account.  The Board may  adopt  a  reasonable  classification
31    schedule  for  the various receivables.  The contractor shall
32    remit the amount collected, net of the contingent fee, to the
33    respective State agency which shall deposit  the  net  amount
34    received  into  the fund that would have received the receipt
 
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 1    had it been collected by the State agency.  No portion of the
 2    collections shall be deposited into  an  Accounts  Receivable
 3    Fund  established  under  Section  6 of this Act.   The Board
 4    shall act only upon the unanimous vote of its members.
 5        This Section is repealed July 1, 2004.
 6    (Source: P.A. 89-511, eff. 1-1-97.)

 7        (30 ILCS 210/10 new)
 8        Sec. 10.  Debt Collection Unit of the  Auditor  General's
 9    Office.
10        (a)  The  Auditor  General shall establish and maintain a
11    division within his or her office to be  known  as  the  Debt
12    Collection  Unit.   The  purpose  of  the  Unit  shall be the
13    collection of debts more than 90 days overdue to  the  State.
14    The  Auditor General shall adopt rules for the administration
15    and procedures of the Unit.
16        (b)  The  Auditor  General  shall  adopt  rules  for  the
17    certification of debt collection specialists to  be  employed
18    by the Unit.
19        (c)  The   Auditor   General   shall   adopt   rules  for
20    determining   when  a  debt  owed  to  a  State   agency   is
21    uncollectible.  The  rules  shall  be  used by State agencies
22    other than universities beginning July 1,  2004  and  may  be
23    used  by  universities beginning July 1, 2004. The Department
24    of Revenue is exempt from those rules with  regard  to  debts
25    the  confidentiality  of  which  the Department of Revenue is
26    required by law to maintain. The Auditor General may contract
27    with private collection entities and attorneys to pursue  the
28    collection of a debt determined to be uncollectable.
29        (d)  Beginning  July 1, 2004, a State agency other than a
30    university shall turn over, and a university may  turn  over,
31    to the Unit for collection any debt that is more than 90 days
32    overdue  to  the  State.  The Department of Revenue is exempt
33    from turning over to the Unit any debt the confidentiality of
 
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 1    which the  Department  of  Revenue  is  required  by  law  to
 2    maintain.  When  turning  over a debt, the State agency shall
 3    also turn over all documents  and  records  relating  to  the
 4    debt.  In  collecting  a debt, the Unit may exercise the same
 5    rights and powers with regard to debt collection possessed by
 6    the State agency that turned over the debt to the  Unit.  The
 7    Department  of  Public Aid is exempt from the requirements of
 8    this subsection with  regard  to  child  support  debts,  the
 9    collection  of which is governed by the requirements of Title
10    IV,  Part  D  of  the  federal  Social  Security  Act.    The
11    Department  of  Public Aid may refer child support debts more
12    than 90 days overdue to the State to the Unit.  In the  event
13    a  child support debt is  referred to the Unit, the Unit must
14    use any appropriate means for collection of the debt that are
15    normally available to the Unit under State  law.   The  debt,
16    however,  remains  an obligation owed under the Department of
17    Public Aid's Child Support Enforcement Program subject to the
18    requirements of Title  IV,  Part  D  of  the  federal  Social
19    Security  Act,  including  the  continued  use  of  federally
20    mandated   enforcement   remedies   and   techniques  by  the
21    Department of Public Aid.
22        (e)  The Debt Collection Fund is  created  as  a  special
23    fund  in  the  State  treasury.   Ten  percent  of the amount
24    collected on each debt by the Unit shall  be  deposited  into
25    the  Debt  Collection  Fund;  the remaining 90% of the amount
26    collected shall be deposited into the appropriate State  fund
27    or  funds  to  which  the  debt was owed.  Moneys in the Debt
28    Collection  Fund  shall  be   appropriated   only   for   the
29    administrative  costs  of the Unit. At the end of each fiscal
30    year, moneys remaining unappropriated in the Debt  Collection
31    Fund  shall be transferred into the General Revenue Fund. The
32    provisions of this subsection  do  not  apply  to  any  child
33    support debt referred to the Unit by the Department of Public
34    Aid  under  this Section or Section 5.  Collections resulting
 
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 1    from the referrals must be distributed and disbursed  at  the
 2    direction  of the Department of Public Aid in accordance with
 3    the requirements of Title IV, Part D of  the  federal  Social
 4    Security  Act,  applicable  provisions  of State law, and the
 5    rules of the Department of Public Aid.
 6        (f)  The Attorney General  and  State  Comptroller  shall
 7    assist  in  the  debt  collection  efforts  of  the  Unit  as
 8    requested by the Unit.
 9        (g)  The  Auditor  General  shall report semi-annually to
10    the General Assembly and  State  Comptroller  upon  the  debt
11    collection efforts of the Unit.  Each report shall include an
12    analysis of the overdue debts owed to the State.

13        Section  99.  Effective date.  This Act takes effect upon
14    becoming law.