HB4393sam001 93RD GENERAL ASSEMBLY

Sen. Debbie DeFrancesco Halvorson

Filed: 5/6/2004

09300HB4393sam001 LRB093 17919 AMC 50528 a

AMENDMENT TO HOUSE BILL 4393

AMENDMENT NO. ______. Amend House Bill 4393 by replacing everything after the enacting clause with the following:

"Section 5. The Collection Agency Act is amended by changing Section 2.04 as follows:

(225 ILCS 425/2.04) (from Ch. 111, par. 2005.1)

(Section scheduled to be repealed on January 1, 2006)

Sec. 2.04. Child support indebtedness.

(a) Persons, associations, partnerships, or corporations engaged in the business of collecting child support indebtedness owing under a court order as provided under the Illinois Public Aid Code, the Illinois Marriage and Dissolution of Marriage Act, the Non-Support of Spouse and Children Act, the Non-Support Punishment Act, the Illinois Parentage Act of 1984, or similar laws of other states are not restricted (i) in the frequency of contact with an obligor who is in arrears, whether by phone, mail, or other means, (ii) from contacting the employer of an obligor who is in arrears, (iii) from publishing or threatening to publish a list of obligors in arrears, (iv) from disclosing or threatening to disclose an arrearage that the obligor disputes, but for which a verified notice of delinquency has been served under the Income Withholding for Support Act (or any of its predecessors, Section 10-16.2 of the Illinois Public Aid Code, Section 706.1 of the Illinois Marriage and Dissolution of Marriage Act, Section 4.1 of the Non-Support of Spouse and Children Act, Section 26.1 of the Revised Uniform Reciprocal Enforcement of Support Act, or Section 20 of the Illinois Parentage Act of 1984), or (v) from engaging in conduct that would not cause a reasonable person mental or physical illness. For purposes of this subsection, "obligor" means an individual who owes a duty to make periodic payments, under a court order, for the support of a child. "Arrearage" means the total amount of an obligor's unpaid child support obligations.

(a-5) A collection agency may not impose a fee or charge, including costs, for any child support payments collected through the efforts of a federal, State, or local government agency, including but not limited to child support collected from federal or State tax refunds, unemployment insurance benefits, or Social Security benefits.

If the client has received one or more payments during the 12 months prior to execution of the contract with a collection agency, that collection agency may not impose a fee or charge on a current payment of an obligor.

As to any fees or charges retained by the collection agency, the agency shall provide documentation to the client demonstrating that the child support payments resulted from the actions of the agency.

After collection of the total amount of arrearage, including statutory interest, due on or before the date of execution of the collection contract, no further fees may be charged.

(a-6) The Department of Professional Regulation shall determine a fee rate of not less than 25% but not greater than 35% based upon presentation by the licensee as to costs to provide the service and a fair rate of return. This rate shall be established by administrative rule.

Without prejudice to the determination by the Department of the appropriate rate through administrative rule, a collection agency shall impose a fee of not more than 29% of the amount of child support actually collected by the collection agency subject to the provisions of subsection (a-5). This interim rate is based upon the March 2002 General Accounting Office report "Child Support Enforcement", GAO-02-349. This rate shall apply until a fee rate is established by administrative rule.

(a-7) A collection agency shall execute a written contract for the enforcement of child support for each client of the agency. The contract required under this Section must:

(1) be in writing, dated, and signed by both parties to the contract;

(2) specify its terms in clear language, including:

(A) the nature of the services to be provided the client;

(B) all fees and charges for services provided by the agency;

(C) the opportunities available to the client or the agency to terminate the contract or other conditions under which the contract terminates;

(D) the expected duration of the contract, stated as a length of time or as an amount to be collected by the agency as determined on the basis of official government payment records or on the basis of an affidavit of arrears by the client if official government payment records requested by the registered agency on behalf of the client are not made available to the registered agency;

(E) the mailing address, telephone numbers, facsimile numbers, and internet address or location of the agency for the purpose of communications between the registered agency and the client or any authorized agent of the client; and

(F) a statement that all inquiries that cannot be resolved with the agency should be directed to the Department of Professional Regulation and provides an address, telephone number, and internet address.

(3) be reviewed for clarity by an attorney with the Department of Professional Regulation and approved by the Department.

(4) contain a provision in a font at least as large as the other provisions of the contract, but no smaller than 10-point size, informing the client that, subject to the limitation in subsection (a-5), fees will be assessed on all amounts collected regardless of whether they are designated as current support or arrears.

(a-8) A registered agency shall maintain records of all child support collections made on behalf of, and disbursed to, a client who is an obligee, including:

(1) the name of and other identifying information relating to any obligor who made child support payments collected by the agency;

(2) the amount of support collected by the agency for each client, including:

(A) the date on which the amount was collected; and

(B) the date on which each amount due the client by the obligor was paid to the client;

(3) a copy of the order establishing the child support obligation under which a collection was made by the agency;

(4) any other pertinent information relating to the child support obligation, including any case, cause, or docket number of the court having jurisdiction over the matter and official government payment records obtained by the agency on behalf of and at the request of the client;

(5) records of all correspondence between the agency and a client or obligor in a case.

The records required under this Section must be updated at least monthly and must be maintained by the agency for a period of 4 years from the date of the last support payment collected by the agency on behalf of an obligee.

An agency must safeguard case records in a manner reasonably expected to prevent intentional or accidental disclosure of confidential client information, including restricting access to authorized individuals within the agency and providing necessary protections for records maintained in an automated system.

A registered agency must timely inform clients of all legal orders, hearings and notices intended for the client that have been sent to the agency by a government child support enforcement agency.

(a-9) All information contained in the files of an agency, including information concerning the identity and location of an obligee, an obligor, or any child, is confidential and may not be disclosed to any person, except to the extent permitted under applicable federal and state law to:

(1) the Department as required for the purpose of an investigation of a complaint under Article 29 of this Act;

(2) a court or administrative tribunal having jurisdiction in the enforcement of a child support obligation; or

(3) a government agency authorized by law to enforce child support obligations.

(b) The Department shall adopt rules necessary to administer and enforce the provisions of this Section.

(Source: P.A. 90-673, eff. 1-1-99; 91-613, eff. 10-1-99.)".