HB3741 96TH GENERAL ASSEMBLY

LRB096 08991 RCE 19130 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB3741

Introduced 2/25/2009, by Rep. Michael J. Zalewski

SYNOPSIS AS INTRODUCED:

20 ILCS 2505/2505-660 new
205 ILCS 645/3	from Ch. 17, par. 2710
215 ILCS 5/238.1
215 ILCS 5/299.1b
215 ILCS 5/337.1

Amends the Department of Revenue Law of the Civil Administrative Code of Illinois, the Foreign Banking Office Act, and the Illinois Insurance Code. Allows the Department of Revenue to require financial institutions doing business with the State to provide data concerning those holding accounts with the institution for use in collecting debts owed to the State. Provides for data matches, accommodation of the institutions and charges, confidentiality, and liability.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning debt collection.

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

Section 5. The Department of Revenue Law of the Civil Administrative Code of Illinois is amended by adding Section 2505-660 as follows:

(20 ILCS 2505/2505-660 new)

Sec. 2505-660. Financial institution record sharing for debt collection. For the purpose of the collection of any debt owed to the State, the Department may require each financial institution doing business in the State to provide data concerning account holders, owners, or customers who maintain one or more accounts with that institution.

(a) Definitions.

"Account" means a demand deposit account, checking or negotiable withdrawal order account, savings account, time deposit account, or money market mutual fund account.

"Financial institution" includes:

(1) a depository institution, which is any bank or saving association;

(2) an insured depository institution, which is any bank or saving institution the deposits of which are insured pursuant to the Federal Deposit Insurance Act, or any uninsured branch or agency of a foreign bank or a commercial lending company owned or controlled by a foreign bank;

(3) a federal depository institution, which is any national bank, any federal savings association, or any federal branch;

(4) a state depository institution, which is any state bank, any state savings association, or any insured branch that is not a federal branch;

(5) a federal credit union, which is a cooperative association organized in accordance with the provisions of the Federal Credit Union Act;

(6) a state chartered credit union that is organized and operated according to the laws of this or any other state, which laws provide for the organization of credit unions similar in principle and objectives to federal credit unions; and

(7) any benefit association, insurance company, safe deposit company, money market mutual fund, or similar entity authorized to do business in this State.

"Financial record" has the meaning given to that term in Section 1101 of the federal Right to Financial Privacy Act of 1978 (12 U.S.C. 3401).

"Person" means any natural individual, firm, partnership, association, joint stock company, joint adventure, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian, or other representative appointed by order of any court.

(b) Financial institutions data matches.

(1) The Department may design and implement a data match system pursuant to which the Department shall enter into agreements with financial institutions doing business in this State for the purpose of identifying accounts to be used in the collection of debts owed to the State of Illinois.

(2) Every agreement entered into with a financial institution under this Section shall provide, at the option of the financial institution, either (i) that the financial institution shall compare data concerning account holders, owners, or customers who maintain one or more accounts at the financial institution with data concerning persons identified by the Department as responsible for owing debt and for each of whom the Department shall provide the name, record address, and social security number or tax identification number, or (ii) that the financial institution shall provide the social security number or tax identification number of the account holders, owners, or customers who maintain one or more accounts at the financial institution to the Department, which shall compare that data with data concerning persons identified as responsible for owing debt.

(3) Every agreement shall provide that the Department shall pay to the financial institution providing or comparing the data a reasonable fee not to exceed the institution's actual cost of providing the data or performing the comparison.

(4) If the financial institution or Department determines that the name and either social security number or tax identification number of any person identified by the Department under subsection (b)(2) of this section match the name and either social security number or tax identification number of the account holder, owner, or customer who maintains one or more accounts at the financial institution, then the financial institution shall report the person's name and either social security number or tax identification number to the Department, for each calendar quarter in which the person is identified by the Department as responsible for owing debt.

(c) Types of accounts to be reported. The account reporting requirements of subsection (b) of this Section apply to accounts held or owned by "persons", as that term is defined in subsection (a) of this Section. In the case of a joint account, the account holder or owner shall be deemed to be the primary account holder or owner established by the financial institution in accordance with federal 1099 reporting requirements.

(d) Accommodation of financial institutions. The Department shall make a reasonable effort to accommodate those financial institutions on which the requirements of this Section would impose a hardship. In the case of a non-automated financial institution, a paper copy including either social security numbers or tax identification numbers would be an acceptable format. In order to allow for data processing implementation, no agreement shall become effective earlier than 90 days after its execution.

(e) Financial institution's charges on account.

(1) If the Department requests a financial institution to hold or encumber assets in an account, the financial institution at which the account is maintained may charge and collect its normally scheduled account activity fees to maintain the account during the period of time the account assets are held or encumbered.

(2) If the Department takes any action to enforce a lien or levy imposed on an account and the financial institution at which the account is maintained remits moneys in the account to the Department as a result of enforcement of a lien or levy on the account, the financial institution at which the account is maintained may charge to the account a fee of up to $50 and shall deduct the amount of the fee from the account before remitting any moneys from the account to the Department.

(f) Confidentiality. All information provided to the Department by a financial institution under this Section is confidential and may be used only for the purpose of enforcing collection of debts owed to the State of Illinois.

(g) Financial institution's freedom from liability. A financial institution that provides information under this Section shall not be liable to any account holder, owner, or other person in any civil, criminal, or administrative action for any of the following:

(1) Disclosing the required information to the Department, any other provisions of law not withstanding.

(2) Holding, encumbering, or surrendering any accounts in response to a lien or order to withhold and deliver issued by:

(A) the Department under this Section, or

(B) a person or entity acting on behalf of the Department.

(3) Any other action taken or omission made in good faith to comply with this Section, including individual or mechanical errors, provided that the action or omission does not constitute gross negligence or willful misconduct.

Section 10. The Foreign Banking Office Act is amended by changing Section 3 as follows:

(205 ILCS 645/3) (from Ch. 17, par. 2710)

Sec. 3. Certificates of authority; qualifications; rights; supervision. A foreign banking corporation, upon receipt of a certificate of authority from the Commissioner, may establish and maintain an Illinois banking office to conduct thereat a general banking business and may apply for, and procure from the Commissioner, a certificate of authority to conduct thereat a trust business pursuant to the Corporate Fiduciary Act. No such foreign banking corporation is, however, entitled to a certificate of authority under this Act unless, under the laws of the country under which such foreign banking corporation was organized, a State bank and a national bank may be authorized to maintain a banking office which may engage in a general banking business or may be authorized to own all the shares (except for directors' qualifying shares) of a banking organization organized under the laws of such country.

Upon receipt of a certificate of authority under this Act, a foreign banking corporation may conduct its banking business in this State with the same, but no greater, rights and privileges as a State bank, and except as otherwise provided in this Act, subject to the same duties, restrictions, penalties and liabilities now or hereafter imposed under the Illinois Banking Act upon a State bank. Any such banking office shall be maintained subject to supervision and examination by the Commissioner and such reports and examinations as are required of State banks under the Illinois Banking Act applicable to such banking office.

This Section does not prohibit the furnishing of information pursuant to any other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.

This Section does not prohibit the furnishing of information in accordance with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any foreign banking corporation governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the foreign banking corporation a reasonable fee not to exceed its actual cost incurred. A foreign banking corporation providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the foreign banking corporation in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct. A foreign banking corporation shall have no obligation to hold, encumber, or surrender assets until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy.

(Source: P.A. 89-208, eff. 6-1-97; 89-364, eff. 8-18-95; 89-626, eff. 8-9-96; 90-18, eff. 7-1-97.)

Section 15. The Illinois Insurance Code is amended by changing Sections 238.1, 299.1b, and 337.1 as follows:

(215 ILCS 5/238.1)

Sec. 238.1. Data exchanges; administrative liens.

(a) Any insurance company doing business in the State and governed by this Code shall enter into an agreement for data exchanges with the Department of Healthcare and Family Services for the purpose of locating accounts as defined in Section 10-24 of the Illinois Public Aid Code of responsible relatives to satisfy past-due child support owed by responsible relatives under an order for support entered by a court or administrative body of this or any other State on behalf of resident or non-resident persons.

(b) This Section does not prohibit the furnishing of information pursuant to any other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.

(c) (b) Notwithstanding any provisions in this Code to the contrary, an insurance company shall not be liable to any person:

(1) for any disclosure of information to the Department of Healthcare and Family Services (formerly Illinois Department of Public Aid) under subsection (a) or for any disclosure of information to any other entity under subsection (b);

(2) for encumbering or surrendering any accounts as defined in Section 10-24 of the Illinois Public Aid Code held by such insurance company in response to a notice of lien or levy issued by the Department of Healthcare and Family Services (formerly Illinois Department of Public Aid), or by any other state's child support enforcement agency, as provided for in Section 238 of this Code; or

(3) for any other action taken in good faith to comply with the requirements of subsections subsection (a) or (b).

(Source: P.A. 95-331, eff. 8-21-07.)

(215 ILCS 5/299.1b)

(Section scheduled to be repealed on January 1, 2017)

Sec. 299.1b. Data exchanges; administrative liens.

(a) Any benefit association doing business in the State and governed by this Code shall enter into an agreement for data exchanges with the Department of Healthcare and Family Services for the purpose of locating accounts as defined in Section 10-24 of the Illinois Public Aid Code of responsible relatives to satisfy past-due child support owed by responsible relatives under an order for support entered by a court or administrative body of this or any other State on behalf of resident or non-resident persons.

(b) This Section does not prohibit the furnishing of information pursuant to any other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.

(c) (b) Notwithstanding any provisions in this Code to the contrary, a benefit association shall not be liable to any person:

(1) for any disclosure of information to the Department of Healthcare and Family Services (formerly Illinois Department of Public Aid) under subsection (a) or for any disclosure of information to any other entity under subsection (b);

(2) for encumbering or surrendering any accounts as defined in Section 10-24 of the Illinois Public Aid Code held by such benefit association in response to a notice of lien or levy issued by the Department of Healthcare and Family Services (formerly Illinois Department of Public Aid), or by any other state's child support enforcement agency, as provided for in Section 299.1a of this Code; or

(3) for any other action taken in good faith to comply with the requirements of subsections subsection (a) or (b).

(Source: P.A. 95-331, eff. 8-21-07.)

(215 ILCS 5/337.1)

Sec. 337.1. Data exchanges; administrative liens.

(a) Any benefit association governed by this Article XVIII shall encumber or surrender accounts as defined in Section 10-24 of the Illinois Public Aid Code held by the benefit association on behalf of any responsible relative who is subject to a child support lien, upon notice of the lien or levy by the Department of Healthcare and Family Services (formerly Illinois Department of Public Aid) or its successor agency pursuant to Section 10-25.5 of the Illinois Public Aid Code, or upon notice of interstate lien from any other state's agency responsible for implementing the child support enforcement program set forth in Title IV, Part D of the Social Security Act.

(b) This Section shall not prohibit the furnishing of information in accordance with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any benefit association governed by this Article XVIII shall enter into an agreement for data exchanges with the Department of Healthcare and Family Services provided the Department of Healthcare and Family Services pays to the benefit association a reasonable fee not to exceed its actual cost incurred. A benefit association providing information in accordance with this item shall not be liable to any owner of an account as defined in Section 10-24 of the Illinois Public Aid Code or other person for any disclosure of information to the Department of Healthcare and Family Services (formerly Department of Public Aid), for encumbering or surrendering any accounts held by the benefit association in response to a lien or order to withhold and deliver issued by the Department of Healthcare and Family Services (formerly Department of Public Aid), or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct. A benefit association shall have no obligation to hold, encumber, or surrender the accounts or portions thereof as defined in Section 10-24 of the Illinois Public Aid Code until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy.

(c) This Section does not prohibit the furnishing of information pursuant to any other statute that by its terms or by regulations promulgated thereunder requires the disclosure of financial records other than by subpoena, summons, warrant, or court order.

(Source: P.A. 95-331, eff. 8-21-07.)