093_SB1923ham001 LRB093 08780 RCE 17297 a 1 AMENDMENT TO SENATE BILL 1923 2 AMENDMENT NO. . Amend Senate Bill 1923 by replacing 3 everything after the enacting clause with the following: 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 4, 5, 6, 7, and 8 and adding 10 Section 10 as follows: 11 (30 ILCS 210/4) (from Ch. 15, par. 154) 12 Sec. 4. (a) The Comptroller shall provide by rule 13 appropriate procedures for State agencies to follow in 14 establishing and recording within the State accounting system 15 records of amounts owed to the State of Illinois. The rules 16 of the Comptroller shall include, but are not limited to: 17 (1) the manner by which State agencies shall recognize 18 debts; 19 (2) systems to age accounts receivable of State 20 agencies; -2- LRB093 08780 RCE 17297 a 1 (3) standards by which State agencies' claims may be 2 entered and removed from the Comptroller's Offset System 3 authorized by Section 10.05 of the State Comptroller Act; 4 (4) accounting procedures for estimating the amount of 5 uncollectible receivables of State agencies; and 6 (5) accounting procedures for writing off bad debts and 7 uncollectible claims prior to referring them to the 8 Department of Revenue Collections Bureau for collection. 9 (b) State agencies shall report to the Comptroller 10 information concerning their accounts receivable and 11 uncollectible claims in accordance with the rules of the 12 Comptroller, which may provide for summary reporting. The 13 Department of Revenue is exempt from the provisions of this 14 subsection with regard to debts the confidentiality of which 15 the Department of Revenue is required by law to maintain. 16 (c) The rules of the Comptroller authorized by this 17 Section may specify varying procedures and forms of reporting 18 dependent upon the nature and amount of the account 19 receivable or uncollectible claim, the age of the debt, the 20 probability of collection and such other factors that will 21 increase the net benefit to the State of the collection 22 effort. 23 (d) The Comptroller shall report annually by March 14, 24 to the Governor and the General Assembly, the amount of all 25 delinquent debt owed to each State agency as of December 31 26 of the previous calendar year. 27 (Source: P.A. 86-515.) 28 (30 ILCS 210/5) (from Ch. 15, par. 155) 29 Sec. 5. Rules; payment plans; offsets. 30 (a) Until July 1, 2004 for the Department of Public Aid 31 and July 1, 2005 for Universities and all other State 32 agencies, State agencies shall adopt rules establishing 33 formal due dates for amounts owing to the State and for the -3- LRB093 08780 RCE 17297 a 1 referral of seriously past due accounts to private collection 2 agencies, unless otherwise expressly provided by law or rule, 3 except that on and after July 1, 2005, the Department of 4 Employment Security may continue to refer to private 5 collection agencies past due amounts that are exempt from 6 subsection (g). Such procedures shall be established in 7 accord with sound business practices. 8 (b) Until July 1, 2004 for the Department of Public Aid 9 and July 1, 2005 for Universities and all other State 10 agencies, agencies may enter deferred payment plans for 11 debtors of the agency and documentation of this fact retained 12 by the agency, where the deferred payment plan is likely to 13 increase the net amount collected by the State, except that, 14 on and after July 1, 2005, the Department of Employment 15 Security may continue to enter deferred payment plans for 16 debts that are exempt from subsection (g). 17 (c) Until July 1, 2004 for the Department of Public Aid 18 and July 1, 2005 for Universities and all other State 19 agencies, 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, except that, 22 on and after July 1, 2005, the Department of Employment 23 Security may continue to use the Comptroller's offset system 24 to collect amounts that are exempt from subsection (g). All 25 debts that exceed $1,000 and are more than 90 days past due 26 shall be placed in the Comptroller's Offset System, unless 27 the State agency shall have entered into a deferred payment 28 plan or demonstrates to the Comptroller's satisfaction that 29 referral for offset is not cost effective. 30 (d) State agencies shall develop internal procedures 31 whereby agency initiated payments to its debtors may be 32 offset without referral to the Comptroller's Offset System. 33 (e) State agencies or the Comptroller may remove claims 34 from the Comptroller's Offset System, where such claims have -4- LRB093 08780 RCE 17297 a 1 been inactive for more than one year. 2 (f) State agencies may use the Comptroller's Offset 3 System to determine if any State agency is attempting to 4 collect debt from a contractor, bidder, or other proposed 5 contracting party. 6 (g) Beginning July 1, 2004 for the Departments of Public 7 Aid and Employment Security and July 1, 2005 for Universities 8 and other State agencies, State agencies shall refer to the 9 Department of Revenue Debt Collection Bureau (the Bureau) all 10 debt to the State, provided that the debt satisfies the 11 requirements for referral of delinquent debt as established 12 by rule by the Department of Revenue. 13 (h) The Department of Public Aid shall be exempt from 14 the requirements of this Section with regard to child support 15 debts, the collection of which is governed by the 16 requirements of Title IV, Part D of the federal Social 17 Security Act. The Department of Public Aid may refer child 18 support debts to the Bureau, provided that the debt satisfies 19 the requirements for referral of delinquent debt as 20 established by rule by the Department of Revenue. The Bureau 21 shall use all legal means available to collect child support 22 debt, including those authorizing the Department of Revenue 23 to collect debt and those authorizing the Department of 24 Public Aid to collect debt. All such referred debt shall 25 remain an obligation under the Department of Public Aid's 26 Child Support Enforcement Program subject to the requirements 27 of Title IV, Part D of the federal Social Security Act, 28 including the continued use of federally mandated enforcement 29 remedies and techniques by the Department of Public Aid. 30 (h-1) The Department of Employment Security is exempt 31 from subsection (g) with regard to debts to any federal 32 account, including but not limited to the Unemployment Trust 33 Fund, and penalties and interest assessed under the 34 Unemployment Insurance Act. The Department of Employment -5- LRB093 08780 RCE 17297 a 1 Security may refer those debts to the Bureau, provided the 2 debt satisfies the requirements for referral of delinquent 3 debt as established by rule by the Department of Revenue. The 4 Bureau shall use all legal means available to collect the 5 debts, including those authorizing the Department of Revenue 6 to collect debt and those authorizing the Department of 7 Employment Security to collect debt. All referred debt shall 8 remain an obligation to the account to which it is owed. 9 (i) All debt referred to the Bureau for collection shall 10 remain the property of the referring agency. The Bureau shall 11 collect debt on behalf of the referring agency using all 12 legal means available, including those authorizing the 13 Department of Revenue to collect debt and those authorizing 14 the referring agency to collect debt. 15 (j) No debt secured by an interest in real property 16 granted by the debtor in exchange for the creation of the 17 debt shall be referred to the Bureau. The Bureau shall have 18 no obligation to collect debts secured by an interest in real 19 property. 20 (k) Beginning July 1, 2003, each agency shall collect 21 and provide the Bureau information regarding the nature and 22 details of its debt in such form and manner as the Department 23 of Revenue shall require. 24 (l) For all debt accruing after July 1, 2003, each 25 agency shall collect and transmit such debtor identification 26 information as the Department of Revenue shall require. 27 (Source: P.A. 92-404, eff. 7-1-02.) 28 (30 ILCS 210/6) (from Ch. 15, par. 156) 29 Sec. 6. The Comptroller with the approval of the 30 Governor may provide by rule and regulation for the creation 31 of a special fund or funds for the deposit of designated 32 receipts by designated agencies to be known as the Accounts 33 Receivable Fund or Funds. Deposits shall be segregated by -6- LRB093 08780 RCE 17297 a 1 the creditor agency. No deposit shall be made unless the 2 collection is of an account receivable more than 120 days 3 past due. 4 Seventy-five percent of the amounts deposited each 5 quarter into such a special fund shall be transferred to the 6 General Revenue Fund or such other fund that would have 7 originally received the receipts. The remaining amounts may 8 be used by the creditor agency for collecting overdue 9 accounts pursuant to appropriation by the General Assembly. 10 An agency, with the approval of the Comptroller, may 11 deposit all receipts into the General Revenue Fund or other 12 such fund that would have originally received the receipts. 13 Twenty-five percent of such deposits made each quarter for 14 accounts receivable more than 120 days past due shall be 15 transferred to the Accounts Receivable Fund or Funds. The 16 transferred amounts may be used by the creditor agency for 17 collecting overdue accounts pursuant to appropriation by the 18 General Assembly. 19 In determining the types of receipts to be deposited 20 pursuant to this Section the Comptroller and the Governor 21 shall consider the following factors: 22 (1) The percentage of such receipts estimated to be 23 uncollectible by the creditor agency; 24 (2) The percentage of such receipts certified as 25 uncollectible by the Attorney General; 26 (3) The potential increase in future receipts, as 27 estimated by the creditor agency, if 25% of amounts collected 28 are retained for collection efforts; 29 (4) The impact of the retention of 25% of receipts on 30 the relevant fund balances; and 31 (5) Such other factors as the Comptroller and the 32 Governor deem relevant. 33 This Section shall not apply to the Department of Revenue 34 nor the Department of Employment Security. -7- LRB093 08780 RCE 17297 a 1 This Section is repealed July 1, 2004. On that date any 2 moneys in the Accounts Receivable Funds created under this 3 Section shall be transferred to the General Revenue Fund. 4 (Source: P.A. 86-194.) 5 (30 ILCS 210/7) (from Ch. 15, par. 157) 6 Sec. 7. Upon agreement of the Attorney General, the 7 Bureau
agenciesmay contract for legal assistance in 8 collecting past due accounts. Any contract entered into under 9 this Section before the effective date of this amendatory Act 10 of the 93rd General Assembly shall remain valid but may not 11 be renewed. In addition, agencies may contract for collection12 assistance where such assistance is determined by the agency13 to be in the best economic interest of the State. Agencies14 may utilize monies in the Accounts Receivable Fund to pay for15 such legal and collection assistance; provided, however, that16 no more than 20% of collections on an account may be paid17 from the Accounts Receivable Fund as compensation for legal18 and collection assistance on that account. If the amount19 available for expenditure from the Accounts Receivable Fund20 is insufficient to pay the cost of such services, the21 difference, up to 40% of the total collections per account,22 may be paid from other monies which may be available to the23 Agency.24 (Source: P.A. 85-814.) 25 (30 ILCS 210/8) (from Ch. 15, par. 158) 26 Sec. 8. Debt Collection Board. There is created a Debt 27 Collection Board consisting of the Director of Central 28 Management Services as chairman, the State Comptroller, and 29 the Attorney General, or their respective designees. The 30 Board shall establish a centralized collections service to 31 undertake further collection efforts on delinquent accounts 32 or claims of the State which have not been collected through -8- LRB093 08780 RCE 17297 a 1 the reasonable efforts of the respective State agencies. 2 The Board shall promulgate rules and regulations pursuant to 3 the Illinois Administrative Procedure Act with regard to the 4 establishment of timetables and the assumption of 5 responsibility for agency accounts receivable that have not 6 been collected by the agency, are not subject to a current 7 repayment plan, or have not been certified as uncollectible 8 as of the date specified by the Board. The Board shall make 9 a final evaluation of those accounts and either (i) direct or 10 conduct further collection activities when further collection 11 efforts are in the best economic interest of the State or 12 (ii) in accordance with Section 2 of the Uncollected State 13 Claims Act, certify the receivable as uncollectible or submit 14 the account to the Attorney General for that certification. 15 The Board is empowered to adopt rules and regulations 16 subject to the provisions of the Illinois Administrative 17 Procedure Act. 18 The Board is empowered to enter into one or more 19 contracts with outside vendors with demonstrated capabilities 20 in the area of account collection. The contracts shall be 21 let on the basis of competitive proposals secured from 22 responsible proposers. The Board may require that vendors be 23 prequalified. All contracts shall provide for a contingent 24 fee based on the age, nature, amount and type of delinquent 25 account. The Board may adopt a reasonable classification 26 schedule for the various receivables. The contractor shall 27 remit the amount collected, net of the contingent fee, to the 28 respective State agency which shall deposit the net amount 29 received into the fund that would have received the receipt 30 had it been collected by the State agency. No portion of the 31 collections shall be deposited into an Accounts Receivable 32 Fund established under Section 6 of this Act. The Board 33 shall act only upon the unanimous vote of its members. 34 The authority granted the Debt Collection Board under -9- LRB093 08780 RCE 17297 a 1 this Section shall be limited to the administration of debt 2 not otherwise required by the provisions of this amendatory 3 Act of the 93rd General Assembly to be referred to the 4 Department of Revenue's Debt Collection Bureau. Upon referral 5 to and acceptance of any debt by the Bureau, the provisions 6 of this Section shall be rendered null and void as to that 7 debt and the Board shall promptly deliver its entire file and 8 all records relating to such debt to the Bureau, together 9 with a status report describing all action taken by the Board 10 or any entity on its behalf to collect the debt, and 11 including an accounting of all payments received. 12 (Source: P.A. 89-511, eff. 1-1-97.) 13 (30 ILCS 210/10 new) 14 Sec. 10. Department of Revenue Debt Collection Bureau to 15 assume collection duties. 16 (a) The Department of Revenue's Debt Collection Bureau 17 shall serve as the primary debt collecting entity for the 18 State and in that role shall collect debts on behalf of 19 agencies of the State. All debts owed the State of Illinois 20 shall be referred to the Bureau, subject to such limitations 21 as the Department of Revenue shall by rule establish. The 22 Bureau shall utilize the Comptroller's offset system and 23 private collection agencies, as well as its own collections 24 personnel. The Bureau shall collect debt using all legal 25 authority available to the Department of Revenue to collect 26 debt and all legal authority available to the referring 27 agency. 28 (b) The Bureau shall have the sole authority to let 29 contracts with persons specializing in debt collection for 30 the collection of debt referred to and accepted by the 31 Bureau. Any contract with the debt collector shall specify 32 that the collector's fee shall be on a contingency basis and 33 that the debt collector shall not be entitled to collect a -10- LRB093 08780 RCE 17297 a 1 contingency fee for any debt collected through the efforts of 2 any State offset system. 3 (c) The Department of Revenue shall adopt rules for the 4 certification of debt from referring agencies and shall adopt 5 rules for the certification of collection specialists to be 6 employed by the Bureau. 7 (d) The Department of Revenue shall adopt rules for 8 determining when a debt referred by an agency shall be deemed 9 by the Bureau to be uncollectible. 10 (e) Once an agency's debt is deemed by the Bureau to be 11 uncollectible, the Bureau shall return the debt to the 12 referring agency which shall then write the debt off as 13 uncollectible or return the debt to the Bureau for additional 14 collection efforts. The Bureau shall refuse to accept debt 15 that has been deemed uncollectible absent factual assertions 16 from the referring agency that due to circumstances not known 17 at the time the debt was deemed uncollectible that the debt 18 is worthy of additional collection efforts. 19 (f) For each debt referred, the State agency shall 20 retain all documents and records relating to or supporting 21 the debt. In the event a debtor shall raise a reasonable 22 doubt as to the validity of the debt, the Bureau may in its 23 discretion refer the debt back to the referring agency for 24 further review and recommendation. 25 (g) The Department of Public Aid shall be exempt from 26 the requirements of this Section with regard to child support 27 debts, the collection of which is governed by the 28 requirements of Title IV, Part D of the federal Social 29 Security Act. The Department of Public Aid may refer child 30 support debts to the Bureau, provided that the debt satisfies 31 the requirements for referral of delinquent debt as 32 established by rule by the Department of Revenue. The Bureau 33 shall use all legal means available to collect child support 34 debt, including those authorizing the Department of Revenue -11- LRB093 08780 RCE 17297 a 1 to collect debt and those authorizing the Department of 2 Public Aid to collect debt. All such referred debt shall 3 remain an obligation under the Department of Public Aid's 4 Child Support Enforcement Program subject to the requirements 5 of Title IV, Part D of the federal Social Security Act, 6 including the continued use of federally mandated enforcement 7 remedies and techniques by the Department of Public Aid. 8 (g-1) The Department of Employment Security is exempt 9 from subsection (a) with regard to debts to any federal 10 account, including but not limited to the Unemployment Trust 11 Fund, and penalties and interest assessed under the 12 Unemployment Insurance Act. The Department of Employment 13 Security may refer those debts to the Bureau, provided the 14 debt satisfies the requirements for referral of delinquent 15 debt as established by rule by the Department of Revenue. The 16 Bureau shall use all legal means available to collect the 17 debts, including those authorizing the Department of Revenue 18 to collect debt and those authorizing the Department of 19 Employment Security to collect debt. All referred debt shall 20 remain an obligation to the account to which it is owed. 21 (h) The Debt Collection Fund is created as a special 22 fund in the State treasury. Debt collection contractors under 23 this Act shall receive a contingency fee as provided by the 24 terms of their contracts with the Department of Revenue. 25 Thereafter, 20% of all amounts collected by the Bureau, 26 excluding amounts collected on behalf of the Departments of 27 Public Aid and Revenue, shall be deposited into the Debt 28 Collection Fund. All remaining amounts collected shall be 29 deposited into the General Revenue Fund unless the funds are 30 owed to any State fund or funds other than the General 31 Revenue Fund. Moneys in the Debt Collection Fund shall be 32 appropriated only for the administrative costs of the Bureau. 33 On the last day of each fiscal year, unappropriated moneys 34 and moneys otherwise deemed unneeded for the next fiscal year -12- LRB093 08780 RCE 17297 a 1 remaining in the Debt Collection Fund may be transferred into 2 the General Revenue Fund at the Governor's reasonable 3 discretion. The provisions of this subsection do not apply to 4 debt that is exempt from subsection (a) pursuant to 5 subsection (g-1) or child support debt referred to the Bureau 6 by the Department of Public Aid pursuant to this amendatory 7 Act of the 93rd General Assembly. Collections arising from 8 referrals from the Department of Public Aid shall be 9 deposited into such fund or funds as the Department of Public 10 Aid shall direct, in accordance with the requirements of 11 Title IV, Part D of the federal Social Security Act, 12 applicable provisions of State law, and the rules of the 13 Department of Public Aid. Collections arising from referrals 14 from the Department of Employment Security shall be deposited 15 into the fund or funds that the Department of Employment 16 Security shall direct, in accordance with the requirements of 17 Section 3304(a)(3) of the federal Unemployment Tax Act, 18 Section 303(a)(4) of the federal Social Security Act, and the 19 Unemployment Insurance Act. 20 (i) The Attorney General and the State Comptroller may 21 assist in the debt collection efforts of the Bureau, as 22 requested by the Department of Revenue. 23 (j) The Director of Revenue shall report annually to the 24 General Assembly and State Comptroller upon the debt 25 collection efforts of the Bureau. Each report shall include 26 an analysis of the overdue debts owed to the State. 27 (k) The Department of Revenue shall adopt rules and 28 procedures for the administration of this amendatory Act of 29 the 93rd General Assembly. The rules shall be adopted under 30 the Department of Revenue's emergency rulemaking authority 31 within 90 days following the effective date of this 32 amendatory Act of the 93rd General Assembly due to the budget 33 crisis threatening the public interest. 34 (l) The Department of Revenue's Debt Collection Bureau's -13- LRB093 08780 RCE 17297 a 1 obligations under this Section 10 shall be subject to 2 appropriation by the General Assembly. 3 Section 99. Effective date. This Act shall take effect 4 upon becoming law.".