SB0397 EngrossedLRB097 04209 HLH 44248 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Department of Revenue Law of the Civil
5Administrative Code of Illinois is amended by adding Section
62505-660 as follows:
 
7    (20 ILCS 2505/2505-660 new)
8    Sec. 2505-660. Collection of delinquent debts; housing
9authority. Upon certification by a housing authority of the
10amounts of delinquent debts, the Department of Revenue may
11collect the delinquent debts by intercepting the tax refund of
12any person owing the delinquent debts. The Department of
13Revenue shall enter into an agreement with the housing
14authority as provided in Section 8.1d of the Housing
15Authorities Act prior to undertaking any collections under this
16Section. Any agreement between the Department of Revenue and
17the housing authority for the intercept of tax refunds shall
18contain provisions for certification of debt, notification to
19the taxpayer of the intercept, and treatment of joint returns
20that are consistent with the requirements for a refund
21withholding request under Section 8.1d of the Housing
22Authorities Act.
 

 

 

SB0397 Engrossed- 2 -LRB097 04209 HLH 44248 b

1    Section 10. The Illinois Income Tax Act is amended by
2changing Section 911.3 as follows:
 
3    (35 ILCS 5/911.3)
4    Sec. 911.3. Refunds withheld; order of honoring requests.
5The Department shall honor refund withholding requests in the
6following order:
7        (1) a refund withholding request to collect an unpaid
8    State tax;
9        (2) a refund withholding request to collect certified
10    past due child support amounts under Section 2505-650 of
11    the Department of Revenue Law of the Civil Administrative
12    Code of Illinois;
13        (3) a refund withholding request to collect any debt
14    owed to the State;
15        (4) a refund withholding request made by the Secretary
16    of the Treasury of the United States, or his or her
17    delegate, to collect any tax liability arising from Title
18    26 of the United States Code;
19        (5) a refund withholding request pursuant to Section
20    911.2 of this Act; and
21        (6) a refund withholding request to collect certified
22    past due fees owed to the Clerk of the Circuit Court as
23    authorized under Section 2505-655 of the Department of
24    Revenue Law of the Civil Administrative Code of Illinois;
25    and .

 

 

SB0397 Engrossed- 3 -LRB097 04209 HLH 44248 b

1        (7) a refund withholding request to collect a
2    delinquent debt owed to a housing authority as authorized
3    under Section 2505-660 of the Department of Revenue Law of
4    the Civil Administrative Code of Illinois.
5(Source: P.A. 92-826, eff. 8-21-02; 93-836, eff. 1-1-05.)
 
6    Section 15. The Housing Authorities Act is amended by
7adding Section 8.1d as follows:
 
8    (310 ILCS 10/8.1d new)
9    Sec. 8.1d. Collection of debt; setoff program.
10    (a) Definitions. As used in this Section:
11    "Debtor" means a person having a delinquent debt with a
12housing authority which has not been adjusted, satisfied, or
13set aside by court order, or discharged in bankruptcy.
14    "Delinquent debt" means a sum which has been reduced to
15judgment in a final court order and is due and owing a housing
16authority, including collection costs, court costs, fines,
17penalties, and interest which have accrued through contract,
18subrogation, tort, operation of law, or other legal theory.
19"Delinquent debt" does not include sums owed to a housing
20authority when the housing authority and the debtor have
21entered into a written payment agreement and the debtor is
22current in meeting the obligations of the agreement.
23"Delinquent debt" also includes any fine, penalty, cost, fee,
24assessment, surcharge, service charge, restitution, or other

 

 

SB0397 Engrossed- 4 -LRB097 04209 HLH 44248 b

1amount imposed by a court or as a direct consequence of a final
2court order which is received by or payable to the clerk of the
3appropriate court or treasurer of the entity where the court is
4located.
5    "Refund" means any individual Illinois income tax refund
6payable. "Refund" also includes a refund belonging to a debtor
7resulting from the filing of a joint income tax return.
8    (b) Collection of debt; information to be given by housing
9authority; information to be given by Department of Revenue to
10housing authority.
11        (1) The collection remedy under this Section is in
12    addition to any other remedy available by law.
13        (2) Housing authorities may submit for collection
14    under the procedure established by this Section all
15    delinquent debts which they are owed.
16        (3) All housing authorities, whenever possible, shall
17    obtain the full name, social security number, address, and
18    any other identifying information, required by rules
19    promulgated by the Department of Revenue for
20    implementation of this Section, from any person for whom
21    the housing authorities provide any service or transact any
22    business and who the housing authorities can foresee may
23    become a debtor under the terms of this Section.
24        (4) Upon request from a housing authority, the
25    Department of Revenue shall furnish to the housing
26    authority any information the Department of Revenue deems

 

 

SB0397 Engrossed- 5 -LRB097 04209 HLH 44248 b

1    necessary to properly notify the debtor.
2    (c) Choice of housing authority as to use of or
3participation in setoff program. If the housing authority
4determines that the administrative cost of utilizing this
5Section is prohibitive, it may choose not to participate in the
6setoff program, or it may choose to participate only in cases
7of delinquent debts above an amount it determines appropriate.
8    (d) Department of Revenue to assist in collection of
9delinquent debt by setoff of any refunds due to debtor. Subject
10to the limitations contained in this Section, the Department of
11Revenue, upon request, shall render assistance in the
12collection of any delinquent debt owing to any housing
13authority by setting off any refunds due the debtor from the
14Department of Revenue by the sum certified by the housing
15authority as delinquent debt.
16    (e) Notification by housing authority; refund
17determinations; Department of Revenue liability.
18        (1) A housing authority seeking to attempt collection
19    of a delinquent debt through setoff shall notify the
20    Department of Revenue in writing and supply information the
21    Department of Revenue determines necessary to identify the
22    debtor whose refund is sought to be set off. A request for
23    setoff may be made only after the housing authority has
24    notified the debtor of its intention to cause the debtor's
25    refund to be set off. The housing authority shall promptly
26    notify the debtor when the liability out of which the

 

 

SB0397 Engrossed- 6 -LRB097 04209 HLH 44248 b

1    setoff arises is satisfied. The housing authority shall
2    promptly notify the Department of Revenue of a reduction in
3    the delinquent debt.
4        (2) Upon receiving the certification of the housing
5    authority of the amount of the delinquent debt, the
6    Department of Revenue shall determine if the debtor is due
7    a refund. If the debtor is due a refund of more than a
8    tolerance amount as determined by the Department of
9    Revenue, the Department of Revenue shall set off the
10    delinquent debt against the amount of the refund. The
11    Department of Revenue may retain an amount not to exceed
12    $25 of each refund set off to defray its administrative
13    expenses, and that amount may be added to the debt.
14    Apportionment is not required in the case of a refund
15    resulting from filing a joint return. A person has no
16    property right or property interest in a refund until all
17    amounts due the State and housing authorities are paid. The
18    Department of Revenue shall consider a delinquent debt and
19    debtor list provided by a housing authority as correct and
20    the Department of Revenue is not liable for a wrongful or
21    improper setoff.
22    (f) Notice of intention to set off debt; form, delivery and
23presumption. The notice of intention to set off must be given
24by mailing the notice, with postage prepaid, addressed to the
25debtor at the address provided to the housing authority when
26the debt was incurred or at the debtor's last known address. If

 

 

SB0397 Engrossed- 7 -LRB097 04209 HLH 44248 b

1the notice is returned to the housing authority as
2undeliverable or the housing authority has any reason to
3believe the debtor did not receive the notice, the housing
4authority shall obtain the last known address of the debtor
5from the Department of Revenue and resend the notice. The
6giving of the notice by mail is complete upon mailing the
7notice or resending the notice if the notice is returned to the
8housing authority as undeliverable or the housing authority has
9any reason to believe the debtor did not receive the notice. A
10certification by the housing authority that the notice has been
11sent is presumptive proof that the requirements as to notice
12are met, even if the notice actually has not been received by
13the debtor. The notice must include a statement substantially
14as follows:
15    "According to our records, you owe the (housing authority)
16a debt in the amount of (amount of the debt), plus interest, if
17applicable, for (type of debt). You are hereby notified of the
18(housing authority's) intention to submit this debt to the
19Illinois Department of Revenue to be set off against your
20individual income tax refunds until the debt is paid in full.
21Pursuant to Section 8.1d of the Housing Authorities Act,
22Section 2505-660 of the Department of Revenue Law of the Civil
23Administrative Code of Illinois, and Section 911.3 of the
24Illinois Income Tax Act, this amount, plus $25 in
25administrative costs, will be deducted from your Illinois
26individual income tax refunds unless you fully satisfy this

 

 

SB0397 Engrossed- 8 -LRB097 04209 HLH 44248 b

1debt with the (housing authority). If you file a joint return
2with your spouse, this amount will be deducted from the total
3joint refunds without regard to which spouse incurred the debt
4or actually withheld the taxes."
5    (g) Agreements; credit to debtor's obligation by housing
6authority; notification of housing authority to debtor of
7setoff.
8        (1) A housing authority may enter into an agreement
9    with the Department of Revenue to establish a program for
10    the purpose of collecting certain delinquent debts. The
11    purpose shall be to intercept, in whole or in part, State
12    income tax refunds due the persons who owe delinquent debts
13    to the housing authority in order to satisfy delinquent
14    debts. The agreement shall include, but may not be limited
15    to, a certification by the housing authority that the debt
16    claims forwarded to the Department of Revenue are valid,
17    that reasonable efforts have been made to notify persons of
18    the delinquency of the debts, and that the delinquent debts
19    have been reduced to judgment in a final court order. The
20    agreement shall include provisions for payment of the
21    intercept by the Department of Revenue to the housing
22    authority. The agreement may also include provisions to
23    allow the Department of Revenue to recover its cost for
24    administering the program. Intercepts made pursuant to
25    this Section shall not interfere with the collection of
26    debts related to child support. During the collection of

 

 

SB0397 Engrossed- 9 -LRB097 04209 HLH 44248 b

1    debts under this Section, when there are 2 or more debt
2    claims certified to the Department of Revenue at the same
3    time, priority of collection shall be as provided in
4    Section 911.3 of the Illinois Income Tax Act.
5        (2) Upon receipt by a housing authority of proceeds
6    collected on its behalf by the Department of Revenue, the
7    housing authority shall credit the debtor's obligation and
8    shall notify the debtor in writing of the amount of the
9    setoff.
10        (3) The Department of Revenue may add an administrative
11    fee of no more than $25 to the delinquent debt. This fee
12    shall be used by the Department of Revenue to cover any
13    administrative costs pursuant to this Section.
14    (h) Information from Department of Revenue to be used only
15by housing authority for collection purposes; penalties for
16disclosure.
17        (1) The exchange of information among the Department of
18    Revenue, housing authority, and the debtor pursuant to this
19    Section is lawful.
20        (2) The information obtained by a housing authority
21    from the Department of Revenue in accordance with the
22    exemption allowed by paragraph (1) may be used by the
23    housing authority only in the pursuit of its debt
24    collection duties and practices. A person employed by or
25    formerly employed by the housing authority who knowingly
26    discloses the information for another purpose commits a

 

 

SB0397 Engrossed- 10 -LRB097 04209 HLH 44248 b

1    Class A misdemeanor.
2    (i) Indemnification of Department of Revenue by housing
3authority. Housing authorities shall indemnify the Department
4of Revenue against any injuries, actions, liabilities, or
5proceedings arising from performance under the provisions of
6this Section.
7    (j) Department of Revenue rules, forms, and procedures
8permitted. The Department of Revenue may promulgate rules and
9prescribe forms and procedures necessary to implement this
10Section.