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   agencies   may  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 collection
12    assistance  where such assistance is determined by the agency
13    to be in the best economic interest of the State.    Agencies
14    may utilize monies in the Accounts Receivable Fund to pay for
15    such legal and collection assistance; provided, however, that
16    no  more  than  20%  of collections on an account may be paid
17    from the Accounts Receivable Fund as compensation  for  legal
18    and  collection  assistance  on  that account.  If the amount
19    available for expenditure from the Accounts  Receivable  Fund
20    is  insufficient  to  pay  the  cost  of  such  services, the
21    difference, up to 40% of the total collections  per  account,
22    may  be  paid from other monies which may be available to the
23    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.".