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90_HB0960
30 ILCS 105/5.449 new
30 ILCS 210/2 from Ch. 15, par. 152
30 ILCS 210/4 from Ch. 15, par. 154
30 ILCS 210/5 from Ch. 15, par. 155
30 ILCS 210/6 from Ch. 15, par. 156
30 ILCS 210/7 from Ch. 15, par. 157
30 ILCS 210/8 from Ch. 15, par. 158
30 ILCS 210/10 new
30 ILCS 105/5.449 new
30 ILCS 210/2 from Ch. 15, par. 152
30 ILCS 210/4 from Ch. 15, par. 154
30 ILCS 210/5 from Ch. 15, par. 155
30 ILCS 210/6 from Ch. 15, par. 156
30 ILCS 210/7 from Ch. 15, par. 157
30 ILCS 210/8 from Ch. 15, par. 158
30 ILCS 210/10 new
Amends the State Finance Act and the Illinois State
Collection Act of 1986. Requires that the Auditor General
establish a Debt Collection Unit for the collection of
overdue debts owed to the State. Beginning July 1, 1998,
requires State agencies other than universities to determine
the uncollectibility of debts using rules adopted by the
Auditor General and to turn over to the Debt Collection Unit
debts more than 90 days overdue. Exempts confidential debts
owed to the Department of Revenue. Permits universities to
use the Auditor General's rules and to turn debts over to the
Debt Collection Unit. Requires that 10% of debts collected
by the Debt Collection Unit be deposited into a special fund
in the State treasury for payment of the Unit's
administrative costs. Requires the Auditor General to report
semi-annually to the General Assembly and State Comptroller
upon debts owed to the State and upon collection efforts.
Abolishes in 1998 the Debt Collection Board, the
Comptroller's use of special account receivable funds, and
the use of private collection services by individual State
agencies. Effective immediately.
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1 AN ACT concerning State collection of debts, amending
2 named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The State Finance Act is amended by adding
6 Section 5.449 as follows:
7 (30 ILCS 105/5.449 new)
8 Sec. 5.449. The Debt Collection Fund.
9 Section 10. The Illinois State Collection Act of 1986 is
10 amended by changing Sections 2, 4, 5, 6, 7, and 8 and adding
11 Section 10 as follows:
12 (30 ILCS 210/2) (from Ch. 15, par. 152)
13 Sec. 2. This Act applies to all accounts or claims owed
14 to "State agencies", as that term is defined in the Illinois
15 State Auditing Act, except that the debt collection and
16 write-off provisions of this Act shall not apply to the
17 Illinois State Scholarship Commission in the administration
18 of its student loan programs. To the extent that some other
19 statute prescribes procedures for collection of particular
20 types of accounts or claims owed to State agencies in
21 conflict with the provisions of this Act, such other statute
22 shall continue in full force and effect. The debt collection
23 and write-off provisions of this Act may be utilized by the
24 General Assembly, the Supreme Court and the several courts of
25 this State, and the constitutionally elected State Officers,
26 at their discretion, except that Section 10 applies to all
27 State agencies unless otherwise specified in that Section.
28 However reporting requirements established by the comptroller
29 shall be followed by all State agencies. The provisions of
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1 this Act shall be utilized at all times by all departments,
2 agencies, divisions, and offices under the jurisdiction of
3 the Governor.
4 (Source: P.A. 85-814.)
5 (30 ILCS 210/4) (from Ch. 15, par. 154)
6 Sec. 4. (a) The Comptroller shall provide by rule
7 appropriate procedures for State agencies to follow in
8 establishing and recording within the State accounting system
9 records of amounts owed to the State of Illinois. The rules
10 of the Comptroller shall include, but are not limited to:
11 (1) the manner by which State agencies shall recognize
12 debts;
13 (2) systems to age accounts receivable of State
14 agencies;
15 (3) standards by which State agencies' claims may be
16 entered and removed from the Comptroller's Offset System
17 authorized by Section 10.05 of the State Comptroller Act;
18 (4) accounting procedures for estimating the amount of
19 uncollectible receivables of State agencies; and
20 (5) accounting procedures for writing off bad debts and
21 uncollectible claims, subject to the requirement of Section
22 10 that debts more than 90 days overdue be turned over to the
23 Debt Collection Unit of the Auditor General's Office.
24 (b) State agencies shall report to the Comptroller
25 information concerning their accounts receivable and
26 uncollectible claims in accordance with the rules of the
27 Comptroller, which may provide for summary reporting.
28 (c) The rules of the Comptroller authorized by this
29 Section may specify varying procedures and forms of reporting
30 dependent upon the nature and amount of the account
31 receivable or uncollectible claim, the age of the debt, the
32 probability of collection and such other factors that will
33 increase the net benefit to the State of the collection
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1 effort.
2 (d) The Comptroller shall report annually by March 14,
3 to the Governor and the General Assembly, the amount of all
4 delinquent debt owed to each State agency as of December 31
5 of the previous calendar year.
6 (Source: P.A. 86-515.)
7 (30 ILCS 210/5) (from Ch. 15, par. 155)
8 Sec. 5. (a) State agencies shall adopt rules
9 establishing formal due dates for amounts owing to the State
10 and, until July 1, 1998, for the referral of seriously past
11 due accounts to private collection agencies, unless otherwise
12 expressly provided by law or rule. Such procedures shall be
13 established in accord with sound business practices.
14 (b) Until July 1, 1998, agencies may enter deferred
15 payment plans for debtors of the agency and documentation of
16 this fact retained by the agency, where the deferred payment
17 plan is likely to increase the net amount collected by the
18 State.
19 (c) 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. Until July
22 1, 1998, all debts that exceed $1,000 and are more than 1
23 year past due shall be placed in the Comptroller's Offset
24 System, unless the State agency shall have entered into a
25 deferred payment plan or demonstrates to the Comptroller's
26 satisfaction that referral for offset is not cost effective.
27 (d) State agencies shall develop internal procedures
28 whereby agency initiated payments to its debtors may be
29 offset without referral to the Comptroller's Offset System.
30 (e) State agencies or the Comptroller may remove claims
31 from the Comptroller's Offset System, where such claims have
32 been inactive for more than one year.
33 (f) Beginning July 1, 1998, State agencies other than
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1 universities shall determine that a debt is uncollectible in
2 accordance with rules adopted by the Auditor General under
3 Section 10 and shall turn over to the Debt Collection Unit of
4 the Auditor General's Office any debt that is more than 90
5 days overdue to the State. Beginning July 1, 1998,
6 universities may determine that a debt is uncollectible in
7 accordance with rules adopted by the Auditor General under
8 Section 10 and may turn over to the Debt Collection Unit of
9 the Auditor General's Office any debt that is more than 90
10 days overdue to the State. The Department of Revenue is
11 exempt from this subsection with regard to debts the
12 confidentiality of which the Department of Revenue is
13 required by law to maintain.
14 (Source: P.A. 85-814.)
15 (30 ILCS 210/6) (from Ch. 15, par. 156)
16 Sec. 6. The Comptroller with the approval of the
17 Governor may provide by rule and regulation for the creation
18 of a special fund or funds for the deposit of designated
19 receipts by designated agencies to be known as the Accounts
20 Receivable Fund or Funds. Deposits shall be segregated by
21 the creditor agency. No deposit shall be made unless the
22 collection is of an account receivable more than 120 days
23 past due.
24 Seventy-five percent of the amounts deposited each
25 quarter into such a special fund shall be transferred to the
26 General Revenue Fund or such other fund that would have
27 originally received the receipts. The remaining amounts may
28 be used by the creditor agency for collecting overdue
29 accounts pursuant to appropriation by the General Assembly.
30 An agency, with the approval of the Comptroller, may
31 deposit all receipts into the General Revenue Fund or other
32 such fund that would have originally received the receipts.
33 Twenty-five percent of such deposits made each quarter for
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1 accounts receivable more than 120 days past due shall be
2 transferred to the Accounts Receivable Fund or Funds. The
3 transferred amounts may be used by the creditor agency for
4 collecting overdue accounts pursuant to appropriation by the
5 General Assembly.
6 In determining the types of receipts to be deposited
7 pursuant to this Section the Comptroller and the Governor
8 shall consider the following factors:
9 (1) The percentage of such receipts estimated to be
10 uncollectible by the creditor agency;
11 (2) The percentage of such receipts certified as
12 uncollectible by the Attorney General;
13 (3) The potential increase in future receipts, as
14 estimated by the creditor agency, if 25% of amounts collected
15 are retained for collection efforts;
16 (4) The impact of the retention of 25% of receipts on
17 the relevant fund balances; and
18 (5) Such other factors as the Comptroller and the
19 Governor deem relevant.
20 This Section shall not apply to the Department of Revenue
21 nor the Department of Employment Security.
22 This Section is repealed July 1, 1998. On that date any
23 moneys in the Accounts Receivable Funds created under this
24 Section shall be transferred into the General Revenue Fund.
25 (Source: P.A. 86-194.)
26 (30 ILCS 210/7) (from Ch. 15, par. 157)
27 Sec. 7. Upon agreement of the Attorney General, agencies
28 may contract for legal assistance in collecting past due
29 accounts. In addition, agencies may contract for collection
30 assistance where such assistance is determined by the agency
31 to be in the best economic interest of the State. Agencies
32 may utilize monies in the Accounts Receivable Fund to pay for
33 such legal and collection assistance; provided, however, that
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1 no more than 20% of collections on an account may be paid
2 from the Accounts Receivable Fund as compensation for legal
3 and collection assistance on that account. If the amount
4 available for expenditure from the Accounts Receivable Fund
5 is insufficient to pay the cost of such services, the
6 difference, up to 40% of the total collections per account,
7 may be paid from other monies which may be available to the
8 Agency.
9 This Section is repealed July 1, 1998. Any contract
10 entered into under this Section before that date shall remain
11 valid but may not be renewed.
12 (Source: P.A. 85-814.)
13 (30 ILCS 210/8) (from Ch. 15, par. 158)
14 Sec. 8. Debt Collection Board. There is created a Debt
15 Collection Board consisting of the Director of Central
16 Management Services as chairman, the State Comptroller, and
17 the Attorney General, or their respective designees. The
18 Board shall establish a centralized collections service to
19 undertake further collection efforts on delinquent accounts
20 or claims of the State which have not been collected through
21 the reasonable efforts of the respective State agencies.
22 The Board shall promulgate rules and regulations pursuant to
23 the Illinois Administrative Procedure Act with regard to the
24 establishment of timetables and the assumption of
25 responsibility for agency accounts receivable that have not
26 been collected by the agency, are not subject to a current
27 repayment plan, or have not been certified as uncollectible
28 as of the date specified by the Board. The Board shall make
29 a final evaluation of those accounts and either (i) direct or
30 conduct further collection activities when further collection
31 efforts are in the best economic interest of the State or
32 (ii) in accordance with Section 2 of the Uncollected State
33 Claims Act, certify the receivable as uncollectible or submit
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1 the account to the Attorney General for that certification.
2 The Board is empowered to adopt rules and regulations
3 subject to the provisions of the Illinois Administrative
4 Procedure Act.
5 The Board is empowered to enter into one or more
6 contracts with outside vendors with demonstrated capabilities
7 in the area of account collection. The contracts shall be
8 let on the basis of competitive proposals secured from
9 responsible proposers. The Board may require that vendors be
10 prequalified. All contracts shall provide for a contingent
11 fee based on the age, nature, amount and type of delinquent
12 account. The Board may adopt a reasonable classification
13 schedule for the various receivables. The contractor shall
14 remit the amount collected, net of the contingent fee, to the
15 respective State agency which shall deposit the net amount
16 received into the fund that would have received the receipt
17 had it been collected by the State agency. No portion of the
18 collections shall be deposited into an Accounts Receivable
19 Fund established under Section 6 of this Act. The Board
20 shall act only upon the unanimous vote of its members.
21 This Section is repealed July 1, 1998.
22 (Source: P.A. 89-511, eff. 1-1-97.)
23 (30 ILCS 210/10 new)
24 Sec. 10. Debt Collection Unit of the Auditor General's
25 Office.
26 (a) The Auditor General shall establish and maintain a
27 division within his or her office to be known as the Debt
28 Collection Unit. The purpose of the Unit shall be the
29 collection of debts more than 90 days overdue to the State.
30 The Auditor General shall adopt rules for the administration
31 and procedures of the Unit.
32 (b) The Auditor General shall adopt rules for the
33 certification of debt collection specialists to be employed
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1 by the Unit.
2 (c) The Auditor General shall adopt rules for
3 determining when a debt owed to a State agency is
4 uncollectible. The rules shall be used by State agencies
5 other than universities beginning July 1, 1998 and may be
6 used by universities beginning July 1, 1998. The Department
7 of Revenue is exempt from those rules with regard to debts
8 the confidentiality of which the Department of Revenue is
9 required by law to maintain.
10 (d) Beginning July 1, 1998, a State agency other than a
11 university shall turn over, and a university may turn over,
12 to the Unit for collection any debt that is more than 90 days
13 overdue to the State. The Department of Revenue is exempt
14 from turning over to the Unit any debt the confidentiality of
15 which the Department of Revenue is required by law to
16 maintain. When turning over a debt, the State agency shall
17 also turn over all documents and records relating to the
18 debt. In collecting a debt, the Unit may exercise the same
19 rights and powers with regard to debt collection possessed by
20 the State agency that turned over the debt to the Unit.
21 (e) The Debt Collection Fund is created as a special
22 fund in the State treasury. Ten percent of the amount
23 collected on each debt by the Unit shall be deposited into
24 the Debt Collection Fund; the remaining 90% of the amount
25 collected shall be deposited into the appropriate State fund
26 or funds to which the debt was owed. Moneys in the Debt
27 Collection Fund shall be appropriated only for the
28 administrative costs of the Unit. At the end of each fiscal
29 year, moneys remaining unappropriated in the Debt Collection
30 Fund shall be transferred into the General Revenue Fund.
31 (f) The Attorney General and State Comptroller shall
32 assist in the debt collection efforts of the Unit as
33 requested by the Unit.
34 (g) The Auditor General shall report semi-annually to
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1 the General Assembly and State Comptroller upon the debt
2 collection efforts of the Unit. Each report shall include an
3 analysis of the overdue debts owed to the State.
4 Section 99. Effective date. This Act takes effect upon
5 becoming law.