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91_HB1433
LRB9100270DHpk
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 5.490 as follows:
7 (30 ILCS 105/5.490 new)
8 Sec. 5.490. 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. Scope of the Act. This Act applies to all
14 accounts or claims owed to "State agencies", as that term is
15 defined in the Illinois State Auditing Act, except that the
16 debt collection and write-off provisions of this Act shall
17 not apply to the Illinois State Scholarship Commission in the
18 administration of its student loan programs. To the extent
19 that some other statute prescribes procedures for collection
20 of particular types of accounts or claims owed to State
21 agencies in conflict with the provisions of this Act, such
22 other statute shall continue in full force and effect. The
23 debt collection and write-off provisions of this Act may be
24 utilized by the General Assembly, the Supreme Court and the
25 several courts of this State, and the constitutionally
26 elected State Officers, at their discretion, except that
27 Section 10 applies to all State agencies unless otherwise
28 specified in that Section. However reporting requirements
29 established by the comptroller shall be followed by all State
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1 agencies. The provisions of this Act shall be utilized at
2 all times by all departments, agencies, divisions, and
3 offices under the jurisdiction of the Governor.
4 (Source: P.A. 85-814.)
5 (30 ILCS 210/4) (from Ch. 15, par. 154)
6 Sec. 4. Comptroller; rules; reports.
7 (a) The Comptroller shall provide by rule appropriate
8 procedures for State agencies to follow in establishing and
9 recording within the State accounting system records of
10 amounts owed to the State of Illinois. The rules of the
11 Comptroller shall include, but are not limited to:
12 (1) the manner by which State agencies shall
13 recognize debts;
14 (2) systems to age accounts receivable of State
15 agencies;
16 (3) standards by which State agencies' claims may
17 be entered and removed from the Comptroller's Offset
18 System authorized by Section 10.05 of the State
19 Comptroller Act;
20 (4) accounting procedures for estimating the amount
21 of uncollectible receivables of State agencies; and
22 (5) accounting procedures for writing off bad debts
23 and uncollectible claims, subject to the requirement of
24 Section 10 that debts more than 90 days overdue be turned
25 over to the Debt Collection Unit of the Auditor General's
26 Office.
27 (b) State agencies shall report to the Comptroller
28 information concerning their accounts receivable and
29 uncollectible claims in accordance with the rules of the
30 Comptroller, which may provide for summary reporting.
31 (c) The rules of the Comptroller authorized by this
32 Section may specify varying procedures and forms of reporting
33 dependent upon the nature and amount of the account
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1 receivable or uncollectible claim, the age of the debt, the
2 probability of collection and such other factors that will
3 increase the net benefit to the State of the collection
4 effort.
5 (d) The Comptroller shall report annually by March 14,
6 to the Governor and the General Assembly, the amount of all
7 delinquent debt owed to each State agency as of December 31
8 of the previous calendar year.
9 (Source: P.A. 86-515.)
10 (30 ILCS 210/5) (from Ch. 15, par. 155)
11 Sec. 5. Rules; payment plans; offsets.
12 (a) State agencies shall adopt rules establishing formal
13 due dates for amounts owing to the State, until July 1, 2000,
14 and for the referral of seriously past due accounts to
15 private collection agencies, unless otherwise expressly
16 provided by law or rule. Such procedures shall be
17 established in accord with sound business practices.
18 (b) Until July 1, 2000, agencies may enter deferred
19 payment plans for debtors of the agency and documentation of
20 this fact retained by the agency, where the deferred payment
21 plan is likely to increase the net amount collected by the
22 State.
23 (c) State agencies may use the Comptroller's Offset
24 System provided in Section 10.05 of the State Comptroller Act
25 for the collection of debts owed to the agency. Until July
26 1, 2000, all debts that exceed $1,000 and are more than 90
27 days past due shall be placed in the Comptroller's Offset
28 System, unless the State agency shall have entered into a
29 deferred payment plan or demonstrates to the Comptroller's
30 satisfaction that referral for offset is not cost effective.
31 (d) State agencies shall develop internal procedures
32 whereby agency initiated payments to its debtors may be
33 offset without referral to the Comptroller's Offset System.
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1 (e) State agencies or the Comptroller may remove claims
2 from the Comptroller's Offset System, where such claims have
3 been inactive for more than one year.
4 (f) Beginning July 1, 2000, State agencies other than
5 universities shall determine that a debt is uncollectible in
6 accordance with rules adopted by the Auditor General under
7 Section 10 and shall turn over to the Debt Collection Unit of
8 the Auditor General's Office any debt that is more than 90
9 days overdue to the State. Beginning July 1, 2000,
10 universities may determine that a debt is uncollectible in
11 accordance with rules adopted by the Auditor General under
12 Section 10 and may turn over to the Debt Collection Unit of
13 the Auditor General's Office any debt that is more than 90
14 days overdue to the State. The Department of Revenue is
15 exempt from this subsection with regard to debts the
16 confidentiality of which the Department of Revenue is
17 required by law to maintain.
18 (Source: P.A. 90-332, eff. 1-1-98.)
19 (30 ILCS 210/6) (from Ch. 15, par. 156)
20 Sec. 6. Accounts Receivable Funds. The Comptroller with
21 the approval of the Governor may provide by rule and
22 regulation for the creation of a special fund or funds for
23 the deposit of designated receipts by designated agencies to
24 be known as the Accounts Receivable Fund or Funds. Deposits
25 shall be segregated by the creditor agency. No deposit shall
26 be made unless the collection is of an account receivable
27 more than 120 days past due.
28 Seventy-five percent of the amounts deposited each
29 quarter into such a special fund shall be transferred to the
30 General Revenue Fund or such other fund that would have
31 originally received the receipts. The remaining amounts may
32 be used by the creditor agency for collecting overdue
33 accounts pursuant to appropriation by the General Assembly.
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1 An agency, with the approval of the Comptroller, may
2 deposit all receipts into the General Revenue Fund or other
3 such fund that would have originally received the receipts.
4 Twenty-five percent of such deposits made each quarter for
5 accounts receivable more than 120 days past due shall be
6 transferred to the Accounts Receivable Fund or Funds. The
7 transferred amounts may be used by the creditor agency for
8 collecting overdue accounts pursuant to appropriation by the
9 General Assembly.
10 In determining the types of receipts to be deposited
11 pursuant to this Section the Comptroller and the Governor
12 shall consider the following factors:
13 (1) The percentage of such receipts estimated to be
14 uncollectible by the creditor agency;
15 (2) The percentage of such receipts certified as
16 uncollectible by the Attorney General;
17 (3) The potential increase in future receipts, as
18 estimated by the creditor agency, if 25% of amounts collected
19 are retained for collection efforts;
20 (4) The impact of the retention of 25% of receipts on
21 the relevant fund balances; and
22 (5) Such other factors as the Comptroller and the
23 Governor deem relevant.
24 This Section shall not apply to the Department of Revenue
25 nor the Department of Employment Security.
26 This Section is repealed July 1, 2000. On that date any
27 moneys in the Accounts Receivable Funds created under this
28 Section shall be transferred into the General Revenue Fund.
29 (Source: P.A. 86-194.)
30 (30 ILCS 210/7) (from Ch. 15, par. 157)
31 Sec. 7. Contracts for legal and collection assistance.
32 Upon agreement of the Attorney General, agencies may contract
33 for legal assistance in collecting past due accounts. In
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1 addition, agencies may contract for collection assistance
2 where such assistance is determined by the agency to be in
3 the best economic interest of the State. Agencies may
4 utilize monies in the Accounts Receivable Fund to pay for
5 such legal and collection assistance; provided, however, that
6 no more than 20% of collections on an account may be paid
7 from the Accounts Receivable Fund as compensation for legal
8 and collection assistance on that account. If the amount
9 available for expenditure from the Accounts Receivable Fund
10 is insufficient to pay the cost of such services, the
11 difference, up to 40% of the total collections per account,
12 may be paid from other monies which may be available to the
13 Agency.
14 This Section is repealed July 1, 2000. Any contract
15 entered into under this Section before that date shall remain
16 valid but may not be renewed.
17 (Source: P.A. 85-814.)
18 (30 ILCS 210/8) (from Ch. 15, par. 158)
19 Sec. 8. Debt Collection Board. There is created a Debt
20 Collection Board consisting of the Director of Central
21 Management Services as chairman, the State Comptroller, and
22 the Attorney General, or their respective designees. The
23 Board shall establish a centralized collections service to
24 undertake further collection efforts on delinquent accounts
25 or claims of the State which have not been collected through
26 the reasonable efforts of the respective State agencies.
27 The Board shall promulgate rules and regulations pursuant to
28 the Illinois Administrative Procedure Act with regard to the
29 establishment of timetables and the assumption of
30 responsibility for agency accounts receivable that have not
31 been collected by the agency, are not subject to a current
32 repayment plan, or have not been certified as uncollectible
33 as of the date specified by the Board. The Board shall make
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1 a final evaluation of those accounts and either (i) direct or
2 conduct further collection activities when further collection
3 efforts are in the best economic interest of the State or
4 (ii) in accordance with Section 2 of the Uncollected State
5 Claims Act, certify the receivable as uncollectible or submit
6 the account to the Attorney General for that certification.
7 The Board is empowered to adopt rules and regulations
8 subject to the provisions of the Illinois Administrative
9 Procedure Act.
10 The Board is empowered to enter into one or more
11 contracts with outside vendors with demonstrated capabilities
12 in the area of account collection. The contracts shall be
13 let on the basis of competitive proposals secured from
14 responsible proposers. The Board may require that vendors be
15 prequalified. All contracts shall provide for a contingent
16 fee based on the age, nature, amount and type of delinquent
17 account. The Board may adopt a reasonable classification
18 schedule for the various receivables. The contractor shall
19 remit the amount collected, net of the contingent fee, to the
20 respective State agency which shall deposit the net amount
21 received into the fund that would have received the receipt
22 had it been collected by the State agency. No portion of the
23 collections shall be deposited into an Accounts Receivable
24 Fund established under Section 6 of this Act. The Board
25 shall act only upon the unanimous vote of its members.
26 This Section is repealed July 1, 2000.
27 (Source: P.A. 89-511, eff. 1-1-97.)
28 (30 ILCS 210/10 new)
29 Sec. 10. Debt Collection Unit of the Auditor General's
30 Office.
31 (a) The Auditor General shall establish and maintain a
32 division within his or her office to be known as the Debt
33 Collection Unit. The purpose of the Unit shall be the
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1 collection of debts more than 90 days overdue to the State.
2 The Auditor General shall adopt rules for the administration
3 and procedures of the Unit.
4 (b) The Auditor General shall adopt rules for the
5 certification of debt collection specialists to be employed
6 by the Unit.
7 (c) The Auditor General shall adopt rules for
8 determining when a debt owed to a State agency is
9 uncollectible. The rules shall be used by State agencies
10 other than universities beginning July 1, 2000 and may be
11 used by universities beginning July 1, 2000. The Department
12 of Revenue is exempt from those rules with regard to debts
13 the confidentiality of which the Department of Revenue is
14 required by law to maintain.
15 (d) Beginning July 1, 2000, a State agency other than a
16 university shall turn over, and a university may turn over,
17 to the Unit for collection any debt that is more than 90 days
18 overdue to the State. The Department of Revenue is exempt
19 from turning over to the Unit any debt the confidentiality of
20 which the Department of Revenue is required by law to
21 maintain. When turning over a debt, the State agency shall
22 also turn over all documents and records relating to the
23 debt. In collecting a debt, the Unit may exercise the same
24 rights and powers with regard to debt collection possessed by
25 the State agency that turned over the debt to the Unit.
26 (e) The Debt Collection Fund is created as a special
27 fund in the State treasury. Ten percent of the amount
28 collected on each debt by the Unit shall be deposited into
29 the Debt Collection Fund; the remaining 90% of the amount
30 collected shall be deposited into the appropriate State fund
31 or funds to which the debt was owed. Moneys in the Debt
32 Collection Fund shall be appropriated only for the
33 administrative costs of the Unit. At the end of each fiscal
34 year, moneys remaining unappropriated in the Debt Collection
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1 Fund shall be transferred into the General Revenue Fund.
2 (f) The Attorney General and State Comptroller shall
3 assist in the debt collection efforts of the Unit as
4 requested by the Unit.
5 (g) The Auditor General shall report semi-annually to
6 the General Assembly and State Comptroller upon the debt
7 collection efforts of the Unit. Each report shall include an
8 analysis of the overdue debts owed to the State.
9 Section 99. Effective date. This Act takes effect upon
10 becoming law.