093_HB0089ham002

 










                                     LRB093 02361 JAM 13938 a

 1                     AMENDMENT TO HOUSE BILL 89

 2        AMENDMENT NO.     .  Amend House Bill 89, AS AMENDED,  by
 3    replacing  everything  after  the  enacting  clause  with the
 4    following:

 5        "Section 5.  The State Finance Act is amended  by  adding
 6    Section 5.595 as follows:

 7        (30 ILCS 105/5.595 new)
 8        Sec. 5.595. The Debt Collection Fund.

 9        Section 10.  The Illinois State Collection Act of 1986 is
10    amended  by  changing  Sections  4, 5, 6, 7, and 8 and adding
11    Section 10 as follows:

12        (30 ILCS 210/4) (from Ch. 15, par. 154)
13        Sec. 4.   (a)  The  Comptroller  shall  provide  by  rule
14    appropriate  procedures  for  State  agencies  to  follow  in
15    establishing and recording within the State accounting system
16    records  of amounts owed to the State of Illinois.  The rules
17    of the Comptroller shall include, but are not limited to:
18        (1)  the manner by which State agencies  shall  recognize
19    debts;
20        (2)  systems   to   age   accounts  receivable  of  State
 
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 1    agencies;
 2        (3)  standards by which State  agencies'  claims  may  be
 3    entered  and  removed  from  the  Comptroller's Offset System
 4    authorized by Section 10.05 of the State Comptroller Act;
 5        (4)  accounting procedures for estimating the  amount  of
 6    uncollectible receivables of State agencies; and
 7        (5)  accounting  procedures for writing off bad debts and
 8    uncollectible  claims  prior  to  referring   them   to   the
 9    Department of Revenue Collections Bureau for collection.
10        (b)  State  agencies  shall  report  to  the  Comptroller
11    information   concerning   their   accounts   receivable  and
12    uncollectible claims in accordance  with  the  rules  of  the
13    Comptroller,  which  may  provide  for summary reporting. The
14    Department of Revenue is exempt from the provisions  of  this
15    subsection  with regard to debts the confidentiality of which
16    the Department of Revenue is required by law to maintain.
17        (c)  The rules of  the  Comptroller  authorized  by  this
18    Section may specify varying procedures and forms of reporting
19    dependent   upon   the  nature  and  amount  of  the  account
20    receivable or uncollectible claim, the age of the  debt,  the
21    probability  of  collection  and such other factors that will
22    increase the net benefit  to  the  State  of  the  collection
23    effort.
24        (d)  The  Comptroller  shall report annually by March 14,
25    to the Governor and the General Assembly, the amount  of  all
26    delinquent  debt  owed to each State agency as of December 31
27    of the previous calendar year.
28    (Source: P.A. 86-515.)

29        (30 ILCS 210/5) (from Ch. 15, par. 155)
30        Sec. 5.  Rules; payment plans; offsets.
31        (a)  Until July 1, 2004 for the Department of Public  Aid
32    and  July  1,  2005  for  Universities  and  all  other State
33    agencies,  State  agencies  shall  adopt  rules  establishing
 
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 1    formal due dates for amounts owing to the State and  for  the
 2    referral of seriously past due accounts to private collection
 3    agencies, unless otherwise expressly provided by law or rule,
 4    except  that  on  and  after  July 1, 2005, the Department of
 5    Employment  Security  may  continue  to  refer   to   private
 6    collection  agencies  past  due  amounts that are exempt from
 7    subsection (g).  Such  procedures  shall  be  established  in
 8    accord with sound business practices.
 9        (b)  Until  July 1, 2004 for the Department of Public Aid
10    and July  1,  2005  for  Universities  and  all  other  State
11    agencies,  agencies  may  enter  deferred  payment  plans for
12    debtors of the agency and documentation of this fact retained
13    by the agency, where the deferred payment plan is  likely  to
14    increase  the net amount collected by the State, except that,
15    on and after July  1,  2005,  the  Department  of  Employment
16    Security  may  continue  to  enter deferred payment plans for
17    debts that are exempt from subsection (g).
18        (c)  Until July 1, 2004 for the Department of Public  Aid
19    and  July  1,  2005  for  Universities  and  all  other State
20    agencies, State agencies may  use  the  Comptroller's  Offset
21    System provided in Section 10.05 of the State Comptroller Act
22    for  the collection of debts owed to the agency, except that,
23    on and after July  1,  2005,  the  Department  of  Employment
24    Security  may continue to use the Comptroller's offset system
25    to collect amounts that are exempt from subsection (g).   All
26    debts  that  exceed $1,000 and are more than 90 days past due
27    shall be placed in the Comptroller's  Offset  System,  unless
28    the  State  agency shall have entered into a deferred payment
29    plan or demonstrates to the Comptroller's  satisfaction  that
30    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.
34        (e)  State  agencies or the Comptroller may remove claims
 
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 1    from the Comptroller's Offset System, where such claims  have
 2    been inactive for more than one year.
 3        (f)  State  agencies  may  use  the  Comptroller's Offset
 4    System to determine if any  State  agency  is  attempting  to
 5    collect  debt  from  a  contractor, bidder, or other proposed
 6    contracting party.
 7        (g)  Beginning July 1, 2004 for the Departments of Public
 8    Aid and Employment Security and July 1, 2005 for Universities
 9    and other State agencies, State agencies shall refer  to  the
10    Department of Revenue Debt Collection Bureau (the Bureau) all
11    debt  to  the  State,  provided  that  the debt satisfies the
12    requirements for referral of delinquent debt  as  established
13    by rule by the Department of Revenue.
14        (h)  The  Department  of  Public Aid shall be exempt from
15    the requirements of this Section with regard to child support
16    debts,  the  collection  of  which   is   governed   by   the
17    requirements  of  Title  IV,  Part  D  of  the federal Social
18    Security Act. The Department of Public Aid  may  refer  child
19    support debts to the Bureau, provided that the debt satisfies
20    the   requirements   for   referral  of  delinquent  debt  as
21    established by rule by the Department of Revenue. The  Bureau
22    shall  use all legal means available to collect child support
23    debt, including those authorizing the Department  of  Revenue
24    to  collect  debt  and  those  authorizing  the Department of
25    Public Aid to collect debt.  All  such  referred  debt  shall
26    remain  an  obligation  under  the Department of Public Aid's
27    Child Support Enforcement Program subject to the requirements
28    of Title IV, Part D  of  the  federal  Social  Security  Act,
29    including the continued use of federally mandated enforcement
30    remedies and techniques by the Department of Public Aid.
31        (h-1)  The  Department  of  Employment Security is exempt
32    from subsection (g) with  regard  to  debts  to  any  federal
33    account,  including but not limited to the Unemployment Trust
34    Fund,  and  penalties  and  interest   assessed   under   the
 
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 1    Unemployment  Insurance  Act.  The  Department  of Employment
 2    Security may refer those debts to the  Bureau,  provided  the
 3    debt  satisfies  the  requirements for referral of delinquent
 4    debt as established by rule by the Department of Revenue. The
 5    Bureau shall use all legal means  available  to  collect  the
 6    debts,  including those authorizing the Department of Revenue
 7    to collect debt  and  those  authorizing  the  Department  of
 8    Employment Security to collect debt.  All referred debt shall
 9    remain an obligation to the account to which it is owed.
10        (i)  All debt referred to the Bureau for collection shall
11    remain the property of the referring agency. The Bureau shall
12    collect  debt  on  behalf  of  the referring agency using all
13    legal  means  available,  including  those  authorizing   the
14    Department  of  Revenue to collect debt and those authorizing
15    the referring agency to collect debt.
16        (j)  No debt secured by  an  interest  in  real  property
17    granted  by  the  debtor  in exchange for the creation of the
18    debt shall be referred to the Bureau. The Bureau  shall  have
19    no obligation to collect debts secured by an interest in real
20    property.
21        (k)  Beginning  July  1,  2003, each agency shall collect
22    and provide the Bureau information regarding the  nature  and
23    details of its debt in such form and manner as the Department
24    of Revenue shall require.
25        (l)  For  all  debt  accruing  after  July  1, 2003, each
26    agency shall collect and transmit such debtor  identification
27    information as the Department of Revenue shall require.
28    (Source: P.A. 92-404, eff. 7-1-02.)

29        (30 ILCS 210/6) (from Ch. 15, par. 156)
30        Sec.  6.   The  Comptroller  with  the  approval  of  the
31    Governor  may provide by rule and regulation for the creation
32    of a special fund or funds  for  the  deposit  of  designated
33    receipts  by  designated agencies to be known as the Accounts
 
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 1    Receivable Fund or Funds.  Deposits shall  be  segregated  by
 2    the  creditor  agency.   No  deposit shall be made unless the
 3    collection is of an account receivable  more  than  120  days
 4    past due.
 5        Seventy-five   percent  of  the  amounts  deposited  each
 6    quarter into such a special fund shall be transferred to  the
 7    General  Revenue  Fund  or  such  other  fund that would have
 8    originally received the receipts.  The remaining amounts  may
 9    be  used  by  the  creditor  agency  for  collecting  overdue
10    accounts pursuant to appropriation by the General Assembly.
11        An  agency,  with  the  approval  of the Comptroller, may
12    deposit all receipts into the General Revenue Fund  or  other
13    such  fund  that would have originally received the receipts.
14    Twenty-five percent of such deposits made  each  quarter  for
15    accounts  receivable  more  than  120  days past due shall be
16    transferred to the Accounts Receivable Fund  or  Funds.   The
17    transferred  amounts  may  be used by the creditor agency for
18    collecting overdue accounts pursuant to appropriation by  the
19    General Assembly.
20        In  determining  the  types  of  receipts to be deposited
21    pursuant to this Section the  Comptroller  and  the  Governor
22    shall consider the following factors:
23        (1)  The  percentage  of  such  receipts  estimated to be
24    uncollectible by the creditor agency;
25        (2)  The  percentage  of  such  receipts   certified   as
26    uncollectible by the Attorney General;
27        (3)  The   potential  increase  in  future  receipts,  as
28    estimated by the creditor agency, if 25% of amounts collected
29    are retained for collection efforts;
30        (4)  The impact of the retention of 25%  of  receipts  on
31    the relevant fund balances; and
32        (5)  Such  other  factors  as  the  Comptroller  and  the
33    Governor deem relevant.
34        This Section shall not apply to the Department of Revenue
 
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 1    nor the Department of Employment Security.
 2        This  Section  is repealed July 1, 2004. On that date any
 3    moneys in the Accounts Receivable Funds  created  under  this
 4    Section shall be transferred to the General Revenue Fund.
 5    (Source: P.A. 86-194.)

 6        (30 ILCS 210/7) (from Ch. 15, par. 157)
 7        Sec.  7.   Upon  agreement  of  the Attorney General, the
 8    Bureau  agencies  may  contract  for  legal   assistance   in
 9    collecting past due accounts. Any contract entered into under
10    this Section before the effective date of this amendatory Act
11    of  the  93rd General Assembly shall remain valid but may not
12    be renewed. In addition, agencies may contract for collection
13    assistance where such assistance is determined by the  agency
14    to  be  in the best economic interest of the State.  Agencies
15    may utilize monies in the Accounts Receivable Fund to pay for
16    such legal and collection assistance; provided, however, that
17    no more than 20% of collections on an  account  may  be  paid
18    from  the  Accounts Receivable Fund as compensation for legal
19    and collection assistance on that  account.   If  the  amount
20    available  for  expenditure from the Accounts Receivable Fund
21    is insufficient  to  pay  the  cost  of  such  services,  the
22    difference,  up  to 40% of the total collections per account,
23    may be paid from other monies which may be available  to  the
24    Agency.
25    (Source: P.A. 85-814.)

26        (30 ILCS 210/8) (from Ch. 15, par. 158)
27        Sec. 8.  Debt Collection Board.   There is created a Debt
28    Collection  Board  consisting  of  the  Director  of  Central
29    Management  Services  as chairman, the State Comptroller, and
30    the Attorney General, or  their  respective  designees.   The
31    Board  shall  establish  a centralized collections service to
32    undertake further collection efforts on  delinquent  accounts
 
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 1    or  claims of the State which have not been collected through
 2    the reasonable efforts  of  the  respective  State  agencies.
 3    The  Board shall promulgate rules and regulations pursuant to
 4    the Illinois Administrative Procedure Act with regard to  the
 5    establishment   of   timetables   and   the   assumption   of
 6    responsibility  for  agency accounts receivable that have not
 7    been collected by the agency, are not subject  to  a  current
 8    repayment  plan,  or have not been certified as uncollectible
 9    as of the date specified by the Board.  The Board shall  make
10    a final evaluation of those accounts and either (i) direct or
11    conduct further collection activities when further collection
12    efforts  are  in  the  best economic interest of the State or
13    (ii) in accordance with Section 2 of  the  Uncollected  State
14    Claims Act, certify the receivable as uncollectible or submit
15    the account to the Attorney General for that certification.
16        The  Board  is  empowered  to adopt rules and regulations
17    subject to the  provisions  of  the  Illinois  Administrative
18    Procedure Act.
19        The  Board  is  empowered  to  enter  into  one  or  more
20    contracts with outside vendors with demonstrated capabilities
21    in  the  area  of account collection.  The contracts shall be
22    let on  the  basis  of  competitive  proposals  secured  from
23    responsible proposers.  The Board may require that vendors be
24    prequalified.   All  contracts shall provide for a contingent
25    fee based on the age, nature, amount and type  of  delinquent
26    account.   The  Board  may  adopt a reasonable classification
27    schedule for the various receivables.  The  contractor  shall
28    remit the amount collected, net of the contingent fee, to the
29    respective  State  agency  which shall deposit the net amount
30    received into the fund that would have received  the  receipt
31    had it been collected by the State agency.  No portion of the
32    collections  shall  be  deposited into an Accounts Receivable
33    Fund established under Section 6 of this  Act.     The  Board
34    shall act only upon the unanimous vote of its members.
 
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 1        The  authority  granted  the  Debt Collection Board under
 2    this Section shall be limited to the administration  of  debt
 3    not  otherwise  required by the provisions of this amendatory
 4    Act of the 93rd  General  Assembly  to  be  referred  to  the
 5    Department of Revenue's Debt Collection Bureau. Upon referral
 6    to  and  acceptance of any debt by the Bureau, the provisions
 7    of this Section shall be rendered null and void  as  to  that
 8    debt and the Board shall promptly deliver its entire file and
 9    all  records  relating  to  such debt to the Bureau, together
10    with a status report describing all action taken by the Board
11    or any  entity  on  its  behalf  to  collect  the  debt,  and
12    including an accounting of all payments received.
13    (Source: P.A. 89-511, eff. 1-1-97.)

14        (30 ILCS 210/10 new)
15        Sec. 10.  Department of Revenue Debt Collection Bureau to
16    assume collection duties.
17        (a)  The  Department  of Revenue's Debt Collection Bureau
18    shall serve as the primary debt  collecting  entity  for  the
19    State  and  in  that  role  shall  collect debts on behalf of
20    agencies of the State. All debts owed the State  of  Illinois
21    shall  be referred to the Bureau, subject to such limitations
22    as the Department of Revenue shall  by  rule  establish.  The
23    Bureau  shall  utilize  the  Comptroller's  offset system and
24    private collection agencies, as well as its  own  collections
25    personnel.  The  Bureau  shall  collect  debt using all legal
26    authority available to the Department of Revenue  to  collect
27    debt  and  all  legal  authority  available  to the referring
28    agency.
29        (b)  The Bureau shall have  the  sole  authority  to  let
30    contracts  with  persons  specializing in debt collection for
31    the collection of  debt  referred  to  and  accepted  by  the
32    Bureau.  Any  contract  with the debt collector shall specify
33    that the collector's fee shall be on a contingency basis  and
 
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 1    that  the  debt  collector shall not be entitled to collect a
 2    contingency fee for any debt collected through the efforts of
 3    any State offset system.
 4        (c)  The Department of Revenue shall adopt rules for  the
 5    certification of debt from referring agencies and shall adopt
 6    rules  for  the certification of collection specialists to be
 7    employed by the Bureau.
 8        (d)  The Department of  Revenue  shall  adopt  rules  for
 9    determining when a debt referred by an agency shall be deemed
10    by the Bureau to be uncollectible.
11        (e)  Once  an agency's debt is deemed by the Bureau to be
12    uncollectible, the  Bureau  shall  return  the  debt  to  the
13    referring  agency  which  shall  then  write  the debt off as
14    uncollectible or return the debt to the Bureau for additional
15    collection efforts. The Bureau shall refuse  to  accept  debt
16    that  has been deemed uncollectible absent factual assertions
17    from the referring agency that due to circumstances not known
18    at the time the debt was deemed uncollectible that  the  debt
19    is worthy of additional collection efforts.
20        (f)  For  each  debt  referred,  the  State  agency shall
21    retain all documents and records relating  to  or  supporting
22    the  debt.  In  the  event  a debtor shall raise a reasonable
23    doubt as to the validity of the debt, the Bureau may  in  its
24    discretion  refer  the  debt back to the referring agency for
25    further review and recommendation.
26        (g)  The Department of Public Aid shall  be  exempt  from
27    the requirements of this Section with regard to child support
28    debts,   the   collection   of   which  is  governed  by  the
29    requirements of Title  IV,  Part  D  of  the  federal  Social
30    Security  Act.  The  Department of Public Aid may refer child
31    support debts to the Bureau, provided that the debt satisfies
32    the  requirements  for  referral  of   delinquent   debt   as
33    established  by rule by the Department of Revenue. The Bureau
34    shall use all legal means available to collect child  support
 
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 1    debt,  including  those authorizing the Department of Revenue
 2    to collect debt  and  those  authorizing  the  Department  of
 3    Public  Aid  to  collect  debt.  All such referred debt shall
 4    remain an obligation under the  Department  of  Public  Aid's
 5    Child Support Enforcement Program subject to the requirements
 6    of  Title  IV,  Part  D  of  the federal Social Security Act,
 7    including the continued use of federally mandated enforcement
 8    remedies and techniques by the Department of Public Aid.
 9        (g-1)  The Department of Employment  Security  is  exempt
10    from  subsection  (a)  with  regard  to  debts to any federal
11    account, including but not limited to the Unemployment  Trust
12    Fund,   and   penalties   and  interest  assessed  under  the
13    Unemployment Insurance Act.   The  Department  of  Employment
14    Security  may  refer  those debts to the Bureau, provided the
15    debt satisfies the requirements for  referral  of  delinquent
16    debt as established by rule by the Department of Revenue. The
17    Bureau  shall  use  all  legal means available to collect the
18    debts, including those authorizing the Department of  Revenue
19    to  collect  debt  and  those  authorizing  the Department of
20    Employment Security to collect debt. All referred debt  shall
21    remain an obligation to the account to which it is owed.
22        (h)  The  Debt  Collection  Fund  is created as a special
23    fund in the State treasury. Debt collection contractors under
24    this Act shall receive a contingency fee as provided  by  the
25    terms  of  their  contracts  with  the Department of Revenue.
26    Thereafter, 20% of  all  amounts  collected  by  the  Bureau,
27    excluding  amounts  collected on behalf of the Departments of
28    Public Aid and Revenue, shall  be  deposited  into  the  Debt
29    Collection  Fund.  All  remaining  amounts collected shall be
30    deposited into the General Revenue Fund unless the funds  are
31    owed  to  any  State  fund  or  funds  other than the General
32    Revenue Fund. Moneys in the Debt  Collection  Fund  shall  be
33    appropriated only for the administrative costs of the Bureau.
34    On  the  last  day of each fiscal year, unappropriated moneys
 
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 1    and moneys otherwise deemed unneeded for the next fiscal year
 2    remaining in the Debt Collection Fund may be transferred into
 3    the  General  Revenue  Fund  at  the  Governor's   reasonable
 4    discretion. The provisions of this subsection do not apply to
 5    debt   that   is  exempt  from  subsection  (a)  pursuant  to
 6    subsection (g-1) or child support debt referred to the Bureau
 7    by the Department of Public Aid pursuant to  this  amendatory
 8    Act  of  the  93rd General Assembly. Collections arising from
 9    referrals  from  the  Department  of  Public  Aid  shall   be
10    deposited into such fund or funds as the Department of Public
11    Aid  shall  direct,  in  accordance  with the requirements of
12    Title  IV,  Part  D  of  the  federal  Social  Security  Act,
13    applicable provisions of State law,  and  the  rules  of  the
14    Department  of Public Aid. Collections arising from referrals
15    from the Department of Employment Security shall be deposited
16    into the fund or funds  that  the  Department  of  Employment
17    Security shall direct, in accordance with the requirements of
18    Section  3304(a)(3)  of  the  federal  Unemployment  Tax Act,
19    Section 303(a)(4) of the federal Social Security Act, and the
20    Unemployment Insurance Act.
21        (i)  The Attorney General and the State Comptroller shall
22    assist in the debt  collection  efforts  of  the  Bureau,  as
23    requested by the Department of Revenue.
24        (j)  The Director of Revenue shall report annually to the
25    General   Assembly   and  State  Comptroller  upon  the  debt
26    collection efforts of the Bureau. Each report  shall  include
27    an analysis of the overdue debts owed to the State.
28        (k)  The  Department  of  Revenue  shall  adopt rules and
29    procedures for the administration of this amendatory  Act  of
30    the  93rd  General Assembly. The rules shall be adopted under
31    the Department of Revenue's  emergency  rulemaking  authority
32    within   90   days  following  the  effective  date  of  this
33    amendatory Act of the 93rd General Assembly due to the budget
34    crisis threatening the public interest.
 
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 1        (l)  The Department of Revenue's Debt Collection Bureau's
 2    obligations  under  this  Section  10  shall  be  subject  to
 3    appropriation by the General Assembly.

 4        Section 99.  Effective date.  This Act shall take  effect
 5    upon becoming law.".