HB1077 97TH GENERAL ASSEMBLY

LRB097 05581 KTG 45643 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1077

Introduced 02/03/11, by Rep. Chapin Rose

SYNOPSIS AS INTRODUCED:

30 ILCS 210/10
305 ILCS 5/12-4.43 new

Amends the Illinois State Collection Act of 1986. Exempts the Department of Healthcare and Family Services and the Department of Human Services from the requirements of the Act in regard to financial aid or health care benefits debts. Amends the Administration Article of the Illinois Public Aid Code. Provides that upon entry of a judgment by a court of competent jurisdiction for repayment of any financial aid or health care benefits obtained by a person under the Code or under any Act administered by the Department of Healthcare and Family Services or the Department of Human Services for which that person was not eligible to receive, the Departments shall have the sole authority to let contracts with persons specializing in debt collection for the collection of the judgment amount. Provides that contracts shall be awarded by competitive sealed bidding in accordance with the Illinois Procurement Code and shall be awarded with reasonable promptness by written notice to the responsible and responsive bidder who bids the lowest contingency fee percentage.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning public aid.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois State Collection Act of 1986 is amended by changing Section 10 as follows:

(30 ILCS 210/10)

Sec. 10. Department of Revenue Debt Collection Bureau to assume collection duties.

(a) The Department of Revenue's Debt Collection Bureau shall serve as the primary debt collecting entity for the State and in that role shall collect debts on behalf of agencies of the State. All debts owed the State of Illinois shall be referred to the Bureau, subject to such limitations as the Department of Revenue shall by rule establish. The Bureau shall utilize the Comptroller's offset system and private collection agencies, as well as its own collections personnel. The Bureau shall collect debt using all legal authority available to the Department of Revenue to collect debt and all legal authority available to the referring agency.

(b) The Bureau shall have the sole authority to let contracts with persons specializing in debt collection for the collection of debt referred to and accepted by the Bureau. Any contract with the debt collector shall specify that the collector's fee shall be on a contingency basis and that the debt collector shall not be entitled to collect a contingency fee for any debt collected through the efforts of any State offset system.

(c) The Department of Revenue shall adopt rules for the certification of debt from referring agencies and shall adopt rules for the certification of collection specialists to be employed by the Bureau.

(d) The Department of Revenue shall adopt rules for determining when a debt referred by an agency shall be deemed by the Bureau to be uncollectible.

(e) Once an agency's debt is deemed by the Bureau to be uncollectible, the Bureau shall return the debt to the referring agency which shall then write the debt off as uncollectible in accordance with the requirements of the Uncollected State Claims Act or return the debt to the Bureau for additional collection efforts. The Bureau shall refuse to accept debt that has been deemed uncollectible absent factual assertions from the referring agency that due to circumstances not known at the time the debt was deemed uncollectible that the debt is worthy of additional collection efforts.

(f) For each debt referred, the State agency shall retain all documents and records relating to or supporting the debt. In the event a debtor shall raise a reasonable doubt as to the validity of the debt, the Bureau may in its discretion refer the debt back to the referring agency for further review and recommendation.

(g) The Department of Healthcare and Family Services shall be exempt from the requirements of this Section with regard to child support debts, the collection of which is governed by the requirements of Title IV, Part D of the federal Social Security Act. The Department of Healthcare and Family Services may refer child support debts to the Bureau, provided that the debt satisfies the requirements for referral of delinquent debt as established by rule by the Department of Revenue. The Bureau shall use all legal means available to collect child support debt, including those authorizing the Department of Revenue to collect debt and those authorizing the Department of Healthcare and Family Services to collect debt. All such referred debt shall remain an obligation under the Department of Healthcare and Family Services' Child Support Enforcement Program subject to the requirements of Title IV, Part D of the federal Social Security Act, including the continued use of federally mandated enforcement remedies and techniques by the Department of Healthcare and Family Services.

(g-1) The Department of Employment Security is exempt from subsection (a) with regard to debts to any federal account, including but not limited to the Unemployment Trust Fund, and penalties and interest assessed under the Unemployment Insurance Act. The Department of Employment Security may refer those debts to the Bureau, provided the debt satisfies the requirements for referral of delinquent debt as established by rule by the Department of Revenue. The Bureau shall use all legal means available to collect the debts, including those authorizing the Department of Revenue to collect debt and those authorizing the Department of Employment Security to collect debt. All referred debt shall remain an obligation to the account to which it is owed.

(g-2) The Department of Healthcare and Family Services and the Department of Human Services are exempt from the requirements of this Section with regard to financial aid or health care benefits debts, the collection of which are governed by the requirements of Section 12-4.43 of the Illinois Public Aid Code. The Department of Healthcare and Family Services or the Department of Human Services, as the case may be, may refer these debts to the Bureau, provided that the debt satisfies the requirements for referral of delinquent debt as established by rule by the Department of Revenue. The Bureau shall use all legal means available to collect the debt, including those authorizing the Department of Revenue to collect debt and those authorizing the Department of Healthcare and Family Services or the Department of Human Services, as the case may be, to collect debt. All such referred debt shall remain an obligation to the Department of Healthcare and Family Services or the Department of Human Services, as the case may be.

(h) The Bureau may collect its costs of collecting debts on behalf of other State agencies from those agencies in a manner to be determined by the Director of Revenue, except that the Bureau shall not recover any such cost on any accounts referred by the General Assembly, the Supreme Court and other courts of this State, and the State executive branch constitutional officers. The provisions of this subsection do not apply to debt that is exempt from subsection (a) pursuant to subsection (g-1) or child support debt referred to the Bureau by the Department of Healthcare and Family Services (formerly Department of Public Aid) pursuant to this amendatory Act of the 93rd General Assembly. Collections arising from referrals from the Department of Healthcare and Family Services (formerly Department of Public Aid) shall be deposited into such fund or funds as the Department of Healthcare and Family Services shall direct, in accordance with the requirements of Title IV, Part D of the federal Social Security Act, applicable provisions of State law, and the rules of the Department of Healthcare and Family Services. Collections arising from referrals from the Department of Employment Security shall be deposited into the fund or funds that the Department of Employment Security shall direct, in accordance with the requirements of Section 3304(a)(3) of the federal Unemployment Tax Act, Section 303(a)(4) of the federal Social Security Act, and the Unemployment Insurance Act.

(i) The Attorney General and the State Comptroller may assist in the debt collection efforts of the Bureau, as requested by the Department of Revenue.

(j) The Director of Revenue shall report annually to the General Assembly and State Comptroller upon the debt collection efforts of the Bureau. Each report shall include an analysis of the overdue debts owed to the State.

(k) The Department of Revenue shall adopt rules and procedures for the administration of this amendatory Act of the 93rd General Assembly. The rules shall be adopted under the Department of Revenue's emergency rulemaking authority within 90 days following the effective date of this amendatory Act of the 93rd General Assembly due to the budget crisis threatening the public interest.

(l) The Department of Revenue's Debt Collection Bureau's obligations under this Section 10 shall be subject to appropriation by the General Assembly.

(Source: P.A. 95-331, eff. 8-21-07; 96-493, eff. 1-1-10; 96-1383, eff. 1-1-11.)

Section 10. The Illinois Public Aid Code is amended by adding Section 12-4.43 as follows:

(305 ILCS 5/12-4.43 new)

Sec. 12-4.43. Enforcement of judgments. Upon entry of a judgment by a court of competent jurisdiction for repayment of any financial aid or health care benefits obtained by a person under this Code or under any Act administered by the Department for which that person was not eligible to receive, the Illinois Department shall have the sole authority to let contracts with persons specializing in debt collection for the collection of the judgment amount. Contracts shall be awarded by competitive sealed bidding in accordance with Article 20 of the Illinois Procurement Code and shall be awarded with reasonable promptness by written notice to the responsible and responsive bidder who bids the lowest contingency fee percentage. The Illinois Department shall promulgate any rules necessary for the implementation of this Section.