97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1349

 

Introduced 2/9/2011, by Rep. Naomi D. Jakobsson

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 205/2  from Ch. 15, par. 102
30 ILCS 210/10.1
30 ILCS 210/10.2

    Amends the Uncollected State Claims Act. Provides that a public university may delete from its records debts of $1,000 or more certified as uncollectible when the debt is more than 8 years old. Amends the Illinois State Collection Act of 1986. Provides that Illinois public universities are not subject to certain provisions of the Act setting out requirements for entering into deferred payment plans or compromising past due debts. Provides that certain provisions of the Act concerning collection agency fees do not apply to second, third, or subsequent placements or to litigation activities. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1349LRB097 09063 PJG 49197 b

1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Uncollected State Claims Act is amended by
5changing Section 2 as follows:
 
6    (30 ILCS 205/2)  (from Ch. 15, par. 102)
7    Sec. 2. (a) When any State agency is unable to collect any
8claim or account receivable of $1,000 or more due the agency
9after having pursued the procedure prescribed by law or
10applicable rules and regulations for the collection thereof or,
11if no procedure is so prescribed, then after having undertaken
12all reasonable and appropriate procedures available to the
13agency to effectuate collection, the State agency shall request
14the Attorney General to certify the claim or account receivable
15to be uncollectible.
16    (b) Each request to the Attorney General asking that a
17claim or account receivable of $1,000 or more be declared
18uncollectible shall be in a format prescribed by the Attorney
19General and shall include at a minimum the following
20information: debtor's name, debtor's social security number or
21comparable identifying number, debtor's last known address,
22nature of the debt, efforts made to collect the debt and the
23time period covered by those efforts, the age of the debt, the

 

 

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1age of the debtor and the specific reason the State agency
2believes the debt to be uncollectible. Nothing in this
3provision should be interpreted as a limitation on the
4authority of the Attorney General to require additional
5information that he may find to be necessary to evaluate
6requests sent him pursuant to this provision.
7    (c) Claims or accounts receivable of less than $1,000 may
8be certified as uncollectible by the agency when the agency
9determines that further collection efforts are not in the best
10economic interest of the State. Such determination shall be
11made in accordance with rules of the Comptroller.
12    (d) If any item of information required by this provision
13or any item of additional information required by the Attorney
14General is not available, the State agency shall specifically
15so state in its request to the Attorney General asking that the
16debt be declared uncollectible.
17    (e) A State agency participating in a federal student loan
18program may remove student loans from its records by assigning
19or referring such student loans to the federal government for
20collection pursuant to the procedures prescribed by federal
21laws and regulations.
22    (f) Claims and receivables due from another State agency
23may be written off if the agency has pursued all reasonable
24means of collection and if the amount (1) is payable from an
25appropriation which has lapsed; (2) may not properly be charged
26against a current appropriation; and (3) was not originally

 

 

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1payable from federal funds, a trust fund or locally held funds.
2Each agency which writes off claims or receivables pursuant to
3this subparagraph shall submit a listing of all such write-offs
4to the Comptroller within 60 days of taking such action.
5    (g) Debts certified as uncollectible may be reopened for
6collection by an agency upon the approval of the Attorney
7General.
8    (h) Agencies shall submit a list of debts certified as
9uncollectible to the Comptroller in the form and manner
10specified by the Comptroller. The Comptroller shall take
11reasonable steps to accept information on agency computer
12tapes.
13    (i) After compliance with all provisions of this Section,
14an agency may delete from its records debts certified as
15uncollectible as follows:
16        (1) When the debt is less than $1,000, immediately upon
17    certification by the agency;
18        (2) For debts of $1,000 or more that are less than 5
19    years old, when the agency determines pursuant to rules and
20    regulations promulgated by the Comptroller that such
21    deletion is in the best economic interest of the State;
22        (3) For debts of $1,000 or more, when, the debt is more
23    than 5 years old or, in the case of a public university,
24    more than 8 years old.
25    (j) The Attorney General shall report to the General
26Assembly by February 1 of each year the following:

 

 

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1        (1) the total number and dollar amount of debts
2    referred to him for collection in the preceding calendar
3    year;
4        (2) the total amount actually collected;
5        (3) the number of cases by agency.
6    (k) Each State agency shall report in its annual report the
7total amount and the number of claims due and payable to the
8State. Each agency shall also describe in its annual report the
9method used in collecting debts, whether by a private
10collection service or by the Attorney General.
11    (l) The provisions of Section 2505-250 of the Department of
12Revenue Law (20 ILCS 2505/2505-250) take precedence over the
13provisions of this Section.
14(Source: P.A. 91-239, eff. 1-1-00.)
 
15    Section 10. The Illinois State Collection Act of 1986 is
16amended by renumbering and changing Section 9 added by Public
17Act 96-1383 and Section 9 added by Public Act 96-1435 as
18follows:
 
19    (30 ILCS 210/10.1)
20    Sec. 10.1 9. Collection agency fees. Except where
21prohibited by federal law or regulation, in the case of any
22liability referred to a collection agency on or after July 1,
232010, any fee charged to the State by the collection agency (i)
24may not exceed 25% for a first placement of the underlying

 

 

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1liability referred to the collection agency unless the
2liability is for a tax debt, (ii) is considered an additional
3liability owed to the State, (iii) is immediately subject to
4all collection procedures applicable to the liability referred
5to the collection agency, and (iv) must be separately stated in
6any statement or notice of the liability issued by the
7collection agency to the debtor. The fee limitations of this
8Section do not apply to a second, third, or subsequent
9placement or to litigation activities.
10(Source: P.A. 96-1383, eff. 1-1-11; revised 9-7-10.)
 
11    (30 ILCS 210/10.2)
12    Sec. 10.2 9. Deferral and compromise of past due debt.
13    (a) In this Section, "past due debt" means any debt owed to
14the State that has been outstanding for more than 12 months.
15"Past due debt" does not include any debt if any of the actions
16required under this Section would violate federal law or
17regulation.
18    (b) State agencies may enter into a deferred payment plan
19for the purpose of satisfying a past due debt. The deferred
20payment plan must meet the following requirements:
21        (1) The term of the deferred payment plan may not
22    exceed 2 years.
23        (2) The first payment of the deferred payment plan must
24    be at least 10% of the total amount due.
25        (3) All subsequent monthly payments for the deferred

 

 

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1    payment plan must be assessed as equal monthly principal
2    payments, together with interest.
3        (4) The deferred payment plan must include interest at
4    a rate that is the same as the interest required under the
5    State Prompt Payment Act.
6        (5) The deferred payment plan must be approved by the
7    Secretary or Director of the State agency.
8    (b-5) The requirements of subsection (b) do not apply to a
9deferred payment plan entered into by any Illinois public
10university, as defined in Section 10 of the Illinois Prepaid
11Tuition Act.
12    (c) State agencies may compromise past due debts. Any
13action taken by a State agency to compromise a past due debt
14must meet the following requirements:
15        (1) The amount of the compromised debt shall be no less
16    than 80% of the total of the past due debt.
17        (2) Once a past due debt has been compromised, the
18    debtor must remit to the State agency the total amount of
19    the compromised debt. However, the State agency may collect
20    the compromised debt through a payment plan not to exceed 6
21    months. If the State agency accepts the compromised debt
22    through a payment plan, then the compromised debt shall be
23    subject to the same rate of interest as required under the
24    State Prompt Payment Act.
25        (3) Before a State agency accepts a compromised debt,
26    the amount of the compromised debt must be approved by the

 

 

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1    Department of Revenue.
2    (c-5) Illinois public universities, as defined in Section
310 of the Illinois Prepaid Tuition Act, may compromise past due
4debt without regard to the requirements set forth in subsection
5(c).
6    (d) State agencies may sell a past due debt to one or more
7outside private vendors. Sales shall be conducted under rules
8adopted by the Department of Revenue using a request for
9proposals procedure similar to that procedure under the
10Illinois Procurement Code. The outside private vendors shall
11remit to the State agency the purchase price for debts sold
12under this subsection.
13    (e) The State agency shall deposit all amounts received
14under this Section into the General Revenue Fund.
15    (f) This Section does not apply to any tax debt owing to
16the Department of Revenue.
17(Source: P.A. 96-1435, eff. 8-16-10; revised 9-7-10.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.