98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5433

 

Introduced , by Rep. Ron Sandack

 

SYNOPSIS AS INTRODUCED:
 
15 ILCS 405/9.03  from Ch. 15, par. 209.03
30 ILCS 210/5  from Ch. 15, par. 155

    Amends the State Comptroller Act. Provides that all State payments to an entity from a payroll or retirement voluntary deduction must be made through direct deposit. Authorizes the State Comptroller to charge a fee if an entity receives a payment from a payroll or retirement voluntary deduction without using direct deposit. Requires any new entities that receive a payroll or retirement voluntary deduction to sign up for direct deposit during the application process. Further provides that the detail information associated with a State payment to an entity from a payroll or retirement voluntary deduction must be retrieved by the entity from the Comptroller's designated Internet website or an electronic alternative approved by the Comptroller. Authorizes the Comptroller to charge a processing fee if the entity requires the Comptroller to mail the detail information to it. Requires the Comptroller to provide reasonable notice to all entities impacted by these requirement. Amends the Illinois State Collection Act of 1986. Provides that if a State university withholds moneys from a university-funded payroll for a debt, the university may also withhold certain processing charges that must be remitted to the Office of the Comptroller in a timely manner. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Comptroller Act is amended by changing
5Section 9.03 as follows:
 
6    (15 ILCS 405/9.03)  (from Ch. 15, par. 209.03)
7    Sec. 9.03. Direct deposit of State payments.
8    (a) The Comptroller, with the approval of the State
9Treasurer, may provide by rule or regulation for the direct
10deposit of any payment lawfully payable from the State Treasury
11and in accordance with federal banking regulations including
12but not limited to payments to (i) persons paid from personal
13services, (ii) persons receiving benefit payments from the
14Comptroller under the State pension systems, (iii) individuals
15who receive assistance under Articles III, IV, and VI of the
16Illinois Public Aid Code, (iv) providers of services under the
17Mental Health and Developmental Disabilities Administrative
18Act, (v) providers of community-based mental health services,
19and (vi) providers of services under programs administered by
20the State Board of Education, in the accounts of those persons
21or entities maintained at a bank, savings and loan association,
22or credit union, where authorized by the payee. The Comptroller
23also may deposit public aid payments for individuals who

 

 

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1receive assistance under Articles III, IV, VI, and X of the
2Illinois Public Aid Code directly into an electronic benefits
3transfer account in a financial institution approved by the
4State Treasurer as prescribed by the Illinois Department of
5Human Services and in accordance with the rules and regulations
6of that Department and the rules and regulations adopted by the
7Comptroller and the State Treasurer. The Comptroller, with the
8approval of the State Treasurer, may provide by rule for the
9electronic direct deposit of payments to public agencies and
10any other payee of the State. The electronic direct deposits
11may be made to the designated account in those financial
12institutions specified in this Section for the direct deposit
13of payments. Within 6 months after the effective date of this
14amendatory Act of 1994, the Comptroller shall establish a pilot
15program for the electronic direct deposit of payments to local
16school districts, municipalities, and units of local
17government. The payments may be made without the use of the
18voucher-warrant system, provided that documentation of
19approval by the Treasurer of each group of payments made by
20direct deposit shall be retained by the Comptroller. The form
21and method of the Treasurer's approval shall be established by
22the rules or regulations adopted by the Comptroller under this
23Section.
24    (b) Except as provided in subsection (b-5), all State
25payments for an employee's payroll or an employee's expense
26reimbursement must be made through direct deposit. It is the

 

 

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1responsibility of the paying State agency to ensure compliance
2with this mandate. If a State agency pays an employee's payroll
3or an employee's expense reimbursement without using direct
4deposit, the Comptroller may charge that employee a processing
5fee of $2.50 per paper warrant. The processing fee may be
6withheld from the employee's payment or reimbursement. The
7amount collected from the fee shall be deposited into the
8Comptroller's Administrative Fund.
9    (b-5) If an employee wants his or her payments deposited
10into a secure check account, the employee must submit a direct
11deposit form to the paying State agency for his or her payroll
12or to the Comptroller for his or her expense reimbursements.
13Upon acceptance of the direct deposit form, the Comptroller
14shall disburse those funds to the secure check account. For the
15purposes of this Section, "secure check account" means an
16account established with a financial institution for the
17employee that allows the dispensing of the funds in the account
18through a third party who dispenses to the employee a paper
19check.
20    (c) All State payments to a vendor that exceed the
21allowable limit of paper warrants in a fiscal year, by the same
22agency, must be made through direct deposit. It is the
23responsibility of the paying State agency to ensure compliance
24with this mandate. If a State agency pays a vendor more times
25than the allowable limit in a single fiscal year without using
26direct deposit, the Comptroller may charge the vendor a

 

 

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1processing fee of $2.50 per paper warrant. The processing fee
2may be withheld from the vendor's payment. The amount collected
3from the processing fee shall be deposited into the
4Comptroller's Administrative Fund. The Office of the
5Comptroller shall define "allowable limit" in the
6Comptroller's Statewide Accounting Management System (SAMS)
7manual, except that the allowable limit shall not be less than
830 paper warrants. The Office of the Comptroller shall also
9provide reasonable notice to all State agencies of the
10allowable limit of paper warrants.
11    (c-1) All State payments to an entity from a payroll or
12retirement voluntary deduction must be made through direct
13deposit. If an entity receives a payment from a payroll or
14retirement voluntary deduction without using direct deposit,
15the Comptroller may charge the entity a processing fee of $2.50
16per paper warrant. The processing fee may be withheld from the
17entity's payment or billed to the entity at a later date. The
18amount collected from the processing fee shall be deposited
19into the Comptroller's Administrative Fund. The Comptroller
20shall provide reasonable notice to all entities impacted by
21this requirement. Any new entities that receive a payroll or
22retirement voluntary deduction must sign up for direct deposit
23during the application process.
24    (c-2) The detail information, such as names, identifiers,
25and amounts, associated with a State payment to an entity from
26a payroll or retirement voluntary deduction must be retrieved

 

 

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1by the entity from the Comptroller's designated Internet
2website or an electronic alternative approved by the
3Comptroller. If the entity requires the Comptroller to mail the
4detail information, the Comptroller may charge the entity a
5processing fee up to $25.00 per mailing. Any processing fee
6will be billed to the entity at a later date. The amount
7collected from the processing fee shall be deposited into the
8Comptroller's Administrative Fund. The Comptroller shall
9provide reasonable notice to all entities impacted by this
10requirement.
11    (d) State employees covered by provisions in collective
12bargaining agreements that do not require direct deposit of
13paychecks are exempt from this mandate. No later than 60 days
14after the effective date of this amendatory Act of the 97th
15General Assembly, all State agencies must provide to the Office
16of the Comptroller a list of employees that are exempt under
17this subsection (d) from the direct deposit mandate. In
18addition, a State employee or vendor may file a hardship
19petition with the Office of the Comptroller requesting an
20exemption from the direct deposit mandate under this Section. A
21hardship petition shall be made available for download on the
22Comptroller's official Internet website.
23    (e) Notwithstanding any provision of law to the contrary,
24the direct deposit of State payments under this Section for an
25employee's payroll, an employee's expense reimbursement, or a
26State vendor's payment does not authorize the State to

 

 

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1automatically withdraw funds from those accounts.
2    (f) For the purposes of this Section, "vendor" means a
3non-governmental entity with a taxpayer identification number
4issued by the Social Security Administration or Internal
5Revenue Service that receives payments through the
6Comptroller's commercial system. The term does not include
7State agencies.
8    (g) The requirements of this Section do not apply to the
9legislative or judicial branches of State government.
10(Source: P.A. 97-348, eff. 8-12-11; 97-993, eff. 9-16-12;
1198-463, eff. 8-16-13.)
 
12    Section 10. The Illinois State Collection Act of 1986 is
13amended by changing Section 5 as follows:
 
14    (30 ILCS 210/5)  (from Ch. 15, par. 155)
15    Sec. 5. Rules; payment plans; offsets.
16    (a) Until July 1, 2004 for the Department of Public Aid and
17July 1, 2005 for Universities and all other State agencies,
18State agencies shall adopt rules establishing formal due dates
19for amounts owing to the State and for the referral of
20seriously past due accounts to private collection agencies,
21unless otherwise expressly provided by law or rule, except that
22on and after July 1, 2005, the Department of Employment
23Security may continue to refer to private collection agencies
24past due amounts that are exempt from subsection (g). Such

 

 

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1procedures shall be established in accord with sound business
2practices.
3    (b) Until July 1, 2004 for the Department of Public Aid and
4July 1, 2005 for Universities and all other State agencies,
5agencies may enter deferred payment plans for debtors of the
6agency and documentation of this fact retained by the agency,
7where the deferred payment plan is likely to increase the net
8amount collected by the State, except that, on and after July
91, 2005, the Department of Employment Security may continue to
10enter deferred payment plans for debts that are exempt from
11subsection (g).
12    (c) Until July 1, 2004 for the Department of Public Aid and
13July 1, 2005 for Universities and all other State agencies,
14State agencies may use the Comptroller's Offset System provided
15in Section 10.05 of the State Comptroller Act for the
16collection of debts owed to the agency, except that, on and
17after July 1, 2005, the Department of Employment Security may
18continue to use the Comptroller's offset system to collect
19amounts that are exempt from subsection (g).
20    (c-1) All debts that exceed $250 and are more than 90 days
21past due shall be placed in the Comptroller's Offset System,
22unless (i) the State agency shall have entered into a deferred
23payment plan or demonstrates to the Comptroller's satisfaction
24that referral for offset is not cost effective; or (ii) the
25State agency is a university that elects to place in the
26Comptroller's Offset System only debts that exceed $1,000 and

 

 

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1are more than 90 days past due. All debt, and maintenance of
2that debt, that is placed in the Comptroller's Offset System
3must be submitted electronically to the office of the
4Comptroller. Any exception to this requirement must be approved
5in writing by the Comptroller.
6    (c-2) Upon processing a deduction to satisfy a debt owed to
7a university or a State agency and placed in the Comptroller's
8Offset System in accordance with subsection (c-1), the
9Comptroller shall give written notice to the person subject to
10the offset. The notice shall inform the person that he or she
11may make a written protest to the Comptroller within 60 days
12after the Comptroller has given notice. The protest shall
13include the reason for contesting the deduction and any other
14information that will enable the Comptroller to determine the
15amount due and payable. If the person subject to the offset has
16not made a written protest within 60 days after the Comptroller
17has given notice, or if a final disposition is made concerning
18the deduction, the Comptroller shall pay the deduction to the
19university or the State agency.
20    (c-3) For a debt owed to a university or a State agency and
21placed in the Comptroller's Offset System in accordance with
22subsection (c-1), the Comptroller shall deduct, from a warrant
23or other payment, its processing charge and the amount
24certified as necessary to satisfy, in whole or in part, the
25debt owed to the university or the State agency. The
26Comptroller shall deduct a processing charge of up to $15 per

 

 

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1transaction for each offset and such charges shall be deposited
2into the Comptroller Debt Recovery Trust Fund.
3    (c-4) If a State university withholds moneys from a
4university-funded payroll for a debt in accordance with this
5Act, the university may also withhold the processing charge
6identified in Section 10.05d of the State Comptroller Act and
7subsection (c-3) of Section 5 of the Illinois State Collection
8Act of 1986. Both amounts must be remitted to the Office of the
9Comptroller in a timely manner.
10    (d) State agencies shall develop internal procedures
11whereby agency initiated payments to its debtors may be offset
12without referral to the Comptroller's Offset System.
13    (e) State agencies or the Comptroller may remove claims
14from the Comptroller's Offset System, where such claims have
15been inactive for more than one year.
16    (f) State agencies may use the Comptroller's Offset System
17to determine if any State agency is attempting to collect debt
18from a contractor, bidder, or other proposed contracting party.
19    (g) Beginning July 1, 2004 for the Departments of Public
20Aid (now Healthcare and Family Services) and Employment
21Security and July 1, 2005 for Universities and other State
22agencies, State agencies shall refer to the Department of
23Revenue Debt Collection Bureau (the Bureau) all debt to the
24State, provided that the debt satisfies the requirements for
25referral of delinquent debt as established by rule by the
26Department of Revenue.

 

 

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1    (h) The Department of Healthcare and Family Services shall
2be exempt from the requirements of this Section with regard to
3child support debts, the collection of which is governed by the
4requirements of Title IV, Part D of the federal Social Security
5Act. The Department of Healthcare and Family Services may refer
6child support debts to the Bureau, provided that the debt
7satisfies the requirements for referral of delinquent debt as
8established by rule by the Department of Revenue. The Bureau
9shall use all legal means available to collect child support
10debt, including those authorizing the Department of Revenue to
11collect debt and those authorizing the Department of Healthcare
12and Family Services to collect debt. All such referred debt
13shall remain an obligation under the Department of Healthcare
14and Family Services' Child Support Enforcement Program subject
15to the requirements of Title IV, Part D of the federal Social
16Security Act, including the continued use of federally mandated
17enforcement remedies and techniques by the Department of
18Healthcare and Family Services.
19    (h-1) The Department of Employment Security is exempt from
20subsection (g) with regard to debts to any federal account,
21including but not limited to the Unemployment Trust Fund, and
22penalties and interest assessed under the Unemployment
23Insurance Act. The Department of Employment Security may refer
24those debts to the Bureau, provided the debt satisfies the
25requirements for referral of delinquent debt as established by
26rule by the Department of Revenue. The Bureau shall use all

 

 

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1legal means available to collect the debts, including those
2authorizing the Department of Revenue to collect debt and those
3authorizing the Department of Employment Security to collect
4debt. All referred debt shall remain an obligation to the
5account to which it is owed.
6    (i) All debt referred to the Bureau for collection shall
7remain the property of the referring agency. The Bureau shall
8collect debt on behalf of the referring agency using all legal
9means available, including those authorizing the Department of
10Revenue to collect debt and those authorizing the referring
11agency to collect debt.
12    (j) No debt secured by an interest in real property granted
13by the debtor in exchange for the creation of the debt shall be
14referred to the Bureau. The Bureau shall have no obligation to
15collect debts secured by an interest in real property.
16    (k) Beginning July 1, 2003, each agency shall collect and
17provide the Bureau information regarding the nature and details
18of its debt in such form and manner as the Department of
19Revenue shall require.
20    (l) For all debt accruing after July 1, 2003, each agency
21shall collect and transmit such debtor identification
22information as the Department of Revenue shall require.
23(Source: P.A. 97-759, eff. 7-6-12.)
 
24    Section 99. Effective date. This Act takes effect upon
25becoming law.