093_HB0089ham001

 










                                     LRB093 02361 JAM 11738 a

 1                     AMENDMENT TO HOUSE BILL 89

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

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

 6        (30 ILCS 105/5.595 new)
 7        Sec. 5.595.  The Debt Collection Fund.

 8        Section 10.  The Illinois State Collection Act of 1986 is
 9    amended by changing Sections 2, 4, 5, 6, 7, and 8 and  adding
10    Section 10 as follows:

11        (30 ILCS 210/2) (from Ch. 15, par. 152)
12        Sec.  2.  This Act applies to all accounts or claims owed
13    to "State agencies", as that term is defined in the  Illinois
14    State  Auditing  Act,  except  that  the  debt collection and
15    write-off provisions of this  Act  shall  not  apply  to  the
16    Illinois  State  Scholarship Commission in the administration
17    of its student loan programs.  To the extent that some  other
18    statute  prescribes  procedures  for collection of particular
19    types of  accounts  or  claims  owed  to  State  agencies  in
20    conflict  with the provisions of this Act, such other statute
 
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 1    shall continue in full force and effect.  The debt collection
 2    and write-off provisions of this Act may be utilized  by  the
 3    General Assembly, the Supreme Court and the several courts of
 4    this  State, and the constitutionally elected State Officers,
 5    at their discretion, except that Section 10  applies  to  all
 6    State  agencies  unless  otherwise specified in that Section.
 7    However reporting requirements established by the comptroller
 8    shall be followed by all State agencies.  The provisions   of
 9    this  Act  shall be utilized at all times by all departments,
10    agencies, divisions, and offices under  the  jurisdiction  of
11    the Governor.
12    (Source: P.A. 85-814.)

13        (30 ILCS 210/4) (from Ch. 15, par. 154)
14        Sec.  4.   (a)  The  Comptroller  shall  provide  by rule
15    appropriate  procedures  for  State  agencies  to  follow  in
16    establishing and recording within the State accounting system
17    records of amounts owed to the State of Illinois.  The  rules
18    of the Comptroller shall include, but are not limited to:
19        (1)  the  manner  by which State agencies shall recognize
20    debts;
21        (2)  systems  to  age  accounts   receivable   of   State
22    agencies;
23        (3)  standards  by  which  State  agencies' claims may be
24    entered and removed  from  the  Comptroller's  Offset  System
25    authorized by Section 10.05 of the State Comptroller Act;
26        (4)  accounting  procedures  for estimating the amount of
27    uncollectible receivables of State agencies; and
28        (5)  accounting procedures for writing off bad debts  and
29    uncollectible  claims,  subject to the requirement of Section
30    10 that debts more than 90 days overdue be turned over to the
31    Debt Collection Unit of the Department of Revenue.
32        (b)  State  agencies  shall  report  to  the  Comptroller
33    information  concerning   their   accounts   receivable   and
 
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 1    uncollectible  claims  in  accordance  with  the rules of the
 2    Comptroller, which may provide for summary reporting.
 3        (c)  The rules of  the  Comptroller  authorized  by  this
 4    Section may specify varying procedures and forms of reporting
 5    dependent   upon   the  nature  and  amount  of  the  account
 6    receivable or uncollectible claim, the age of the  debt,  the
 7    probability  of  collection  and such other factors that will
 8    increase the net benefit  to  the  State  of  the  collection
 9    effort.
10        (d)  The  Comptroller  shall report annually by March 14,
11    to the Governor and the General Assembly, the amount  of  all
12    delinquent  debt  owed to each State agency as of December 31
13    of the previous calendar year.
14    (Source: P.A. 86-515.)

15        (30 ILCS 210/5) (from Ch. 15, par. 155)
16        Sec. 5.  Rules; payment plans; offsets.
17        (a)  State agencies shall adopt rules establishing formal
18    due dates for amounts owing to the State and, until  July  1,
19    2004,  for  the  referral  of  seriously past due accounts to
20    private  collection  agencies,  unless  otherwise   expressly
21    provided   by   law   or  rule.   Such  procedures  shall  be
22    established in accord with sound business practices.
23        (b)  Until July 1,  2004,  agencies  may  enter  deferred
24    payment  plans for debtors of the agency and documentation of
25    this fact retained by the agency, where the deferred  payment
26    plan  is  likely  to increase the net amount collected by the
27    State.
28        (c)  State agencies  may  use  the  Comptroller's  Offset
29    System provided in Section 10.05 of the State Comptroller Act
30    for  the  collection of debts owed to the agency.  Until July
31    1, 2004, all debts that exceed $1,000 and are  more  than  90
32    days  past  due  shall  be placed in the Comptroller's Offset
33    System, unless the State agency shall  have  entered  into  a
 
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 1    deferred  payment  plan  or demonstrates to the Comptroller's
 2    satisfaction that referral for offset is not cost effective.
 3        (d)  State agencies  shall  develop  internal  procedures
 4    whereby  agency  initiated  payments  to  its  debtors may be
 5    offset without referral to the Comptroller's Offset System.
 6        (e)  State agencies or the Comptroller may remove  claims
 7    from  the Comptroller's Offset System, where such claims have
 8    been inactive for more than one year.
 9        (f)  State agencies  may  use  the  Comptroller's  Offset
10    System  to  determine  if  any  State agency is attempting to
11    collect debt from a contractor,  bidder,  or  other  proposed
12    contracting party.
13        (g)  Beginning  July  1,  2004, State agencies other than
14    universities shall determine that a debt is uncollectible  in
15    accordance  with  rules  adopted by the Department of Revenue
16    under Section 10 and shall turn over to the  Debt  Collection
17    Unit  of the Department of Revenue any debt that is more than
18    90 days overdue  to  the  State.   Beginning  July  1,  2004,
19    universities  may  determine  that a debt is uncollectible in
20    accordance with rules adopted by the  Department  of  Revenue
21    under  Section  10  and  may turn over to the Debt Collection
22    Unit of the Department of Revenue any debt that is more  than
23    90  days  overdue  to the State. The Department of Revenue is
24    exempt  from  this  subsection  with  regard  to  debts   the
25    confidentiality   of  which  the  Department  of  Revenue  is
26    required by law to maintain.  The Department of Public Aid is
27    exempt from the requirements of this subsection  with  regard
28    to  child  support debts, the collection of which is governed
29    by the requirements of Title IV, Part D of the federal Social
30    Security Act.  The Department of Public Aid may  refer  child
31    support  debts  more than 90 days overdue to the State to the
32    Unit.  In the event a child support debt is  referred to  the
33    Unit,  the Unit must use any appropriate means for collection
34    of the debt that are normally available  to  the  Unit  under
 
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 1    State  law.   The  debt,  however, remains an obligation owed
 2    under  the  Department  of   Public   Aid's   Child   Support
 3    Enforcement  Program subject to the requirements of Title IV,
 4    Part D of the federal  Social  Security  Act,  including  the
 5    continued  use of federally mandated enforcement remedies and
 6    techniques by the Department of Public Aid.
 7    (Source: P.A. 92-404, eff. 7-1-02.)

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

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

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

21        (30 ILCS 210/10 new)
22        Sec. 10.  Debt  Collection  Unit  of  the  Department  of
23    Revenue.
24        (a)  The   Department  of  Revenue  shall  establish  and
25    maintain a division to be known as the Debt  Collection  Unit
26    ("Unit").  The purpose of the Unit shall be the collection of
27    debts  more than 90 days overdue to the State. All debts more
28    than 90 days overdue shall be referred to the Unit. The  Unit
29    shall   use  the  Comptroller's  offset  system,  then  shall
30    undertake debt collection activity in-house, then  shall  use
31    the  Comptroller's offset system again. If, at that time, the
32    debt still has not been collected, the Unit may,  along  with
33    continuing the offset process, contract with a person, group,
 
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 1    or  agency specializing in debt collection. The contract with
 2    the debt collector shall specify  that  the  collector's  fee
 3    shall  be on a contingency basis; however, the contract shall
 4    also provide that the debt collectors shall not  collect  the
 5    contingency  fee  if the offset system collects the debt. The
 6    Department   of   Revenue   shall   adopt   rules   for   the
 7    administration and procedures of the Unit. The rules shall be
 8    adopted under the Department's emergency rulemaking authority
 9    within 30 days after the effective date  of  this  amendatory
10    Act  of  the  93rd  General Assembly due to the budget crisis
11    threatening the public interest.
12        (b)  The Department of Revenue shall adopt rules for  the
13    certification  of  debt collection specialists to be employed
14    by the Unit.
15        (c)  The Department of  Revenue  shall  adopt  rules  for
16    determining    when   a  debt  owed  to  a  State  agency  is
17    uncollectible. The rules shall  be  used  by  State  agencies
18    other  than  universities  beginning  July 1, 2004 and may be
19    used by universities beginning July 1, 2004.  The  Department
20    of  Revenue  is  exempt from those rules with regard to debts
21    the confidentiality of which the  Department  of  Revenue  is
22    required  by  law  to maintain. The Department of Revenue may
23    contract with  private  collection  entities  to  pursue  the
24    collection of a debt determined to be uncollectable.
25        (d)  Beginning  July 1, 2004, a State agency other than a
26    university shall turn over, and a university may  turn  over,
27    to the Unit for collection any debt that is more than 90 days
28    overdue  to  the  State.  The Department of Revenue is exempt
29    from turning over to the Unit any debt the confidentiality of
30    which the  Department  of  Revenue  is  required  by  law  to
31    maintain.  When  turning  over a debt, the State agency shall
32    also turn over all documents  and  records  relating  to  the
33    debt.  In  collecting  a debt, the Unit may exercise the same
34    rights and powers with regard to debt collection possessed by
 
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 1    the State agency that turned over the debt to the  Unit.  The
 2    Department  of  Public Aid is exempt from the requirements of
 3    this subsection with  regard  to  child  support  debts,  the
 4    collection  of which is governed by the requirements of Title
 5    IV,  Part  D  of  the  federal  Social  Security  Act.    The
 6    Department  of  Public Aid may refer child support debts more
 7    than 90 days overdue to the State to the Unit.  In the  event
 8    a  child support debt is  referred to the Unit, the Unit must
 9    use any appropriate means for collection of the debt that are
10    normally available to the Unit under State  law.   The  debt,
11    however,  remains  an obligation owed under the Department of
12    Public Aid's Child Support Enforcement Program subject to the
13    requirements of Title  IV,  Part  D  of  the  federal  Social
14    Security  Act,  including  the  continued  use  of  federally
15    mandated   enforcement   remedies   and   techniques  by  the
16    Department of Public Aid.
17        (e)  The Debt Collection Fund is  created  as  a  special
18    fund  in  the State treasury.  If private debt collectors are
19    contractors under this Act they shall receive  a  contingency
20    fee  as  provided  in the contracts they executed; then 5% of
21    the amount collected on each debt by the Unit or  5%  of  the
22    balance  after  fees are deducted for private debt collectors
23    shall  be  deposited  into  the  Debt  Collection  Fund.  All
24    remaining amounts  collected  shall  be  deposited  into  the
25    appropriate  State  fund  or funds, if any, to which the debt
26    was owed. To the extent there  is  no  identifiable  fund  or
27    funds,  that  amount  shall  be  deposited  into  the General
28    Revenue Fund. Moneys in the Debt  Collection  Fund  shall  be
29    appropriated  only  for the administrative costs of the Unit.
30    On the last day of each fiscal  year,  unappropriated  moneys
31    and moneys otherwise deemed unneeded for the next fiscal year
32    remaining in the Debt Collection Fund may be transferred into
33    the   General  Revenue  Fund  at  the  Governor's  reasonable
34    discretion. The provisions of this subsection do not apply to
 
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 1    any child support debt referred to the Unit by the Department
 2    of Public Aid under this Section or Section  5.   Collections
 3    resulting   from   the  referrals  must  be  distributed  and
 4    disbursed at the direction of the Department of Public Aid in
 5    accordance with the requirements of Title IV, Part D  of  the
 6    federal  Social  Security Act, applicable provisions of State
 7    law, and the rules of the Department of Public Aid.
 8        (f)  The Attorney General  and  State  Comptroller  shall
 9    assist  in  the  debt  collection  efforts  of  the  Unit  as
10    requested by the Unit.
11        (g)  The  Director  of Revenue shall report semi-annually
12    to the General Assembly and State Comptroller upon  the  debt
13    collection efforts of the Unit.  Each report shall include an
14    analysis of the overdue debts owed to the State.

15        Section  99.  Effective date.  This Act takes effect upon
16    becoming law.".