093_HB0040eng

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 1        AN ACT in relation to State loans.

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

 4        Section  1.  Short  title.   This Act may be cited as the
 5    State Loan Act.

 6        Section 5.  Definitions.  As used in this Act:
 7        "State loan" means any loan of, or combination  of  loans
 8    totaling,  $50,000  or  more made by the State of Illinois or
 9    any State agency to any person for  any  purpose  except  for
10    participation   loans   or   financial  transactions  through
11    statutorily-authorized financial intermediaries in support of
12    small business loans and investments.
13        "State agencies" has the meaning ascribed to that term in
14    Section 1-7 of the Illinois State Auditing Act.
15        "Person" means any individual, corporation,  partnership,
16    unincorporated   association,   limited   liability  company,
17    limited liability partnership, or other entity.
18        "Designated individuals" means:
19             (i)  In the case of a partnership, all  general  and
20        limited partners of the partnership.
21             (ii)  In the case of a corporation, all shareholders
22        with  10%  or  more  equity  or ownership interest in the
23        corporation.
24             (iii)  In the case of one or more  individuals,  all
25        of the individuals.
26             (iv)  In   the   case   of  any  other  entity,  all
27        individuals with any equity or ownership interest in  the
28        entity.

29        Section  10.  Disclosure.   Each contract providing for a
30    State loan shall contain a disclosure setting forth the names
 
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 1    and addresses of each designated  individual  of  the  person
 2    receiving  the  loan.   The  contract  must  state  that this
 3    disclosure is a public record  and  is  not  subject  to  any
 4    exemptions  or  exceptions  under  the Freedom of Information
 5    Act.  A State agency making,  renegotiating,  or  renewing  a
 6    State  loan shall maintain a publicly-available record of the
 7    names and  addresses  of  each  person  and  each  designated
 8    individual   of   the  person  receiving,  renegotiating,  or
 9    renewing a State loan.

10        Section 15.  Guarantee.  Before any  State  loan  may  be
11    made   to   any  person  or  renewed  or  renegotiated,  each
12    designated individual of the person must personally guarantee
13    repayment of the loan.  A guarantee remains in  effect  until
14    the  loan  has  been  repaid in full.  A guarantee may not be
15    rescinded  or  abrogated  under   any   circumstances.    Any
16    agreement that purports to rescind or abrogate a guarantee is
17    null and void.

18        Section  20.  Certain  contracts  prohibited.   No  State
19    agency  may  enter  into  any contract with any person if the
20    person or any designated  individual  of  the  person  is  in
21    default  on  any  State  loan. The person and each designated
22    individual of the person receiving a State loan must  certify
23    to  the  State agency that he or she is not delinquent in the
24    payment of any debt to the State.  The contract must  provide
25    that  the  contract may be declared void if the certification
26    is false or the contractor later becomes delinquent  and  has
27    not entered into a deferred payment plan to pay off the debt.

28        Section 30.  Default; Attorney General investigation.  In
29    the  case  of  any  default on a State loan, the State agency
30    making the loan  shall  notify  the  Attorney  General.   The
31    Attorney  General  shall investigate the circumstances of the
 
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 1    default.  Unless the Attorney  General  determines  that  the
 2    loan  is  uncollectible,  the  Attorney  General  shall  take
 3    appropriate  action  to collect any amount owing to the State
 4    and enforce the State's rights under the loan agreement.

 5        Section  35.  Uncollected  State  Claims  Act   and   the
 6    Illinois  State Collection Act of 1986.  Any renegotiation of
 7    a  State  Loan  resulting  in  acceptance  of  an  offer   in
 8    compromise  for  an amount less than the total amount due and
 9    owing on the loan shall require the approval of the  Attorney
10    General  and must be in compliance with the provisions of the
11    Uncollected  State  Claims  Act  and   the   Illinois   State
12    Collection  Act of 1986 regarding the reporting and recording
13    of debt collections and the writing off of debts.

14        Section 40.  Report. The Attorney General shall report to
15    the  General  Assembly  by  February  1  of  each  year   the
16    following:
17        (1)  the  total  number  and dollar amount of loans about
18    which the Attorney General was notified  in  accordance  with
19    this Act in the preceding calendar year;
20        (2)  the total amount actually collected;
21        (3)  the number of cases by agency; and
22        (4)  the   names   and   addresses   of   all  designated
23    individuals of any person that is a party  to  a  State  loan
24    about  which  the Attorney General was notified in accordance
25    with this Act in the preceding calendar year.

26        Section 800. The Uncollected State Claims Act is  amended
27    by changing Section 2 as follows:

28        (30 ILCS 205/2) (from Ch. 15, par. 102)
29        Sec.  2.  (a) When  any State agency is unable to collect
30    any claim or account receivable of $1,000  or  more  due  the
 
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 1    agency  after  having pursued the procedure prescribed by law
 2    or  applicable  rules  and  regulations  for  the  collection
 3    thereof or, if no procedure  is  so  prescribed,  then  after
 4    having  undertaken  all reasonable and appropriate procedures
 5    available to the agency to effectuate collection,  the  State
 6    agency  shall  request  the  Attorney  General to certify the
 7    claim or account receivable to be uncollectible.
 8        (b)  Each request to the Attorney General asking  that  a
 9    claim  or  account  receivable  of $1,000 or more be declared
10    uncollectible shall be in a format prescribed by the Attorney
11    General  and  shall  include  at  a  minimum  the   following
12    information:   debtor's name, debtor's social security number
13    or  comparable  identifying  number,  debtor's   last   known
14    address, nature of the debt, efforts made to collect the debt
15    and  the time period covered by those efforts, the age of the
16    debt, the age of the debtor and the specific reason the State
17    agency believes the debt to  be  uncollectible.   Nothing  in
18    this  provision  should be interpreted as a limitation on the
19    authority of  the  Attorney  General  to  require  additional
20    information  that  he  may  find  to be necessary to evaluate
21    requests sent him pursuant to this provision.
22        (c)  Claims or accounts receivable of  less  than  $1,000
23    may  be  certified  as  uncollectible  by the agency when the
24    agency determines that further collection efforts are not  in
25    the  best economic interest of the State.  Such determination
26    shall be made in accordance with rules of the Comptroller.
27        (d)  If  any  item  of  information  required   by   this
28    provision  or  any item of additional information required by
29    the Attorney General is not available, the State agency shall
30    specifically so state in its request to the Attorney  General
31    asking that the debt be declared uncollectible.
32        (e)  A  State  agency  participating in a federal student
33    loan program may remove student loans  from  its  records  by
34    assigning  or  referring  such  student  loans to the federal
 
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 1    government  for  collection  pursuant   to   the   procedures
 2    prescribed by federal laws and regulations.
 3        (f)  Claims and receivables due from another State agency
 4    may  be  written off if the agency has pursued all reasonable
 5    means of collection and if the amount (1) is payable from  an
 6    appropriation  which  has  lapsed;  (2)  may  not properly be
 7    charged against a current  appropriation;  and  (3)  was  not
 8    originally  payable  from  federal  funds,  a  trust  fund or
 9    locally held funds.  Each agency which writes off  claims  or
10    receivables  pursuant  to  this  subparagraph  shall submit a
11    listing of all such write-offs to the Comptroller  within  60
12    days of taking such action.
13        (g)  Debts certified as uncollectible may be reopened for
14    collection  by  an  agency  upon the approval of the Attorney
15    General.
16        (h)  Agencies shall submit a list of debts  certified  as
17    uncollectible  to  the  Comptroller  in  the  form and manner
18    specified by the Comptroller.   The  Comptroller  shall  take
19    reasonable  steps  to  accept  information on agency computer
20    tapes.
21        (i)  After  compliance  with  all  provisions   of   this
22    Section,   an  agency  may  delete  from  its  records  debts
23    certified as uncollectible as follows:
24             (1)  When the debt is less than $1,000,  immediately
25        upon certification by the agency;
26             (2)  For  debts of $1,000 or more that are less than
27        5 years old, when the agency determines pursuant to rules
28        and regulations promulgated by the Comptroller that  such
29        deletion is in the best economic interest of the State;
30             (3)  For  debts  of $1,000 or more when, the debt is
31        more than 5 years old.
32        (j)  The Attorney General shall  report  to  the  General
33    Assembly by February 1 of each year the following:
34             (1)  the  total  number  and  dollar amount of debts
 
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 1        referred to him for collection in the preceding  calendar
 2        year;
 3             (2)  the total amount actually collected;
 4             (3)  the number of cases by agency.
 5        (k)  Each  State agency shall report in its annual report
 6    the total amount and the number of claims due and payable  to
 7    the  State.   Each  agency  shall also describe in its annual
 8    report the method used in  collecting  debts,  whether  by  a
 9    private collection service or by the Attorney General.
10        (l)  The provisions of Section 2505-250 of the Department
11    of  Revenue  Law (20 ILCS 2505/2505-250) take precedence over
12    the provisions of this Section.
13        (m)  Any renegotiation  of  a  State  Loan  resulting  in
14    acceptance  of an offer in compromise for an amount less than
15    the total amount due and owing on the loan shall require  the
16    approval  of  the  Attorney General and shall comply with the
17    reporting and  uncollectible  certification  requirements  of
18    this Act.
19    (Source: P.A. 91-239, eff. 1-1-00.)

20        Section  900.  The  Illinois State Collection Act of 1986
21    is amended by changing Section 4 as follows:

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

29        Section 999.  Effective date.  This Act takes effect upon
30    becoming law.