Illinois General Assembly - Full Text of SB0397
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Full Text of SB0397  97th General Assembly


Sen. James F. Clayborne, Jr.

Filed: 4/8/2011





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2    AMENDMENT NO. ______. Amend Senate Bill 397 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Department of Revenue Law of the Civil
5Administrative Code of Illinois is amended by adding Section
62505-660 as follows:
7    (20 ILCS 2505/2505-660 new)
8    Sec. 2505-660. Collection of delinquent debts; housing
9authority. Upon certification by a housing authority of the
10amounts of delinquent debts, the Department of Revenue may
11collect the delinquent debts by intercepting the tax refund of
12any person owing the delinquent debts. The Department of
13Revenue shall enter into an agreement with the housing
14authority as provided in Section 8.1d of the Housing
15Authorities Act prior to undertaking any collections under this
16Section. Any agreement between the Department of Revenue and



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1the housing authority for the intercept of tax refunds shall
2contain provisions for certification of debt, notification to
3the taxpayer of the intercept, and treatment of joint returns
4that are consistent with the requirements for a refund
5withholding request under Section 8.1d of the Housing
6Authorities Act.
7    Section 10. The Illinois Income Tax Act is amended by
8changing Section 911.3 as follows:
9    (35 ILCS 5/911.3)
10    Sec. 911.3. Refunds withheld; order of honoring requests.
11The Department shall honor refund withholding requests in the
12following order:
13        (1) a refund withholding request to collect an unpaid
14    State tax;
15        (2) a refund withholding request to collect certified
16    past due child support amounts under Section 2505-650 of
17    the Department of Revenue Law of the Civil Administrative
18    Code of Illinois;
19        (3) a refund withholding request to collect any debt
20    owed to the State;
21        (4) a refund withholding request made by the Secretary
22    of the Treasury of the United States, or his or her
23    delegate, to collect any tax liability arising from Title
24    26 of the United States Code;



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1        (5) a refund withholding request pursuant to Section
2    911.2 of this Act; and
3        (6) a refund withholding request to collect certified
4    past due fees owed to the Clerk of the Circuit Court as
5    authorized under Section 2505-655 of the Department of
6    Revenue Law of the Civil Administrative Code of Illinois;
7    and .
8        (7) a refund withholding request to collect a
9    delinquent debt owed to a housing authority as authorized
10    under Section 2505-660 of the Department of Revenue Law of
11    the Civil Administrative Code of Illinois
12(Source: P.A. 92-826, eff. 8-21-02; 93-836, eff. 1-1-05.)
13    Section 15. The Housing Authorities Act is amended by
14adding Section 8.1d as follows:
15    (310 ILCS 10/8.1d new)
16    Sec. 8.1d. Collection of debt; setoff program.
17    (a) Definitions. As used in this Section:
18    "Debtor" means a person having a delinquent debt with a
19housing authority which has not been adjusted, satisfied, or
20set aside by court order, or discharged in bankruptcy.
21    "Delinquent debt" means a sum which has been reduced to
22judgment in a final court order and is due and owing a housing
23authority, including collection costs, court costs, fines,
24penalties, and interest which have accrued through contract,



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1subrogation, tort, operation of law, or other legal theory.
2"Delinquent debt" does not include sums owed to a housing
3authority when the housing authority and the debtor have
4entered into a written payment agreement and the debtor is
5current in meeting the obligations of the agreement.
6"Delinquent debt" also includes any fine, penalty, cost, fee,
7assessment, surcharge, service charge, restitution, or other
8amount imposed by a court or as a direct consequence of a final
9court order which is received by or payable to the clerk of the
10appropriate court or treasurer of the entity where the court is
12    "Refund" means any individual Illinois income tax refund
13payable. "Refund" also includes a refund belonging to a debtor
14resulting from the filing of a joint income tax return.
15    (b) Collection of debt; information to be given by housing
16authority; information to be given by Department of Revenue to
17housing authority.
18        (1) The collection remedy under this Section is in
19    addition to any other remedy available by law.
20        (2) Housing authorities may submit for collection
21    under the procedure established by this Section all
22    delinquent debts which they are owed.
23        (3) All housing authorities, whenever possible, shall
24    obtain the full name, social security number, address, and
25    any other identifying information, required by rules
26    promulgated by the Department of Revenue for



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1    implementation of this Section, from any person for whom
2    the housing authorities provide any service or transact any
3    business and who the housing authorities can foresee may
4    become a debtor under the terms of this Section.
5        (4) Upon request from a housing authority, the
6    Department of Revenue shall furnish to the housing
7    authority any information the Department of Revenue deems
8    necessary to properly notify the debtor.
9    (c) Choice of housing authority as to use of or
10participation in setoff program. If the housing authority
11determines that the administrative cost of utilizing this
12Section is prohibitive, it may choose not to participate in the
13setoff program, or it may choose to participate only in cases
14of delinquent debts above an amount it determines appropriate.
15    (d) Department of Revenue to assist in collection of
16delinquent debt by setoff of any refunds due to debtor. Subject
17to the limitations contained in this Section, the Department of
18Revenue, upon request, shall render assistance in the
19collection of any delinquent debt owing to any housing
20authority by setting off any refunds due the debtor from the
21Department of Revenue by the sum certified by the housing
22authority as delinquent debt.
23    (e) Notification by housing authority; refund
24determinations; Department of Revenue liability.
25        (1) A housing authority seeking to attempt collection
26    of a delinquent debt through setoff shall notify the



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1    Department of Revenue in writing and supply information the
2    Department of Revenue determines necessary to identify the
3    debtor whose refund is sought to be set off. A request for
4    setoff may be made only after the housing authority has
5    notified the debtor of its intention to cause the debtor's
6    refund to be set off. The housing authority shall promptly
7    notify the debtor when the liability out of which the
8    setoff arises is satisfied. The housing authority shall
9    promptly notify the Department of Revenue of a reduction in
10    the delinquent debt.
11        (2) Upon receiving the certification of the housing
12    authority of the amount of the delinquent debt, the
13    Department of Revenue shall determine if the debtor is due
14    a refund. If the debtor is due a refund of more than a
15    tolerance amount as determined by the Department of
16    Revenue, the Department of Revenue shall set off the
17    delinquent debt against the amount of the refund. The
18    Department of Revenue may retain an amount not to exceed
19    $25 of each refund set off to defray its administrative
20    expenses, and that amount may be added to the debt.
21    Apportionment is not required in the case of a refund
22    resulting from filing a joint return. A person has no
23    property right or property interest in a refund until all
24    amounts due the State and housing authorities are paid. The
25    Department of Revenue shall consider a delinquent debt and
26    debtor list provided by a housing authority as correct and



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1    the Department of Revenue is not liable for a wrongful or
2    improper setoff.
3    (f) Notice of intention to set off debt; form, delivery and
4presumption. The notice of intention to set off must be given
5by mailing the notice, with postage prepaid, addressed to the
6debtor at the address provided to the housing authority when
7the debt was incurred or at the debtor's last known address. If
8the notice is returned to the housing authority as
9undeliverable or the housing authority has any reason to
10believe the debtor did not receive the notice, the housing
11authority shall obtain the last known address of the debtor
12from the Department of Revenue and resend the notice. The
13giving of the notice by mail is complete upon mailing the
14notice or resending the notice if the notice is returned to the
15housing authority as undeliverable or the housing authority has
16any reason to believe the debtor did not receive the notice. A
17certification by the housing authority that the notice has been
18sent is presumptive proof that the requirements as to notice
19are met, even if the notice actually has not been received by
20the debtor. The notice must include a statement substantially
21as follows:
22    "According to our records, you owe the (housing authority)
23a debt in the amount of (amount of the debt), plus interest, if
24applicable, for (type of debt). You are hereby notified of the
25(housing authority's) intention to submit this debt to the
26Illinois Department of Revenue of Revenue to be set off against



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1your individual income tax refunds until the debt is paid in
2full. Pursuant to Section 8.1d of the Housing Authorities Act,
3Section 2505-660 of the Department of Revenue Law of the Civil
4Administrative Code of Illinois, and Section 911.3 of the
5Illinois Income Tax Act, this amount, plus $25 in
6administrative costs, will be deducted from your Illinois
7individual income tax refunds unless you fully satisfy this
8debt with the (housing authority). If you file a joint return
9with your spouse, this amount will be deducted from the total
10joint refunds without regard to which spouse incurred the debt
11or actually withheld the taxes."
12    (g) Agreements; credit to debtor's obligation by housing
13authority; notification of housing authority to debtor of
15        (1) A housing authority may enter into an agreement
16    with the Department of Revenue to establish a program for
17    the purpose of collecting certain delinquent debts. The
18    purpose shall be to intercept, in whole or in part, State
19    income tax refunds due the persons who owe delinquent debts
20    to the housing authority in order to satisfy delinquent
21    debts. The agreement shall include, but may not be limited
22    to, a certification by the housing authority that the debt
23    claims forwarded to the Department of Revenue are valid,
24    that reasonable efforts have been made to notify persons of
25    the delinquency of the debts, and that the delinquent debts
26    have been reduced to judgment in a final court order. The



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1    agreement shall include provisions for payment of the
2    intercept by the Department of Revenue to the housing
3    authority. The agreement may also include provisions to
4    allow the Department of Revenue to recover its cost for
5    administering the program. Intercepts made pursuant to
6    this Section shall not interfere with the collection of
7    debts related to child support. During the collection of
8    debts under this Section, when there are 2 or more debt
9    claims certified to the Department of Revenue at the same
10    time, priority of collection shall be as provided in
11    Section 911.3 of the Illinois Income Tax Act.
12        (2) Upon receipt by a housing authority of proceeds
13    collected on its behalf by the Department of Revenue the
14    housing authority shall credit the debtor's obligation and
15    shall notify the debtor in writing of the amount of the
16    setoff.
17        (3) The Department of Revenue may add an administrative
18    fee of no more than $25 to the delinquent debt. This fee
19    shall be used by the Department of Revenue to cover any
20    administrative costs pursuant to this Section.
21    (h) Information from Department of Revenue to be used only
22by housing authority for collection purposes; penalties for
24        (1) The exchange of information among the Department of
25    Revenue, housing authority, and the debtor pursuant to this
26    Section is lawful.



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1        (2) The information obtained by a housing authority
2    from the Department of Revenue in accordance with the
3    exemption allowed by paragraph (1) may be used by the
4    housing authority only in the pursuit of its debt
5    collection duties and practices. A person employed by or
6    formerly employed by the housing authority who knowingly
7    discloses the information for another purpose commits a
8    Class A misdemeanor.
9    (i) Indemnification of Department of Revenue by housing
10authority. Housing authorities shall indemnify the Department
11of Revenue against any injuries, actions, liabilities, or
12proceedings arising from performance under the provisions of
13this Section.
14    (j) Department of Revenue rules, forms, and procedures
15permitted. The Department of Revenue may promulgate rules and
16prescribe forms and procedures necessary to implement this