State of Illinois
92nd General Assembly
Legislation

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92_HB0086

 
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 1        AN  ACT  concerning  State  collection of debts, amending
 2    named Acts.

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

 5        Section  5.   The  State Finance Act is amended by adding
 6    Section 5.545 as follows:

 7        (30 ILCS 105/5.545 new)
 8        Sec. 5.545.  The Debt Collection Fund.

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

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

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

 7        (30 ILCS 210/5) (from Ch. 15, par. 155)
 8        Sec. 5.  Rules; payment plans; offsets.
 9        (a)  State agencies shall adopt rules establishing formal
10    due dates for amounts owing to the State and, until  July  1,
11    2002,  for  the  referral  of  seriously past due accounts to
12    private  collection  agencies,  unless  otherwise   expressly
13    provided   by   law   or  rule.   Such  procedures  shall  be
14    established in accord with sound business practices.
15        (b)  Until July 1,  2002,  agencies  may  enter  deferred
16    payment  plans for debtors of the agency and documentation of
17    this fact retained by the agency, where the deferred  payment
18    plan  is  likely  to increase the net amount collected by the
19    State.
20        (c)  State agencies  may  use  the  Comptroller's  Offset
21    System provided in Section 10.05 of the State Comptroller Act
22    for the collection of debts owed to the agency. Until July 1,
23    2002,  all debts that exceed $1,000 and are more than 90 days
24    past due shall be placed in the Comptroller's Offset  System,
25    unless  the  State  agency shall have entered into a deferred
26    payment   plan   or   demonstrates   to   the   Comptroller's
27    satisfaction that referral for offset is not cost effective.
28        (d)  State agencies  shall  develop  internal  procedures
29    whereby  agency  initiated  payments  to  its  debtors may be
30    offset without referral to the Comptroller's Offset System.
31        (e)  State agencies or the Comptroller may remove  claims
32    from  the Comptroller's Offset System, where such claims have
33    been inactive for more than one year.
 
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 1        (f)  Beginning July 1, 2002, State  agencies  other  than
 2    universities  shall determine that a debt is uncollectible in
 3    accordance with rules adopted by the  Auditor  General  under
 4    Section 10 and shall turn over to the Debt Collection Unit of
 5    the  Auditor  General's  Office any debt that is more than 90
 6    days  overdue  to  the  State.   Beginning  July   1,   2002,
 7    universities  may  determine  that a debt is uncollectible in
 8    accordance with rules adopted by the  Auditor  General  under
 9    Section  10  and may turn over to the Debt Collection Unit of
10    the Auditor General's Office any debt that is  more  than  90
11    days  overdue  to  the  State.   The Department of Revenue is
12    exempt  from  this  subsection  with  regard  to  debts   the
13    confidentiality   of  which  the  Department  of  Revenue  is
14    required by law to maintain.
15    (Source: P.A. 90-332, eff. 1-1-98.)

16        (30 ILCS 210/6) (from Ch. 15, par. 156)
17        Sec.  6.   The  Comptroller  with  the  approval  of  the
18    Governor may provide by rule and regulation for the  creation
19    of  a  special  fund  or  funds for the deposit of designated
20    receipts by designated agencies to be known as  the  Accounts
21    Receivable  Fund  or  Funds.  Deposits shall be segregated by
22    the creditor agency.  No deposit shall  be  made  unless  the
23    collection  is  of  an  account receivable more than 120 days
24    past due.
25        Seventy-five  percent  of  the  amounts  deposited   each
26    quarter  into such a special fund shall be transferred to the
27    General Revenue Fund or  such  other  fund  that  would  have
28    originally  received the receipts.  The remaining amounts may
29    be  used  by  the  creditor  agency  for  collecting  overdue
30    accounts pursuant to appropriation by the General Assembly.
31        An agency, with the  approval  of  the  Comptroller,  may
32    deposit  all  receipts into the General Revenue Fund or other
33    such fund that would have originally received  the  receipts.
 
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 1    Twenty-five  percent  of  such deposits made each quarter for
 2    accounts receivable more than 120  days  past  due  shall  be
 3    transferred  to  the  Accounts Receivable Fund or Funds.  The
 4    transferred amounts may be used by the  creditor  agency  for
 5    collecting  overdue accounts pursuant to appropriation by the
 6    General Assembly.
 7        In determining the types  of  receipts  to  be  deposited
 8    pursuant  to  this  Section  the Comptroller and the Governor
 9    shall consider the following factors:
10        (1)  The percentage of  such  receipts  estimated  to  be
11    uncollectible by the creditor agency;
12        (2)  The   percentage   of  such  receipts  certified  as
13    uncollectible by the Attorney General;
14        (3)  The  potential  increase  in  future  receipts,   as
15    estimated by the creditor agency, if 25% of amounts collected
16    are retained for collection efforts;
17        (4)  The  impact  of  the retention of 25% of receipts on
18    the relevant fund balances; and
19        (5)  Such  other  factors  as  the  Comptroller  and  the
20    Governor deem relevant.
21        This Section shall not apply to the Department of Revenue
22    nor the Department of Employment Security.
23        This Section is repealed July 1, 2002.  On that date  any
24    moneys  in  the  Accounts Receivable Funds created under this
25    Section shall be transferred into the General Revenue Fund.
26    (Source: P.A. 86-194.)

27        (30 ILCS 210/7) (from Ch. 15, par. 157)
28        Sec. 7.  Upon agreement of the Attorney General, agencies
29    may contract for legal  assistance  in  collecting  past  due
30    accounts.   In addition, agencies may contract for collection
31    assistance where such assistance is determined by the  agency
32    to  be  in the best economic interest of the State.  Agencies
33    may utilize monies in the Accounts Receivable Fund to pay for
 
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 1    such legal and collection assistance; provided, however, that
 2    no more than 20% of collections on an  account  may  be  paid
 3    from  the  Accounts Receivable Fund as compensation for legal
 4    and collection assistance on that  account.   If  the  amount
 5    available  for  expenditure from the Accounts Receivable Fund
 6    is insufficient  to  pay  the  cost  of  such  services,  the
 7    difference,  up  to 40% of the total collections per account,
 8    may be paid from other monies which may be available  to  the
 9    Agency.
10        This  Section  is  repealed  July  1, 2002.  Any contract
11    entered into under this Section before that date shall remain
12    valid but may not be renewed.
13    (Source: P.A. 85-814.)

14        (30 ILCS 210/8) (from Ch. 15, par. 158)
15        Sec. 8.  Debt Collection Board.   There is created a Debt
16    Collection  Board  consisting  of  the  Director  of  Central
17    Management Services as chairman, the State  Comptroller,  and
18    the  Attorney  General,  or  their respective designees.  The
19    Board shall establish a centralized  collections  service  to
20    undertake  further  collection efforts on delinquent accounts
21    or claims of the State which have not been collected  through
22    the  reasonable  efforts  of  the  respective State agencies.
23    The Board shall promulgate rules and regulations pursuant  to
24    the  Illinois Administrative Procedure Act with regard to the
25    establishment   of   timetables   and   the   assumption   of
26    responsibility for agency accounts receivable that  have  not
27    been  collected  by  the agency, are not subject to a current
28    repayment plan, or have not been certified  as  uncollectible
29    as  of the date specified by the Board.  The Board shall make
30    a final evaluation of those accounts and either (i) direct or
31    conduct further collection activities when further collection
32    efforts are in the best economic interest  of  the  State  or
33    (ii)  in  accordance  with Section 2 of the Uncollected State
 
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 1    Claims Act, certify the receivable as uncollectible or submit
 2    the account to the Attorney General for that certification.
 3        The Board is empowered to  adopt  rules  and  regulations
 4    subject  to  the  provisions  of  the Illinois Administrative
 5    Procedure Act.
 6        The  Board  is  empowered  to  enter  into  one  or  more
 7    contracts with outside vendors with demonstrated capabilities
 8    in the area of account collection.  The  contracts  shall  be
 9    let  on  the  basis  of  competitive  proposals  secured from
10    responsible proposers.  The Board may require that vendors be
11    prequalified.  All contracts shall provide for  a  contingent
12    fee  based  on the age, nature, amount and type of delinquent
13    account.  The Board may  adopt  a  reasonable  classification
14    schedule  for  the various receivables.  The contractor shall
15    remit the amount collected, net of the contingent fee, to the
16    respective State agency which shall deposit  the  net  amount
17    received  into  the fund that would have received the receipt
18    had it been collected by the State agency.  No portion of the
19    collections shall be deposited into  an  Accounts  Receivable
20    Fund  established  under  Section  6 of this Act.   The Board
21    shall act only upon the unanimous vote of its members.
22        This Section is repealed July 1, 2002.
23    (Source: P.A. 89-511, eff. 1-1-97.)

24        (30 ILCS 210/10 new)
25        Sec. 10.  Debt Collection Unit of the  Auditor  General's
26    Office.
27        (a)  The  Auditor  General shall establish and maintain a
28    division within his or her office to be  known  as  the  Debt
29    Collection  Unit.   The  purpose  of  the  Unit  shall be the
30    collection of debts more than 90 days overdue to  the  State.
31    The  Auditor General shall adopt rules for the administration
32    and procedures of the Unit.
33        (b)  The  Auditor  General  shall  adopt  rules  for  the
 
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 1    certification of debt collection specialists to  be  employed
 2    by the Unit.
 3        (c)  The   Auditor   General   shall   adopt   rules  for
 4    determining   when  a  debt  owed  to  a  State   agency   is
 5    uncollectible.  The  rules  shall  be  used by State agencies
 6    other than universities beginning July 1,  2002  and  may  be
 7    used  by  universities beginning July 1, 2002. The Department
 8    of Revenue is exempt from those rules with  regard  to  debts
 9    the  confidentiality  of  which  the Department of Revenue is
10    required by law to maintain.
11        (d)  Beginning July 1, 2002, a State agency other than  a
12    university  shall  turn over, and a university may turn over,
13    to the Unit for collection any debt that is more than 90 days
14    overdue to the State.  The Department of  Revenue  is  exempt
15    from turning over to the Unit any debt the confidentiality of
16    which  the  Department  of  Revenue  is  required  by  law to
17    maintain. When turning over a debt, the  State  agency  shall
18    also  turn  over  all  documents  and records relating to the
19    debt. In collecting a debt, the Unit may  exercise  the  same
20    rights and powers with regard to debt collection possessed by
21    the State agency that turned over the debt to the Unit.
22        (e)  The  Debt  Collection  Fund  is created as a special
23    fund in the  State  treasury.   Ten  percent  of  the  amount
24    collected  on  each  debt by the Unit shall be deposited into
25    the Debt Collection Fund; the remaining  90%  of  the  amount
26    collected  shall be deposited into the appropriate State fund
27    or funds to which the debt was  owed.   Moneys  in  the  Debt
28    Collection   Fund   shall   be   appropriated  only  for  the
29    administrative costs of the Unit. At the end of  each  fiscal
30    year,  moneys remaining unappropriated in the Debt Collection
31    Fund shall be transferred into the General Revenue Fund.
32        (f)  The Attorney General  and  State  Comptroller  shall
33    assist  in  the  debt  collection  efforts  of  the  Unit  as
34    requested by the Unit.
 
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 1        (g)  The  Auditor  General  shall report semi-annually to
 2    the General Assembly and  State  Comptroller  upon  the  debt
 3    collection efforts of the Unit.  Each report shall include an
 4    analysis of the overdue debts owed to the State.

 5        Section  99.  Effective date.  This Act takes effect upon
 6    becoming law.

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