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91_HB1436eng HB1436 Engrossed LRB9100269DHpk 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 $50,000 or more made by 8 the State of Illinois or any State agency to any person for 9 any purpose. 10 "State agencies" has the meaning ascribed to that term in 11 Section 1-7 of the Illinois State Auditing Act. 12 "Person" means any individual, corporation, partnership, 13 unincorporated association, limited liability company, 14 limited liability partnership, or other entity. 15 "Designated individuals" means: 16 (i) In the case of a partnership, all general and 17 limited partners of the partnership. 18 (ii) In the case of a corporation, all shareholders 19 with 10% or more equity or ownership interest in the 20 corporation. 21 (iii) In the case of one or more individuals, all 22 of the individuals. 23 (iv) In the case of any other entity, all 24 individuals with any equity or ownership interest in the 25 entity. 26 Section 10. Disclosure. Before any State loan may be 27 made to any person or renewed (and before repayment of any 28 part of a State loan may be forgiven or renegotiated), the 29 names and addresses of each designated individual of the 30 person must be disclosed and made public. HB1436 Engrossed -2- LRB9100269DHpk 1 Section 15. Guarantee. Before any State loan may be 2 made to any person or renewed or renegotiated, each 3 designated individual of the person must personally guarantee 4 repayment of the loan. A guarantee remains in effect until 5 the loan has been repaid in full. A guarantee may not be 6 rescinded or abrogated under any circumstances. Any 7 agreement that purports to rescind or abrogate a guarantee is 8 null and void. 9 Section 20. Certain contracts prohibited. No State 10 agency may enter into any contract with any person if the 11 person or any designated individual of the person is in 12 default on any State loan. 13 Section 25. Disclosure of contributions. No State loan 14 may be made or renewed, nor may repayment of any part of a 15 State loan be forgiven or renegotiated, unless each 16 designated individual of the person with which the State 17 loan, renewal, forgiveness, or renegotiation is proposed to 18 be made has publicly disclosed all contributions made by the 19 designated individual in the past 5 years. As used in this 20 Act, "contribution" includes any contribution as defined in 21 Section 9-1.4 of the Election Code and any contribution to a 22 political committee. As used in this Act, "political 23 committee" has the meaning ascribed to that term in Section 24 9-1.9 of the Election Code. 25 Section 30. Default; Attorney General investigation. In 26 the case of any default on a State loan, the State agency 27 making the loan shall notify the Attorney General. The 28 Attorney General shall investigate the circumstances of the 29 default. Unless the Attorney General determines that the 30 loan is uncollectible, the Attorney General shall take 31 appropriate action to collect any amount owing to the State HB1436 Engrossed -3- LRB9100269DHpk 1 and enforce the State's rights under the loan agreement. 2 Section 35. Uncollected State Claims Act. Any 3 renegotiation or forgiveness of a State loan must be in 4 compliance with the provisions of the Uncollected State 5 Claims Act and the Illinois State Collection Act of 1986 6 regarding reporting and recording of debt collections and the 7 writing off of debts. 8 Section 40. Report. 9 The Attorney General shall report to the General Assembly 10 by February 1 of each year the following: 11 (1) the total number and dollar amount of loans about 12 which the Attorney General was notified in accordance with 13 this Act in the preceding calendar year; 14 (2) the total amount actually collected; 15 (3) the number of cases by agency; and 16 (4) the names and addresses of all designated 17 individuals of any person that is a party to a State loan 18 about which the Attorney General was notified in accordance 19 with this Act in the preceding calendar year. 20 Section 800. The Uncollected State Claims Act is amended 21 by changing Section 2 as follows: 22 (30 ILCS 205/2) (from Ch. 15, par. 102) 23 Sec. 2. Uncollectible debts; assignment of student 24 loans; annual reports. 25 (a) When any State agency is unable to collect any claim 26 or account receivable of $1,000 or more due the agency after 27 having pursued the procedure prescribed by law or applicable 28 rules and regulations for the collection thereof or, if no 29 procedure is so prescribed, then after having undertaken all 30 reasonable and appropriate procedures available to the agency HB1436 Engrossed -4- LRB9100269DHpk 1 to effectuate collection, the State agency shall request the 2 Attorney General to certify the claim or account receivable 3 to be uncollectible. 4 (b) Each request to the Attorney General asking that a 5 claim or account receivable of $1,000 or more be declared 6 uncollectible shall be in a format prescribed by the Attorney 7 General and shall include at a minimum the following 8 information: debtor's name, debtor's social security number 9 or comparable identifying number, debtor's last known 10 address, nature of the debt, efforts made to collect the debt 11 and the time period covered by those efforts, the age of the 12 debt, the age of the debtor and the specific reason the State 13 agency believes the debt to be uncollectible. Nothing in 14 this provision should be interpreted as a limitation on the 15 authority of the Attorney General to require additional 16 information that he may find to be necessary to evaluate 17 requests sent him pursuant to this provision. 18 (c) Claims or accounts receivable of less than $1,000 19 may be certified as uncollectible by the agency when the 20 agency determines that further collection efforts are not in 21 the best economic interest of the State. Such determination 22 shall be made in accordance with rules of the Comptroller. 23 (d) If any item of information required by this 24 provision or any item of additional information required by 25 the Attorney General is not available, the State agency shall 26 specifically so state in its request to the Attorney General 27 asking that the debt be declared uncollectible. 28 (e) A State agency participating in a federal student 29 loan program may remove student loans from its records by 30 assigning or referring such student loans to the federal 31 government for collection pursuant to the procedures 32 prescribed by federal laws and regulations. 33 (f) Claims and receivables due from another State agency 34 may be written off if the agency has pursued all reasonable HB1436 Engrossed -5- LRB9100269DHpk 1 means of collection and if the amount (1) is payable from an 2 appropriation which has lapsed; (2) may not properly be 3 charged against a current appropriation; and (3) was not 4 originally payable from federal funds, a trust fund or 5 locally held funds. Each agency which writes off claims or 6 receivables pursuant to this subparagraph shall submit a 7 listing of all such write-offs to the Comptroller within 60 8 days of taking such action. 9 (g) Debts certified as uncollectible may be reopened for 10 collection by an agency upon the approval of the Attorney 11 General. 12 (h) Agencies shall submit a list of debts certified as 13 uncollectible to the Comptroller in the form and manner 14 specified by the Comptroller. The Comptroller shall take 15 reasonable steps to accept information on agency computer 16 tapes. 17 (i) After compliance with all provisions of this 18 Section, an agency may delete from its records debts 19 certified as uncollectible as follows: 20 (1) When the debt is less than $1,000, immediately upon 21 certification by the agency; 22 (2) For debts of $1,000 or more that are less than 5 23 years old, when the agency determines pursuant to rules and 24 regulations promulgated by the Comptroller that such deletion 25 is in the best economic interest of the State; 26 (3) For debts of $1,000 or more when, the debt is more 27 than 5 years old. 28 (j) The Attorney General shall report to the General 29 Assembly by February 1 of each year the following: 30 (1) the total number and dollar amount of debts referred 31 to him for collection in the preceding calendar year; 32 (2) the total amount actually collected; 33 (3) the number of cases by agency. 34 (k) Each State agency shall report in its annual report HB1436 Engrossed -6- LRB9100269DHpk 1 the total amount and the number of claims due and payable to 2 the State. Each agency shall also describe in its annual 3 report the method used in collecting debts, whether by a 4 private collection service or by the Attorney General. 5 (1) The provisions of Section 39c of The Civil 6 Administrative Code of Illinois take precedence over the 7 provisions of this Section. 8 (m) Any renegotiation or forgiveness of a State loan to 9 which the State Loan Act applies must be in compliance with 10 the provisions of this Act regarding reporting and recording 11 of debt collections and the writing off of debts. 12 (Source: P.A. 84-1308; 84-1344.) 13 Section 900. The Illinois State Collection Act of 1986 14 is amended by changing Section 4 as follows: 15 (30 ILCS 210/4) (from Ch. 15, par. 154) 16 Sec. 4. (a) The Comptroller shall provide by rule 17 appropriate procedures for State agencies to follow in 18 establishing and recording within the State accounting system 19 records of amounts owed to the State of Illinois. The rules 20 of the Comptroller shall include, but are not limited to: 21 (1) the manner by which State agencies shall recognize 22 debts; 23 (2) systems to age accounts receivable of State 24 agencies; 25 (3) standards by which State agencies' claims may be 26 entered and removed from the Comptroller's Offset System 27 authorized by Section 10.05 of the State Comptroller Act; 28 (4) accounting procedures for estimating the amount of 29 uncollectible receivables of State agencies; and 30 (5) accounting procedures for writing off bad debts and 31 uncollectible claims. 32 (b) State agencies shall report to the Comptroller HB1436 Engrossed -7- LRB9100269DHpk 1 information concerning their accounts receivable and 2 uncollectible claims in accordance with the rules of the 3 Comptroller, which may provide for summary reporting. 4 (c) The rules of the Comptroller authorized by this 5 Section shallmayspecify varying procedures and forms of 6 reporting dependent upon the nature and amount of the account 7 receivable or uncollectible claim, the age of the debt, the 8 probability of collection and such other factors that will 9 increase the net benefit to the State of the collection 10 effort. 11 (d) The Comptroller shall report annually by March 14, 12 to the Governor and the General Assembly, the amount of all 13 delinquent debt owed to each State agency as of December 31 14 of the previous calendar year. 15 (e) Any renegotiation or forgiveness of a State loan to 16 which the State Loan Act applies must be in compliance with 17 the provisions of this Act regarding reporting and recording 18 of debt collections and the writing off of debts. 19 (Source: P.A. 86-515.) 20 Section 999. Effective date. This Act takes effect upon 21 becoming law.