Public Act 93-0570
SB1923 Enrolled LRB093 08780 RCE 09011 b
AN ACT in relation to State collection of debts.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Finance Act is amended by adding
Section 5.595 as follows:
(30 ILCS 105/5.595 new)
Sec. 5.595. The Debt Collection Fund.
Section 10. The Illinois State Collection Act of 1986 is
amended by changing Sections 4, 5, 6, 7, and 8 and adding
Section 10 as follows:
(30 ILCS 210/4) (from Ch. 15, par. 154)
Sec. 4. (a) The Comptroller shall provide by rule
appropriate procedures for State agencies to follow in
establishing and recording within the State accounting system
records of amounts owed to the State of Illinois. The rules
of the Comptroller shall include, but are not limited to:
(1) the manner by which State agencies shall recognize
debts;
(2) systems to age accounts receivable of State
agencies;
(3) standards by which State agencies' claims may be
entered and removed from the Comptroller's Offset System
authorized by Section 10.05 of the State Comptroller Act;
(4) accounting procedures for estimating the amount of
uncollectible receivables of State agencies; and
(5) accounting procedures for writing off bad debts and
uncollectible claims prior to referring them to the
Department of Revenue Collections Bureau for collection.
(b) State agencies shall report to the Comptroller
information concerning their accounts receivable and
uncollectible claims in accordance with the rules of the
Comptroller, which may provide for summary reporting. The
Department of Revenue is exempt from the provisions of this
subsection with regard to debts the confidentiality of which
the Department of Revenue is required by law to maintain.
(c) The rules of the Comptroller authorized by this
Section may specify varying procedures and forms of reporting
dependent upon the nature and amount of the account
receivable or uncollectible claim, the age of the debt, the
probability of collection and such other factors that will
increase the net benefit to the State of the collection
effort.
(d) The Comptroller shall report annually by March 14,
to the Governor and the General Assembly, the amount of all
delinquent debt owed to each State agency as of December 31
of the previous calendar year.
(Source: P.A. 86-515.)
(30 ILCS 210/5) (from Ch. 15, par. 155)
Sec. 5. Rules; payment plans; offsets.
(a) Until July 1, 2004 for the Department of Public Aid
and July 1, 2005 for Universities and all other State
agencies, State agencies shall adopt rules establishing
formal due dates for amounts owing to the State and for the
referral of seriously past due accounts to private collection
agencies, unless otherwise expressly provided by law or rule,
except that on and after July 1, 2005, the Department of
Employment Security may continue to refer to private
collection agencies past due amounts that are exempt from
subsection (g). Such procedures shall be established in
accord with sound business practices.
(b) Until July 1, 2004 for the Department of Public Aid
and July 1, 2005 for Universities and all other State
agencies, agencies may enter deferred payment plans for
debtors of the agency and documentation of this fact retained
by the agency, where the deferred payment plan is likely to
increase the net amount collected by the State, except that,
on and after July 1, 2005, the Department of Employment
Security may continue to enter deferred payment plans for
debts that are exempt from subsection (g).
(c) Until July 1, 2004 for the Department of Public Aid
and July 1, 2005 for Universities and all other State
agencies, State agencies may use the Comptroller's Offset
System provided in Section 10.05 of the State Comptroller Act
for the collection of debts owed to the agency, except that,
on and after July 1, 2005, the Department of Employment
Security may continue to use the Comptroller's offset system
to collect amounts that are exempt from subsection (g). All
debts that exceed $1,000 and are more than 90 days past due
shall be placed in the Comptroller's Offset System, unless
the State agency shall have entered into a deferred payment
plan or demonstrates to the Comptroller's satisfaction that
referral for offset is not cost effective.
(d) State agencies shall develop internal procedures
whereby agency initiated payments to its debtors may be
offset without referral to the Comptroller's Offset System.
(e) State agencies or the Comptroller may remove claims
from the Comptroller's Offset System, where such claims have
been inactive for more than one year.
(f) State agencies may use the Comptroller's Offset
System to determine if any State agency is attempting to
collect debt from a contractor, bidder, or other proposed
contracting party.
(g) Beginning July 1, 2004 for the Departments of Public
Aid and Employment Security and July 1, 2005 for Universities
and other State agencies, State agencies shall refer to the
Department of Revenue Debt Collection Bureau (the Bureau) all
debt to the State, provided that the debt satisfies the
requirements for referral of delinquent debt as established
by rule by the Department of Revenue.
(h) The Department of Public Aid shall be exempt from
the requirements of this Section with regard to child support
debts, the collection of which is governed by the
requirements of Title IV, Part D of the federal Social
Security Act. The Department of Public Aid may refer child
support debts to the Bureau, provided that the debt satisfies
the requirements for referral of delinquent debt as
established by rule by the Department of Revenue. The Bureau
shall use all legal means available to collect child support
debt, including those authorizing the Department of Revenue
to collect debt and those authorizing the Department of
Public Aid to collect debt. All such referred debt shall
remain an obligation under the Department of Public Aid's
Child Support Enforcement Program subject to the requirements
of Title IV, Part D of the federal Social Security Act,
including the continued use of federally mandated enforcement
remedies and techniques by the Department of Public Aid.
(h-1) The Department of Employment Security is exempt
from subsection (g) with regard to debts to any federal
account, including but not limited to the Unemployment Trust
Fund, and penalties and interest assessed under the
Unemployment Insurance Act. The Department of Employment
Security may refer those debts to the Bureau, provided the
debt satisfies the requirements for referral of delinquent
debt as established by rule by the Department of Revenue. The
Bureau shall use all legal means available to collect the
debts, including those authorizing the Department of Revenue
to collect debt and those authorizing the Department of
Employment Security to collect debt. All referred debt shall
remain an obligation to the account to which it is owed.
(i) All debt referred to the Bureau for collection shall
remain the property of the referring agency. The Bureau shall
collect debt on behalf of the referring agency using all
legal means available, including those authorizing the
Department of Revenue to collect debt and those authorizing
the referring agency to collect debt.
(j) No debt secured by an interest in real property
granted by the debtor in exchange for the creation of the
debt shall be referred to the Bureau. The Bureau shall have
no obligation to collect debts secured by an interest in real
property.
(k) Beginning July 1, 2003, each agency shall collect
and provide the Bureau information regarding the nature and
details of its debt in such form and manner as the Department
of Revenue shall require.
(l) For all debt accruing after July 1, 2003, each
agency shall collect and transmit such debtor identification
information as the Department of Revenue shall require.
(Source: P.A. 92-404, eff. 7-1-02.)
(30 ILCS 210/6) (from Ch. 15, par. 156)
Sec. 6. The Comptroller with the approval of the
Governor may provide by rule and regulation for the creation
of a special fund or funds for the deposit of designated
receipts by designated agencies to be known as the Accounts
Receivable Fund or Funds. Deposits shall be segregated by
the creditor agency. No deposit shall be made unless the
collection is of an account receivable more than 120 days
past due.
Seventy-five percent of the amounts deposited each
quarter into such a special fund shall be transferred to the
General Revenue Fund or such other fund that would have
originally received the receipts. The remaining amounts may
be used by the creditor agency for collecting overdue
accounts pursuant to appropriation by the General Assembly.
An agency, with the approval of the Comptroller, may
deposit all receipts into the General Revenue Fund or other
such fund that would have originally received the receipts.
Twenty-five percent of such deposits made each quarter for
accounts receivable more than 120 days past due shall be
transferred to the Accounts Receivable Fund or Funds. The
transferred amounts may be used by the creditor agency for
collecting overdue accounts pursuant to appropriation by the
General Assembly.
In determining the types of receipts to be deposited
pursuant to this Section the Comptroller and the Governor
shall consider the following factors:
(1) The percentage of such receipts estimated to be
uncollectible by the creditor agency;
(2) The percentage of such receipts certified as
uncollectible by the Attorney General;
(3) The potential increase in future receipts, as
estimated by the creditor agency, if 25% of amounts collected
are retained for collection efforts;
(4) The impact of the retention of 25% of receipts on
the relevant fund balances; and
(5) Such other factors as the Comptroller and the
Governor deem relevant.
This Section shall not apply to the Department of Revenue
nor the Department of Employment Security.
This Section is repealed July 1, 2004. On that date any
moneys in the Accounts Receivable Funds created under this
Section shall be transferred to the General Revenue Fund.
(Source: P.A. 86-194.)
(30 ILCS 210/7) (from Ch. 15, par. 157)
Sec. 7. Upon agreement of the Attorney General, the
Bureau agencies may contract for legal assistance in
collecting past due accounts. Any contract entered into under
this Section before the effective date of this amendatory Act
of the 93rd General Assembly shall remain valid but may not
be renewed. In addition, agencies may contract for collection
assistance where such assistance is determined by the agency
to be in the best economic interest of the State. Agencies
may utilize monies in the Accounts Receivable Fund to pay for
such legal and collection assistance; provided, however, that
no more than 20% of collections on an account may be paid
from the Accounts Receivable Fund as compensation for legal
and collection assistance on that account. If the amount
available for expenditure from the Accounts Receivable Fund
is insufficient to pay the cost of such services, the
difference, up to 40% of the total collections per account,
may be paid from other monies which may be available to the
Agency.
(Source: P.A. 85-814.)
(30 ILCS 210/8) (from Ch. 15, par. 158)
Sec. 8. Debt Collection Board. There is created a Debt
Collection Board consisting of the Director of Central
Management Services as chairman, the State Comptroller, and
the Attorney General, or their respective designees. The
Board shall establish a centralized collections service to
undertake further collection efforts on delinquent accounts
or claims of the State which have not been collected through
the reasonable efforts of the respective State agencies.
The Board shall promulgate rules and regulations pursuant to
the Illinois Administrative Procedure Act with regard to the
establishment of timetables and the assumption of
responsibility for agency accounts receivable that have not
been collected by the agency, are not subject to a current
repayment plan, or have not been certified as uncollectible
as of the date specified by the Board. The Board shall make
a final evaluation of those accounts and either (i) direct or
conduct further collection activities when further collection
efforts are in the best economic interest of the State or
(ii) in accordance with Section 2 of the Uncollected State
Claims Act, certify the receivable as uncollectible or submit
the account to the Attorney General for that certification.
The Board is empowered to adopt rules and regulations
subject to the provisions of the Illinois Administrative
Procedure Act.
The Board is empowered to enter into one or more
contracts with outside vendors with demonstrated capabilities
in the area of account collection. The contracts shall be
let on the basis of competitive proposals secured from
responsible proposers. The Board may require that vendors be
prequalified. All contracts shall provide for a contingent
fee based on the age, nature, amount and type of delinquent
account. The Board may adopt a reasonable classification
schedule for the various receivables. The contractor shall
remit the amount collected, net of the contingent fee, to the
respective State agency which shall deposit the net amount
received into the fund that would have received the receipt
had it been collected by the State agency. No portion of the
collections shall be deposited into an Accounts Receivable
Fund established under Section 6 of this Act. The Board
shall act only upon the unanimous vote of its members.
The authority granted the Debt Collection Board under
this Section shall be limited to the administration of debt
not otherwise required by the provisions of this amendatory
Act of the 93rd General Assembly to be referred to the
Department of Revenue's Debt Collection Bureau. Upon referral
to and acceptance of any debt by the Bureau, the provisions
of this Section shall be rendered null and void as to that
debt and the Board shall promptly deliver its entire file and
all records relating to such debt to the Bureau, together
with a status report describing all action taken by the Board
or any entity on its behalf to collect the debt, and
including an accounting of all payments received.
(Source: P.A. 89-511, eff. 1-1-97.)
(30 ILCS 210/10 new)
Sec. 10. Department of Revenue Debt Collection Bureau to
assume collection duties.
(a) The Department of Revenue's Debt Collection Bureau
shall serve as the primary debt collecting entity for the
State and in that role shall collect debts on behalf of
agencies of the State. All debts owed the State of Illinois
shall be referred to the Bureau, subject to such limitations
as the Department of Revenue shall by rule establish. The
Bureau shall utilize the Comptroller's offset system and
private collection agencies, as well as its own collections
personnel. The Bureau shall collect debt using all legal
authority available to the Department of Revenue to collect
debt and all legal authority available to the referring
agency.
(b) The Bureau shall have the sole authority to let
contracts with persons specializing in debt collection for
the collection of debt referred to and accepted by the
Bureau. Any contract with the debt collector shall specify
that the collector's fee shall be on a contingency basis and
that the debt collector shall not be entitled to collect a
contingency fee for any debt collected through the efforts of
any State offset system.
(c) The Department of Revenue shall adopt rules for the
certification of debt from referring agencies and shall adopt
rules for the certification of collection specialists to be
employed by the Bureau.
(d) The Department of Revenue shall adopt rules for
determining when a debt referred by an agency shall be deemed
by the Bureau to be uncollectible.
(e) Once an agency's debt is deemed by the Bureau to be
uncollectible, the Bureau shall return the debt to the
referring agency which shall then write the debt off as
uncollectible or return the debt to the Bureau for additional
collection efforts. The Bureau shall refuse to accept debt
that has been deemed uncollectible absent factual assertions
from the referring agency that due to circumstances not known
at the time the debt was deemed uncollectible that the debt
is worthy of additional collection efforts.
(f) For each debt referred, the State agency shall
retain all documents and records relating to or supporting
the debt. In the event a debtor shall raise a reasonable
doubt as to the validity of the debt, the Bureau may in its
discretion refer the debt back to the referring agency for
further review and recommendation.
(g) The Department of Public Aid shall be exempt from
the requirements of this Section with regard to child support
debts, the collection of which is governed by the
requirements of Title IV, Part D of the federal Social
Security Act. The Department of Public Aid may refer child
support debts to the Bureau, provided that the debt satisfies
the requirements for referral of delinquent debt as
established by rule by the Department of Revenue. The Bureau
shall use all legal means available to collect child support
debt, including those authorizing the Department of Revenue
to collect debt and those authorizing the Department of
Public Aid to collect debt. All such referred debt shall
remain an obligation under the Department of Public Aid's
Child Support Enforcement Program subject to the requirements
of Title IV, Part D of the federal Social Security Act,
including the continued use of federally mandated enforcement
remedies and techniques by the Department of Public Aid.
(g-1) The Department of Employment Security is exempt
from subsection (a) with regard to debts to any federal
account, including but not limited to the Unemployment Trust
Fund, and penalties and interest assessed under the
Unemployment Insurance Act. The Department of Employment
Security may refer those debts to the Bureau, provided the
debt satisfies the requirements for referral of delinquent
debt as established by rule by the Department of Revenue. The
Bureau shall use all legal means available to collect the
debts, including those authorizing the Department of Revenue
to collect debt and those authorizing the Department of
Employment Security to collect debt. All referred debt shall
remain an obligation to the account to which it is owed.
(h) The Debt Collection Fund is created as a special
fund in the State treasury. Debt collection contractors under
this Act shall receive a contingency fee as provided by the
terms of their contracts with the Department of Revenue.
Thereafter, 20% of all amounts collected by the Bureau,
excluding amounts collected on behalf of the Departments of
Public Aid and Revenue, shall be deposited into the Debt
Collection Fund. All remaining amounts collected shall be
deposited into the General Revenue Fund unless the funds are
owed to any State fund or funds other than the General
Revenue Fund. Moneys in the Debt Collection Fund shall be
appropriated only for the administrative costs of the Bureau.
On the last day of each fiscal year, unappropriated moneys
and moneys otherwise deemed unneeded for the next fiscal year
remaining in the Debt Collection Fund may be transferred into
the General Revenue Fund at the Governor's reasonable
discretion. The provisions of this subsection do not apply to
debt that is exempt from subsection (a) pursuant to
subsection (g-1) or child support debt referred to the Bureau
by the Department of Public Aid pursuant to this amendatory
Act of the 93rd General Assembly. Collections arising from
referrals from the Department of Public Aid shall be
deposited into such fund or funds as the Department of Public
Aid shall direct, in accordance with the requirements of
Title IV, Part D of the federal Social Security Act,
applicable provisions of State law, and the rules of the
Department of Public Aid. Collections arising from referrals
from the Department of Employment Security shall be deposited
into the fund or funds that the Department of Employment
Security shall direct, in accordance with the requirements of
Section 3304(a)(3) of the federal Unemployment Tax Act,
Section 303(a)(4) of the federal Social Security Act, and the
Unemployment Insurance Act.
(i) The Attorney General and the State Comptroller may
assist in the debt collection efforts of the Bureau, as
requested by the Department of Revenue.
(j) The Director of Revenue shall report annually to the
General Assembly and State Comptroller upon the debt
collection efforts of the Bureau. Each report shall include
an analysis of the overdue debts owed to the State.
(k) The Department of Revenue shall adopt rules and
procedures for the administration of this amendatory Act of
the 93rd General Assembly. The rules shall be adopted under
the Department of Revenue's emergency rulemaking authority
within 90 days following the effective date of this
amendatory Act of the 93rd General Assembly due to the budget
crisis threatening the public interest.
(l) The Department of Revenue's Debt Collection Bureau's
obligations under this Section 10 shall be subject to
appropriation by the General Assembly.
Section 99. Effective date. This Act shall take effect
upon becoming law.