Bill Text: IL SB2293 | 2011-2012 | 97th General Assembly | Engrossed

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Bill Title: Amends the State Comptroller Act, the Illinois State Collection Act of 1986, and the Illinois Income Tax Act. Provides that the Department of Revenue may enter into a reciprocal offset agreement with the Office of the State Comptroller and the Secretary of the Treasury of the United States, or his or her delegate, which provides for (i) the use of the Comptroller's offset system to offset State payments to collect federal nontax debts and for the Comptroller to charge a fee up to $25 per transaction for such offsets and (ii) offsetting federal payments, as authorized by federal law, to collect State debts, State tax, and nontax obligations. Sets forth the requirements for the agreement. Makes other changes.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2011-08-22 - Public Act . . . . . . . . . 97-0478 [SB2293 Detail]

Download: Illinois-2011-SB2293-Engrossed.html

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AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Comptroller Act is amended by changing
Section 10.05 and by adding Section 10.05c as follows:
(15 ILCS 405/10.05) (from Ch. 15, par. 210.05)
Sec. 10.05. Deductions from warrants; statement of reason
for deduction. Whenever any person shall be entitled to a
warrant or other payment from the treasury or other funds held
by the State Treasurer, on any account, against whom there
shall be any account or claim in favor of the State or to the
United States upon certification by the Secretary of the
Treasury of the United States, or his or her delegate, pursuant
to a reciprocal offset agreement under subsection (i-1) of
Section 10 of the Illinois State Collection Act of 1986, then
due and payable, the Comptroller, upon notification thereof,
shall ascertain the amount due and payable to the State, or to
the United States, as aforesaid, and draw a warrant on the
treasury or on other funds held by the State Treasurer, stating
the amount for which the party was entitled to a warrant or
other payment, the amount deducted therefrom, and on what
account, and directing the payment of the balance; which
warrant or payment as so drawn shall be entered on the books of

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the Treasurer, and such balance only shall be paid. The
Comptroller may deduct the entire amount due and payable to the
State or may deduct a portion of the amount due and payable to
the State in accordance with the request of the notifying
agency, and may deduct the entire amount due and payable to the
United States, or may deduct a portion of the amount due and
payable to the United States, in accordance with a reciprocal
offset agreement under subsection (i-1) of Section 10 of the
Illinois State Collection Act of 1986. No request from a
notifying agency or from the Secretary of the Treasury of the
United States for an amount to be deducted under this Section
from a wage or salary payment, or from a contractual payment to
an individual for personal services, shall exceed 25% of the
net amount of such payment. "Net amount" means that part of the
earnings of an individual remaining after deduction of any
amounts required by law to be withheld. For purposes of this
provision, wage, salary or other payments for personal services
shall not include final compensation payments for the value of
accrued vacation, overtime or sick leave. Whenever the
Comptroller draws a warrant or makes a payment involving a
deduction ordered under this Section, the Comptroller shall
notify the payee and the State agency that submitted the
voucher of the reason for the deduction and he or she shall
retain a record of such statement in his or her records. As
used in this Section, an "account or claim in favor of the
State" includes all amounts owing to "State agencies" as

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defined in Section 7 of this Act. However, the Comptroller
shall not be required to accept accounts or claims owing to
funds not held by the State Treasurer, where such accounts or
claims do not exceed $50, nor shall the Comptroller deduct from
funds held by the State Treasurer under the Senior Citizens and
Disabled Persons Property Tax Relief and Pharmaceutical
Assistance Act or for payments to institutions from the
Illinois Prepaid Tuition Trust Fund (unless the Trust Fund
moneys are used for child support). The Comptroller and the
Department of Revenue the Lottery shall enter into an
interagency agreement to establish responsibility, duties, and
procedures relating to deductions from lottery prizes awarded
under Section 20.1 of the Illinois Lottery Law. The Comptroller
may enter into an intergovernmental agreement with the
Department of Revenue and the Secretary of the Treasury of the
United States, or his or her delegate, to establish
responsibilities, duties, and procedures relating to
reciprocal offset of delinquent State and federal obligations
pursuant to subsection (i-1) of Section 10 of the Illinois
State Collection Act of 1986.
(Source: P.A. 93-56, eff. 7-1-03.)
(15 ILCS 405/10.05c new)
Sec. 10.05c. Deduction from warrants and payments for
satisfaction of delinquent federal obligations. Pursuant to
the procedures established under a reciprocal offset agreement

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entered into under Section 10.05 and subsection (i-1) of
Section 10 of the Illinois State Collection Act of 1986, the
Comptroller shall deduct from a warrant or other payment
described in Section 10.05, in accordance with the procedures
provided therein, and pay over to the Secretary of the Treasury
of the United States, or his or her delegate, that amount
certified as necessary to satisfy, in whole or in part, a
delinquent federal obligation. The Comptroller shall provide
the Secretary of the Treasury of the United States, or his or
her delegate, with the address to which the warrant or other
payment was to be mailed and the social security number of each
person from whom a deduction is made pursuant to this Section.
Section 10. The Illinois State Collection Act of 1986 is
amended by changing Section 10 as follows:
(30 ILCS 210/10)
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

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agencies, as well as its own collections personnel, and may use
the offset system of the Department of the Treasury of the
United States for the collection of State debt pursuant to
Sections 10.05 and 10.05c of the State Comptroller Act and
subsection (i-1) of Section 10 of the Illinois State Collection
Act of 1986. 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

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uncollectible in accordance with the requirements of the
Uncollected State Claims Act 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 Healthcare and Family Services 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 Healthcare and Family Services 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 Healthcare
and Family Services to collect debt. All such referred debt
shall remain an obligation under the Department of Healthcare

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and Family Services' 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
Healthcare and Family Services.
(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 Bureau may collect its costs of collecting debts on
behalf of other State agencies from those agencies in a manner
to be determined by the Director of Revenue, except that the
Bureau shall not recover any such cost on any accounts referred
by the General Assembly, the Supreme Court and other courts of
this State, and the State executive branch constitutional
officers. The provisions of this subsection do not apply to
debt that is exempt from subsection (a) pursuant to subsection

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(g-1) or child support debt referred to the Bureau by the
Department of Healthcare and Family Services (formerly
Department of Public Aid) pursuant to this amendatory Act of
the 93rd General Assembly. Collections arising from referrals
from the Department of Healthcare and Family Services (formerly
Department of Public Aid) shall be deposited into such fund or
funds as the Department of Healthcare and Family Services 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 Healthcare and
Family Services. 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.
(i-1) The Department may enter into a reciprocal offset
agreement with the Office of the State Comptroller and the
Secretary of the Treasury of the United States, or his or her
delegate, which provides for (i) the use of the Comptroller's
offset system to offset State payments to collect federal
nontax debts and for the Comptroller to charge a fee up to $25

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per transaction for such offsets; and (ii) offsetting federal
payments, as authorized by federal law, to collect State debts,
State tax, and nontax obligations, and for the Comptroller to
collect the offset cost from the Department of the Treasury of
the United States to cover the full cost of offsets taken, to
the extent allowed by federal law, or, if not allowed by
federal law, from the debtor by offset of the overpayment. The
agreement shall provide that the Department of Treasury of the
United States may deduct a fee from each administrative offset
and State payment offset. Any offset fees collected by the
Comptroller under this subsection for administrative offset or
State payment offset shall be deposited into the Comptroller's
Administrative Fund.
For purposes of this subsection, "administrative offset"
is any offset of federal payments to collect State debts.
For purposes of this subsection, "State payment offset" is
any offset of State payments to collect federal nontax debts.
(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

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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.
(Source: P.A. 95-331, eff. 8-21-07; 96-493, eff. 1-1-10;
96-1383, eff. 1-1-11.)
Section 15. The Illinois Income Tax Act is amended by
changing Section 911.3 as follows:
(35 ILCS 5/911.3)
Sec. 911.3. Refunds withheld; order of honoring requests.
The Department shall honor refund withholding requests in the
following order:
(1) a refund withholding request to collect an unpaid
State tax;
(2) a refund withholding request to collect certified
past due child support amounts under Section 2505-650 of
the Department of Revenue Law of the Civil Administrative
Code of Illinois;
(3) a refund withholding request to collect any debt
owed to the State;
(4) a refund withholding request made by the Secretary
of the Treasury of the United States, or his or her
delegate, to collect any tax liability arising from Title

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26 of the United States Code;
(4.5) a refund withholding request made by the
Secretary of the Treasury of the United States, or his or
her delegate, to collect any nontax debt owed to the United
States as authorized under subsection (i-1) of Section 10
of the Illinois State Collection Act of 1986;
(5) a refund withholding request pursuant to Section
911.2 of this Act; and
(6) a refund withholding request to collect certified
past due fees owed to the Clerk of the Circuit Court as
authorized under Section 2505-655 of the Department of
Revenue Law of the Civil Administrative Code of Illinois.
(Source: P.A. 92-826, eff. 8-21-02; 93-836, eff. 1-1-05.)