093_HB0040eng HB0040 Engrossed LRB093 02366 ACG 02374 b 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, or combination of loans 8 totaling, $50,000 or more made by the State of Illinois or 9 any State agency to any person for any purpose except for 10 participation loans or financial transactions through 11 statutorily-authorized financial intermediaries in support of 12 small business loans and investments. 13 "State agencies" has the meaning ascribed to that term in 14 Section 1-7 of the Illinois State Auditing Act. 15 "Person" means any individual, corporation, partnership, 16 unincorporated association, limited liability company, 17 limited liability partnership, or other entity. 18 "Designated individuals" means: 19 (i) In the case of a partnership, all general and 20 limited partners of the partnership. 21 (ii) In the case of a corporation, all shareholders 22 with 10% or more equity or ownership interest in the 23 corporation. 24 (iii) In the case of one or more individuals, all 25 of the individuals. 26 (iv) In the case of any other entity, all 27 individuals with any equity or ownership interest in the 28 entity. 29 Section 10. Disclosure. Each contract providing for a 30 State loan shall contain a disclosure setting forth the names HB0040 Engrossed -2- LRB093 02366 ACG 02374 b 1 and addresses of each designated individual of the person 2 receiving the loan. The contract must state that this 3 disclosure is a public record and is not subject to any 4 exemptions or exceptions under the Freedom of Information 5 Act. A State agency making, renegotiating, or renewing a 6 State loan shall maintain a publicly-available record of the 7 names and addresses of each person and each designated 8 individual of the person receiving, renegotiating, or 9 renewing a State loan. 10 Section 15. Guarantee. Before any State loan may be 11 made to any person or renewed or renegotiated, each 12 designated individual of the person must personally guarantee 13 repayment of the loan. A guarantee remains in effect until 14 the loan has been repaid in full. A guarantee may not be 15 rescinded or abrogated under any circumstances. Any 16 agreement that purports to rescind or abrogate a guarantee is 17 null and void. 18 Section 20. Certain contracts prohibited. No State 19 agency may enter into any contract with any person if the 20 person or any designated individual of the person is in 21 default on any State loan. The person and each designated 22 individual of the person receiving a State loan must certify 23 to the State agency that he or she is not delinquent in the 24 payment of any debt to the State. The contract must provide 25 that the contract may be declared void if the certification 26 is false or the contractor later becomes delinquent and has 27 not entered into a deferred payment plan to pay off the debt. 28 Section 30. Default; Attorney General investigation. In 29 the case of any default on a State loan, the State agency 30 making the loan shall notify the Attorney General. The 31 Attorney General shall investigate the circumstances of the HB0040 Engrossed -3- LRB093 02366 ACG 02374 b 1 default. Unless the Attorney General determines that the 2 loan is uncollectible, the Attorney General shall take 3 appropriate action to collect any amount owing to the State 4 and enforce the State's rights under the loan agreement. 5 Section 35. Uncollected State Claims Act and the 6 Illinois State Collection Act of 1986. Any renegotiation of 7 a State Loan resulting in acceptance of an offer in 8 compromise for an amount less than the total amount due and 9 owing on the loan shall require the approval of the Attorney 10 General and must be in compliance with the provisions of the 11 Uncollected State Claims Act and the Illinois State 12 Collection Act of 1986 regarding the reporting and recording 13 of debt collections and the writing off of debts. 14 Section 40. Report. The Attorney General shall report to 15 the General Assembly by February 1 of each year the 16 following: 17 (1) the total number and dollar amount of loans about 18 which the Attorney General was notified in accordance with 19 this Act in the preceding calendar year; 20 (2) the total amount actually collected; 21 (3) the number of cases by agency; and 22 (4) the names and addresses of all designated 23 individuals of any person that is a party to a State loan 24 about which the Attorney General was notified in accordance 25 with this Act in the preceding calendar year. 26 Section 800. The Uncollected State Claims Act is amended 27 by changing Section 2 as follows: 28 (30 ILCS 205/2) (from Ch. 15, par. 102) 29 Sec. 2. (a) When any State agency is unable to collect 30 any claim or account receivable of $1,000 or more due the HB0040 Engrossed -4- LRB093 02366 ACG 02374 b 1 agency after having pursued the procedure prescribed by law 2 or applicable rules and regulations for the collection 3 thereof or, if no procedure is so prescribed, then after 4 having undertaken all reasonable and appropriate procedures 5 available to the agency to effectuate collection, the State 6 agency shall request the Attorney General to certify the 7 claim or account receivable to be uncollectible. 8 (b) Each request to the Attorney General asking that a 9 claim or account receivable of $1,000 or more be declared 10 uncollectible shall be in a format prescribed by the Attorney 11 General and shall include at a minimum the following 12 information: debtor's name, debtor's social security number 13 or comparable identifying number, debtor's last known 14 address, nature of the debt, efforts made to collect the debt 15 and the time period covered by those efforts, the age of the 16 debt, the age of the debtor and the specific reason the State 17 agency believes the debt to be uncollectible. Nothing in 18 this provision should be interpreted as a limitation on the 19 authority of the Attorney General to require additional 20 information that he may find to be necessary to evaluate 21 requests sent him pursuant to this provision. 22 (c) Claims or accounts receivable of less than $1,000 23 may be certified as uncollectible by the agency when the 24 agency determines that further collection efforts are not in 25 the best economic interest of the State. Such determination 26 shall be made in accordance with rules of the Comptroller. 27 (d) If any item of information required by this 28 provision or any item of additional information required by 29 the Attorney General is not available, the State agency shall 30 specifically so state in its request to the Attorney General 31 asking that the debt be declared uncollectible. 32 (e) A State agency participating in a federal student 33 loan program may remove student loans from its records by 34 assigning or referring such student loans to the federal HB0040 Engrossed -5- LRB093 02366 ACG 02374 b 1 government for collection pursuant to the procedures 2 prescribed by federal laws and regulations. 3 (f) Claims and receivables due from another State agency 4 may be written off if the agency has pursued all reasonable 5 means of collection and if the amount (1) is payable from an 6 appropriation which has lapsed; (2) may not properly be 7 charged against a current appropriation; and (3) was not 8 originally payable from federal funds, a trust fund or 9 locally held funds. Each agency which writes off claims or 10 receivables pursuant to this subparagraph shall submit a 11 listing of all such write-offs to the Comptroller within 60 12 days of taking such action. 13 (g) Debts certified as uncollectible may be reopened for 14 collection by an agency upon the approval of the Attorney 15 General. 16 (h) Agencies shall submit a list of debts certified as 17 uncollectible to the Comptroller in the form and manner 18 specified by the Comptroller. The Comptroller shall take 19 reasonable steps to accept information on agency computer 20 tapes. 21 (i) After compliance with all provisions of this 22 Section, an agency may delete from its records debts 23 certified as uncollectible as follows: 24 (1) When the debt is less than $1,000, immediately 25 upon certification by the agency; 26 (2) For debts of $1,000 or more that are less than 27 5 years old, when the agency determines pursuant to rules 28 and regulations promulgated by the Comptroller that such 29 deletion is in the best economic interest of the State; 30 (3) For debts of $1,000 or more when, the debt is 31 more than 5 years old. 32 (j) The Attorney General shall report to the General 33 Assembly by February 1 of each year the following: 34 (1) the total number and dollar amount of debts HB0040 Engrossed -6- LRB093 02366 ACG 02374 b 1 referred to him for collection in the preceding calendar 2 year; 3 (2) the total amount actually collected; 4 (3) the number of cases by agency. 5 (k) Each State agency shall report in its annual report 6 the total amount and the number of claims due and payable to 7 the State. Each agency shall also describe in its annual 8 report the method used in collecting debts, whether by a 9 private collection service or by the Attorney General. 10 (l) The provisions of Section 2505-250 of the Department 11 of Revenue Law (20 ILCS 2505/2505-250) take precedence over 12 the provisions of this Section. 13 (m) Any renegotiation of a State Loan resulting in 14 acceptance of an offer in compromise for an amount less than 15 the total amount due and owing on the loan shall require the 16 approval of the Attorney General and shall comply with the 17 reporting and uncollectible certification requirements of 18 this Act. 19 (Source: P.A. 91-239, eff. 1-1-00.) 20 Section 900. The Illinois State Collection Act of 1986 21 is amended by changing Section 4 as follows: 22 (30 ILCS 210/4) (from Ch. 15, par. 154) 23 Sec. 4. (a) The Comptroller shall provide by rule 24 appropriate procedures for State agencies to follow in 25 establishing and recording within the State accounting system 26 records of amounts owed to the State of Illinois. The rules 27 of the Comptroller shall include, but are not limited to: 28 (1) the manner by which State agencies shall recognize 29 debts; 30 (2) systems to age accounts receivable of State 31 agencies; 32 (3) standards by which State agencies' claims may be HB0040 Engrossed -7- LRB093 02366 ACG 02374 b 1 entered and removed from the Comptroller's Offset System 2 authorized by Section 10.05 of the State Comptroller Act; 3 (4) accounting procedures for estimating the amount of 4 uncollectible receivables of State agencies; and 5 (5) accounting procedures for writing off bad debts and 6 uncollectible claims. 7 (b) State agencies shall report to the Comptroller 8 information concerning their accounts receivable and 9 uncollectible claims in accordance with the rules of the 10 Comptroller, which may provide for summary reporting. 11 (c) The rules of the Comptroller authorized by this 12 Section shallmayspecify varying procedures and forms of 13 reporting dependent upon the nature and amount of the account 14 receivable or uncollectible claim, the age of the debt, the 15 probability of collection and such other factors that will 16 increase the net benefit to the State of the collection 17 effort. 18 (d) The Comptroller shall report annually by March 14, 19 to the Governor and the General Assembly, the amount of all 20 delinquent debt owed to each State agency as of December 31 21 of the previous calendar year. 22 (e) Any renegotiation of a State Loan resulting in 23 acceptance of an offer in compromise for an amount less than 24 the total amount due and owing on the loan shall require the 25 approval of the Attorney General and shall comply with the 26 reporting and uncollectible certification requirements of 27 this Act. 28 (Source: P.A. 86-515.) 29 Section 999. Effective date. This Act takes effect upon 30 becoming law.