SB1278sam001 99TH GENERAL ASSEMBLY

Sen. Ira I. Silverstein

Filed: 3/3/2015

09900SB1278sam001 LRB099 05880 JLK 31924 a

AMENDMENT TO SENATE BILL 1278

AMENDMENT NO. ______. Amend Senate Bill 1278 by replacing everything after the enacting clause with the following:

"Section 5. The State Comptroller Act is amended by adding Section 10.05e as follows:

(15 ILCS 405/10.05e new)

Sec. 10.05e. Deduction from refund for satisfaction of debt.

(a) As used in this Section:

(1) "Debt" means any amount due and owing under a judgment.

(2) "Debtor" means any person or legal entity who owes money to another, if:

(A) the debt has been reduced to a judgment in this State; and

(B) the judgment has not been:

(i) satisfied by court order;

(ii) set aside by court order; or

(iii) discharged in bankruptcy.

(3) "Refund" means a refund of overpaid income taxes imposed by the State of Illinois.

(b) If a debtor owes a debt, the judgment creditor may, as provided in this Section:

(1) have the Comptroller garnish an unpaid refund payable to the debtor; and

(2) have the refund applied against the judgment debt.

(c) To obtain a garnishment under this Section, a judgment creditor must obtain a garnishment order, under Part 7 of Article XII of the Code of Civil Procedure, naming the Comptroller as garnishee. The judgment creditor shall provide the garnishment order to the Comptroller.

(d) The Comptroller shall deposit the amount available for garnishment under the terms of the order with the judgment attorney of record in the garnishment action, or, if the judgment creditor is not represented by an attorney, with the judgment creditor or the creditor's designee.

(e) If 2 or more garnishment orders are received by the Comptroller for the same debtor, the Comptroller shall give priority to the garnishment order that is received first by the Comptroller. The Comptroller shall process each garnishment in order of the date of receipt until the refund of the debtor has been applied in its entirety.

(f) A judgment creditor must pay to the Comptroller a processing fee of $5 that is chargeable to the debtor for each garnishment order under this Section provided to the Comptroller. The judgment creditor must pay the fee at the time the garnishment order is provided to the Comptroller.

(g) The Comptroller's liability to the plaintiff under a garnishment order under this Section is limited to the amount of the refund due to the debtor for the period the garnishment order is in effect, less any setoff, counterclaim, or other demand of the State against the debtor. After the Comptroller has deposited the amount available under subsection (d) of this Section, the Comptroller has no further liability in the matter unless:

(1) a garnishment order is received by the Comptroller for a subsequent tax year; or

(2) the amount deposited by the Comptroller under subsection (d) of this Section is in question.

(h) The Comptroller shall adopt rules to implement this Section.

Section 10. 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 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;

(4.6) a refund withholding request to collect any debt owed to a unit of local government, school district, or public institution of higher education collected under an intergovernmental agreement entered into under Sections 10.05 and 10.05d of the State Comptroller Act;

(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; and .

(7) a garnishment order under Section 10.05e of the State Comptroller Act.

(Source: P.A. 97-269, eff. 12-16-11 (see Section 15 of P.A. 97-632 for the effective date of changes made by P.A. 97-269); 97-632, eff. 12-16-11.)

Section 15. The Code of Civil Procedure is amended by adding Section 12-703.5 as follows:

(735 ILCS 5/12-703.5 new)

Sec. 12-703.5. Garnishment of tax refunds. Notwithstanding any other provision of this Part, if the garnishee is the Comptroller under Section 10.05e of the State Comptroller Act, the garnishment of any tax refund on behalf of a judgment creditor under this Part shall be accomplished in accordance with the rules adopted by the Comptroller.

Section 99. Effective date. This Act takes effect January 1, 2016.".