Texas House Bill HB3762

Texas 2017 - 85th Regular

Caption

Relating to the recovery of certain debts owed to this state; authorizing fees.

Impact

The implementation of HB3762 is expected to enhance the efficiency of debt recovery efforts across Texas. By integrating the responsibilities under a single contractor, the bill aims to reduce the administrative burden on state agencies and local governments. It will facilitate improved communication regarding debts among financial institutions and the SORC, allowing for better data sharing and coordination. This may lead to increased revenue recovery for the state, positively impacting its budget and potentially benefiting services funded by these revenues.

Summary

House Bill 3762 introduces measures for the recovery of debts owed to the state of Texas by establishing the State Obligation Recovery Center (SORC). The bill provides a structured framework for identifying, tracking, and collecting debts that are not related to taxes. The SORC acts as a contracted entity tasked with managing these debts, allowing for the systemic collection of outstanding financial obligations owed to various state agencies and local governments. This establishes a centralized approach to debt recovery, streamlining processes that were previously managed on a case-by-case basis.

Contention

Notably, some concerns may arise regarding the broad powers granted to the SORC in collecting debts. The bill allows for the imposition of a 20 percent cost recovery charge on top of the principal owed, which some may view as overly punitive, particularly for low-income debtors. Additionally, the bill stipulates that the SORC may utilize stringent methods for debt collection, including wage garnishment and bank levies. Critics may argue that these measures could disproportionately affect vulnerable populations, creating financial hardship rather than relief.

Enforcement

The SORC is tasked with the annual assessment of outstanding debt and must maintain confidentiality regarding the information it handles. This includes a duty to remit collected amounts back to referring entities promptly, while also ensuring that debtors are made aware of their outstanding obligations and associated costs. The emphasis on transparency through annual reports to the legislature aims to hold the SORC accountable for its collection activities, ensuring that the debt recovery process remains fair and equitable.