Texas 2017 - 85th Regular

Texas House Bill HB3762 Compare Versions

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1	1	By: Phelan H.B. No. 3762
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the recovery of certain debts owed to this state;
7	7	authorizing fees.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Chapter 321, Government Code, is amended by
10	10	adding Subchapter B and to read as follows:
11	11	SUBCHAPTER B. COLLECTION OF DEBT OWED TO STATE
12	12	Sec. 321.551. DEFINITIONS. In this subchapter:
13	13	(1) "Account" includes any demand deposit account,
14	14	checking account, negotiable withdrawal order account, savings
15	15	account, time deposit account, money market mutual fund, or any
16	16	type of mutual fund account, and intangible property. The term
17	17	account does not include amounts held by a financial institution as
18	18	collateral for loans extended by the financial institution.
19	19	(2) "Debt" a legal non-tax related obligation to pay
20	20	money, including any principal, any interest that has accrued or
21	21	will accrue until the debt is paid, any penalties, any costs, and
22	22	any other charges permitted by law. The term debt includes any
23	23	non-tax related obligation of any kind referred to the SORC for
24	24	collection by the state, government, or any government agency, by
25	25	the Judicial System, or by the State higher education system.
26	26	(3) "Debtor" means a person who is indebted to the
27	27	state, government, or any government agency for any delinquent
28	28	accounts, charges, fees, loans, taxes, or other indebtedness due,
29	29	or any obligation being collected by the SORC.
30	30	(4) "Employee" means any person or entity that
31	31	performs services for another and includes a debtor acting as a
32	32	contractor, subcontractor, distributor, agent, or in any
33	33	representative capacity in which the debtor receives any form of
34	34	consideration.
35	35	(5) "Employer" means any person or entity that pays an
36	36	employee to do a specific task or tasks.
37	37	(6) "Financial institution" any financial institution
38	38	and any other depository institution, credit union, benefit
39	39	association, insurance company, safe deposit company, bond fund,
40	40	money market mutual fund, and any mutual fund of any kind or
41	41	character.
42	42	(7) "Final debt" a debt that is no longer subject to an
43	43	appeal.
44	44	(8) "Final notification" the notification provided by
45	45	section 12 of this Act.
46	46	(9) "Referring entity" the entity referring the debt
47	47	to the SORC for collection.
48	48	(10) "State Obligation Recovery Center (SORC)" is not
49	49	a state agency and means a benefits funded contractor procured as a
50	50	third-party to recover debts owed to the state.
51	51	(11) "Wage" means any form of compensation due a
52	52	debtor and includes wages, salary, bonus, commission, or other
53	53	payment directly or indirectly related to consideration for the
54	54	performance of a service.
55	55	Sec. 321.552. DUTIES. The SORC shall work to collect every
56	56	debt referred to the SORC. Exceptions to the use of the SORC are
57	57	permissible if the debt includes HIPPA data. The SORC is not a debt
58	58	collection agency. The character of the debt in the hands of the
59	59	referring entity does not change by the referral of the debt to the
60	60	SORC for collection.
61	61	Sec. 321.553. ANNUAL ASSESSMENT OF OUTSTANDING DEBT. The
62	62	third-party vendor selected by the state auditor to operate the
63	63	SORC shall preform an annual assessment of all outstanding debt
64	64	eligible for referral to the SORC.
65	65	Sec. 321.554. GENERAL POWERS. The SORC shall have the
66	66	ability to use the referring entity's statutory collection
67	67	authority to recover the obligations owed to the referring entity.
68	68	The SORC shall also have the authority to:
69	69	(1) Sue;
70	70	(2) File liens;
71	71	(3) Enter into payment agreements with debtors;
72	72	(4) Impose a cost recovery charge;
73	73	(5) Collect data for obligation recovery purposes;
74	74	(6) Establish and maintain a centralized electronic
75	75	obligation registry;
76	76	(7) Exercise the settlement authority granted to it by
77	77	the referring entity;
78	78	(8) Provide information to the motor vehicle division
79	79	of the Department of Revenue regarding the non-renewal of
80	80	registrations for motor vehicles, motorcycles, boats or other
81	81	conveyances;
82	82	(9) Provide information to any unit of the state
83	83	regarding the non-renewal of professional licenses;
84	84	(10) Provide information to the Department
85	85	responsible for hunting licenses and fishing licenses regarding the
86	86	non-issuance of hunting and fishing licenses;
87	87	(11) Impose an administrative wage assignment
88	88	process;
89	89	(12) Establish and maintain a financial institution
90	90	data match system;
91	91	(13) Impose an administrative bank levy process;
92	92	(14) Set-off against any monies to be paid by the state
93	93	to a debtor for any obligation owed by the debtor;
94	94	(15) Contract with collection agencies for the
95	95	recovery of an obligation on behalf of the SORC;
96	96	(16) Utilize any other obligation recovery methods
97	97	authorized by state law; and
98	98	(17) All other authority granted to the SORC by this
99	99	Act.
100	100	(b) The SORC may determine which method or combination is
101	101	most suitable to recover the obligation.
102	102	(c) A state debtor may be prohibited from renewing,
103	103	obtaining or maintaining the following licenses or registrations
104	104	unless the obligation and cost recovery charge is either paid in
105	105	full or the debtor has entered into a payment plan with the SORC and
106	106	the payment plan is current:
107	107	(1) Any registration for any motor vehicle,
108	108	motorcycle, boat, or other conveyances;
109	109	(2) Any professional license; and
110	110	(3) Any hunting license or any fishing license.
111	111	Sec. 321.555 COLLECTION CHARGE. (a) To fund its
112	112	operations, the SORC will collect a cost recovery charge, which
113	113	shall be 20 percent of the principal amount of the obligation. All
114	114	methods available to recover any obligation referred to the SORC
115	115	are available to the SORC for the collection of the cost recovery
116	116	charge. The SORC shall retain the cost recovery fee and transfer
117	117	any monies collected from a debtor to the referring entity within
118	118	thirty days after the end of the month in which the monies were
119	119	collected. If the amount recovered is less than the obligation and
120	120	the cost recovery charge, the amount recovered shall be prorated
121	121	between the referred obligation and the cost recovery charge.
122	122	(b) Prior to transferring any obligation to the SORC, the
123	123	referring entity shall send a final notification to the debtor that
124	124	the obligation will be referred to the SORC and a 20 percent cost
125	125	recovery charge will be added. Challenges to any obligation
126	126	recovery by the SORC may be initiated only in writing and by the
127	127	debtor.
128	128	(c) Any executive branch agency shall use the SORC to
129	129	collect any executive branch agency debt.
130	130	(d) The Judicial System may use the SORC to collect any
131	131	costs, fines, fees, or restitution ordered in any adult criminal
132	132	proceeding.
133	133	(e) The state higher education system may use the SORC to
134	134	collect any debt owed within the state higher education system.
135	135	(f) All local governments, including municipalities,
136	136	counties, and townships, may use the SORC to collect any debt owed
137	137	them.
138	138	Sec. 321.556. INFORMATION FOR COLLECTION. (a) The SORC
139	139	shall keep any information regarding any obligation referred to the
140	140	SORC confidential. Notwithstanding any law to the contrary,
141	141	referring entities are authorized to transmit data to the SORC
142	142	deemed necessary by the SORC to aid in the obligation recovery.
143	143	(b) Information a referring entity provides to the SORC may
144	144	be used only for the purpose of collecting a referred debt.
145	145	Sec. 321.557. REMITTANCE AND DEPOSIT OF COLLECTED AMOUNTS.
146	146	(a) Except as provided by Sec. 321.554 a contracted third-party
147	147	vendor shall remit to the referring entity all amounts the
148	148	collector collects on debts transferred to the SORC.
149	149	(b) The referring entity shall deposit the remitted amounts
150	150	to the credit of the same funds or accounts to which the money would
151	151	have been deposited if collected by the referring entity.
152	152	(c) If more than one debt owed by the debtor is transferred
153	153	to the SORC, amounts recovered from the debtor and allocated to each
154	154	referred debt in the order in which the debts were referred to the
155	155	SORC or, if the debts were referred concurrently, are allocated
156	156	proportionally to each debt.
157	157	(d) Any payment of any kind to be made to a debtor by the
158	158	state, when the debtor has an obligation that is referred to the
159	159	SORC, is subject to offset by the SORC unless the obligation and
160	160	cost recovery charge is either paid in full or the debtor has
161	161	entered into a payment plan with SORC and the payment plan is
162	162	current.
163	163	(e) Notwithstanding other statutory provisions which
164	164	provide for execution, attachment, garnishment, or levy against
165	165	accounts, the SORC may use an administrative wage assignment or
166	166	administrative bank levy process to collect the debt referred to
167	167	the SORC.
168	168	(f) If the SORC is unable to recover the referred
169	169	obligation, the SORC, with the approval of the referring entity,
170	170	may forward the obligation to a collection agency, which is
171	171	permitted to add a collection charge.
172	172	Sec. 321.558. ANNUAL REPORT. Not later than October 1 of
173	173	each year, the state auditor shall provide a written report to the
174	174	legislature concerning the collection of referred debts under this
175	175	subchapter during the preceding state fiscal year.
176	176	Sec. 321.559. RULES. The state auditor shall have the
177	177	ability to promulgate rules for operation of the SORC and shall
178	178	implement this subchapter by December 31, 2017. The SORC shall
179	179	maintain the necessary data to provide statistical measurements of
180	180	the operation of the SORC as provided in this Act.
181	181	SECTION 2. This Act takes effect immediately if it receives
182	182	a vote of two-thirds of all the members elected to each house, as
183	183	provided by Section 39, Article III, Texas Constitution. If this
184	184	Act does not receive the vote necessary for immediate effect, this
185	185	Act takes effect September 1, 2017.