Texas 2019 - 86th Regular

Texas House Bill HB632 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R3280 BRG-D
2	2	By: Phelan H.B. No. 632
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a pilot program for the recovery of delinquent state
8	8	obligations owed to certain state agencies.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 2107, Government Code, is amended by
11	11	designating Sections 2107.001 through 2107.008 as Subchapter A and
12	12	adding a subchapter heading to read as follows:
13	13	SUBCHAPTER A. COLLECTION OF DELINQUENT OBLIGATIONS BY ATTORNEY
14	14	GENERAL
15	15	SECTION 2. Chapter 2107, Government Code, is amended by
16	16	adding Subchapter B to read as follows:
17	17	SUBCHAPTER B. PILOT PROGRAM FOR RECOVERY OF OBLIGATIONS OWED TO
18	18	STATE AGENCIES
19	19	Sec. 2107.051. DEFINITIONS. In this subchapter:
20	20	(1) "Contractor" means an entity selected by the
21	21	attorney general under Section 2107.052(a).
22	22	(2) "Debtor" means a person who is indebted to a state
23	23	agency for any delinquent account, charge, fee, loan, or other form
24	24	of indebtedness.
25	25	(3) "Financial institution" means a bank or any other
26	26	form of depository institution, credit union, benefit association,
27	27	insurance entity, safe deposit entity, bond fund, money market
28	28	mutual fund, or mutual fund of any kind or character.
29	29	Sec. 2107.052. PILOT PROGRAM FOR DELINQUENT STATE
30	30	OBLIGATION RECOVERY. (a) The attorney general shall contract with
31	31	one or more entities to collect delinquent obligations owed to
32	32	state agencies as provided by this subchapter.
33	33	(b) The attorney general shall provide for a contractor
34	34	selected by the attorney general under Subsection (a) to conduct an
35	35	assessment of all nontax delinquent obligations owed to all state
36	36	agencies and identify for participation in a pilot program the 75
37	37	state agencies that have the highest percentage of recoverable
38	38	obligations.
39	39	(c) A state agency that is identified for participation in
40	40	the pilot program under Subsection (b) shall refer outstanding
41	41	obligations owed to the agency to a contractor for collection in
42	42	accordance with this subchapter to the extent the referral is
43	43	allowable under state and federal law.
44	44	(d) In addition to the state agencies identified by a
45	45	contractor under Subsection (b), an entity in the state judicial
46	46	system or a public institution of higher education may refer
47	47	outstanding obligations owed to the entity or institution to a
48	48	contractor for collection in accordance with this subchapter to the
49	49	extent the referral is allowable under state and federal law.
50	50	Sec. 2107.053. POWERS AND DUTIES OF CONTRACTOR. (a) A
51	51	contractor shall attempt to collect each obligation referred to the
52	52	contractor by a state agency.
53	53	(b) A contractor is not a debt collection agency. The nature
54	54	of an obligation owed to a state agency and referred to a contractor
55	55	does not change as a result of the referral.
56	56	(c) With respect to a referred obligation, a contractor may:
57	57	(1) sue;
58	58	(2) file a lien;
59	59	(3) enter into a payment agreement with the debtor,
60	60	subject to Section 55, Article III, Texas Constitution;
61	61	(4) impose a cost recovery fee;
62	62	(5) collect information for obligation recovery
63	63	purposes;
64	64	(6) exercise any settlement authority the referring
65	65	state agency is authorized by law to exercise and delegates to the
66	66	contractor;
67	67	(7) seek a judicial or administrative determination of
68	68	a referred obligation and, following the rendering of the
69	69	determination:
70	70	(A) deliver a notice of levy to a financial
71	71	institution possessing or controlling assets or funds owned by, or
72	72	owed to, a debtor; or
73	73	(B) impose income garnishment or withholding
74	74	against a debtor to the extent permitted by law;
75	75	(8) create and maintain a data match system with
76	76	financial institutions;
77	77	(9) create and maintain a centralized electronic
78	78	obligation management system to collect, track, and maintain
79	79	information relating to obligation recovery under this subchapter;
80	80	(10) reduce the amount of any money to be paid to a
81	81	debtor by this state by the amount of the referred obligation;
82	82	(11) enter into contracts with one or more third-party
83	83	debt collectors to collect the obligation on behalf of the
84	84	contractor;
85	85	(12) use any other debt collection method authorized
86	86	by state law; and
87	87	(13) use any other power this subchapter grants the
88	88	contractor.
89	89	(d) The contractor may determine the method or methods that
90	90	are most suitable to use in attempting to collect a referred
91	91	obligation.
92	92	(e) A contractor selected by the attorney general under
93	93	Section 2107.052(b) shall perform annually an assessment of all
94	94	outstanding obligations owed to state agencies that are eligible
95	95	for referral to the contractor.
96	96	Sec. 2107.054. NOTICE OF REFERRAL OF OBLIGATION TO
97	97	CONTRACTOR. (a) Before referring a delinquent obligation to a
98	98	contractor for collection, the state agency to which the obligation
99	99	is owed must provide a final notice to the debtor stating that:
100	100	(1) the debt will be referred to a contractor for
101	101	collection; and
102	102	(2) a cost recovery fee of 30 percent of the total
103	103	amount due on the date of the referral will be added to the total
104	104	amount owed if the obligation is referred to a contractor.
105	105	(b) A state agency may enter into a contract with a
106	106	contractor that, using a benefits-funded model, enables the
107	107	contractor to:
108	108	(1) provide the final notice required by Subsection
109	109	(a) to debtors on behalf of the agency; or
110	110	(2) collect delinquent obligations that are owed to
111	111	the agency on behalf of the agency, before the referral of the
112	112	obligations to the contractor by the agency in accordance with the
113	113	pilot program created under this subchapter.
114	114	(c) The attorney general shall create a process for a debtor
115	115	to challenge the recovery of an obligation by a contractor under
116	116	this subchapter. The process must provide that a challenge to the
117	117	recovery of an obligation by a contractor may be made only by the
118	118	debtor and must be made in writing.
119	119	Sec. 2107.055. COLLECTION OF INFORMATION. (a) Information
120	120	regarding an obligation referred to a contractor for collection
121	121	under this subchapter is confidential.
122	122	(b) Notwithstanding any other law, a state agency that
123	123	refers an obligation to a contractor for collection may share any
124	124	information with the contractor that the contractor considers
125	125	relevant and necessary to assist in the collection of the
126	126	obligation.
127	127	(c) Information a state agency provides to a contractor may
128	128	be used only for the purpose of collecting a referred obligation.
129	129	(d) Any information, record, or file used by a contractor to
130	130	collect an obligation under this subchapter is privileged and
131	131	confidential. A person may not disclose any information obtained
132	132	from the information, records, or files used by a contractor,
133	133	except in relation to the administration or enforcement of an
134	134	obligation.
135	135	(e) A contractor may not use any information, record, or
136	136	file that contains information protected by the Health Insurance
137	137	Portability and Accountability Act and Privacy Standards, as that
138	138	term is defined by Section 181.001, Health and Safety Code, to
139	139	collect an obligation.
140	140	Sec. 2107.056. COST RECOVERY FEE. (a) To fund the
141	141	obligation recovery authorized under this subchapter, a contractor
142	142	shall impose a cost recovery fee for any referred obligation. The
143	143	cost recovery fee is a debt owed by the debtor and is in addition to
144	144	the amount of the referred obligation.
145	145	(b) The amount of the cost recovery fee is equal to 30
146	146	percent of the total amount due on the date of the referral.
147	147	(c) A contractor may use any debt collection method
148	148	authorized by law for collecting a referred debt to collect the cost
149	149	recovery fee.
150	150	Sec. 2107.057. COLLECTION OF OBLIGATION BY CONTRACTOR. (a)
151	151	Notwithstanding any other provision of law providing for execution,
152	152	attachment, garnishment, or levy against a person's accounts, a
153	153	contractor may seek income garnishment or a notice of levy for a
154	154	financial institution to collect an obligation referred to the
155	155	contractor.
156	156	(b) If a debtor has an outstanding obligation that has been
157	157	referred to a contractor for collection, any payment made by the
158	158	debtor to the state is subject to offset by the contractor unless:
159	159	(1) the debtor has paid the referred obligation and
160	160	cost recovery charge in full; or
161	161	(2) the debtor has entered into a payment plan with the
162	162	contractor and is not delinquent.
163	163	(c) If a contractor is unable to recover an obligation, the
164	164	contractor, subject to approval by the referring state agency, may
165	165	forward the obligation to a collection agency. A collection agency
166	166	that is forwarded an obligation under this subsection may impose an
167	167	additional collection charge to the obligation.
168	168	Sec. 2107.058. ALLOCATION, REMITTANCE, AND DEPOSIT OF
169	169	COLLECTED AMOUNTS. (a) A contractor shall remit any money
170	170	recovered from a debtor, less the cost recovery fee, to the
171	171	comptroller not later than the 30th day after the last day of the
172	172	month in which the contractor recovered the money from the debtor.
173	173	(b) The comptroller shall deposit any money a contractor
174	174	remits under Subsection (a) to the credit of the foundation school
175	175	fund.
176	176	(c) If a contractor collects on a referred obligation in an
177	177	amount that is less than the total amount owed on the obligation,
178	178	including the cost recovery fee, the amount collected is allocated
179	179	proportionally between:
180	180	(1) the total amount of the referred obligation; and
181	181	(2) the cost recovery fee.
182	182	(d) If more than one obligation owed by the same debtor is
183	183	referred to a contractor, amounts the contractor collects from the
184	184	debtor are allocated to each referred obligation and cost recovery
185	185	fee imposed in the order in which the obligations were referred to
186	186	the contractor. If the obligations were referred concurrently,
187	187	amounts the contractor collects from the debtor shall be allocated
188	188	proportionally between each referred obligation and cost recovery
189	189	fee.
190	190	Sec. 2107.059. RULES. The attorney general may adopt rules
191	191	necessary to implement this subchapter.
192	192	Sec. 2107.060. REPORT. (a) Not later than October 1 of
193	193	each year, the attorney general shall provide a report to the
194	194	legislature regarding:
195	195	(1) the collection of referred obligations by a
196	196	contractor under this subchapter during the preceding fiscal year;
197	197	and
198	198	(2) any recommendations to improve or enhance the
199	199	pilot program created under this subchapter.
200	200	(b) A contractor shall maintain any information necessary
201	201	to allow for statistical measurements and evaluations of the
202	202	operation of the obligation recovery pilot program under this
203	203	subchapter.
204	204	SECTION 3. Not later than March 1, 2020, the attorney
205	205	general shall contract with one or more entities to create the
206	206	delinquent state obligation recovery pilot program, as provided
207	207	under Subchapter B, Chapter 2107, Government Code, as added by this
208	208	Act.
209	209	SECTION 4. This Act takes effect immediately if it receives
210	210	a vote of two-thirds of all the members elected to each house, as
211	211	provided by Section 39, Article III, Texas Constitution. If this
212	212	Act does not receive the vote necessary for immediate effect, this
213	213	Act takes effect on the 91st day after the last day of the
214	214	legislative session.