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S.B. 200

This document includes Senate Committee Amendments incorporated into the bill on Tue, Feb 15, 2011 at 8:02 AM by rday. -->              1     

STATE DEBT COLLECTIONS AMENDMENTS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Lyle W. Hillyard

             5     
House Sponsor: ____________

             6     

             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions relating to the Office of State Debt Collection and the
             10      Division of Finance.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies definitions;
             14          .    moves the Office of State Debt Collection from the Department of Administrative
             15      Services to the Division of Finance;
             16          .    modifies procedures for the collection of accounts receivable by the Division of
             17      Finance;
             18          .    requires a party to file a complaint in court within one year of the creation of the
             19      lien;
             20          .    allows the Office of State Debt Collection to obtain records and databases by
             21      entering into written agreements with other government agencies for the purpose of
             22      collecting state accounts receivable; and
             23          .    provides technical changes.
             24      Money Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          None



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             28
     Utah Code Sections Affected:
             29      AMENDS:
             30          15-1-4, as last amended by Laws of Utah 2010, Chapter 102
             31          63A-1-109, as last amended by Laws of Utah 2006, Chapter 139
             32          63A-1-109.5, as enacted by Laws of Utah 2010, Chapter 341
             33          63A-3-103, as last amended by Laws of Utah 2010, Chapter 341
             34          63A-3-301, as renumbered and amended by Laws of Utah 1993, Chapter 212
             35          63A-3-303, as renumbered and amended by Laws of Utah 1993, Chapter 212
             36          63A-3-304, as renumbered and amended by Laws of Utah 1993, Chapter 212
             37          63A-3-307, as renumbered and amended by Laws of Utah 1993, Chapter 212
             38          63A-3-308, as renumbered and amended by Laws of Utah 1993, Chapter 212
             39          76-3-201.1, as last amended by Laws of Utah 2009, Chapter 356
             40          78A-2-214, as renumbered and amended by Laws of Utah 2008, Chapter 3
             41          78B-8-201, as last amended by Laws of Utah 2010, Chapter 345
             42      RENUMBERS AND AMENDS:
             43          63A-3-501, (Renumbered from 63A-8-101, as last amended by Laws of Utah 2009,
             44      Chapter 288)
             45          63A-3-502, (Renumbered from 63A-8-201, as last amended by Laws of Utah 2009,
             46      Chapter 183)
             47          63A-3-503, (Renumbered from 63A-8-203, as last amended by Laws of Utah 2005,
             48      Chapter 23)
             49          63A-3-504, (Renumbered from 63A-8-204, as last amended by Laws of Utah 2008,
             50      Chapter 382)
             51          63A-3-505, (Renumbered from 63A-8-301, as last amended by Laws of Utah 2006,
             52      Chapter 65)
             53          63A-3-506, (Renumbered from 63A-8-302, as last amended by Laws of Utah 1999,
             54      Chapter 279)
             55     

             56      Be it enacted by the Legislature of the state of Utah:
             57          Section 1. Section 15-1-4 is amended to read:
             58           15-1-4. Interest on judgments.



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             59
         (1) As used in this section, "federal postjudgment interest rate" means the interest rate
             60      established for the federal court system under 28 U.S.C. Sec. 1961, as amended.
             61          (2) (a) Except as provided in Subsection (2)(b), a judgment rendered on a lawful
             62      contract shall conform to the contract and shall bear the interest agreed upon by the parties,
             63      which shall be specified in the judgment.
             64          (b) A judgment rendered on a deferred deposit loan subject to Title 7, Chapter 23,
             65      Check Cashing and Deferred Deposit Lending Registration Act, shall bear interest at the rate
             66      imposed under Subsection (3) on an amount not exceeding the sum of:
             67          (i) the total of the principal balance of the deferred deposit loan;
             68          (ii) interest at the rate imposed by the deferred deposit loan agreement for a period not
             69      exceeding 10 weeks as provided in Subsection 7-23-401 (4);
             70          (iii) costs;
             71          (iv) attorney fees; and
             72          (v) other amounts allowed by law and ordered by the court.
             73          (3) (a) Except as otherwise provided by law, other civil and criminal judgments of the
             74      district court and justice court shall bear interest at the federal postjudgment interest rate as of
             75      January 1 of each year, plus 2%.
             76          (b) The postjudgment interest rate in effect at the time of the judgment shall remain the
             77      interest rate for the duration of the judgment.
             78          (c) The interest on criminal judgments shall be calculated on the total amount of the
             79      judgment.
             80          (d) Interest paid on state revenue shall be deposited in accordance with Section
             81      [ 63A-8-301 ] 63A-3-505 .
             82          (e) Interest paid on revenue to a county or municipality shall be paid to the general
             83      fund of the county or municipality.
             84          Section 2. Section 63A-1-109 is amended to read:
             85           63A-1-109. Divisions of department -- Administration.
             86          (1) The department shall be composed of the following divisions:
             87          (a) administrative rules;
             88          (b) archives and records;
             89          (c) facilities construction and management;



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             90
         (d) finance;
             91          (e) fleet operations;
             92          [(f) office of state debt collection;]
             93          [(g)] (f) state purchasing and general services;
             94          [(h)] (g) risk management; and
             95          [(i)] (h) office of child welfare parental defense.
             96          (2) Each division shall be administered and managed by a division director.
             97          Section 3. Section 63A-1-109.5 is amended to read:
             98           63A-1-109.5. Department authority to operate a division as an internal service
             99      fund agency -- Exception.
             100          [(1) Except as provided in Subsection (2) and subject] Subject to Section 63A-1-114
             101      and provisions governing internal service funds or internal service fund agencies under Title
             102      63J, Chapter 1, Budgetary Procedures Act, the department may operate a division described in
             103      Section 63A-1-109 as an internal service fund agency.
             104          [(2) The department may not operate the division described in Subsection
             105      63A-1-109 (1)(f) as an internal service fund agency.]
             106          Section 4. Section 63A-3-103 is amended to read:
             107           63A-3-103. Duties of director of division -- Application to institutions of higher
             108      education.
             109          (1) The director of the Division of Finance shall:
             110          (a) define fiscal procedures relating to approval and allocation of funds;
             111          (b) provide for the accounting control of funds;
             112          (c) approve proposed expenditures for the purchase of supplies and services;
             113          (d) promulgate rules that:
             114          (i) establish procedures for maintaining detailed records of all types of leases;
             115          (ii) account for all types of leases in accordance with generally accepted accounting
             116      principles;
             117          (iii) require the performance of a lease with an option to purchase study by state
             118      agencies prior to any lease with an option to purchase acquisition of capital equipment; and
             119          (iv) require that the completed lease with an option to purchase study be approved by
             120      the director of the Division of Finance;



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Senate Committee Amendments 2-15-2011 rd/gcl
             121
         (e) if the department operates the Division of Finance as an internal service fund
             122      agency in accordance with Section 63A-1-109.5 , submit to the Rate Committee established in
             123      Section 63A-1-114 :
             124          (i) the proposed rate and fee schedule as required by Section 63A-1-114 ; and
             125          (ii) other information or analysis requested by the Rate Committee; [and]
             126          (f) oversee the Office of State Debt Collection; and
             127          [(f)] (g) prescribe other fiscal functions required by law or under the constitutional
             128      authority of the governor to transact all executive business for the state.
             129          (2) (a) Institutions of higher education are subject to the provisions of Title 63A,
             130      Chapter 3, Part 1, General Provisions, and Part 2, Accounting System, only to the extent
             131      expressly authorized or required by the State Board of Regents under Title 53B, State System
             132      of Higher Education.
             133          (b) Institutions of higher education shall submit financial data for the past fiscal year
             134      conforming to generally accepted accounting principles to the director of the Division of
             135      Finance.
             136          (3) The Division of Finance shall prepare financial statements and other reports in
             137      accordance with legal requirements and generally accepted accounting principles for the state
             138      auditor's examination and certification:
             139          (a) not later than 60 days after a request from the state auditor; and
             140          (b) at the end of each fiscal year.
             141          Section 5. Section 63A-3-301 is amended to read:
             142           63A-3-301. Definitions.
             143          As used in this part, "account receivable" means any amount due the state or any other
             144      governmental entity as a result of a court or administrative order, or for which materials or
             145      services have been provided but for which payment has not been received by the servicing unit.
             146          Section 6. Section 63A-3-303 is amended to read:
             147           63A-3-303. Notice to debtor -- Contents.
             148          (1) Upon default in payment of any account receivable that is not due pursuant to final
             148a      S. court or .S
             149      administrative order or judgment, the entity responsible for collecting the account shall send a
             150      notice by S. [ certified ] .S mail to the debtor at the debtor's last-known address.
             151          (2) The notice shall state:



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             152
         (a) the date and amount of the receivable;
             153          (b) a demand for immediate payment of the amount;
             154          (c) a statement of the right of the debtor to file a written response to the notice, to have
             155      a hearing, to be represented at the hearing, and to appeal any decision of the hearing examiner;
             156          (d) the time within which a written response must be filed; and
             157          (e) a statement notifying the debtor that the state may obtain an order under this part
             158      and execute upon income tax overpayments or refunds of the debtor if:
             159          (i) the debtor fails to respond to the notice; or
             160          (ii) a hearing is held and the hearing officer decides against the debtor.
             161          Section 7. Section 63A-3-304 is amended to read:
             162           63A-3-304. Effect of nonpayment or failure to respond.
             163          If a written response or payment of delinquent receivable is not received by the state
             164      within 15 days from the date of receipt of the notice by the debtor, the debtor is in default and
             165      the state may determine the balance due and collect the balance as provided in Section
             166      63A-3-307 .
             167          Section 8. Section 63A-3-307 is amended to read:
             168           63A-3-307. Abstract of order and nonpayment or failure to respond -- Liens.
             169          (1) [An abstract of an order of a hearing examiner stating a default may be filed with
             170      the State Tax Commission, and when filed, constitutes a lien to the extent] The following shall
             171      constitute a lien in the amount of the receivable plus interest and collection costs allowed by
             172      law against any state income tax refund or overpayment due or to become due the debtor [for a
             173      period of eight years from the date of the order, unless satisfied or otherwise released in writing
             174      by the state.]:
             175          (a) an abstract of an administrative order; or
             176          (b) nonpayment or failure to respond as provided under Section 63A-3-304 .
             177          (2) The lien created by this section shall, for the purposes of Section 59-10-529 only,
             178      be considered a judgment, but no credit of a tax refund or overpayment may be made on
             179      account of this lien until 20 days after the date of the [hearing examiner's] administrative order.
             180          (3) The lien created by this section shall remain effective for eight years.
             181          Section 9. Section 63A-3-308 is amended to read:
             182           63A-3-308. Judicial review -- Effect on lien.



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             183
         (1) A judicial review of [an order of a hearing examiner] a lien created under Section
             184      63A-3-307 may be obtained by any party within one year of the creation of the lien by filing a
             185      complaint with the district court.
             186          (2) (a) A notice of the filing of a complaint may be filed with the State Tax
             187      Commission.
             188          (b) If notice is filed, the tax commission may take no action with respect to the lien
             189      created by Section 63A-3-307 until the matter is finally disposed of by the courts, except as
             190      provided in this part.
             191          Section 10. Section 63A-3-501 , which is renumbered from Section 63A-8-101 is
             192      renumbered and amended to read:
             193     
Part 5. Office of State Debt Collection

             194           [63A-8-101].     63A-3-501. Definitions.
             195          As used in this [chapter] part:
             196          (1) (a) "Accounts receivable" or "receivables" means any amount due the state from an
             197      entity for which payment has not been received by the state agency that is servicing the debt.
             198          (b) "Accounts receivable" includes unpaid fees, licenses, taxes, loans, overpayments,
             199      fines, forfeitures, surcharges, costs, contracts, interest, penalties, restitution to victims,
             200      third-party claims, sale of goods, sale of services, claims, and damages.
             201          (2) "Administrative offset" means:
             202          (a) a reduction of an individual's tax refund or other payments due to the individual to
             203      reduce or eliminate accounts receivable that the individual owes to the state; and
             204          (b) a reduction of an entity's tax refund or other payments due to the entity to reduce or
             205      eliminate accounts receivable that the entity owes to the state.
             206          (3) "Entity" means an individual, a corporation, partnership, or other organization that
             207      pays taxes to or does business with the state.
             208          (4) "Office" means the Office of State Debt Collection established by this [chapter]
             209      part.
             210          (5) "Past due" means any accounts receivable that the state has not received by the
             211      payment due date.
             212          (6) (a) "State agency" includes any department, division, commission, council, board,
             213      bureau, committee, office, or other administrative subunit of Utah state government, including



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             214
     the legislative and judicial branches of state government.
             215          (b) "State agency" does not include:
             216          (i) any institution of higher education;
             217          (ii) except in Subsection [ 63A-8-201 ] 63A-3-502 (7)(g), the State Tax Commission; or
             218          (iii) the administrator of the Uninsured Employers' Fund appointed by the Labor
             219      Commissioner under Section 34A-2-704 , solely for the purposes of collecting money required
             220      to be deposited into the Uninsured Employers' Fund under:
             221          (A) Section 34A-1-405 ;
             222          (B) Title 34A, Chapter 2, Workers' Compensation Act;
             223          (C) Title 34A, Chapter 3, Utah Occupational Disease Act; or
             224          (D) Title 34A, Chapter 8a, Utah Injured Worker Reemployment Act.
             225          (7) "Writing-off" means the removal of an accounts receivable from an agency's
             226      accounts receivable records but does not necessarily eliminate further collection efforts.
             227          Section 11. Section 63A-3-502 , which is renumbered from Section 63A-8-201 is
             228      renumbered and amended to read:
             229           [63A-8-201].     63A-3-502. Office of State Debt Collection created -- Duties.
             230          (1) The state and each state agency shall comply with the requirements of this chapter
             231      and any rules established by the Office of State Debt Collection.
             232          (2) There is created the Office of State Debt Collection in the [Department of
             233      Administrative Services] Division of Finance.
             234          (3) The office shall:
             235          (a) have overall responsibility for collecting and managing state receivables;
             236          (b) assist the Division of Finance to develop consistent policies governing the
             237      collection and management of state receivables;
             238          (c) oversee and monitor state receivables to ensure that state agencies are:
             239          (i) implementing all appropriate collection methods;
             240          (ii) following established receivables guidelines; and
             241          (iii) accounting for and reporting receivables in the appropriate manner;
             242          (d) assist the Division of Finance to develop policies, procedures, and guidelines for
             243      accounting, reporting, and collecting money owed to the state;
             244          (e) provide information, training, and technical assistance to all state agencies on



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             245
     various collection-related topics;
             246          (f) write an inclusive receivables management and collection manual for use by all
             247      state agencies;
             248          (g) prepare quarterly and annual reports of the state's receivables;
             249          (h) create or coordinate a state accounts receivable database;
             250          (i) develop reasonable criteria to gauge state agencies' efforts in maintaining an
             251      effective accounts receivable program;
             252          (j) identify those state agencies that are not making satisfactory progress toward
             253      implementing collection techniques and improving accounts receivable collections;
             254          (k) coordinate information, systems, and procedures between state agencies to
             255      maximize the collection of past-due accounts receivable;
             256          (l) establish an automated cash receipt process between state agencies;
             257          (m) assist the Division of Finance to establish procedures for writing off accounts
             258      receivable for accounting and collection purposes;
             259          (n) establish standard time limits after which an agency will delegate responsibility to
             260      collect state receivables to the office or its designee;
             261          (o) be a real party in interest for an account receivable referred to the office by any
             262      state agency; and
             263          (p) allocate money collected for judgments registered under Section 77-18-6 in
             264      accordance with Sections 51-9-402 , [ 63A-8-302 ] 63A-3-506 , and 78A-5-110 .
             265          (4) The office may:
             266          (a) recommend to the Legislature new laws to enhance collection of past-due accounts
             267      by state agencies;
             268          (b) collect accounts receivables for higher education entities, if the higher education
             269      entity agrees;
             270          (c) prepare a request for proposal for consulting services to:
             271          (i) analyze the state's receivable management and collection efforts; and
             272          (ii) identify improvements needed to further enhance the state's effectiveness in
             273      collecting its receivables;
             274          (d) contract with private or state agencies to collect past-due accounts;
             275          (e) perform other appropriate and cost-effective coordinating work directly related to



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             276
     collection of state receivables;
             277          (f) obtain access to records and databases of any state agency that are necessary to the
             278      duties of the office by following the procedures and requirements of Section 63G-2-206 ;
             279          (g) collect interest and fees related to the collection of receivables under this chapter,
             280      and establish, by following the procedures and requirements of Section 63J-1-504 :
             281          (i) a fee to cover the administrative costs of collection, on accounts administered by the
             282      office;
             283          (ii) a late penalty fee that may not be more than 10% of the account receivable on
             284      accounts administered by the office;
             285          (iii) an interest charge that is:
             286          (A) the postjudgment interest rate established by Section 15-1-4 in judgments
             287      established by the courts; or
             288          (B) not more than 2% above the prime rate as of July 1 of each fiscal year for accounts
             289      receivable for which no court judgment has been entered; and
             290          (iv) fees to collect accounts receivable for higher education;
             291          (h) collect reasonable attorney fees and reasonable costs of collection that are related to
             292      the collection of receivables under this chapter;
             293          (i) make rules that allow accounts receivable to be collected over a reasonable period
             294      of time and under certain conditions with credit cards;
             295          (j) file a satisfaction of judgment in the district court by following the procedures and
             296      requirements of the Utah Rules of Civil Procedure;
             297          (k) ensure that judgments for which the office is the judgment creditor are renewed, as
             298      necessary; [and]
             299          (l) notwithstanding Section 63G-2-206 , share records obtained under Subsection (4)(f)
             300      with private sector vendors under contract with the state to assist state agencies in collecting
             301      debts owed to the state agencies without changing the classification of any private, controlled,
             302      or protected record into a public record[.]; and
             303          (m) enter into written agreements with other governmental agencies to obtain
             304      information for the purpose of collecting state accounts receivable.
             305          (5) The office shall ensure that:
             306          (a) a record obtained by the office or a private sector vendor as referred to in



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             307
     Subsection (4)(l):
             308          (i) is used only for the limited purpose of collecting accounts receivable; and
             309          (ii) is subject to federal, state, and local agency records restrictions; and
             310          (b) any person employed by, or formerly employed by, the office or a private sector
             311      vendor as referred to in Subsection (4)(l) is subject to:
             312          (i) the same duty of confidentiality with respect to the record imposed by law on
             313      officers and employees of the state agency from which the record was obtained; and
             314          (ii) any civil or criminal penalties imposed by law for violations of lawful access to a
             315      private, controlled, or protected record.
             316          (6) (a) The office shall collect accounts receivable ordered by the district court as a
             317      result of prosecution for a criminal offense that have been transferred to the office under
             318      Subsection 76-3-201.1 (5)(h) or (8).
             319          (b) The office may not assess the interest charge established by the office under
             320      Subsection (4) on an account receivable subject to the postjudgment interest rate established by
             321      Section 15-1-4 .
             322          (7) The office shall require state agencies to:
             323          (a) transfer collection responsibilities to the office or its designee according to time
             324      limits established by the office;
             325          (b) make annual progress towards implementing collection techniques and improved
             326      accounts receivable collections;
             327          (c) use the state's accounts receivable system or develop systems that are adequate to
             328      properly account for and report their receivables;
             329          (d) develop and implement internal policies and procedures that comply with the
             330      collections policies and guidelines established by the office;
             331          (e) provide internal accounts receivable training to staff involved in their management
             332      and collection of receivables as a supplement to statewide training;
             333          (f) bill for and make initial collection efforts of its receivables up to the time the
             334      accounts must be transferred; and
             335          (g) submit quarterly receivable reports to the office that identify the age, collection
             336      status, and funding source of each receivable.
             337          (8) The office shall use the information provided by the agencies and any additional



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             338
     information from the office's records to compile a one-page summary report of each agency.
             339          (9) The summary shall include:
             340          (a) the type of revenue that is owed to the agency;
             341          (b) any attempted collection activity; and
             342          (c) any costs incurred in the collection process.
             343          (10) The office shall annually provide copies of each agency's summary to the governor
             344      and to the Legislature.
             345          Section 12. Section 63A-3-503 , which is renumbered from Section 63A-8-203 is
             346      renumbered and amended to read:
             347           [63A-8-203].     63A-3-503. Legal services.
             348          The Office of the Attorney General shall:
             349          (1) provide to the office all legal services and advice related to the collection of
             350      accounts receivable owed to the state; and
             351          (2) establish policies governing:
             352          (a) legal matters involving accounts receivable; and
             353          (b) litigation of past-due accounts receivable.
             354          Section 13. Section 63A-3-504 , which is renumbered from Section 63A-8-204 is
             355      renumbered and amended to read:
             356           [63A-8-204].     63A-3-504. Rulemaking authority -- Collection techniques.
             357          In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             358      office shall make rules:
             359          (1) providing details, as necessary, for the distribution of debts collected in accordance
             360      with the priorities under Subsection [ 63A-8-301 ] 63A-3-505 (3); and
             361          (2) to govern collection techniques, which may include the use of:
             362          (a) credit reporting bureaus;
             363          (b) collection agencies;
             364          (c) garnishments;
             365          (d) liens;
             366          (e) judgments; and
             367          (f) administrative offsets.
             368          Section 14. Section 63A-3-505 , which is renumbered from Section 63A-8-301 is



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             369
     renumbered and amended to read:
             370           [63A-8-301].     63A-3-505. State Debt Collection Fund.
             371          (1) There is created a restricted special revenue fund entitled the "State Debt Collection
             372      Fund."
             373          (2) The fund consists of:
             374          (a) all amounts appropriated to the fund under this chapter;
             375          (b) fees and interest established by the office under Subsection [ 63A-8-201 ]
             376      63A-3-502 (4)(g); and
             377          (c) except as otherwise provided by law, all postjudgment interest collected by the
             378      office or the state except postjudgment interest on restitution.
             379          (3) Monies in this fund shall be used to pay for:
             380          (a) the costs of the office in the performance of its duties under this chapter;
             381          (b) restitution to victims to whom the debt is owed;
             382          (c) interest accrued that is associated with the debt;
             383          (d) principal on the debt to the state agencies or other entities that placed the receivable
             384      for collection; and
             385          (e) other legal obligations including those ordered by a court.
             386          (4) (a) The fund may collect interest.
             387          (b) All interest earned from the fund shall be deposited in the General Fund.
             388          (5) The office shall ensure that monies remaining in the fund at the end of the fiscal
             389      year that are not committed under the priorities established under Subsection (3) are deposited
             390      into the General Fund.
             391          (6) (a) The office shall report at least annually to the appropriations subcommittee
             392      assigned to review the budget of the Department of Administrative Services on the fund
             393      balance and its revenues and expenditures and administrative offsets.
             394          (b) The report shall include the amounts paid under each provision under Subsection
             395      (3).
             396          Section 15. Section 63A-3-506 , which is renumbered from Section 63A-8-302 is
             397      renumbered and amended to read:
             398           [63A-8-302].     63A-3-506. Allocation of funds.
             399          (1) Except as provided in Subsection (2), the money collected by the office less the



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             400
     office's fees shall be allocated on a prorated basis to the various revenue types that generated
             401      the accounts receivable.
             402          (2) Notwithstanding the requirements of Subsection (1):
             403          (a) federal cost allocation requirements for specific accounts receivable related to
             404      programs that are supported by federal funds take precedence over other cost allocation
             405      methods provided in this section; and
             406          (b) the office shall use interest and fees collected on past due accounts receivable as
             407      provided in Section [ 63A-8-301 ] 63A-3-505 .
             408          Section 16. Section 76-3-201.1 is amended to read:
             409           76-3-201.1. Collection of criminal judgment accounts receivable.
             410          (1) As used in this section:
             411          (a) "Criminal judgment accounts receivable" means any amount due the state arising
             412      from a criminal judgment for which payment has not been received by the state agency that is
             413      servicing the debt.
             414          (b) "Accounts receivable" includes unpaid fees, overpayments, fines, forfeitures,
             415      surcharges, costs, interest, penalties, restitution to victims, third party claims, claims,
             416      reimbursement of a reward, and damages.
             417          (2) (a) A criminal judgment account receivable ordered by the court as a result of
             418      prosecution for a criminal offense may be collected by any means authorized by law for the
             419      collection of a civil judgment.
             420          (b) (i) The court may permit a defendant to pay a criminal judgment account receivable
             421      in installments.
             422          (ii) In the district court, if the criminal judgment account receivable is paid in
             423      installments, the total amount due shall include all fines, surcharges, postjudgment interest, and
             424      fees.
             425          (c) Upon default in the payment of a criminal judgment account receivable or upon
             426      default in the payment of any installment of that receivable, the criminal judgment account
             427      receivable may be collected as provided in this section or Subsection 77-18-1 (9) or (10), and by
             428      any means authorized by law for the collection of a civil judgment.
             429          (3) When a defendant defaults in the payment of a criminal judgment account
             430      receivable or any installment of that receivable, the court, on motion of the prosecution, victim,



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             431
     or upon its own motion may:
             432          (a) order the defendant to appear and show cause why the default should not be treated
             433      as contempt of court; or
             434          (b) issue a warrant of arrest.
             435          (4) (a) Unless the defendant shows that the default was not attributable to an
             436      intentional refusal to obey the order of the court or to a failure to make a good faith effort to
             437      make the payment, the court may find that the default constitutes contempt.
             438          (b) Upon a finding of contempt, the court may order the defendant committed until the
             439      criminal judgment account receivable, or a specified part of it, is paid.
             440          (5) If it appears to the satisfaction of the court that the default is not contempt, the
             441      court may enter an order for any of the following or any combination of the following:
             442          (a) require the defendant to pay the criminal judgment account receivable or a specified
             443      part of it by a date certain;
             444          (b) restructure the payment schedule;
             445          (c) restructure the installment amount;
             446          (d) except as provided in Section 77-18-8 , execute the original sentence of
             447      imprisonment;
             448          (e) start the period of probation anew;
             449          (f) except as limited by Subsection (6), convert the criminal judgment account
             450      receivable or any part of it to compensatory service;
             451          (g) except as limited by Subsection (6), reduce or revoke the unpaid amount of the
             452      criminal judgment account receivable; or
             453          (h) in the district court, record the unpaid balance of the criminal judgment account
             454      receivable as a civil judgment and transfer the responsibility for collecting the judgment to the
             455      Office of State Debt Collection.
             456          (6) In issuing an order under this section, the court may not modify the amount of the
             457      judgment of complete restitution.
             458          (7) Whether or not a default constitutes contempt, the court may add to the amount
             459      owed the fees established under Subsection [ 63A-8-201 ] 63A-3-502 (4)(g) and postjudgment
             460      interest.
             461          (8) (a) (i) If a criminal judgment account receivable is past due in a case supervised by



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             462
     the Department of Corrections, the judge shall determine whether or not to record the unpaid
             463      balance of the account receivable as a civil judgment.
             464          (ii) If the judge records the unpaid balance of the account receivable as a civil
             465      judgment, the judge shall transfer the responsibility for collecting the judgment to the Office of
             466      State Debt Collection.
             467          (b) If a criminal judgment account receivable in a case not supervised by the
             468      Department of Corrections is past due, the district court may, without a motion or hearing,
             469      record the unpaid balance of the criminal judgment account receivable as a civil judgment and
             470      transfer the responsibility for collecting the account receivable to the Office of State Debt
             471      Collection.
             472          (c) If a criminal judgment account receivable in a case not supervised by the
             473      Department of Corrections is more than 90 days past due, the district court shall, without a
             474      motion or hearing, record the unpaid balance of the criminal judgment account receivable as a
             475      civil judgment and transfer the responsibility for collecting the criminal judgment account
             476      receivable to the Office of State Debt Collection.
             477          (9) (a) When a fine, forfeiture, surcharge, cost permitted by statute, fee, or an order of
             478      restitution is imposed on a corporation or unincorporated association, the person authorized to
             479      make disbursement from the assets of the corporation or association shall pay the obligation
             480      from those assets.
             481          (b) Failure to pay the obligation may be held to be contempt under Subsection (3).
             482          (10) The prosecuting attorney may collect restitution in behalf of a victim.
             483          Section 17. Section 78A-2-214 is amended to read:
             484           78A-2-214. Collection of accounts receivable.
             485          (1) As used in this section:
             486          (a) "Accounts receivable" means any amount due the state from an entity for which
             487      payment has not been received by the state agency that is servicing the debt.
             488          (b) "Accounts receivable" includes unpaid fees, licenses, taxes, loans, overpayments,
             489      fines, forfeitures, surcharges, costs, contracts, interest, penalties, restitution to victims, third
             490      party claims, sale of goods, sale of services, claims, and damages.
             491          (2) If the Department of Corrections does not have responsibility under Subsection
             492      77-18-1 (9) for collecting an account receivable and if the Office of State Debt Collection does



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             493
     not have responsibility under Subsection [ 63A-8-201 ] 63A-3-502 (6), the district court shall
             494      collect the account receivable.
             495          (3) (a) In the juvenile court, money collected by the court from past-due accounts
             496      receivable may be used to offset system, administrative, legal, and other costs of collection.
             497          (b) The juvenile court shall allocate money collected above the cost of collection on a
             498      pro rata basis to the various revenue types that generated the accounts receivable.
             499          (4) The interest charge established by the Office of State Debt Collection under
             500      Subsection [ 63A-8-201 ] 63A-3-502 (4)(g)(iii) may not be assessed on an account receivable
             501      subject to the postjudgment interest rate established by Section 15-1-4 .
             502          Section 18. Section 78B-8-201 is amended to read:
             503           78B-8-201. Basis for punitive damages awards -- Section inapplicable to DUI
             504      cases or providing illegal controlled substances -- Division of award with state.
             505          (1) (a) Except as otherwise provided by statute, punitive damages may be awarded only
             506      if compensatory or general damages are awarded and it is established by clear and convincing
             507      evidence that the acts or omissions of the tortfeasor are the result of willful and malicious or
             508      intentionally fraudulent conduct, or conduct that manifests a knowing and reckless indifference
             509      toward, and a disregard of, the rights of others.
             510          (b) The limitations, standards of evidence, and standards of conduct of Subsection
             511      (1)(a) do not apply to any claim for punitive damages arising out of the tortfeasor's:
             512          (i) operation of a motor vehicle or motorboat while voluntarily intoxicated or under the
             513      influence of any drug or combination of alcohol and drugs as prohibited by Section 41-6a-502 ;
             514          (ii) causing death of another person by providing or administering an illegal controlled
             515      substance to the person under Section 78B-3-801 ; or
             516          (iii) providing an illegal controlled substance to any person in the chain of transfer that
             517      connects directly to a person who subsequently provided or administered the substance to a
             518      person whose death was caused in whole or in part by the substance.
             519          (c) The award of a penalty under Section 78B-3-108 regarding shoplifting is not
             520      subject to the prior award of compensatory or general damages under Subsection (1)(a) whether
             521      or not restitution has been paid to the merchant prior to or as a part of a civil action under
             522      Section 78B-3-108 .
             523          (2) Evidence of a party's wealth or financial condition shall be admissible only after a



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             524
     finding of liability for punitive damages has been made.
             525          (a) Discovery concerning a party's wealth or financial condition may only be allowed
             526      after the party seeking punitive damages has established a prima facie case on the record that
             527      an award of punitive damages is reasonably likely against the party about whom discovery is
             528      sought and, if disputed, the court is satisfied that the discovery is not sought for the purpose of
             529      harassment.
             530          (b) Subsection (2)(a) does not apply to any claim for punitive damages arising out of
             531      the tortfeasor's:
             532          (i) operation of a motor vehicle or motorboat while voluntarily intoxicated or under the
             533      influence of any drug or combination of alcohol and drugs as prohibited by Section 41-6a-502 ;
             534          (ii) causing death of another person or causing a person to be addicted by providing or
             535      administering an illegal controlled substance to the person under Section 78B-3-801 ; or
             536          (iii) providing an illegal controlled substance to any person in the chain of transfer that
             537      connects directly to a person who subsequently provided or administered the substance to a
             538      person whose death was caused in whole or in part by the substance.
             539          (3) (a) In any case where punitive damages are awarded, the court shall enter judgment
             540      as follows:
             541          (i) for the first $50,000, judgment shall be in favor of the injured party; and
             542          (ii) any amount in excess of $50,000 shall be divided equally between the state and the
             543      injured party, and judgment to each entered accordingly.
             544          (b) (i) The actual and bona fide attorney fees and costs incurred in obtaining and
             545      collecting the judgment for punitive damages shall be considered to have been incurred by the
             546      state and the injured party in proportion to the judgment entered in each party's behalf.
             547          (A) The state and injured party shall be responsible for each one's proportionate share
             548      only.
             549          (B) The state is liable to pay its proportionate share only to the extent it receives
             550      payment toward its judgment.
             551          (ii) If the court awards attorney fees and costs to the injured party as a direct result of
             552      the punitive damage award, the state shall have a corresponding credit in a proportionate
             553      amount based on the amounts of the party's respective punitive damage judgments. This credit
             554      may be applied as an offset against the amount of attorney fees and costs charged to the state



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             555
     for obtaining the punitive damage judgment.
             556          (c) The state shall have all rights due a judgment creditor to collect the full amounts of
             557      both punitive damage judgments until the judgments are fully satisfied.
             558          (i) Neither party is required to pursue collection.
             559          (ii) In pursuing collection, the state may exercise any of its collection rights under
             560      Section 63A-3-301 et seq., Section [ 63A-8-201 ] 63A-3-502 et seq., and any other statutory
             561      provisions. Any amounts collected on these judgments by either party shall be held in trust and
             562      distributed as set forth in Subsection (3)(e).
             563          (d) Unless all affected parties, including the state, expressly agree otherwise, collection
             564      on the punitive damages judgment shall be deferred until all other judgments have been fully
             565      paid. Any payment by or on behalf of any judgment debtor, whether voluntary, by execution,
             566      or otherwise, shall be distributed and applied in the following order:
             567          (i) to the judgment for compensatory damage and any applicable judgment for attorney
             568      fees and costs;
             569          (ii) to the initial $50,000 of the punitive damage judgment;
             570          (iii) to any judgment for attorney fees and costs awarded as a direct result of the
             571      punitive damages; and
             572          (iv) to the remaining judgments for punitive damages.
             573          (e) Any partial payments shall be distributed equally between the state and injured
             574      party.
             575          (f) After the payment of attorney fees and costs, all amounts paid on the state's
             576      judgment shall be remitted to the state treasurer to be deposited into the General Fund.





Legislative Review Note
    as of 2-9-11 3:45 PM


Office of Legislative Research and General Counsel


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