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H.B. 86
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5 AN ACT RELATING TO COLLECTING ON DISHONORED INSTRUMENTS; AMENDING
6 PROVISIONS RELATED TO DISHONORED CHECKS OR OTHER INSTRUMENTS; AND
7 MAKING TECHNICAL CORRECTIONS.
8 This act affects sections of Utah Code Annotated 1953 as follows:
9 AMENDS:
10 7-15-1, as last amended by Chapter 245, Laws of Utah 1997
11 7-15-2, as last amended by Chapter 245, Laws of Utah 1997
12 35A-4-305, as last amended by Chapter 13, Laws of Utah 1998
13 Be it enacted by the Legislature of the state of Utah:
14 Section 1. Section 7-15-1 is amended to read:
15 7-15-1. Definitions -- Civil liability of issuer -- Notice of action -- Collection costs.
16 (1) As used in this chapter:
17 (a) "Check" means a payment instrument on a depository institution including a:
18 (i) check;
19 (ii) draft;
20 (iii) order; or
21 (iv) other instrument.
22 [
23
24 otherwise, for the purpose of:
25 (i) obtaining from any person[
26 property, or other thing of value; or
27 (ii) paying for any service, wages, salary, or rent.
28 (2) (a) An issuer of a check is liable to the holder of the check[
29
30 [
31 [
32 [
33 [
34 made or drawn:
35 [
36 [
37 [
38 check[
39 (iii) (A) the check is issued in partial or complete fulfillment of a valid and legally binding
40 obligation; and
41 (B) the issuer stops payment on the check with the intent to:
42 (I) fraudulently defeat a possessory lien; or
43 (II) otherwise defraud the holder of the check.
44 (b) If an issuer of a check is liable under Subsection (2)(a), the issuer is liable for:
45 (i) the check amount; and
46 (ii) a service charge of $20.
47 [
48 dishonored may:
49 (i) give written or [
50
51 (ii) [
52 under Subsection (2)(b).
53 (b) Notwithstanding Subsection (2)[
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55 service charge [
56 (i) the holder redeposits the check[
57 (ii) that check[
58 (4) If the issuer does not pay the amount owed under Subsection (2)(b) within 15 calendar
59 days from the day on which the notice required under Subsection (5) is mailed, the issuer is liable
60 for:
61 (a) the amount owed under Subsection (2)(b); and
62 (b) collection costs not to exceed $20.
63 [
64 (i) charging collection costs under Subsection (4) in addition to the amount owed under
65 Subsection (2)(b); or
66 (ii) filing an action based upon this section[
67
68 (b) The written notice required under Subsection (5)(a) shall [
69
70
71 (i) if the amount owed under Subsection (2)(b) is not paid within 15 calendar days from
72 the day on which the notice is mailed, the issuer is liable for:
73 (A) the amount owed under Subsection (2)(b); and
74 (B) collection costs under Subsection (4); and
75 (ii) the holder may file civil action[
76 the holder the amount owed under Subsection (4) within 30 calendar days from the [
77 which the notice [
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79 (6) If the issuer has not paid the holder the amounts owed under Subsection (4) within 30
80 calendar days from the day on which the notice required by Subsection (5) is mailed, the holder
81 may offer to not file civil action under this section if the issuer pays the holder:
82 (a) an amount that:
83 (i) is equal to the greater of:
84 (A) $100; or
85 (B) triple the check amount; and
86 (ii) does not exceed the check amount plus $500; and
87 (b) if the holder retains an attorney to recover on the dishonored check, reasonable
88 attorney's fees not to exceed the amounts set forth in Utah Code of Judicial Administration, Rule
89 4-505.01.
90 [
91 the amounts owed under Subsection (4) within 30 calendar days from the day on which the notice
92 required by Subsection (5) is mailed.
93 (b) In a civil action, the [
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95 [
96 [
97 [
98 and
99 (iv) damages:
100 (A) equal to the greater of:
101 (I) $100; or
102 (II) triple the check amount; and
103 (B) not to exceed the check amount plus $750.
104 [
105
106
107 (8) This section may not be construed to prohibit the holder of the check from seeking
108 relief under any other applicable statute or cause of action.
109 Section 2. Section 7-15-2 is amended to read:
110 7-15-2. Notice -- Form.
111 (1) (a) "Notice" means notice given to the [
112 of a check[
113 (b) [
114 (i) first class; and
115 (ii) postage prepaid.
116 (c) Notwithstanding Subsection (1)(b), written notice is conclusively presumed to have
117 been given when the notice is:
118 (i) properly deposited in the United States [
119 (ii) postage prepaid[
120 (iii) certified or registered mail[
121 (iv) return receipt requested[
122 (v) addressed to the signer at the signer's:
123 (A) address as it appears on the check[
124
125 (B) last-known address.
126 (2) Written notice [
127 the following form:
128 Date: ____
129 To: _____
130 You are hereby notified that the check(s) described below issued by you has (have) been
131 returned to us unpaid:
132 [
133 [
134 Originating institution: ____
135 Amount: ____
136 Reason for dishonor (marked on [
137 [
138 for this check together with a service charge of $20, which must be paid to the undersigned [
139
140 If you do not pay the check amount and the $20 service charge within 15 calendar days
141 from the day on which this notice was mailed, you are required to pay within 30 calendar days
142 from the day on which this notice is mailed:
143 (1) the check amount;
144 (2) the $20 service charge; and
145 (3) collection costs not to exceed $20.
146 If you do not pay the check amount, the $20 service charge, and the collection costs within
147 30 calendar days from the day on which this notice is mailed, in accordance with Section 7-15-1 ,
148 Utah Code Annotated, [
149 (1) the check amount [
150 (2) interest[
151 (3) court costs[
152 (4) attorneys' fees[
153 (5) actual costs of collection as provided by law; and
154 (6) damages in an amount equal to the greater of $100 or triple the check amount, except
155 that damages recovered under this Subsection (6) may not exceed the check amount by more than
156 $750.
157 In addition, the criminal code provides in Section 76-6-505 , Utah Code Annotated, that any
158 person who issues or passes a check for the payment of money, for the purpose of obtaining from
159 any person, firm, partnership, or corporation, any money, property, or other thing of value or
160 paying for any services, wages, salary, labor, or rent, knowing it will not be paid by the drawee and
161 payment is refused by the drawee, is guilty of issuing a bad check.
162 The civil action referred to in this notice does not preclude the right to prosecute under the
163 criminal code of the state of Utah.
164 (Signed) _____________________________________________________________
165 Name of Holder: _______________________________________________________
166 Address of Holder: _____________________________________________________
167 Telephone Number: ____________________________________________________
168 Section 3. Section 35A-4-305 is amended to read:
169 35A-4-305. Collection of contributions -- Unpaid contributions to bear interest.
170 (1) (a) Contributions unpaid on the date on which they are due and payable, as prescribed
171 by the division, shall bear interest at the rate of 1% per month from and after that date until
172 payment plus accrued interest is received by the division.
173 (b) (i) Contribution reports not made and filed by the date on which they are due as
174 prescribed by the division shall be subject to a penalty to be assessed and collected in the same
175 manner as contributions due under this section equal to 5% of the contribution due if the failure
176 to file on time was not more than 15 days, with an additional 5% for each additional 15 days or
177 fraction thereof during which the failure continued, but not to exceed 25% in the aggregate and not
178 less than $25 with respect to each reporting period.
179 (ii) If a report is filed after such time and it is shown to the satisfaction of the division or
180 its authorized representative that the failure to file was due to a reasonable cause and not to willful
181 neglect, no addition shall be made to the contribution.
182 (c) (i) If contributions are unpaid after ten days from the date of the mailing or personal
183 delivery by the division or its authorized representative, of a written demand for payment, there
184 shall attach to the contribution, to be assessed and collected in the same manner as contributions
185 due under this section, a penalty equal to 5% of the contribution due.
186 (ii) A penalty may not attach if within ten days after the mailing or personal delivery,
187 arrangements for payment have been made with the division, or its authorized representative, and
188 payment is made in accordance with those arrangements.
189 (d) The division shall assess as a penalty a service charge, in addition to any other penalties
190 that may apply, in an amount not to exceed the [
191 [
192 (i) any amount due the division for contributions, interest, other penalties or benefit
193 overpayments is paid by check, draft, order, or other instrument; and
194 (ii) the instrument is dishonored or not paid by the institution against which it is drawn.
195 (e) Except for benefit overpayments under Subsection 35A-4-405 (5), benefit overpayments,
196 contributions, interest, penalties, and assessed costs, uncollected three years after they become due,
197 may be charged as uncollectable and removed from the records of the division if:
198 (i) no assets belonging to the liable person and subject to attachment can be found; and
199 (ii) in the opinion of the division there is no likelihood of collection at a future date.
200 (f) Interest and penalties collected in accordance with this section shall be paid into the
201 Special Administrative Expense Fund.
202 (g) Action required for the collection of sums due under this chapter is subject to the
203 applicable limitations of actions under Title 78, Chapter 12, Limitation of Actions.
204 (2) (a) If an employer fails to file a report when prescribed by the division for the purpose
205 of determining the amount of the employer's contribution due under this chapter, or if the report
206 when filed is incorrect or insufficient or is not satisfactory to the division, the division may
207 determine the amount of wages paid for employment during the period or periods with respect to
208 which the reports were or should have been made and the amount of contribution due from the
209 employer on the basis of such information as it may be able to obtain.
210 (b) The division shall give written notice of the determination to the employer.
211 (c) The determination is considered correct unless:
212 (i) the employer, within ten days after mailing or personal delivery of notice of the
213 determination, applies to the division for a review of the determination as provided in Section
214 35A-4-508 ; or
215 (ii) unless the division or its authorized representative of its own motion reviews the
216 determination.
217 (d) The amount of contribution so determined shall be subject to penalties and interest as
218 provided in Subsection (1).
219 (3) (a) If, after due notice, any employer defaults in any payment of contributions, interest,
220 or penalties on the contributions, or any claimant defaults in any repayment of benefit
221 overpayments and penalties on the overpayments, the amount due shall be collectible by civil
222 action in the name of the division, and the employer adjudged in default shall pay the costs of the
223 action.
224 (b) Civil actions brought under this section to collect contributions, interest or penalties
225 from an employer, or benefit overpayments and penalties from a claimant shall be:
226 (i) heard by the court at the earliest possible date; and
227 (ii) entitled to preference upon the calendar of the court over all other civil actions except:
228 (A) petitions for judicial review under this chapter; and
229 (B) cases arising under the workers' compensation law of this state.
230 (c) (i) To collect contributions, interest or penalties, or benefit overpayments and penalties
231 due from employers or claimants located outside Utah the division may employ private collectors
232 providing debt collection services outside Utah. Accounts may be placed with private collectors
233 only after the employer or claimant has been given a final notice that the division intends to place
234 the account with a private collector for further collection action. The notice shall advise the
235 employer or claimant of the employer's or claimant's rights under this chapter and the rules
236 applicable of the department.
237 (ii) A private collector may receive as compensation up to, but no more than, 25% of the
238 lesser of the amount collected or the amount due, plus the costs and fees of any civil action or
239 post-judgment remedy instituted by the private collector with the approval of the division. The
240 employer or claimant shall be liable to pay the compensation of the collector, costs, and fees in
241 addition to the original amount due.
242 (iii) A private collector is subject to the federal Fair Debt Collection Practices Act, 15
243 U.S.C. Sec. 1692 et seq.
244 (iv) A civil action may not be maintained by any private collector without specific prior
245 written approval of the division. When division approval is given for civil action against an
246 employer or claimant, the division may cooperate with the private collector to the extent necessary
247 to effect the civil action.
248 (d) (i) Notwithstanding Section 35A-4-312 , the division may disclose the contribution,
249 interest, penalties or benefit overpayments and penalties, costs due, the name of the employer or
250 claimant, and the employer's or claimant's address and telephone number when any collection
251 matter is referred to a private collector under Subsection (3)(c).
252 (ii) A private collector is subject to the confidentiality requirements and penalty provisions
253 provided in Section 35A-4-312 and Subsection 35A-4-104 (4), except to the extent disclosure is
254 necessary in any civil action to enforce collection of the amounts due.
255 (e) An action taken by the division under this section may not be construed to be an
256 election to forego other collection procedures by the division.
257 (4) (a) In the event of any distribution of an employer's assets under an order of any court
258 under the laws of Utah, including any receivership, assignment for benefits of creditors,
259 adjudicated insolvency, composition, or similar proceedings, contributions then or thereafter due
260 shall be paid in full prior to all other claims except taxes and claims for wages of not more than
261 $400 to each claimant, earned within five months of the commencement of the proceeding.
262 (b) If an employer commences a proceeding in the Federal Bankruptcy Court under any
263 chapter of the Bankruptcy Reform Act of 1978, 11 U.S.C. 101 et seq., as amended, contributions,
264 interest, and penalties then or thereafter due shall be entitled to the priority provided for taxes,
265 interest, and penalties in the Bankruptcy Reform Act of 1978.
266 (5) (a) In addition and as an alternative to any other remedy provided by this chapter and
267 provided that no appeal or other proceeding for review provided by this chapter is then pending
268 and the time for taking it has expired, the division may issue a warrant in duplicate, under its
269 official seal, directed to the sheriff of any county of the state, commanding the sheriff to levy upon
270 and sell the real and personal property of a delinquent employer or claimant found within the
271 sheriff's county for the payment of the contributions due thereon, with the added penalties, interest,
272 or benefit overpayment and penalties, and costs, and to return the warrant to the division and pay
273 into the fund the money collected by virtue of the warrant by a time to be therein specified, not
274 more than 60 days from the date of the warrant.
275 (b) Immediately upon receipt of the warrant in duplicate, the sheriff shall file the duplicate
276 with the clerk of the district court in the sheriff's county. The clerk shall enter in the judgment
277 docket, in the column for judgment debtors, the name of the delinquent employer or claimant
278 mentioned in the warrant, and in appropriate columns the amount of the contribution, penalties,
279 interest, or benefit overpayment and penalties, and costs, for which the warrant is issued and the
280 date when the duplicate is filed.
281 (c) The amount of the warrant so docketed shall:
282 (i) have the force and effect of an execution against all personal property of the delinquent
283 employer; and
284 (ii) become a lien upon the real property of the delinquent employer or claimant in the
285 same manner and to the same extent as a judgment duly rendered by any district court and
286 docketed in the office of the clerk.
287 (d) After docketing, the sheriff shall:
288 (i) proceed in the same manner as is prescribed by law with respect to execution issued
289 against property upon judgments of a court of record; and
290 (ii) be entitled to the same fees for the sheriff's services in executing the warrant, to be
291 collected in the same manner.
292 (6) (a) Contributions imposed by this chapter are a lien upon the property of any employer
293 liable for the contribution required to be collected under this section who shall sell out the
294 employer's business or stock of goods or shall quit business, if the employer fails to make a final
295 report and payment on the date subsequent to the date of selling or quitting business on which they
296 are due and payable as prescribed by rule.
297 (b) An employer's successor, successors, or assigns, if any, shall be required to withhold
298 sufficient of the purchase money to cover the amount of the contributions and interest or penalties
299 due and payable until such time as the former owner shall produce a receipt from the division
300 showing that they have been paid or a certificate stating that no amount is due. If the purchaser
301 of a business or stock of goods fails to withhold sufficient purchase money, the purchaser shall be
302 personally liable for the payment of the amount of the contributions required to be paid by the
303 former owner, interest and penalties accrued and unpaid by the former owner, owners, or assignors.
304 (7) (a) If any employer is delinquent in the payment of any contribution, the division may
305 give notice of the amount of the delinquency by registered mail to all persons having in their
306 possession or under their control, any credits or other personal property belonging to the employer,
307 or owing any debts to the employer at the time of the receipt by them of the notice.
308 (b) Any persons notified under Subsection (7)(a) shall neither transfer nor make any other
309 disposition of the credits, other personal property, or debts until:
310 (i) the division has consented to a transfer or disposition; or
311 (ii) 20 days after the receipt of the notice.
312 (c) All persons notified under Subsection (7)(a) shall within five days after receipt of the
313 notice, advise the division of credits, other personal property, or other debts in their possession,
314 under their control or owing by them, as the case may be.
315 (8) (a) Each employer shall furnish the division necessary information for the proper
316 administration of this chapter and shall include wage information for each employee, for each
317 calendar quarter beginning October 1, 1984. The information shall be furnished at a time, in the
318 form, and to those individuals as the department may by rule require.
319 (b) Each employer shall furnish each individual worker who is separated that information
320 as the department may by rule require, and shall furnish within 48 hours of the receipt of a request
321 from the division a report of the earnings of any individual during the individual's base-period.
322 The report shall be on a form prescribed by the division and contain all information prescribed by
323 the division.
324 (c) For each failure by an employer to conform to this Subsection (8) the division shall,
325 unless good cause is shown to the satisfaction of the division for the failure, assess a $50 penalty
326 to be collected in the same manner as contributions due under this chapter.
327 (9) If any person liable to pay any contribution or benefit overpayment imposed by this
328 chapter neglects or refuses to pay the same after demand, the amount, including any interest,
329 additional amount, addition to contributions, or assessable penalty, together with any additional
330 accruable costs, shall be a lien in favor of the division upon all property and rights to property,
331 whether real or personal belonging to the person.
332 (10) (a) The lien imposed by Subsection (9) arises at the time the assessment, as defined
333 in the department rules, is made and continues until the liability for the amount so assessed, or a
334 judgment against the taxpayer arising out of the liability, is satisfied.
335 (b) The lien imposed by Subsection (9) is not valid as against any purchaser, holder of a
336 security interest, mechanics lien holder, or judgment lien creditor until a warrant which meets the
337 requirements of Subsection (5) has been filed with the clerk of the district court. For the purposes
338 of Subsection (10)(b):
339 (i) "Judgment lien creditor" means a person who obtains a valid judgment of a court of
340 record for recovery of specific property or a sum certain of money, and who in the case of a
341 recovery of money, has a perfected lien under the judgment on the property involved. A judgment
342 lien does not include inchoate liens such as attachment or garnishment liens until they ripen into
343 a judgment. A judgment lien does not include the determination or assessment of a quasi-judicial
344 authority, such as a state or federal taxing authority.
345 (ii) "Mechanics lien holder" means any person who has a lien on real property, or on the
346 proceeds of a contract relating to real property, for services, labor, or materials furnished in
347 connection with the construction or improvement of the property. A person has a lien on the
348 earliest date the lien becomes valid against subsequent purchasers without actual notice, but not
349 before the person begins to furnish the services, labor, or materials.
350 (iii) "Person" means:
351 (A) an individual;
352 (B) a trust;
353 (C) an estate;
354 (D) a partnership;
355 (E) an association;
356 (F) a company;
357 (G) a limited liability company;
358 (H) a limited liability partnership; or
359 (I) a corporation.
360 (iv) "Purchaser" means a person who, for adequate and full consideration in money or
361 money's worth, acquires an interest, other than a lien or security interest, in property which is valid
362 under state law against subsequent purchasers without actual notice.
363 (v) "Security interest" means any interest in property acquired by contract for the purpose
364 of securing payment or performance of an obligation or indemnifying against loss or liability. A
365 security interest exists at any time:
366 (A) the property is in existence and the interest has become protected under the law against
367 a subsequent judgment lien arising out of an unsecured obligation; and
368 (B) to the extent that, at that time, the holder has parted with money or money's worth.
Legislative Review Note
as of 1-21-99 12:02 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.