First Substitute H.B. 31

Representative Jeff Alexander proposes the following substitute bill:

1 WORKFORCE SERVICES OVERPAYMENT
2 AMENDMENTS
3 2003 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Jeff Alexander
6 This act modifies provisions related to public assistance overpayments by transferring
7 the recovery of overpayments responsibility from the Office of Recovery Services to the
8 Department of Workforce Services. The act provides for an appeal from an initial
9 department determination of overpayment. The act makes certain technical changes and
10 provides a repealer. The act has a July 1, 2003 effective date.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
13 26-18-8, as last amended by Chapter 174, Laws of Utah 1997
14 35A-3-111, as last amended by Chapter 58, Laws of Utah 2002
15 62A-11-104, as last amended by Chapter 147, Laws of Utah 2002
16 76-8-1201, as last amended by Chapter 174, Laws of Utah 1997
17 76-8-1205, as last amended by Chapters 174 and 375, Laws of Utah 1997
18 78-27-50, as last amended by Chapter 297, Laws of Utah 2000
19 RENUMBERS AND AMENDS:
20 35A-3-601, (Renumbered from 62A-11-201, as enacted by Chapter 1, Laws of Utah
21 1988)
22 35A-3-602, (Renumbered from 62A-11-202, as last amended by Chapter 174, Laws of
23 Utah 1997)
24 35A-3-603, (Renumbered from 35A-1-502, as last amended by Chapter 132, Laws of
25 Utah 1999)

26 35A-3-604, (Renumbered from 62A-11-203, as last amended by Chapter 174, Laws of
27 Utah 1997)
28 35A-3-605, (Renumbered from 62A-11-204.1, as last amended by Chapter 174, Laws
29 of Utah 1997)
30 35A-3-606, (Renumbered from 62A-11-207, as last amended by Chapter 198, Laws of
31 Utah 1996)
32 35A-3-607, (Renumbered from 62A-11-208, as enacted by Chapter 1, Laws of Utah
33 1988)
34 35A-3-608, (Renumbered from 62A-11-209, as last amended by Chapter 174, Laws of
35 Utah 1997)
36 35A-3-609, (Renumbered from 62A-11-210, as enacted by Chapter 1, Laws of Utah
37 1988)
38 35A-3-610, (Renumbered from 62A-11-211, as enacted by Chapter 1, Laws of Utah
39 1988)
40 REPEALS:
41 35A-1-107, as last amended by Chapter 161, Laws of Utah 2000
42 62A-11-110, as last amended by Chapter 174, Laws of Utah 1997
43 Be it enacted by the Legislature of the state of Utah:
44 Section 1. Section 26-18-8 is amended to read:
45 26-18-8. Enforcement of public assistance statutes.
46 (1) The department shall enforce or contract for the enforcement of Sections
47 [ 35A-1-502 ], 35A-1-503 , 35A-3-108 , 35A-3-110 , 35A-3-111 , [and] 35A-3-112 , and
48 35A-3-603 insofar as these sections pertain to benefits conferred or administered by the
49 division under this chapter.
50 (2) The department may contract for services covered in [Title 62A, Chapter 11, Part 1,
51 Office of Recovery Services,] Section 35A-3-111 insofar as that [chapter] section pertains to
52 benefits conferred or administered by the division under this chapter.
53 Section 2. Section 35A-3-111 is amended to read:
54 35A-3-111. Collection of overpayments.
55 (1) The [division, through the Office of Recovery Services as provided in Section
56 35A-1-107 ,] department is responsible for [collecting all funds due or that become due to the

57 state under Section 62A-11-110 ] the recovery of overpayments required in Section 35A-3-603 .
58 (2) Excess property liens required in the various programs not transferred to the federal
59 government shall remain a condition of eligibility in public assistance programs.
60 (3) A client can appeal an initial department determination that there has been an
61 overpayment under rules made by the department in accordance with Title 63, Chapter 46a,
62 Utah Administrative Rulemaking Act.
63 Section 3. Section 35A-3-601 , which is renumbered from Section 62A-11-201 is
64 renumbered and amended to read:
65 Part 6. Administrative Determination of Overpayment Act
66 [62A-11-201]. 35A-3-601. Title.
67 This part shall be known as the "Administrative Determination of Overpayments Act."
68 Section 4. Section 35A-3-602 , which is renumbered from Section 62A-11-202 is
69 renumbered and amended to read:
70 [62A-11-202]. 35A-3-602. Definitions.
71 As used in this part:
72 (1) "Adjudicative proceeding" means an action or proceeding of the [office]
73 department described in Section 63-46b-1 .
74 (2) "Administrative order" means an order issued by the [office or the] department
75 involving an overpayment of public assistance.
76 (3) "Court order" means a judgment or order of any court of this state, another state, or
77 the federal government that involves an overpayment of public assistance.
78 [(4) "Director" means the director of the Office of Recovery Services.]
79 (4) "Department" means the Department of Workforce Services.
80 (5) "Notice of agency action" means the notice required to commence an adjudicative
81 proceeding as described in Section 63-46b-3 .
82 (6) "Obligor" means an individual who is liable to the state under Section [ 35A-1-502 ]
83 35A-3-603 and applicable federal statutes and regulations, or an individual against whom an
84 administrative or judicial order determining overpayment has been obtained.
85 [(7) "Office" means the Office of Recovery Services.]
86 [(8)] (7) (a) "Overpayment" means [the same as that term is defined in Section
87 35A-1-502 .] money, public assistance, or any other thing of value provided under a state or

88 federally funded benefit program to the extent that the person receiving the thing of value is not
89 entitled to receive it or is not entitled to receive it at the level provided.
90 (b) It includes money paid to a provider under this title in connection with public
91 assistance or any other publicly funded assistance program to the extent that the provider
92 receives payment:
93 (i) for goods or services not provided; or
94 (ii) in excess of the amount to which the provider is entitled.
95 Section 5. Section 35A-3-603 , which is renumbered from Section 35A-1-502 is
96 renumbered and amended to read:
97 [35A-1-502]. 35A-3-603. Civil liability for overpayment.
98 (1) As used in this section[:(a) "Intentionally], "intentionally, knowingly, and
99 recklessly" mean the same as those terms are defined in Section 76-2-103 .
100 [(b) (i) "Overpayment" means money, public assistance, or any other thing of value
101 provided under a state or federally funded benefit program to the extent that the person
102 receiving the thing of value is not entitled to receive it or is not entitled to receive it at the level
103 provided.]
104 [(ii) "Overpayment" includes money paid to a provider under this title in connection
105 with public assistance; Title 62A, Chapter 11, Part 3, Public Support of Children Act; Title 78,
106 Chapter 45, Uniform Civil Liability for Support Act; Title 78, Chapter 45a, Uniform Act on
107 Paternity; or any other publicly funded assistance benefit program to the extent that the
108 provider receives payment:]
109 [(A) for goods or services not provided; or]
110 [(B) in excess of the amount to which the provider is entitled.]
111 [(c) "Provider" means the same as that term is defined in Section 62A-11-103 .]
112 (2) Each provider, client, or other person who receives an overpayment shall,
113 regardless of fault, return the overpayment or repay its value to the department immediately:
114 (a) upon receiving written notice of the overpayment from the department; or
115 (b) upon discovering the overpayment, if that occurs prior to receiving notice.
116 (3) (a) Except as provided under Subsection (3)(b), interest on the unreturned balance
117 of the overpayment shall accrue at the rate of [10% a year until an administrative or judicial
118 judgment is entered] 1% a month.

119 (b) If the overpayment was not the fault of the person receiving it, that person is not
120 liable for interest on the unreturned balance.
121 (c) In accordance with federal law and rules [adopted] made by the department, an
122 overpayment may be recovered through deductions from cash assistance, general assistance,
123 food stamps, [or] other cash-related assistance provided to a client under [Chapter 3,
124 Employment Support Act] this chapter, or any other means provided by federal law.
125 (4) Each person who knowingly assists a client, provider, or other person in obtaining
126 an overpayment is jointly and severally liable for the overpayment.
127 (5) (a) In proving civil liability for overpayment under this section or [Subsection
128 62A-11-204.1 (2)(a)(i)] Section 35A-3-605 when fault is alleged, the department shall prove by
129 clear and convincing evidence that the overpayment was obtained intentionally, knowingly,
130 recklessly, by false statement, misrepresentation, impersonation, or other fraudulent means,
131 such as by committing any of the acts or omissions described in Sections 76-8-1203 through
132 76-8-1205 .
133 (b) If fault is established under Subsection (5)(a), Section [ 62A-11-204.1 ] 35A-3-605 ,
134 or Title 76, Chapter 8, Part 12, Public Assistance Fraud, any person who obtained or helped
135 another obtain an overpayment shall be subject to:
136 (i) a civil penalty of 10% of the amount of the overpayment; and
137 (ii) disqualification from receiving cash assistance from the Family Employment
138 Program and the general assistance program, if the overpayment was obtained from either of
139 those programs, for 12 months for the first offense, 24 months for the second offense, and
140 permanently for the third offense, or as otherwise provided by federal law; or
141 (iii) disqualification from the food stamp program, if that is the program from which
142 the overpayment was received, for 12 months for the first offense, 24 months for the second
143 offense, and permanently for the third offense, or as otherwise provided by federal law.
144 (6) If an action is filed, the department may recover, in addition to the principal sum
145 plus interest, reasonable attorneys' fees and costs unless the repayment obligation arose from an
146 administrative error by the department.
147 (7) If a court finds that funds or benefits were secured, in whole or part, by fraud by the
148 person from whom repayment is sought, the court shall assess an additional sum as considered
149 appropriate as punitive damages up to the amount of repayment being sought.

150 (8) Criminal actions for public assistance fraud are governed by Title 76, Chapter 8,
151 Part 12, Public Assistance Fraud.
152 (9) Jurisdiction over benefits is continuous.
153 (10) This chapter does not preclude the Department of Health from carrying out its
154 responsibilities under Title 26, Chapter 19, Medical Benefits Recovery Act, and Chapter 20,
155 False Claims Act.
156 Section 6. Section 35A-3-604 , which is renumbered from Section 62A-11-203 is
157 renumbered and amended to read:
158 [62A-11-203]. 35A-3-604. Obligor presumed to have notice of department's
159 rights -- Authority to administer oaths, issue subpoenas, and compel witnesses and
160 production of documents -- Recovery of attorneys' fees, costs, and interest -- Rulemaking
161 authority -- Administrative procedures.
162 (1) An obligor is presumed to have received notice of the rights of the [office]
163 department under this part upon engaging in this state in any of the acts described in
164 Subsections 35A-1-502 (4) and (5) or Section 76-8-1203 , 76-8-1204 , or 76-8-1205 .
165 (2) For the purposes of this part, the [director or his authorized representative]
166 department may administer oaths and certify official acts, issue subpoenas, and compel
167 witnesses and the production of business records, documents, and evidence.
168 (3) (a) Except when an overpayment results from administrative error, the [office]
169 department may recover from the obligor:
170 (i) reasonable attorneys' fees;
171 (ii) costs incurred in pursuing administrative remedies under this part; and
172 (iii) interest at the rate of 1% a month accruing from the date an administrative or
173 judicial order is issued determining the amount due under this part.
174 (b) The [office] department may recover interest, attorneys' fees, and costs, if notice of
175 the assessment has been included in a notice of agency action issued in conformity with Title
176 63, Chapter 46b, Administrative Procedures Act.
177 (4) [The office] In accordance with Title 63, Chapter 46a, Utah Administrative
178 Rulemaking Act, the department may [adopt] make, amend, and enforce rules to carry out the
179 provisions of this part.
180 (5) Service of all notices and orders under this part shall comply with Title 63, Chapter

181 46b, Administrative Procedures Act, the Utah Rules of Civil Procedure, or rules [adopted]
182 made by the [office] department that meet standards required by due process [and that do not
183 conflict with the requirements of the Administrative Procedures Act].
184 Section 7. Section 35A-3-605 , which is renumbered from Section 62A-11-204.1 is
185 renumbered and amended to read:
186 [62A-11-204.1]. 35A-3-605. Issuance or modification of administrative order
187 -- Voluntary acknowledgment of overpayment -- Court orders supersede administrative
188 orders -- Notification requirement.
189 (1) As used in Subsection (2)(a)(i), "intentional program violation" means obtaining an
190 "overpayment" as defined in Section [ 35A-1-502 ] 35A-3-602 .
191 (2) (a) Through an adjudicative proceeding, the [office] department may issue or
192 modify an administrative order that:
193 (i) determines whether an overpayment was made, the amount of the overpayment, and
194 whether benefits were obtained by an intentional program violation;
195 (ii) reduces the overpayment to an administrative judgment; or
196 (iii) renews an administrative judgment.
197 (b) The [office] department shall commence an adjudicative proceeding to renew a
198 judgment by serving notice of agency action on the obligor before the judgment is barred by the
199 applicable statute of limitations.
200 (3) The [office] department may accept voluntary acknowledgment of an overpayment
201 obligation and enter into stipulated agreements to issue orders and judgments.
202 (4) (a) A provision of an administrative order is enforceable against an obligor, unless
203 it is in direct conflict with or is superseded by a provision of a court order.
204 (b) To the extent of any conflict, the court order governs.
205 (5) After being properly served with a notice of agency action under this part, an
206 obligor shall notify the [office] department of any subsequent change of address or
207 employment.
208 Section 8. Section 35A-3-606 , which is renumbered from Section 62A-11-207 is
209 renumbered and amended to read:
210 [62A-11-207]. 35A-3-606. Docketing abstract of final administrative order
211 -- Real property and personal property liens -- Effect of order -- Execution.

212 (1) (a) An abstract of a final administrative order may be docketed in the district court
213 of any county in the state.
214 (b) The time of receipt of the abstract shall be noted by the clerk on the abstract and
215 entered in the docket.
216 (2) From the time the abstract is docketed in the judgment docket of a district court,
217 any administrative judgment included in the order abstracted constitutes a lien upon the real
218 property of the obligor situated in that county for a period of eight years from the date the order
219 is entered unless previously satisfied.
220 (3) The final administrative order fixing the liability of the obligor shall have the same
221 effect as any other money judgment entered in a district court.
222 (4) Attachment, garnishment, or execution on a judgment included in or accruing under
223 an administrative order filed and docketed [in accordance with] under this section shall be in
224 the same manner and with the same effect as an attachment, garnishment, or execution on a
225 judgment of a district court, except that a writ of garnishment on earnings shall continue to
226 operate and require the garnishee to withhold the nonexempt portion of the earnings at each
227 succeeding earnings disbursement interval until released in writing by the [office] department
228 or by court order.
229 (5) The lien and enforcement remedies provided by this section are in addition to any
230 other lien or remedy provided by law.
231 Section 9. Section 35A-3-607 , which is renumbered from Section 62A-11-208 is
232 renumbered and amended to read:
233 [62A-11-208]. 35A-3-607. Property subject to execution or lien --
234 Restriction on transfer or conveyance -- Release of excess amount above liability to
235 obligor.
236 (1) After receiving notice that an abstract has been docketed and a lien established
237 under this part, a person in possession of any property which may be subject to execution or
238 lien may not pay over, release, sell, transfer, encumber, or convey that property to any person
239 other than the [office] department, unless the person in possession first receives a release or
240 waiver from the [office] department, or a court order releasing the lien or stating that the
241 liability does not exist or has been satisfied.
242 (2) If a person has in his possession earnings, deposits, accounts, or balances owed to

243 the obligor in excess of $100 over the amount of the liability claimed by the [office]
244 department, that person may, without liability under this part, release the excess to the obligor.
245 Section 10. Section 35A-3-608 , which is renumbered from Section 62A-11-209 is
246 renumbered and amended to read:
247 [62A-11-209]. 35A-3-608. Schedule of payments to be paid upon liability --
248 Establishment -- Cancellation.
249 (1) At any time, the [office] department may[,]:
250 (a) consistent with the income, earning capacity, and resources of the obligor, set or
251 reset the level and schedule of payments to be paid upon the liability[,]; and [may,]
252 (b) at any time, cancel the schedule of payments and demand immediate payment in
253 full.
254 (2) The [office] department may recover an overpayment through deductions from cash
255 assistance or food stamps pursuant to Section 35A-1-502 .
256 Section 11. Section 35A-3-609 , which is renumbered from Section 62A-11-210 is
257 renumbered and amended to read:
258 [62A-11-210]. 35A-3-609. Statute of limitations -- Enforcement of lien or
259 order.
260 No action for the enforcement of an order or lien issued under this part may be
261 maintained unless it is commenced within eight years after the date of the order.
262 Section 12. Section 35A-3-610 , which is renumbered from Section 62A-11-211 is
263 renumbered and amended to read:
264 [62A-11-211]. 35A-3-610. Legal representation at hearings.
265 (1) A party may be represented by legal counsel at any hearing held under this part.
266 (2) At the request of the [office] department it is the duty of the attorney general or the
267 county attorney to represent the department in any proceeding commenced under this part.
268 Section 13. Section 62A-11-104 is amended to read:
269 62A-11-104. Duties of office.
270 The office has the following duties:
271 (1) to provide child support services if:
272 (a) the office has received an application for child support services;
273 (b) the state has provided public assistance; or

274 (c) a child lives out of the home in the protective custody, temporary custody, or
275 custody or care of the state or another party for at least 30 days;
276 (2) to carry out the obligations of the department contained in this chapter and in Title
277 78, Chapters 45, Uniform Civil Liability for Support Act, Chapter 45a, Uniform Act on
278 Paternity, and Chapter 45f, Uniform Interstate Family Support Act, for the purpose of
279 collecting child support;
280 [(3) to recover public assistance provided to persons for which they were ineligible;]
281 [(4)] (3) to collect money due the department which could act to offset expenditures by
282 the state;
283 [(5)] (4) to cooperate with the federal government in programs designed to recover
284 health and social service funds;
285 [(6)] (5) to collect civil or criminal assessments, fines, fees, amounts awarded as
286 restitution, and reimbursable expenses owed to the state or any of its political subdivisions, if
287 the office has contracted to provide collection services;
288 [(7)] (6) to implement income withholding for collection of child support in
289 accordance with Part 4 of this chapter;
290 [(8)] (7) to enter into agreements with financial institutions doing business in the state
291 to develop and operate, in coordination with such financial institutions, a data match system in
292 the manner provided for in Section 62A-11-304.5 ;
293 [(9)] (8) to establish and maintain the state case registry in the manner required by the
294 Social Security Act, 42 U.S.C. Sec. 654a, which shall include a record in each case of:
295 (a) the amount of monthly or other periodic support owed under the order, and other
296 amounts, including arrearages, interest, late payment penalties, or fees, due or overdue under
297 the order;
298 (b) any amount described in Subsection [(9)] (8)(a) that has been collected;
299 (c) the distribution of collected amounts;
300 (d) the birth date of any child for whom the order requires the provision of support; and
301 (e) the amount of any lien imposed with respect to the order pursuant to this part;
302 [(10)] (9) to contract with the Department of Workforce Services to establish and
303 maintain the new hire registry created under Section 35A-7-103 ;
304 [(11)] (10) to determine whether an individual who has applied for or is receiving cash

305 assistance or Medicaid is cooperating in good faith with the office as required by Section
306 62A-11-307.2 ;
307 [(12)] (11) to finance any costs incurred from collections, fees, General Fund
308 appropriation, contracts, and federal financial participation; and
309 [(13)] (12) to provide notice to a noncustodial parent in accordance with Section
310 62A-11-304.4 of the opportunity to contest the accuracy of allegations by a custodial parent of
311 nonpayment of past-due child support, prior to taking action against a noncustodial parent to
312 collect the alleged past-due support.
313 Section 14. Section 76-8-1201 is amended to read:
314 76-8-1201. Definitions.
315 As used in this part:
316 (1) "Client" means a person who receives or has received public assistance.
317 (2) "Overpayment" means the same as that term is defined in Section [ 35A-1-502 ]
318 35A-3-602 .
319 (3) "Provider" means the same as that term is defined in Section 62A-11-103 .
320 (4) "Public assistance" means the same as that term is defined in Section 35A-1-102 .
321 Section 15. Section 76-8-1205 is amended to read:
322 76-8-1205. Public assistance fraud defined.
323 Each of the following persons, who intentionally, knowingly, or recklessly commits any
324 of the following acts, is guilty of public assistance fraud:
325 (1) any person who uses, transfers, acquires, traffics in, falsifies, or possesses any food
326 stamp, food stamp identification card, certificate of eligibility for medical services, Medicaid
327 identification card, fund transfer instrument, payment instrument, or public assistance warrant
328 in a manner not allowed by law;
329 (2) any person who fraudulently misappropriates any funds exchanged for food stamps,
330 any food stamp, food stamp identification card, certificate of eligibility for medical services,
331 Medicaid identification card, or other public assistance with which he has been entrusted or
332 that has come into his possession in connection with his duties in administering any state or
333 federally funded public assistance program;
334 (3) any person who receives an unauthorized payment as a result of acts described in
335 this section;

336 (4) any provider who receives payment or any client who receives benefits after failing
337 to comply with any applicable requirement in Sections 76-8-1203 and 76-8-1204 ;
338 (5) any provider who files a claim for payment under any state or federally funded
339 public assistance program for goods or services not provided to or for a client of that program;
340 (6) any provider who files or falsifies a claim, report, or document required by state or
341 federal law, rule, or provider agreement for goods or services not authorized under the state or
342 federally funded public assistance program for which the goods or services were provided;
343 (7) any provider who fails to credit the state for payments received from other sources;
344 (8) any provider who bills a client or a client's family for goods or services not
345 provided, or bills in an amount greater than allowed by law or rule;
346 (9) any client who, while receiving public assistance, acquires income or resources in
347 excess of the amount he previously reported to the state agency administering the public
348 assistance, and fails to notify the state agency to which the client previously reported within ten
349 days after acquiring the excess income or resources;
350 (10) any person who fails to act as required under Section 76-8-1203 or 76-8-1204 with
351 intent to obtain or help another obtain an "overpayment" as defined in Section [ 35A-1-502 ]
352 35A-3-602 ; and
353 (11) any person who obtains an overpayment by violation of Section 76-8-1203 or
354 76-8-1204 .
355 Section 16. Section 78-27-50 is amended to read:
356 78-27-50. Financial information privacy -- Inapplicable to certain official
357 investigations.
358 (1) Sections 78-27-45 through 78-27-47 do not apply when an examination of records is
359 a part of an official investigation by:
360 (a) local police;
361 (b) a sheriff;
362 (c) a peace officer;
363 (d) a city attorney;
364 (e) a county attorney;
365 (f) a district attorney;
366 (g) the attorney general;

367 (h) the Department of Public Safety;
368 (i) the Office of Recovery Services of the Department of Human Services;
369 (j) the Insurance Department;
370 (k) the Department of Commerce;
371 (l) the state auditor; or
372 (m) the State Tax Commission.
373 (2) Except for the Office of Recovery Services, if a governmental entity listed in
374 Subsection (1) seeks a record, the entity shall obtain the record as follows:
375 (a) if the record is a nonprotected record, by request in writing that:
376 (i) certifies that an official investigation is being conducted; and
377 (ii) is signed by a representative of the governmental entity that is conducting the
378 official investigation; or
379 (b) if the record is a protected record, by obtaining:
380 (i) a subpoena authorized by statute; or
381 (ii) other legal process:
382 (A) ordered by a court of competent jurisdiction; and
383 (B) served upon the financial institution.
384 (3) If the Office of Recovery Services seeks a record, it shall obtain the record pursuant
385 to:
386 (a) Subsection 62A-11-104 [(8)] (7);
387 (b) Section 62A-11-304.1 ;
388 (c) Section 62A-11-304.5 ; or
389 (d) Title IV, Part D of the Social Security Act as codified in 42 U.S.C. 651 et seq.
390 (4) A financial institution may not give notice to any person named or referenced
391 within the record disclosed pursuant to Subsection (2)(a).
392 (5) In accordance with Section 78-27-48 , the agency conducting the official
393 investigation that obtains a record from a financial institution under this section shall reimburse
394 the financial institution for costs reasonably and directly incurred by the financial institution.
395 Section 17. Repealer.
396 This act repeals:
397 Section 35A-1-107, Contract with Office of Recovery Services.

398 Section 62A-11-110, Collection of cash assistance repayments.
399 Section 18. Effective date.
400 This act takes effect on July 1, 2003.