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S.B. 214






Chief Sponsor: Peter C. Knudson

House Sponsor: Fred R. Hunsaker

             8      LONG TITLE
             9      General Description:
             10          This bill modifies Title 63A, Chapter 8, Office of State Debt Collection, to amend
             11      certain funding provisions of the Office of State Debt Collection.
             12      Highlighted Provisions:
             13          This bill:
             14          .    allows the Office of State Debt Collection to:
             15              .    collect reasonable attorney's fees and reasonable costs of collection that are
             16      related to certain collections; and
             17              .    collect interest and fees that are related to certain collections of receivables;
             18          .    changes the State Debt Collection Fund from an internal service fund to a restricted
             19      special revenue fund;
             20          .    establishes certain allowed uses of the fund monies;
             21          .    requires the office to report at least annually to the Legislature on the fund;
             22          .    provides certain rulemaking authority; and
             23          .    makes technical changes.
             24      Monies Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          This bill takes effect on July 1, 2006.

             28      Utah Code Sections Affected:
             29      AMENDS:
             30          63A-8-201, as last amended by Chapter 23, Laws of Utah 2005
             31          63A-8-204, as enacted by Chapter 354, Laws of Utah 1995
             32          63A-8-301, as last amended by Chapter 135, Laws of Utah 2002
             34      Be it enacted by the Legislature of the state of Utah:
             35          Section 1. Section 63A-8-201 is amended to read:
             36           63A-8-201. Office of State Debt Collection created -- Duties.
             37          (1) The state and each state agency shall comply with the requirements of this chapter
             38      and any rules established by the Office of State Debt Collection.
             39          (2) There is created the Office of State Debt Collection in the Department of
             40      Administrative Services.
             41          (3) The office shall:
             42          (a) have overall responsibility for collecting and managing state receivables;
             43          (b) develop consistent policies governing the collection and management of state
             44      receivables;
             45          (c) oversee and monitor state receivables to ensure that state agencies are:
             46          (i) implementing all appropriate collection methods;
             47          (ii) following established receivables guidelines; and
             48          (iii) accounting for and reporting receivables in the appropriate manner;
             49          (d) develop policies, procedures, and guidelines for accounting, reporting, and
             50      collecting monies owed to the state;
             51          (e) provide information, training, and technical assistance to all state agencies on
             52      various collection-related topics;
             53          (f) write an inclusive receivables management and collection manual for use by all
             54      state agencies;
             55          (g) prepare quarterly and annual reports of the state's receivables;
             56          (h) create or coordinate a state accounts receivable database;
             57          (i) develop reasonable criteria to gauge state agencies' efforts in maintaining an
             58      effective accounts receivable program;

             59          (j) identify those state agencies that are not making satisfactory progress toward
             60      implementing collection techniques and improving accounts receivable collections;
             61          (k) coordinate information, systems, and procedures between state agencies to
             62      maximize the collection of past-due accounts receivable;
             63          (l) establish an automated cash receipt process between state agencies;
             64          (m) establish procedures for writing off accounts receivable for accounting and
             65      collection purposes;
             66          (n) establish standard time limits after which an agency will delegate responsibility to
             67      collect state receivables to the office or its designee;
             68          (o) be a real party in interest for an account receivable referred to the office by any
             69      state agency; and
             70          (p) allocate monies collected for judgments registered under Section 77-18-6 in
             71      accordance with Sections 63-63a-2 , 63A-8-302 , and 78-3-14.5 .
             72          (4) The office may:
             73          (a) recommend to the Legislature new laws to enhance collection of past-due accounts
             74      by state agencies;
             75          (b) collect accounts receivables for higher education entities, if the higher education
             76      entity agrees;
             77          (c) prepare a request for proposal for consulting services to:
             78          (i) analyze the state's receivable management and collection efforts; and
             79          (ii) identify improvements needed to further enhance the state's effectiveness in
             80      collecting its receivables;
             81          (d) contract with private or state agencies to collect past-due accounts;
             82          (e) perform other appropriate and cost-effective coordinating work directly related to
             83      collection of state receivables;
             84          (f) obtain access to records of any state agency that are necessary to the duties of the
             85      office by following the procedures and requirements of Section 63-2-206 ;
             86          (g) collect interest and fees related to the collection of receivables under this chapter,
             87      and establish, by following the procedures and requirements of Section 63-38-3.2 [establish]:
             88          (i) a fee to cover the administrative costs of collection, on accounts administered by the
             89      office;

             90          (ii) a late penalty fee that may not be more than 10% of the account receivable on
             91      accounts administered by the office;
             92          (iii) an interest charge that is:
             93          (A) the postjudgment interest rate established by Section 15-1-4 in judgments
             94      established by the courts; or
             95          (B) not more than 2% above the prime rate as of July 1 of each fiscal year for accounts
             96      receivable for which no court judgment has been entered; and
             97          (iv) fees to collect accounts receivable for higher education;
             98          (h) collect reasonable attorney's fees and reasonable costs of collection that are related
             99      to the collection of receivables under this chapter;
             100          [(h)] (i) make rules that allow accounts receivable to be collected over a reasonable
             101      period of time and under certain conditions with credit cards;
             102          [(i)] (j) file a satisfaction of judgment in the district court by following the procedures
             103      and requirements of the Utah Rules of Civil Procedure;
             104          [(j)] (k) ensure that judgments for which the office is the judgment creditor are
             105      renewed, as necessary; and
             106          [(k)] (l) notwithstanding Section 63-2-206 , share records obtained under Subsection
             107      (4)(f) with private sector vendors under contract with the state to assist state agencies in
             108      collecting debts owed to the state agencies without changing the classification of any private,
             109      controlled, or protected record into a public record.
             110          (5) The office shall ensure that:
             111          (a) a record obtained by the office or a private sector vendor as referred to in
             112      Subsection (4)[(k)](l):
             113          (i) is used only for the limited purpose of collecting accounts receivable; and
             114          (ii) is subject to federal, state, and local agency records restrictions; and
             115          (b) any person employed by, or formerly employed by, the office or a private sector
             116      vendor as referred to in Subsection (4)[(k)](l) is subject to:
             117          (i) the same duty of confidentiality with respect to the record imposed by law on
             118      officers and employees of the state agency from which the record was obtained; and
             119          (ii) any civil or criminal penalties imposed by law for violations of lawful access to a
             120      private, controlled, or protected record.

             121          (6) (a) The office shall collect accounts receivable ordered by the district court as a
             122      result of prosecution for a criminal offense that have been transferred to the office under
             123      Subsection 76-3-201.1 (5)(h) or (8).
             124          (b) The office may not assess the interest charge established by the office under
             125      Subsection (4) on an account receivable subject to the postjudgment interest rate established by
             126      Section 15-1-4 .
             127          (7) The office shall require state agencies to:
             128          (a) transfer collection responsibilities to the office or its designee according to time
             129      limits established by the office;
             130          (b) make annual progress towards implementing collection techniques and improved
             131      accounts receivable collections;
             132          (c) use the state's accounts receivable system or develop systems that are adequate to
             133      properly account for and report their receivables;
             134          (d) develop and implement internal policies and procedures that comply with the
             135      collections policies and guidelines established by the office;
             136          (e) provide internal accounts receivable training to staff involved in their management
             137      and collection of receivables as a supplement to statewide training;
             138          (f) bill for and make initial collection efforts of its receivables up to the time the
             139      accounts must be transferred; and
             140          (g) submit quarterly receivable reports to the office that identify the age, collection
             141      status, and funding source of each receivable.
             142          (8) The office shall use the information provided by the agencies and any additional
             143      information from the office's records to compile a one-page summary report of each agency.
             144          (9) The summary shall include:
             145          (a) the type of revenue that is owed to the agency;
             146          (b) any attempted collection activity; and
             147          (c) any costs incurred in the collection process.
             148          (10) The office shall annually provide copies of each agency's summary to the governor
             149      and to the Legislature.
             150          Section 2. Section 63A-8-204 is amended to read:
             151           63A-8-204. Rulemaking authority -- Collection techniques.

             152          [The office shall establish rules] In accordance with Title 63, Chapter 46a, Utah
             153      Administrative Rulemaking Act, the office shall make rules:
             154          (1) providing details, as necessary, for the distribution of debts collected in accordance
             155      with the priorities under Subsection 63A-8-301 (3); and
             156          (2) to govern collection techniques, which may include the use of:
             157          [(1)] (a) credit reporting bureaus;
             158          [(2)] (b) collection agencies;
             159          [(3)] (c) garnishments;
             160          [(4)] (d) liens;
             161          [(5)] (e) judgments; and
             162          [(6)] (f) administrative offsets.
             163          Section 3. Section 63A-8-301 is amended to read:
             164           63A-8-301. State Debt Collection Fund.
             165          (1) There is created [an internal service] a restricted special revenue fund entitled the
             166      "State Debt Collection Fund."
             167          [(2) The fund shall be governed by the provisions for internal service funds in Section
             168      63-38-3.5 .]
             169          [(3)] (2) The fund consists of:
             170          (a) all amounts appropriated to the fund under this chapter;
             171          (b) fees and interest established by the office under Subsection 63A-8-201 (4)(g); and
             172          (c) except as otherwise provided by law, all postjudgment interest collected by the
             173      office or the state except postjudgment interest on restitution.
             174          [(4) Monies in this fund shall be used to offset systems, administrative, legal, and other
             175      collection costs of the office or the state agency.]
             176          (3) Monies in this fund shall be used to pay for:
             177          (a) the costs of the office in the performance of its duties under this chapter;
             178          (b) restitution to victims to whom the debt is owed;
             179          (c) interest accrued that is associated with the debt;
             180          (d) principal on the debt to the state agencies or other entities that placed the receivable
             181      for collection; and
             182          (e) other legal obligations including those ordered by a court.

             183          [(5)] (4) (a) The fund may collect interest.
             184          (b) All interest earned from the fund shall be deposited in the General Fund.
             185          [(6)] (5) The office shall ensure that monies remaining in the fund at the end of the
             186      fiscal year that are not committed [to offsets] under the priorities established under Subsection
             187      (3), are deposited into the General Fund.
             188          (6) (a) The office shall report at least annually to the appropriations subcommittee
             189      assigned to review the budget of the Department of Administrative Services on the fund
             190      balance and its revenues and expenditures and administrative offsets.
             191          (b) The report shall include the amounts paid under each provision under Subsection
             192      (3).
             193          Section 4. Effective date.
             194          This bill takes effect on July 1, 2006.

Legislative Review Note
    as of 2-1-06 4:06 PM

Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel

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