1     
ACCOUNTS RECEIVABLE COLLECTION REVISIONS

2     
2019 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Lyle W. Hillyard

5     
House Sponsor: Val K. Potter

6     

7     LONG TITLE
8     General Description:
9          This bill modifies accounts receivable collection provisions.
10     Highlighted Provisions:
11          This bill:
12          ▸     provides and amends definitions;
13          ▸     amends notification procedures for the state or a governmental entity to execute a
14     lien for certain receivables;
15          ▸     authorizes the Office of State Debt Collection to send notification of the execution
16     of a lien for a governmental entity in certain circumstances;
17          ▸     amends procedures for the state or another governmental entity to levy a tax
18     overpayment or refund for the collection of a delinquent receivable;
19          ▸     amends hearing procedures and requirements regarding the collection of a
20     delinquent receivable;
21          ▸     amends the types of receivables that constitute a lien against a state tax overpayment
22     or refund;
23          ▸     amends procedures for seeking agency and judicial review of a hearing decision
24     regarding the collection of a delinquent receivable;
25          ▸     repeals certain bond requirements for seeking judicial review;
26          ▸     grants the Division of Finance, rather than the Board of Examiners, rulemaking
27     authority to adopt rules regarding the collection of certain account receivables; and
28          ▸     makes technical changes.
29     Money Appropriated in this Bill:
30          None
31     Other Special Clauses:
32          None
33     Utah Code Sections Affected:
34     AMENDS:
35          63A-3-301, as last amended by Laws of Utah 2011, Chapter 79
36          63A-3-302, as last amended by Laws of Utah 2016, Chapters 129 and 298
37          63A-3-303, as last amended by Laws of Utah 2011, Chapter 79
38          63A-3-304, as last amended by Laws of Utah 2011, Chapter 79
39          63A-3-305, as renumbered and amended by Laws of Utah 1993, Chapter 212
40          63A-3-306, as last amended by Laws of Utah 2008, Chapter 382
41          63A-3-307, as last amended by Laws of Utah 2011, Chapter 79
42          63A-3-308, as last amended by Laws of Utah 2011, Chapter 79
43          63A-3-310, as renumbered and amended by Laws of Utah 1993, Chapter 212
44     REPEALS:
45          63A-3-309, as renumbered and amended by Laws of Utah 1993, Chapter 212
46     

47     Be it enacted by the Legislature of the state of Utah:
48          Section 1. Section 63A-3-301 is amended to read:
49          63A-3-301. Definitions.
50          As used in this part[,]:
51          (1) ["account] "Account receivable" or "receivable" means any amount due the state or
52     any other governmental entity within the state as a result of a [court] judgment, citation, or
53     administrative order, or for which materials or services have been provided but for which
54     payment has not been received by the servicing unit.
55          (2) "Debtor" means a party that owes, or is alleged to owe, an account receivable.
56          (3) "Mail" means United States Postal Service first class mail to the intended
57     recipient's last known address.
58          Section 2. Section 63A-3-302 is amended to read:
59          63A-3-302. Unpaid accounts receivable due the state.
60          If any account receivable at any point has been unpaid for [more than] 90 days or more,
61     any agency or other authority of [state government] the state, or any political subdivision, as
62     defined in Section 63G-7-102, of the state responsible for collection of the account may
63     proceed under this part to collect the delinquent amount.
64          Section 3. Section 63A-3-303 is amended to read:
65          63A-3-303. Notice to debtor -- Contents -- Joint filers.
66          (1) [Upon default in payment of any account receivable that is not due pursuant to final
67     court or administrative order or judgment, the entity responsible for collecting the account]
68     When the state or any governmental entity executes, or intends to execute, on a lien created by
69     Section 63A-3-307, the state or entity to which the receivable is owed shall send a notice by
70     mail to the debtor at the debtor's last-known address.
71          (2) The notice required by Subsection (1) shall [state] contain:
72          (a) the date and amount of the receivable;
73          (b) a demand for immediate payment of the amount;
74          (c) a statement of the right of the debtor to file a written response to the notice, to
75     [have] request a hearing within 21 days of the date of the notice, to be represented at the
76     hearing, and to appeal any decision of the hearing examiner;
77          (d) the time within which a written response must be [filed; and] received from the
78     debtor;
79          (e) a statement notifying the debtor that the state may obtain an order [under this part]
80     and execute upon income tax overpayments or refunds of the debtor if:
81          (i) the debtor fails to timely respond to the notice; or
82          (ii) a hearing is held and the hearing officer decides against the debtor[.]; and
83          (f) the address to which the debtor may send a written request for a hearing.
84          (3) Notwithstanding Subsection (1), if the Office of State Debt Collection has agreed to
85     collect a receivable, the Office of State Debt Collection may send the notice required by
86     Subsection (1) instead of the entity to which the receivable is owed.
87          (4) Unless otherwise prohibited by law, the notice required by this section shall also be
88     sent to any individuals that are joint filers with a debtor of an affected tax filing, if the state
89     agency or other governmental entity attempting to levy a debtor's tax overpayment or refund is
90     aware of the joint filer.
91          Section 4. Section 63A-3-304 is amended to read:
92          63A-3-304. Effect of nonpayment or failure to respond.
93          If a written [response] request for a hearing, or payment of delinquent receivable, is not
94     received by the state or other governmental entity within [15] 21 days from the date of [receipt
95     of] the notice [by the debtor] required by Section 63A-3-303, the debtor is in default and the
96     state [may determine the balance due] or other governmental entity may:
97          (1) levy the debtor's income tax overpayment or refund up to the amount of the
98     receivable, plus interest, penalties, and collection costs allowed by law; and
99          (2) collect the balance, including as provided in Section 63A-3-307.
100          Section 5. Section 63A-3-305 is amended to read:
101          63A-3-305. Hearing requested -- Notice to debtor.
102          (1) If a written response is received by the state or other governmental entity within 21
103     days from the date of the notice required by Section 63A-3-303 and a hearing is requested in
104     the written response, the state or other governmental entity shall:
105          [(1)] (a) set a hearing date within [30] 28 days of the receipt of the response; and
106          [(2)] (b) mail written notice of the hearing to the debtor at least [15] 14 days before the
107     date of the hearing.
108          (2) Notwithstanding Subsection (1), the state or other governmental entity is not
109     required to set a hearing if the state or governmental entity releases its lien.
110          Section 6. Section 63A-3-306 is amended to read:
111          63A-3-306. Hearing examiner -- Procedures -- Adjudicative proceedings.
112          (1) (a) [The] A hearing requested under this part shall be held before a hearing
113     examiner designated by the state or other governmental entity setting the hearing.
114          (b) The hearing examiner may not be an officer or employee of the entity in state
115     government responsible for collecting or administering the account.
116          (2) The state or other governmental entity shall comply with the procedures and
117     requirements of Title 63G, Chapter 4, Administrative Procedures Act, in its adjudicative
118     proceedings.
119          (3) If a hearing examiner determines a receivable is owed, in whole or in part:
120          (a) the state or other governmental entity may levy the debtor's income tax
121     overpayment or refund up to the amount of the receivable determined to be owed, plus interest,
122     penalties, and collection costs allowed by law and collect the balance, including as provided in
123     Section 63A-3-307; and
124          (b) the state or other governmental entity may charge the debtor reasonable, actual
125     collection costs for amounts charged by the hearing examiner for the debtor's hearing.
126          Section 7. Section 63A-3-307 is amended to read:
127          63A-3-307. Liens.
128          (1) The following shall constitute a lien in the amount of the receivable plus interest,
129     penalties, and collection costs allowed by law against any state income tax [refund or
130     overpayment] overpayment or refund due or to become due the debtor:
131          (a) [an abstract of an] a judgment, citation, or administrative order issued by any
132     agency, court, or other authority of the state, or by any political subdivision, as defined in
133     Section 63G-7-102; or
134          [(b) nonpayment or failure to respond as provided under Section 63A-3-304.]
135          (b) an amount, that has at any point been unpaid for 90 days or more, due the state or
136     other governmental entity for which materials or services have been provided but for which
137     payment has not been received by the servicing unit.
138          (2) The lien created by this section shall, for the purposes of Section 59-10-529 only,
139     be considered a judgment[, but no credit of a tax refund or overpayment may be made on
140     account of this lien until 20 days after the date of the administrative order].
141          [(3) The lien created by this section shall remain effective for eight years.]
142          Section 8. Section 63A-3-308 is amended to read:
143          63A-3-308. Judicial review -- Effect on lien.
144          (1) [A] Agency and judicial review [of a lien created under Section 63A-3-307 may be
145     obtained by any party within one year of the creation of the lien by filing a complaint with the
146     district court] of decisions from hearings conducted under this part are subject to review in
147     accordance with Title 63G, Chapter 4, Administrative Procedures Act.
148          [(2) (a) A notice of the filing of a complaint may be filed with the State Tax
149     Commission.]
150          [(b) If notice is filed, the tax commission may take no action with respect to the lien
151     created by Section 63A-3-307 until the matter is finally disposed of by the courts, except as
152     provided in this part.]
153          (2) The state or other governmental entity may retain in its possession a debtor's tax
154     overpayment or refund while a decision from a hearing conducted under this part is being
155     reviewed by an agency, court, or other authority of the state pursuant to Title 63G, Chapter 4,
156     Administrative Procedures Act.
157          Section 9. Section 63A-3-310 is amended to read:
158          63A-3-310. Rules for implementing part.
159          The [Board of Examiners] Division of Finance may adopt rules for the implementation
160     of this part, including rules for the conduct of hearings, injured spouse claims, and appointment
161     of hearing examiners.
162          Section 10. Repealer.
163          This bill repeals:
164          Section 63A-3-309, Bond required -- Terms -- Expenses of debtor.