This document includes House Committee Amendments incorporated into the bill on Fri, Feb 4, 2022 at 9:18 AM by pflowers.
1     
OFFICE OF STATE DEBT COLLECTION AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Raymond P. Ward

5     
Senate Sponsor: Todd D. Weiler

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions relating to the collection procedures of the Office of State
10     Debt Collection.
11     Highlighted Provisions:
12          This bill:
13          ▸     requires the Office of State Debt Collection (office) to:
14               •     create and maintain a website that provides a debtor certain information
15     regarding the debtor's debts; and
16               •     create policies regarding settlement practices;
17          ▸     eliminates a report from the office to the courts;
18          ▸     requires the office to apply a payment to a debt as directed by a debtor if the
19     payment would eliminate the debt's balance; and
20          ▸     makes technical changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:
26     AMENDS:
27          63A-3-502, as last amended by Laws of Utah 2021, Chapter 260
28          77-18-114, as enacted by Laws of Utah 2021, Chapter 260
29          77-38b-304, as renumbered and amended by Laws of Utah 2021, Chapter 260
30     ENACTS:
31          63A-3-502.5, Utah Code Annotated 1953
32     

33     Be it enacted by the Legislature of the state of Utah:
34          Section 1. Section 63A-3-502 is amended to read:
35          63A-3-502. Office of State Debt Collection created -- Duties.
36          (1) The state and each state agency shall comply with:
37          (a) the requirements of this chapter; and
38          (b) any rules established by the Office of State Debt Collection.
39          (2) There is created the Office of State Debt Collection in the Division of Finance.
40          (3) The office shall:
41          (a) have overall responsibility for collecting and managing state receivables;
42          (b) assist the Division of Finance to develop consistent policies governing the
43     collection and management of state receivables;
44          (c) oversee and monitor state receivables to ensure that state agencies are:
45          (i) implementing all appropriate collection methods;
46          (ii) following established receivables guidelines; and
47          (iii) accounting for and reporting receivables in the appropriate manner;
48          (d) assist the Division of Finance to develop policies, procedures, and guidelines for
49     accounting, reporting, and collecting money owed to the state;
50          (e) provide information, training, and technical assistance to each state agency on
51     various collection-related topics;
52          (f) write an inclusive receivables management and collection manual for use by each
53     state agency;
54          (g) prepare quarterly and annual reports of the state's receivables;
55          (h) create or coordinate a state accounts receivable database;
56          (i) develop reasonable criteria to gauge state agencies' efforts in maintaining an
57     effective accounts receivable program;
58          (j) identify any state agency that is not making satisfactory progress toward
59     implementing collection techniques and improving accounts receivable collections;
60          (k) coordinate information, systems, and procedures between each state agency to
61     maximize the collection of past-due accounts receivable;
62          (l) establish an automated cash receipt process between each state agency;
63          (m) assist the Division of Finance to establish procedures for writing off accounts
64     receivable for accounting and collection purposes;
65          (n) establish standard time limits after which an agency will delegate responsibility to
66     collect state receivables to the office or the office's designee;
67          (o) be a real party in interest for:
68          (i) an account receivable referred to the office by any state agency; and
69          (ii) a civil judgment of restitution entered on a civil judgment docket by a court;
70          (p) allocate money collected for a judgment entered on the civil judgment docket under
71     Section 77-18-114 in accordance with Sections 51-9-402, 63A-3-506, and 78A-5-110; [and]
72          (q) if a criminal accounts receivable is transferred to the office under Subsection
73     77-32b-103(2)(a)(ii), receive, process, and distribute payments for the criminal accounts
74     receivable[.];
75          (r) provide a debtor online access to the debtor's accounts receivable or criminal
76     accounts receivable in accordance with Section 63A-3-502.5;
77          (s) establish a written policy for each of the following:
78          (i) the settling of an accounts receivable, including that a restitution amount may be
79     settled if the victim approves of the settlement;
80          (ii) allowing a debtor to pay off a single debt as part of an accounts receivable even if
81     the debtor has a balance on another debt as part of an accounts receivable or criminal accounts
82     receivable;
83          (iii) setting a payment deadline for settlement agreements and for obtaining an
84     extension of a settlement agreement deadline; and
85          (iv) reducing administrative costs when a settlement has been reached;
86          (t) Ĥ→ [consulting] consult ←Ĥ with a state agency on whether:
87          (i) the office may agree to a settlement for an amount that is less than the debtor's
88     principal amount; and
89          (ii) the state agency may retain authority to negotiate a settlement with a debtor; and
90          (u) provide the terms and conditions of any payment arrangement that the debtor has
91     made with a state agency or the office when:
92          (i) the payment arrangement is created; or
93          (ii) the debtor requests a copy of the terms and conditions.
94          (4) The office may:
95          (a) recommend to the Legislature new laws to enhance collection of past-due accounts
96     by state agencies;
97          (b) collect accounts receivables for higher education entities, if the higher education
98     entity agrees;
99          (c) prepare a request for proposal for consulting services to:
100          (i) analyze the state's receivable management and collection efforts; and
101          (ii) identify improvements needed to further enhance the state's effectiveness in
102     collecting [its] the state's receivables;
103          (d) contract with private or state agencies to collect past-due accounts;
104          (e) perform other appropriate and cost-effective coordinating work directly related to
105     collection of state receivables;
106          (f) obtain access to records and databases of any state agency that are necessary to the
107     duties of the office by following the procedures and requirements of Section 63G-2-206,
108     including the financial declaration form described in Section 77-38b-204;
109          (g) collect interest and fees related to the collection of receivables under this chapter,
110     and establish, by following the procedures and requirements of Section 63J-1-504:
111          (i) a fee to cover the administrative costs of collection on accounts administered by the
112     office;
113          (ii) a late penalty fee that may not be more than 10% of the account receivable on
114     accounts administered by the office;
115          (iii) an interest charge that is:
116          (A) the postjudgment interest rate established by Section 15-1-4 in judgments
117     established by the courts; or
118          (B) not more than 2% above the prime rate as of July 1 of each fiscal year for accounts
119     receivable for which no court judgment has been entered; and
120          (iv) fees to collect accounts receivable for higher education;
121          (h) collect reasonable attorney fees and reasonable costs of collection that are related to
122     the collection of receivables under this chapter;
123          (i) make rules that allow accounts receivable to be collected over a reasonable period
124     of time and under certain conditions with credit cards;
125          (j) for a case that is referred to the office or in which the office is a judgment creditor,
126     file a motion or other document related to the office or the accounts receivable in that case,
127     including a satisfaction of judgment, in accordance with the Utah Rules of Civil Procedure;
128          (k) ensure that judgments for which the office is the judgment creditor are renewed, as
129     necessary;
130          (l) notwithstanding Section 63G-2-206, share records obtained under Subsection (4)(f)
131     with private sector vendors under contract with the state to assist state agencies in collecting
132     debts owed to the state agencies without changing the classification of any private, controlled,
133     or protected record into a public record;
134          (m) enter into written agreements with other governmental agencies to obtain and share
135     information for the purpose of collecting state accounts receivable; and
136          (n) collect accounts receivable for a political subdivision of the state if the political
137     subdivision enters into an agreement or contract with the office under Title 11, Chapter 13,
138     Interlocal Cooperation Act, for the office to collect the political subdivision's accounts
139     receivable.
140          (5) The office shall ensure that:
141          (a) a record obtained by the office or a private sector vendor under Subsection (4)(l):
142          (i) is used only for the limited purpose of collecting accounts receivable; and
143          (ii) is subject to federal, state, and local agency records restrictions; and
144          (b) any [person] individual employed by, or formerly employed by, the office or a
145     private sector vendor as referred to in Subsection (4)(l) is subject to:
146          (i) the same duty of confidentiality with respect to the record imposed by law on
147     officers and employees of the state agency from which the record was obtained; and
148          (ii) any civil or criminal penalties imposed by law for violations of lawful access to a
149     private, controlled, or protected record.
150          (6) (a) The office shall collect a civil accounts receivable or a civil judgment of
151     restitution ordered by a court as a result of prosecution for a criminal offense that have been
152     transferred to the office under Subsection 77-18-114(1) or (2).
153          (b) The office may not assess:
154          (i) the interest charge established by the office under Subsection (4) on an account
155     receivable subject to the postjudgment interest rate established by Section 15-1-4; and
156          (ii) an interest charge on a criminal accounts receivable that is transferred to the office
157     under Subsection 77-32b-103(2)(a)(ii).
158          (7) The office shall require a state agency to:
159          (a) transfer collection responsibilities to the office or the office's designee according to
160     time limits established by the office;
161          (b) make annual progress towards implementing collection techniques and improved
162     accounts receivable collections;
163          (c) use the state's accounts receivable system or develop systems that are adequate to
164     properly account for and report the state's receivables;
165          (d) develop and implement internal policies and procedures that comply with the
166     collections policies and guidelines established by the office;
167          (e) provide internal accounts receivable training to staff involved in the management
168     and collection of receivables as a supplement to statewide training;
169          (f) bill for and make initial collection efforts of [its] the state agency's receivables up to
170     the time the accounts must be transferred; and
171          (g) submit quarterly receivable reports to the office that identify the age, collection
172     status, and funding source of each receivable.
173          (8) All interest, fees, and other amounts authorized to be collected by the office under
174     Subsection (4)(g):
175          (a) are penalties that may be charged by the office;
176          (b) do not require an order from a court for the office to assess or collect;
177          (c) are not compensation for actual pecuniary loss;
178          (d) for a civil accounts receivable:
179          (i) begin to accrue on the day on which the civil accounts receivable is entered on the
180     civil judgment docket under Subsection 77-18-114(1) or (2); and
181          (ii) may be collected as part of the civil accounts receivable;
182          (e) for a civil judgment of restitution:
183          (i) begin to accrue on the day on which the civil judgment of restitution is entered on
184     the civil judgment docket under Subsection 77-18-114(1); and
185          (ii) may be collected as part of the civil judgment of restitution;
186          (f) for all other accounts receivable:
187          (i) begin to accrue on the day on which the accounts receivable is transferred to the
188     office, even if there is no court order on the day on which the accounts receivable is
189     transferred; and
190          (ii) may be collected as part of the accounts receivable; and
191          (g) may be waived by:
192          (i) the office; or
193          (ii) if the interest, fee, or other amount is charged in error, the court.
194          Section 2. Section 63A-3-502.5 is enacted to read:
195          63A-3-502.5. Debtor's online access to debt amount.
196          (1) As used in this section, "debt" means:
197          (a) an accounts receivable; or
198          (b) a criminal accounts receivable.
199          (2) On or before December 31, 2022, the office shall provide a debtor who has a debt
200     transferred to the office online access to the debtor's account that identifies:
201          (a) the total balance the debtor owes for a debt;
202          (b) (i) each person to whom the debtor owes a debt; or
203          (ii) if the person's name is redacted by a court or a state agency with authority to redact,
204     another identifier for the debt in place of the person's name;
205          (c) for each person the debtor owes:
206          (i) the debtor's original balance for a debt; and
207          (ii) the debtor's current balance for a debt;
208          (d) the current interest rate for a debt; and
209          (e) the history of:
210          (i) any additional charge added to a debt including:
211          (A) the reason for the charge;
212          (B) the total amount of the charge; and
213          (C) the date the charge was added; and
214          (ii) any payment made by the debtor including:
215          (A) the debt to which a payment was applied; and
216          (B) whether the payment was applied to an administrative cost, accrued interest, the
217     principal, or other fee.
218          Section 3. Section 77-18-114 is amended to read:
219          77-18-114. Unpaid balance at termination of sentence -- Past due account --
220     Notice -- Account or judgment paid in full -- Effect of civil accounts receivable and civil
221     judgment of restitution.
222          (1) When a defendant's sentence is terminated by law or by the decision of the court or
223     the board:
224          (a) the board shall provide an accounting of the unpaid balance of the defendant's
225     criminal accounts receivable to the court if the defendant was on parole or incarcerated at the
226     time of termination; and
227          (b) within 90 days after the day on which a defendant's sentence is terminated, the
228     court shall:
229          (i) enter an order for a civil accounts receivable and a civil judgment of restitution for a
230     defendant on the civil judgment docket;
231          (ii) transfer the responsibility of collecting the civil accounts receivable and the civil
232     judgment of restitution to the Office of State Debt Collection; and
233          (iii) identify in the order under this Subsection (1):
234          (A) the Office of State Debt Collection as a judgment creditor for the civil accounts
235     receivable and the civil judgment of restitution; and
236          (B) the victim as a judgment creditor for the civil judgment of restitution.
237          (2) If a criminal accounts receivable for the defendant is more than 90 days past due
238     and the court has ordered that a defendant does not owe restitution to any victim, or the time
239     period in Subsection 77-38b-205(5) has passed and the court has not ordered restitution, the
240     court may:
241          (a) enter an order for a civil accounts receivable for the defendant on the civil judgment
242     docket;
243          (b) identify, in the order under Subsection (2)(a), the Office of State Debt Collection as
244     a judgment creditor for the civil accounts receivable; and
245          (c) transfer the responsibility of collecting the civil accounts receivable to the Office of
246     State Debt Collection.
247          (3) An order for a criminal accounts receivable is no longer in effect after the court
248     enters an order for a civil accounts receivable or a civil judgment of restitution under
249     Subsection (1) or (2).
250          (4) The court shall provide notice to the Office of State Debt Collection and the
251     prosecuting attorney of any hearing that affects an order for the civil accounts receivable or the
252     civil judgment of restitution.
253          (5) The Office of State Debt Collection shall[: (a)] notify the court when a civil
254     judgment of restitution or a civil accounts receivable is satisfied[; and].
255          [(b) provide the court with an accounting of any distribution made by the Office of
256     State Debt Collection for the civil accounts receivable and the civil judgment of restitution.]
257          (6) When a fine, forfeiture, surcharge, cost, or fee is recorded in an order for a civil
258     accounts receivable on the civil judgment docket, or when restitution is recorded as an order
259     for a civil judgment of restitution on the civil judgment docket, the order:
260          (a) constitutes a lien on the defendant's real property until the judgment is satisfied; and
261          (b) may be collected by any means authorized by law for the collection of a civil
262     judgment.
263          (7) A criminal accounts receivable, a civil accounts receivable, and a civil judgment of
264     restitution are not subject to the civil statutes of limitation and expire only upon payment in
265     full.
266          (8) (a) If a defendant asserts that a payment was made to a victim or third party for a
267     civil judgment of restitution, or enters into any other transaction that does not involve the
268     Office of State Debt Collection, and the defendant asserts that the payment results in a credit
269     towards the civil judgment of restitution for the defendant:
270          (i) the defendant shall provide notice to the Office of State Debt Collection and the
271     prosecuting attorney within 30 days after the day on which the payment or other transaction is
272     made; and
273          (ii) the payment may only be credited towards the principal of the civil judgment of
274     restitution and does not affect any other amount owed to the Office of State Debt Collection
275     under Section 63A-3-502.
276          (b) Nothing in this Subsection (8) shall be construed to prevent a victim or a third party
277     from providing notice of a payment towards a civil judgment of restitution to the Office of
278     State Debt Collection.
279          Section 4. Section 77-38b-304 is amended to read:
280          77-38b-304. Priority.
281          (1) The court, or the office, shall disburse a payment for restitution within 60 days after
282     the day on which the payment is received from the defendant if:
283          (a) the victim has complied with Subsection 77-38b-203(2);
284          (b) if the defendant has tendered a negotiable instrument, funds from the financial
285     institution are actually received; and
286          (c) the payment to the victim is at least $5, unless the payment is the final payment.
287          (2) The court, or the office, shall disburse money collected from a defendant for a
288     criminal accounts receivable in the following order of priority:
289          (a) first, and except as provided in Subsection (4)(b), to restitution owed by the
290     defendant in accordance with Subsection (4);
291          (b) second, to the cost of obtaining a DNA specimen from the defendant as described
292     in Subsection (4)(b);
293          (c) third, to any criminal fine or surcharge owed by the defendant;
294          (d) fourth, to the cost owed by the defendant for a reward described in Section
295     77-32b-104;
296          (e) fifth, to the cost owed by the defendant for medical care, treatment, hospitalization,
297     and related transportation paid by a county correctional facility under Section 17-50-319; and
298          (f) sixth, to any other cost owed by the defendant.
299          (3) [The] Subject to Subsection (5), the office shall disburse money collected from a
300     defendant for a civil accounts receivable and civil judgment of restitution in the following
301     order of priority:
302          (a) first, to any past due amount owed to the department for the monthly supervision
303     fee under Subsection 64-13-21(6)(a);
304          (b) second, and except as provided in Subsection (4)(b), to restitution owed by the
305     defendant in accordance with Subsection (4);
306          (c) third, to the cost of obtaining a DNA specimen from the defendant in accordance
307     with Subsection (4)(b);
308          (d) fourth, to any criminal fine or surcharge owed by the defendant;
309          (e) fifth, to the cost owed by the defendant for a reward described in Section
310     77-32b-104;
311          (f) sixth, to the cost owed by the defendant for medical care, treatment, hospitalization
312     and related transportation paid by a county correctional facility under Section 17-50-319; and
313          (g) seventh, to any other cost owed by the defendant.
314          (4) (a) [If] Subject to Subsection (5), if a defendant owes restitution to more than one
315     person or government agency at the same time, the court, or the office, shall disburse a
316     payment for restitution in the following order of priority:
317          (i) first, to the victim of the offense;
318          (ii) second, to the Utah Office for Victims of Crime;
319          (iii) third, any other government agency that has provided reimbursement to the victim
320     as a result of the defendant's criminal conduct; and
321          (iv) fourth, any insurance company that has provided reimbursement to the victim as a
322     result of the defendant's criminal conduct.
323          (b) [If] Subject to Subsection (5), if a defendant is required under Section 53-10-404 to
324     reimburse the department for the cost of obtaining the defendant's DNA specimen, the
325     reimbursement for the cost of obtaining the defendant's DNA specimen is the next priority after
326     restitution to the victim of the offense under Subsection (4)(a)(i).
327          (c) [If] Subject to Subsection (5), if the defendant is required to pay restitution to more
328     than one victim, restitution shall be disbursed to each victim according to the percentage of
329     each victim's share of the total order for restitution.
330          (5) The office shall disburse money collected from a defendant to a debt that is a part
331     of a civil accounts receivable or civil judgment of restitution if:
332          (a) a defendant has provided a written request to the office to apply the payment to the
333     debt; and
334          (b) (i) the payment will eliminate the entire balance of the debt, including any interest
335     Ĥ→ [and fees] ←Ĥ ; or
336          (ii) after reaching a settlement, the payment amount will eliminate the entire agreed
337     upon balance of the debt, including any interest Ĥ→ [and fees] ←Ĥ .
338          [(5)] (6) For a criminal accounts receivable, the department shall collect the current and
339     past due amount owed by a defendant for the monthly supervision fee under Subsection
340     64-13-21(6)(a) until the court enters a civil accounts receivable on the civil judgment docket
341     under Section 77-18-114.