By Hill H.B. No. 3062 76R363 CLG-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the regulation of private child support collectors. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 ARTICLE 1. GENERAL PROVISIONS 1-5 SECTION 1.01. DEFINITIONS. In this Act: 1-6 (1) "Private child support collector" means a person 1-7 who engages in the collection of child support for a fee or other 1-8 consideration. The term does not include: 1-9 (A) the state agency designated to serve as the 1-10 state's Title IV-D agency in accordance with Part D, Subchapter IV, 1-11 Social Security Act (42 U.S.C. Section 651 et seq.), or a similar 1-12 entity of another state or political subdivision; or 1-13 (B) a contractor awarded a contract under 1-14 Chapter 234, Family Code, as added by Chapter 420, Acts of the 75th 1-15 Legislature, Regular Session, 1997. 1-16 (2) "Registered location" means a business location 1-17 for which a private child support collector's certificate of 1-18 registration is issued under this Act. 1-19 SECTION 1.02. WAIVER VOID. A waiver of a provision of this 1-20 Act by a person is void. 1-21 ARTICLE 2. REGISTRATION AND DISCLOSURE STATEMENT 1-22 SECTION 2.01. REGISTRATION REQUIRED. (a) A person may not 1-23 act as a private child support collector unless the person is 1-24 registered under this Act. 2-1 (b) A contract for the collection of child support by an 2-2 unregistered private child support collector is void. 2-3 SECTION 2.02. APPLICATION REQUIREMENTS. (a) An applicant 2-4 for registration as a private child support collector must file 2-5 with the attorney general an application stating: 2-6 (1) the applicant's name, street address, and 2-7 telephone number; 2-8 (2) the name under which the applicant is doing or 2-9 intends to do business, if different from the applicant's name; 2-10 (3) if the applicant's business is incorporated: 2-11 (A) the applicant's business name registered 2-12 with the secretary of state; 2-13 (B) the location of the applicant's registered 2-14 business office; and 2-15 (C) the name and address of each person who 2-16 directly or indirectly owns or controls 10 percent or more of the 2-17 outstanding shares of stock in the applicant's business; 2-18 (4) each registered location for which a certificate 2-19 of registration will be issued and the applicant's principal 2-20 business location; 2-21 (5) any assumed name under which the applicant is 2-22 doing business; and 2-23 (6) any litigation, or unresolved complaint filed with 2-24 a governmental authority of this state, relating to the business 2-25 operation of the applicant. 2-26 (b) If there is no litigation or unresolved complaint 2-27 described by Subsection (a)(6) of this section, an application 3-1 filed under this section must contain a notarized statement that 3-2 there has been no litigation or unresolved complaint of that type. 3-3 SECTION 2.03. ISSUANCE OF CERTIFICATE OF REGISTRATION. (a) 3-4 The attorney general shall issue a certificate of registration and 3-5 mail the certificate to the applicant on receipt of: 3-6 (1) a completed application; 3-7 (2) the surety bond required by Section 5.01 of this 3-8 Act; and 3-9 (3) the required registration fee. 3-10 (b) If one application is used to register more than one 3-11 registered location, the attorney general shall: 3-12 (1) issue a certificate of registration for each 3-13 registered location; and 3-14 (2) mail all of the certificates to the principal 3-15 business location stated in the application. 3-16 SECTION 2.04. UPDATE OF CERTIFICATE OF REGISTRATION. If the 3-17 information provided in an application for a certificate of 3-18 registration changes, the certificate holder shall amend the 3-19 application not later than the 45th day after the date on which the 3-20 information changes. 3-21 SECTION 2.05. CERTIFICATE OF REGISTRATION NONTRANSFERABLE. 3-22 A private child support collector's certificate of registration is 3-23 not transferable. 3-24 SECTION 2.06. TERM; RENEWAL. (a) A private child support 3-25 collector's certificate of registration expires on the second 3-26 anniversary of the date of issuance. 3-27 (b) A certificate of registration may be renewed as provided 4-1 by the attorney general. 4-2 SECTION 2.07. CERTIFICATE POSTING. A certificate holder 4-3 shall post a certificate of registration issued under this Act in a 4-4 conspicuous place at each registered location. 4-5 SECTION 2.08. DISCLOSURE STATEMENT. Before executing a 4-6 contract for the collection of child support, a private child 4-7 support collector shall provide to the person contracting with the 4-8 collector a document containing: 4-9 (1) an explanation of the person's right to proceed 4-10 against the surety bond required under Section 5.01 of this Act; 4-11 and 4-12 (2) the name and address of the surety company that 4-13 issued the surety bond. 4-14 SECTION 2.09. COPY OF DISCLOSURE STATEMENT. A private child 4-15 support collector shall keep in its records a copy of a document 4-16 required under Section 2.08 of this Act, signed by the person 4-17 contracting with the collector, acknowledging receipt, until the 4-18 third anniversary of the date on which the collector provides the 4-19 document. 4-20 ARTICLE 3. CONTRACT FOR SERVICES 4-21 SECTION 3.01. FORM AND TERMS OF CONTRACT. Each contract for 4-22 the collection of child support by a private child support 4-23 collector must be in writing, dated, and signed by the person 4-24 contracting with the collector. The contract must contain: 4-25 (1) the amount of the fee or other consideration to be 4-26 received by the collector; 4-27 (2) the address of the collector's principal business 5-1 location; and 5-2 (3) the name and address of the collector's agent in 5-3 this state authorized to receive service of process. 5-4 SECTION 3.02. ISSUANCE OF CONTRACT AND OTHER DOCUMENTS. A 5-5 private child support collector shall give to a person contracting 5-6 with the collector for the collection of child support, when the 5-7 document is signed, a copy of the completed contract and any other 5-8 document the collector requires the person to sign. 5-9 SECTION 3.03. BREACH OF CONTRACT. The breach by a private 5-10 child support collector of a contract under this Act, or of an 5-11 obligation arising from a contract under this Act, is a violation 5-12 of this Act. 5-13 ARTICLE 4. PROHIBITIONS 5-14 SECTION 4.01. FRAUDULENT OR DECEPTIVE CONDUCT. A private 5-15 child support collector may not directly or indirectly engage in a 5-16 fraudulent or deceptive act, practice, or course of business 5-17 relating to the offer or sale of the services of the collector. 5-18 SECTION 4.02. ADVERTISING SERVICES WITHOUT REGISTRATION. A 5-19 private child support collector may not advertise the services of 5-20 the collector if the collector does not have a certificate of 5-21 registration required by Article 2 of this Act. 5-22 SECTION 4.03. CAUSING WAIVER PROHIBITED. A private child 5-23 support collector may not attempt to cause a person to waive a 5-24 right under this Act. 5-25 ARTICLE 5. SURETY BOND 5-26 SECTION 5.01. SURETY BOND. (a) An application for a 5-27 certificate of registration must be accompanied by a surety bond 6-1 approved by the attorney general. 6-2 (b) The surety bond must be: 6-3 (1) issued by a surety company authorized to do 6-4 business in this state; 6-5 (2) in the amount of $50,000; and 6-6 (3) conditioned on the private child support 6-7 collector's complying with this Act. 6-8 SECTION 5.02. BENEFICIARY OF SURETY BOND. The surety bond 6-9 of a private child support collector must be in favor of: 6-10 (1) this state for the benefit of a person damaged by 6-11 a violation of this Act; and 6-12 (2) a person damaged by a violation of this Act. 6-13 SECTION 5.03. CANCELLATION OF SURETY BOND. (a) Not later 6-14 than the 30th day before the date the surety bond filed under 6-15 Section 5.01 of this Act is canceled, a surety on the bond shall 6-16 provide to the attorney general written notice of the cancellation. 6-17 (b) If the surety bond filed under Section 5.01 of this Act 6-18 by a certificate holder is canceled, the attorney general shall 6-19 suspend the certificate holder's certificate of registration on the 6-20 date of cancellation. 6-21 SECTION 5.04. CLAIM AGAINST SURETY BOND. (a) A person 6-22 making a claim against a surety bond of a private child support 6-23 collector for a violation of this Act may file suit against: 6-24 (1) the collector; and 6-25 (2) the surety. 6-26 (b) A surety is liable only for actual damages, reasonable 6-27 attorney's fees, and court costs awarded under Section 7.02 of this 7-1 Act. 7-2 (c) The aggregate liability of a surety for a collector's 7-3 violation of this Act may not exceed the amount of the surety bond. 7-4 SECTION 5.05. TERM OF SURETY BOND. The surety bond of a 7-5 private child support collector shall be maintained until the 7-6 second anniversary of the date on which the collector ceases 7-7 operations. 7-8 ARTICLE 6. POWERS AND DUTIES OF ATTORNEY GENERAL; ADMINISTRATIVE 7-9 ENFORCEMENT 7-10 SECTION 6.01. ADMINISTRATIVE AND RULEMAKING AUTHORITY. (a) 7-11 The attorney general shall administer this Act. 7-12 (b) The attorney general shall adopt rules necessary for the 7-13 administration of this Act. 7-14 SECTION 6.02. FILING FEE. The attorney general may charge 7-15 each applicant for a certificate of registration, or renewal of a 7-16 certificate, a reasonable fee not to exceed $200 for each 7-17 certificate to cover the cost of issuance or renewal. 7-18 SECTION 6.03. DISCIPLINARY ACTION. After notice and 7-19 hearing, the attorney general may deny an application for a 7-20 certificate of registration, or permanently revoke or suspend for a 7-21 definite period a private child support collector's certificate of 7-22 registration, on a finding by the attorney general that the 7-23 applicant or certificate holder: 7-24 (1) provided false information on an application or 7-25 other document filed with the attorney general; 7-26 (2) failed to file or maintain the surety bond as 7-27 required by Article 5 of this Act; or 8-1 (3) failed to provide the disclosure required by 8-2 Section 2.08 of this Act. 8-3 ARTICLE 7. CRIMINAL PENALTIES AND CIVIL REMEDIES 8-4 SECTION 7.01. CRIMINAL PENALTY. (a) A person commits an 8-5 offense if the person violates this Act. 8-6 (b) An offense under this section is a Class A misdemeanor. 8-7 SECTION 7.02. DAMAGES. (a) A person injured by a violation 8-8 of this Act is entitled to recover: 8-9 (1) actual damages; 8-10 (2) reasonable attorney's fees; and 8-11 (3) court costs. 8-12 (b) A plaintiff who prevails in an action under this section 8-13 may also be awarded punitive damages. 8-14 SECTION 7.03. DECEPTIVE TRADE PRACTICE. A violation of this 8-15 Act is a deceptive trade practice actionable under Subchapter E, 8-16 Chapter 17, Business & Commerce Code. 8-17 ARTICLE 8. EFFECTIVE DATE; EMERGENCY 8-18 SECTION 8.01. EFFECTIVE DATE. This Act takes effect 8-19 September 1, 1999. 8-20 SECTION 8.02. EMERGENCY CLAUSE. The importance of this 8-21 legislation and the crowded condition of the calendars in both 8-22 houses create an emergency and an imperative public necessity that 8-23 the constitutional rule requiring bills to be read on three several 8-24 days in each house be suspended, and this rule is hereby suspended.