By Cain S.B. No. 1757
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.