Amend HB 1365 as follows:
(1) add the following new sections to read as follows and
renumber subsequent sections accordingly:
SECTION __. Title 5, Finance Code, is amended by adding
Chapter 396 to read as follows:
CHAPTER 396. PRIVATE CHILD SUPPORT ENFORCEMENT AGENCIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 396.001. DEFINITIONS. In this chapter:
(1) "Child support enforcement" means an action,
conduct, or practice in enforcing, or in soliciting for
enforcement, a child support obligation, including the collection
of an amount owed under a child support obligation.
(2) "Child support obligation" means an obligation for
the payment of financial support for a child under an order or writ
issued by a court or other tribunal.
(3) "Department" means the Banking Department of
Texas.
(4) "Foreign agency" means a private child support
enforcement agency that engages in business in this state solely by
use of telephone, mail, the Internet, facsimile transmission, or
any other means of interstate communication.
(5) "Obligee" means the person identified in an order
for child support issued by a court or other tribunal as the payee
to whom an obligor's amounts of ordered child support are due.
(6) "Obligor" means the person identified in an order
for child support issued by a court or other tribunal as the
individual required to make payment under the terms of a support
order for a child.
(7) "Private child support enforcement agency" means
an individual or nongovernmental entity who engages in the
enforcement of child support ordered by a court or other tribunal
for a fee or other consideration. The term does not include:
(A) an attorney enforcing a child support
obligation on behalf of, and in the name of, a client unless the
attorney has an employee who is not an attorney and who on behalf
of the attorney:
(i) regularly solicits for child support
enforcement; or
(ii) regularly contacts child support
obligees or obligors for the purpose of child support enforcement;
(B) a state agency designated to serve as the
state's Title IV-D agency in accordance with Part D, Subchapter IV,
Social Security Act (42 U.S.C. Section 651 et seq.), as amended; or
(C) a contractor awarded a contract to engage in
child support enforcement on behalf of a governmental agency,
including a contractor awarded a contract:
(i) under Chapter 236, Family Code; or
(ii) by a political subdivision of this or
another state that is authorized by law to enforce a child support
obligation.
(8) "Registered agency" means a private child support
agency, including a foreign agency, that is registered under this
chapter.
Sections 396.002-396.050 reserved for expansion
SUBCHAPTER B. POWERS AND DUTIES OF DEPARTMENT
Sec. 396.051. ADMINISTRATIVE AND RULEMAKING AUTHORITY. (a)
The Department shall administer this chapter.
(b) The Finance Commission of Texas shall adopt rules as
necessary for the administration of this chapter.
Sec. 396.052. FILING FEE. (a) The Department shall charge
each applicant for a certificate of registration, or renewal of a
certificate, a nonrefundable fee of $500 for each certificate.
(b) The application fee is due on the date the applicant
submits an application for registration. The renewal fee is due on
the date that a certificate holder submits an application to renew
a registration.
Sec. 396.053. COST OF REGULATION. The Department may charge
each registered private child support enforcement agency an annual
fee not to exceed $500 to cover the cost of enforcing this chapter.
Sections 396.054-396.100 reserved for expansion
SUBCHAPTER C. REGISTRATION
Sec. 396.101. REGISTRATION REQUIRED. Except as otherwise
provided by this chapter, a private child support enforcement
agency must register with the Department to engage in child support
enforcement in this state.
Sec. 396.102. RECOGNITION OF AUTHORIZATION ISSUED BY ANOTHER
STATE. (a) The Department may waive any prerequisite to obtaining
a registration for a foreign agency:
(1) after reviewing the applicant's credentials and
determining that the applicant holds a valid registration or other
authorization from another state whose requirements are
substantially equivalent to those imposed under this chapter; or
(2) after determining the applicant has a valid
registration or other authorization from another state with which
this state has a reciprocity agreement.
(b) The Department may enter into an agreement with another
state to permit registration by reciprocity.
Sec. 396.103. APPLICATION REQUIREMENTS. (a) An applicant
for registration as a private child support enforcement agency must
file with the Department an application on a form and in the manner
prescribed by the Department.
(b) The application must state:
(1) the name of the applicant;
(2) the name under which the applicant is doing or
intends to do business in this state, if different from the
applicant's name;
(3) the address of the applicant's principal business
office, including the state, municipality, and numeric street
address; and
(4) any Internet or other electronic mail address and
business telephone number of the applicant.
(c) The chief executive officer of the applicant agency
shall state in a notarized statement that the application is
accurate and truthful in all respects.
Sec. 396.104. FINANCIAL AND OTHER DISCLOSURES. The
Department shall require an applicant for registration or renewal
of registration as a private child support enforcement agency to
provide:
(1) a certified financial statement demonstrating the
financial solvency of the agency for which registration or renewal
of registration is sought; and
(2) any other information the Department may
reasonably require the applicant to provide to establish that the
requirements and qualifications for registration or renewal of
registration have been fulfilled by the applicant.
Sec. 396.105. SURETY BOND OR OTHER DEPOSIT REQUIRED. (a)
An application for registration must be accompanied by a surety
bond approved by the Department.
(b) The surety bond must be:
(1) issued by a surety authorized to do business in
this state;
(2) in the amount of $50,000;
(3) in favor of the state for the benefit of a person
damaged by a violation of this chapter; and
(4) conditioned on the private child support
enforcement's agency compliance with this chapter and the faithful
performance of the obligations under the agency's agreements with
its clients.
(c) The surety bond must be filed with and held by the
Department.
(d) Instead of a surety bond, the Department may accept a
deposit of money in an amount determined by the Department not to
exceed $50,000. The Department shall deposit any amounts received
under this subsection in an insured depository account designated
for that purpose.
Sec. 396.106. ISSUANCE OF CERTIFICATE OF REGISTRATION. (a)
The Department shall issue a certificate of registration and mail
the certificate to the applicant on receipt of:
(1) a completed application;
(2) evidence of financial solvency;
(3) the surety bond or deposit of money required by
Section 396.105; and
(4) the required registration fee.
(b) If a single application is used to register more than
one registered location, the Department shall:
(1) issue a certificate of registration for each
registered location; and
(2) mail all of the certificates to the principal
business location stated in the application.
Sec. 396.107. DUTY TO UPDATE APPLICATION INFORMATION. A
certificate holder shall notify the department of any material
change in the information provided in an application for
registration not later than the 60th day after the date on which
the information changes.
Sec. 396.108. TERM OF REGISTRATION; RENEWAL. (a) A private
child support enforcement agency's certificate of registration
expires on the third anniversary of the date of issuance.
(b) A certificate of registration may be renewed for another
three-year period as provided by Department rule.
Sections 396.109-396.150 reserved for expansion
SUBCHAPTER D. AUTHORITY OF FOREIGN AGENCY TO ENGAGE IN
BUSINESS IN THIS STATE
Sec. 396.151. APPLICATION TO OPERATE UNDER OTHER
AUTHORIZATION INSTEAD OF REGISTRATION. (a) To engage in business
in this state, a foreign agency that is exempt from registration as
prescribed by Section 396.102 may file an application with the
Department to operate under that authorization by filing:
(1) the information required for an application for
registration under Section 396.103;
(2) a surety bond or deposit of money that meets the
requirements of Section 396.105 unless the agency provides proof to
the satisfaction of the Department that the agency maintains in the
state in which that agency has its principal office an adequate
bond or similar instrument for purposes similar to the purposes
required for the filing of a surety bond under Section 396.105; and
(3) a copy of the license or other authorization
issued by the state in which that agency is authorized to operate.
(b) The Department may charge a single administrative fee in
a reasonable amount that is sufficient to cover the costs of the
Department in processing and acting on the application.
Sec. 396.152. ACCEPTANCE OF OTHER AUTHORIZATION INSTEAD OF
REGISTRATION. The Department shall issue a certificate to operate
under another state's authorization in this state to a foreign
agency that files an application with the Department under Section
396.151 if:
(1) the agency submits all of the information required
by Section 396.151(a)(1);
(2) the Departmenter determines that the agency has
met the requirements of Section 396.151(a)(2);
(3) the agency remits any required administrative fee
under Section 396.151(b); and
(4) the Department verifies that the registration or
other authorization issued by another state is active and in good
standing.
Sec. 396.153. NOTIFICATION OF UPDATED INFORMATION OR CHANGE
IN STATUS OF OTHER AUTHORIZATION. Not later than the 30th day
after the date on which the change occurs, a foreign private child
support enforcement agency that is issued a certificate to operate
in this state under this subchapter shall notify the Department of
any change in:
(1) the information provided in an application
submitted under Section 396.152; or
(2) the status of the agency's authorization in the
other state.
Sec. 396.154. WITHDRAWAL OF APPROVAL TO OPERATE UNDER OTHER
AUTHORIZATION. A holder of a certificate issued under this
subchapter may not engage in business in this state as a private
child support enforcement agency if another state has revoked or
withdrawn the person's authority to operate as a private child
support enforcement agency in that state unless the Department
grants the agency a registration under this chapter.
Sections 396.155-396.200 reserved for expansion
SUBCHAPTER E. REQUIRED BUSINESS PRACTICES
Sec. 396.201. REGISTRATION PREREQUISITE TO SUIT. A private
child support enforcement agency may not bring an action to enforce
a child support obligation in this state unless the agency is
registered or otherwise authorized to engage in business in this
state as provided by this chapter.
Sec. 396.202. RECORDS. (a) A registered agency shall
maintain records of all child support collections made on behalf
of, and disbursed to, a client who is an obligee, including:
(1) the name of any obligor who made child support
payments collected by the agency;
(2) the amount of support collected by the agency for
each client, including:
(A) the date on which the amount was collected;
and
(B) the date on which each amount due the client
by the obligor was paid to the client;
(3) a copy of the order establishing the child support
obligation under which a collection was made by the agency; and
(4) any other pertinent information relating to the
child support obligation, including any case, cause, or docket
number of the court having jurisdiction over the matter.
(b) The records required under this section must be updated
at least monthly and must be maintained by the registered agency
for a period of four years from the date of the last support
payment collected by the agency on behalf of an obligee.
Sec. 396.203. CONTRACT FOR SERVICES. (a) A registered
agency and foreign agency authorized to engage in business under
this chapter shall execute a written contract for the enforcement
of child support for each client of the agency that is residing in
this state.
(b) The contract required under this section must:
(1) be in writing, dated, and signed by both parties
to the contract; and
(2) specify its terms in clear language.
Sections 396.204-396.250 reserved for expansion
SUBCHAPTER F. PROHIBITED PRACTICES
Sec. 396.251. THREATS OR COERCION. (a) In enforcing a
child support obligation, a registered agency may not use threats,
coercion, or attempts to coerce that employ any of the following
practices:
(1) using or threatening to use violence or other
criminal means to cause harm to an obligor or property of the
obligor;
(2) accusing falsely or threatening to accuse falsely
an obligor of a violation of state or federal child support laws;
(3) taking or threatening to take an enforcement
action against an obligor that is not authorized by law; or
(4) intentionally representing to a person that the
agency is a governmental agency authorized to enforce a child
support obligation.
(b) Subsection (a) does not prevent a registered agency
from:
(1) informing an obligor that the obligor may be
subject to penalties prescribed by law for failure to pay a child
support obligation; or
(2) taking, or threatening to take, an action
authorized by law for the enforcement of a child support obligation
by the agency.
Sec. 396.252. FRAUDULENT, DECEPTIVE, OR MISLEADING
REPRESENTATIONS. In enforcing a child support obligation, a
registered agency or employee of the agency may not:
(1) identify the registered agency by any other name
other than one by which the agency is registered with the
Department;
(2) falsely represent the nature of the child support
enforcement activities in which the agency is authorized by law to
engage; or
(3) falsely represent that an oral or written
communication is the communication of an attorney.
Sections 396.253-396.300 reserved for expansion
SUBCHAPTER G. ADMINISTRATIVE ENFORCEMENT
Sec. 396.301. REVOCATION OF REGISTRATION. (a) After notice
and hearing, the Department may revoke the registration of a
registered agency that:
(1) fails to comply with this chapter or a rule
adopted under this chapter;
(2) does not pay a fee or other charge imposed by the
Department under this chapter; and
(3) fails to maintain and produce at the request of
the Department records attesting to the financial solvency of the
registered agency or other business records concerning client
accounts.
(b) The Department may permit a registered agency to take an
appropriate action to correct a failure to comply with this chapter
and not revoke the registration of the agency.
Sec. 396.302. ADMINISTRATIVE HEARING ON DENIAL, SUSPENSION,
OR REVOCATION OF REGISTRATION. (a) The Department may not deny or
suspend the registration of a private child support enforcement
agency under this chapter without first conducting an
administrative hearing.
(b) A hearing under this section or Section 396.301 is
subject to Chapter 2001, Government Code.
Sec. 396.303. BONA FIDE ERROR. A registered agency does not
violate this chapter if the action complained of resulted from a
bona fide error that occurred notwithstanding the use of reasonable
procedures to avoid the error.
Sec. 396.304. ADMINISTRATIVE INVESTIGATION OF COMPLAINT.
(a) A person may file with the Department a written complaint
against a registered agency for a violation of this chapter.
(b) Not later than the 30th day after the date on which the
Department receives a complaint under this section, the Department
shall initiate an investigation into the merits of the complaint.
(c) The Department may appoint a hearings officer to conduct
the investigation.
(d) A hearings officer appointed by the Department to
investigate a complaint may arrange for the services of a qualified
mediator and attempt to:
(1) resolve the complaint and any differences between
the parties; and
(2) reach a settlement, without the requirement of
further investigation.
(e) The Department may delegate to a hearings officer
appointed to investigate a complaint under this section the
authority to dismiss the complaint, after an initial investigation
and after notice to each affected party and an opportunity for
hearing, for lack of sufficient evidentiary basis.
(f) An individual aggrieved by a decision of the Department
or hearings officer under this section may appeal the decision to a
district court in Travis County.
(g) The Department shall provide for an annual public
inspection of an investigation report of a complaint filed under
this section.
Sections 396.305-396.350 reserved for expansion
SUBCHAPTER H. CIVIL REMEDIES
Sec. 396.351. CIVIL ACTION. (a) In addition to any other
remedy provided by this chapter, a person may bring an action for:
(1) injunctive relief to enjoin or restrain a
violation of this chapter; and
(2) actual damages incurred as a result of a violation
of this chapter.
(b) A person who prevails in an action brought under this
section is entitled to recover court costs and reasonable
attorney's fees.
(c) On a finding by a court that an action under this
section was brought in bad faith or for purposes of harassment, the
court shall award the defendant attorney's fees reasonably related
to the work performed and costs.
Sec. 396.352. SERVICE OF PROCESS OUTSIDE STATE. (a) A
registered agency that is located in another state or a private
child support enforcement agency that engages in the business of
child support enforcement in this state in violation of this
chapter is considered to have submitted to the jurisdiction of the
courts of this state with respect to an action brought under this
chapter.
(b) A foreign agency engaging in business in this state in
violation of this chapter is considered to have appointed the
Department as the agency's agent for service of process in any
action, suit, or proceeding arising from a violation of this
chapter.
Sec. 396.353. REMEDIES UNDER OTHER LAW. (a) A violation of
this chapter is a deceptive trade practice under Subchapter E,
Chapter 17, Business & Commerce Code, and is actionable under that
subchapter.
(b) This chapter does not affect or alter a remedy at law or
in equity otherwise available to an obligor, obligee, governmental
entity, or other legal entity.
(2) On Page 42, after Line 5, add a new Subdivision (d) to
read as follows:
(d) The requirement of Chapter 396, Finance Code, as added by
this Act, that a private child support agency be registered applies
only on or after January 1, 2002.