HBA-EDN H.B. 2429 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2429 By: Goodman Juvenile Justice & Family Issues 3/18/2001 Introduced BACKGROUND AND PURPOSE Currently, private child support enforcement agencies engaging in business in Texas are not regulated by either federal or state law. Although most providers of private child support enforcement services are reputable and provide services in a professional manner, there have been periodic complaints from custodial parents regarding some of these agencies. Because individuals utilizing these services are frequently owed significant amounts of money and may be vulnerable to fraudulent or deceptive practices of these agencies, some level of state oversight of these agencies is warranted. House Bill 2429 establishes procedures for the registration and regulation of private child support enforcement agencies. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Finance Commission of Texas in SECTION 1 (Section 396.051, Finance Code) of this bill. ANALYSIS House Bill 2429 amends the Finance Code to provide that a private child support enforcement agency (agency) must register with the Finance Commission of Texas (commission) to engage in child support enforcement in this state. The bill provides that the commission is authorized to waive any registration prerequisite for a foreign agency that holds a valid registration or other authorization from another state whose requirements are substantially equivalent and with which this state has a reciprocity agreement. The bill provides that an applicant must file an application for a certificate of registration (application) with the commission, accompanied by a surety bond in the amount of $50,000 or a deposit of money in an amount, not to exceed $50,000, to be determined by the commission. The bill authorizes the commission to require an applicant to provide a certified financial statement demonstrating financial solvency or any other information to establish that the requirements for registration have been fulfilled. The bill sets forth provisions regarding the application process (Secs. 396.101-396.108). H.B. 2429 authorizes a foreign agency that is exempt from registration prerequisites to file an application with the commission to operate under that authorization by filing certain information and a surety bond or deposit that meets the requirements for a certificate of registration. The bill provides that a foreign agency may be exempt from filing a surety bond or deposit if proof of an adequate bond or similar instrument maintained in the state of the agency's principal office is offered to the commission's satisfaction. In addition, a copy of the license or other authorization issued by the state in which that agency is authorized to operate must be filed with the commission. The bill sets forth provisions regarding the application process for a foreign agency to operate under another state's authorization. The bill prohibits a person that holds a certificate to operate under other authorization from engaging in business in this state as an agency if another state has revoked or withdrawn the person's authority to operate as an agency, unless the commission grants the foreign agency a registration (Secs. 396.151-396.154). H.B. 2429 prohibits an agency that is not registered or otherwise authorized from bringing an action to enforce a child support obligation in this state. The bill requires a registered agency to maintain and update monthly all records of child support collections made on behalf of, and disbursed to, a client who is an obligee. The bill requires a registered agency and a foreign agency authorized to engage in business to execute a written contract for the enforcement of child support for each client of the agency that is residing in this state (Secs. 396.201-396.203). H.B. 2429 sets forth provisions prohibiting a registered agency from using practices which may be perceived as threatening, coercive, fraudulent, deceptive, or misleading. The bill also sets forth administrative procedures for the revocation, denial, or suspension of a registration and authorizes a person to pursue civil remedies as set forth in the bill for violations of these provisions (Secs. 396.251-396.252, 396.301-396.304, and 396.351-396.353). The bill requires the commission to adopt rules as necessary for the administration of these provisions. The commission is required to charge each applicant a filing fee for a certificate of registration or renewal of a certificate a nonrefundable fee of $500 for each certificate. The commission is authorized to charge each registered private child support enforcement agency an annual fee not to exceed $500 to cover the cost of enforcing these provisions (Secs. 396.051-396.053). EFFECTIVE DATE September 1, 2001. The provisions requiring an agency to be registered are effective January 1, 2002.