Office of House Bill AnalysisH.B. 2429
By: Goodman
Juvenile Justice & Family Issues


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


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. 


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

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).    


September 1, 2001.  The provisions requiring an agency to be registered are
effective January 1, 2002.