By Goodman H.B. No. 2429
77R4201 CLG-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of private child support enforcement
1-3 agencies; providing a civil penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 5, Finance Code, is amended by adding
1-6 Chapter 396 to read as follows:
1-7 CHAPTER 396. PRIVATE CHILD SUPPORT ENFORCEMENT AGENCIES
1-8 SUBCHAPTER A. GENERAL PROVISIONS
1-9 Sec. 396.001. DEFINITIONS. In this chapter:
1-10 (1) "Child support enforcement" means an action,
1-11 conduct, or practice in enforcing, or in soliciting for
1-12 enforcement, a child support obligation, including the collection
1-13 of an amount owed under a child support obligation.
1-14 (2) "Child support obligation" means an obligation for
1-15 the payment of financial support for a child under an order or writ
1-16 issued by a court or other tribunal.
1-17 (3) "Commission" means the Finance Commission of
1-18 Texas.
1-19 (4) "Foreign agency" means a private child support
1-20 enforcement agency that engages in business in this state solely by
1-21 use of telephone, mail, the Internet, facsimile transmission, or
1-22 any other means of interstate communication.
1-23 (5) "Obligee" means the person identified in an order
1-24 for child support issued by a court or other tribunal as the payee
2-1 to whom an obligor's amounts of ordered child support are due.
2-2 (6) "Obligor" means the person identified in an order
2-3 for child support issued by a court or other tribunal as the
2-4 individual required to make payment under the terms of a support
2-5 order for a child.
2-6 (7) "Private child support enforcement agency" means
2-7 an individual or nongovernmental entity who engages in the
2-8 enforcement of child support ordered by a court or other tribunal
2-9 for a fee or other consideration. The term does not include:
2-10 (A) an attorney enforcing a child support
2-11 obligation on behalf of, and in the name of, a client unless the
2-12 attorney has an employee who is not an attorney and who on behalf
2-13 of the attorney:
2-14 (i) regularly solicits for child support
2-15 enforcement; or
2-16 (ii) regularly contacts child support
2-17 obligees or obligors for the purpose of child support enforcement;
2-18 (B) a state agency designated to serve as the
2-19 state's Title IV-D agency in accordance with Part D, Subchapter IV,
2-20 Social Security Act (42 U.S.C. Section 651 et seq.), as amended; or
2-21 (C) a contractor awarded a contract to engage in
2-22 child support enforcement on behalf of a governmental agency,
2-23 including a contractor awarded a contract:
2-24 (i) under Chapter 236, Family Code; or
2-25 (ii) by a political subdivision of this or
2-26 another state that is authorized by law to enforce a child support
2-27 obligation.
3-1 (8) "Registered agency" means a private child support
3-2 agency, including a foreign agency, that is registered under this
3-3 chapter.
3-4 (Sections 396.002-396.050 reserved for expansion
3-5 SUBCHAPTER B. POWERS AND DUTIES OF COMMISSION
3-6 Sec. 396.051. ADMINISTRATIVE AND RULEMAKING AUTHORITY. (a)
3-7 The commission shall administer this chapter.
3-8 (b) The commission shall adopt rules as necessary for the
3-9 administration of this chapter.
3-10 Sec. 396.052. FILING FEE. (a) The commission shall charge
3-11 each applicant for a certificate of registration, or renewal of a
3-12 certificate, a nonrefundable fee of $500 for each certificate.
3-13 (b) The application fee is due on the date the applicant
3-14 submits an application for registration. The renewal fee is due on
3-15 the date that a certificate holder submits an application to renew
3-16 a registration.
3-17 Sec. 396.053. COST OF REGULATION. The commission may charge
3-18 each registered private child support enforcement agency an annual
3-19 fee not to exceed $500 to cover the cost of enforcing this chapter.
3-20 (Sections 396.054-396.100 reserved for expansion
3-21 SUBCHAPTER C. REGISTRATION
3-22 Sec. 396.101. REGISTRATION REQUIRED. Except as otherwise
3-23 provided by this chapter, a private child support enforcement
3-24 agency must register with the commission to engage in child support
3-25 enforcement in this state.
3-26 Sec. 396.102. RECOGNITION OF AUTHORIZATION ISSUED BY ANOTHER
3-27 STATE. (a) The commission may waive any prerequisite to obtaining
4-1 a registration for a foreign agency:
4-2 (1) after reviewing the applicant's credentials and
4-3 determining that the applicant holds a valid registration or other
4-4 authorization from another state whose requirements are
4-5 substantially equivalent to those imposed under this chapter; or
4-6 (2) after determining the applicant has a valid
4-7 registration or other authorization from another state with which
4-8 this state has a reciprocity agreement.
4-9 (b) The commission may enter into an agreement with another
4-10 state to permit registration by reciprocity.
4-11 Sec. 396.103. APPLICATION REQUIREMENTS. (a) An applicant
4-12 for registration as a private child support enforcement agency must
4-13 file with the commission an application on a form and in the manner
4-14 prescribed by the commission.
4-15 (b) The application must state:
4-16 (1) the name of the applicant;
4-17 (2) the name under which the applicant is doing or
4-18 intends to do business in this state, if different from the
4-19 applicant's name;
4-20 (3) the address of the applicant's principal business
4-21 office, including the state, municipality, and numeric street
4-22 address; and
4-23 (4) any Internet or other electronic mail address and
4-24 business telephone number of the applicant.
4-25 (c) The chief executive officer of the applicant agency
4-26 shall state in a notarized statement that the application is
4-27 accurate and truthful in all respects.
5-1 Sec. 396.104. FINANCIAL AND OTHER DISCLOSURES. The
5-2 commission may require an applicant for registration or renewal of
5-3 registration as a private child support enforcement agency to
5-4 provide:
5-5 (1) a certified financial statement demonstrating the
5-6 financial solvency of the agency for which registration or renewal
5-7 of registration is sought; and
5-8 (2) any other information the commission may
5-9 reasonably require the applicant to provide to establish that the
5-10 requirements and qualifications for registration or renewal of
5-11 registration have been fulfilled by the applicant.
5-12 Sec. 396.105. SURETY BOND OR OTHER DEPOSIT REQUIRED. (a)
5-13 An application for registration must be accompanied by a surety
5-14 bond approved by the commission.
5-15 (b) The surety bond must be:
5-16 (1) issued by a surety authorized to do business in
5-17 this state;
5-18 (2) in the amount of $50,000;
5-19 (3) in favor of the state for the benefit of a person
5-20 damaged by a violation of this chapter; and
5-21 (4) conditioned on the private child support
5-22 enforcement's agency compliance with this chapter and the faithful
5-23 performance of the obligations under the agency's agreements with
5-24 its clients.
5-25 (c) The surety bond must be filed with and held by the
5-26 commission.
5-27 (d) Instead of a surety bond, the commission may accept a
6-1 deposit of money in an amount determined by the commission not to
6-2 exceed $50,000. The commission shall deposit any amounts received
6-3 under this subsection in an insured depository account designated
6-4 for that purpose.
6-5 Sec. 396.106. ISSUANCE OF CERTIFICATE OF REGISTRATION. (a)
6-6 The commission shall issue a certificate of registration and mail
6-7 the certificate to the applicant on receipt of:
6-8 (1) a completed application;
6-9 (2) the surety bond or deposit of money required by
6-10 Section 396.105; and
6-11 (3) the required registration fee.
6-12 (b) If a single application is used to register more than
6-13 one registered location, the commission shall:
6-14 (1) issue a certificate of registration for each
6-15 registered location; and
6-16 (2) mail all of the certificates to the principal
6-17 business location stated in the application.
6-18 Sec. 396.107. DUTY TO UPDATE APPLICATION INFORMATION. A
6-19 certificate holder shall notify the commission of any material
6-20 change in the information provided in an application for
6-21 registration not later than the 60th day after the date on which
6-22 the information changes.
6-23 Sec. 396.108. TERM OF REGISTRATION; RENEWAL. (a) A private
6-24 child support enforcement agency's certificate of registration
6-25 expires on the third anniversary of the date of issuance.
6-26 (b) A certificate of registration may be renewed for another
6-27 three-year period as provided by commission rule.
7-1 (Sections 396.109-396.150 reserved for expansion)
7-2 SUBCHAPTER D. AUTHORITY OF FOREIGN AGENCY TO ENGAGE IN
7-3 BUSINESS IN THIS STATE
7-4 Sec. 396.151. APPLICATION TO OPERATE UNDER OTHER
7-5 AUTHORIZATION INSTEAD OF REGISTRATION. (a) To engage in business
7-6 in this state, a foreign agency that is exempt from registration as
7-7 prescribed by Section 396.102 may file an application with the
7-8 commission to operate under that authorization by filing:
7-9 (1) the information required for an application for
7-10 registration under Section 396.103;
7-11 (2) a surety bond or deposit of money that meets the
7-12 requirements of Section 396.105 unless the agency provides proof to
7-13 the satisfaction of the commission that the agency maintains in the
7-14 state in which that agency has its principal office an adequate
7-15 bond or similar instrument for purposes similar to the purposes
7-16 required for the filing of a surety bond under Section 396.105; and
7-17 (3) a copy of the license or other authorization
7-18 issued by the state in which that agency is authorized to operate.
7-19 (b) The commission may charge a single administrative fee in
7-20 a reasonable amount that is sufficient to cover the costs of the
7-21 commission in processing and acting on the application.
7-22 Sec. 396.152. ACCEPTANCE OF OTHER AUTHORIZATION INSTEAD OF
7-23 REGISTRATION. The commission shall issue a certificate to operate
7-24 under another state's authorization in this state to a foreign
7-25 agency that files an application with the commission under Section
7-26 396.151 if:
7-27 (1) the agency submits all of the information required
8-1 by Section 396.151(a)(1);
8-2 (2) the commissioner determines that the agency has
8-3 met the requirements of Section 396.151(a)(2);
8-4 (3) the agency remits any required administrative fee
8-5 under Section 396.151(b); and
8-6 (4) the commission verifies that the registration or
8-7 other authorization issued by another state is active and in good
8-8 standing.
8-9 Sec. 396.153. NOTIFICATION OF UPDATED INFORMATION OR CHANGE
8-10 IN STATUS OF OTHER AUTHORIZATION. Not later than the 30th day
8-11 after the date on which the change occurs, a foreign private child
8-12 support enforcement agency that is issued a certificate to operate
8-13 in this state under this subchapter shall notify the commission of
8-14 any change in:
8-15 (1) the information provided in an application
8-16 submitted under Section 396.152; or
8-17 (2) the status of the agency's authorization in the
8-18 other state.
8-19 Sec. 396.154. WITHDRAWAL OF APPROVAL TO OPERATE UNDER OTHER
8-20 AUTHORIZATION. A holder of a certificate issued under this
8-21 subchapter may not engage in business in this state as a private
8-22 child support enforcement agency if another state has revoked or
8-23 withdrawn the person's authority to operate as a private child
8-24 support enforcement agency in that state unless the commission
8-25 grants the agency a registration under this chapter.
8-26 (Sections 396.155-396.200 reserved for expansion)
8-27 SUBCHAPTER E. REQUIRED BUSINESS PRACTICES
9-1 Sec. 396.201. REGISTRATION PREREQUISITE TO SUIT. A private
9-2 child support enforcement agency may not bring an action to enforce
9-3 a child support obligation in this state unless the agency is
9-4 registered or otherwise authorized to engage in business in this
9-5 state as provided by this chapter.
9-6 Sec. 396.202. RECORDS. (a) A registered agency shall
9-7 maintain records of all child support collections made on behalf
9-8 of, and disbursed to, a client who is an obligee, including:
9-9 (1) the name of any obligor who made child support
9-10 payments collected by the agency;
9-11 (2) the amount of support collected by the agency for
9-12 each client, including:
9-13 (A) the date on which the amount was collected;
9-14 and
9-15 (B) if available, the date on which each amount
9-16 due the client by the obligor was paid to the client;
9-17 (3) a copy of the order establishing the child support
9-18 obligation under which a collection was made by the agency; and
9-19 (4) any other pertinent information relating to the
9-20 child support obligation, including any case, cause, or docket
9-21 number of the court having jurisdiction over the matter.
9-22 (b) The records required under this section must be updated
9-23 at least monthly and must be maintained by the registered agency
9-24 for a period of four years from the date of the last support
9-25 payment collected by the agency on behalf of an obligee.
9-26 Sec. 396.203. CONTRACT FOR SERVICES. (a) A registered
9-27 agency and foreign agency authorized to engage in business under
10-1 this chapter shall execute a written contract for the enforcement
10-2 of child support for each client of the agency that is residing in
10-3 this state.
10-4 (b) The contract required under this section must:
10-5 (1) be in writing, dated, and signed by both parties
10-6 to the contract; and
10-7 (2) specify its terms in clear language.
10-8 (Sections 396.204-396.250 reserved for expansion
10-9 SUBCHAPTER F. PROHIBITED PRACTICES
10-10 Sec. 396.251. THREATS OR COERCION. (a) In enforcing a
10-11 child support obligation, a registered agency may not use threats,
10-12 coercion, or attempts to coerce that employ any of the following
10-13 practices:
10-14 (1) using or threatening to use violence or other
10-15 criminal means to cause harm to an obligor or property of the
10-16 obligor;
10-17 (2) accusing falsely or threatening to accuse falsely
10-18 an obligor of a violation of state or federal child support laws;
10-19 (3) taking or threatening to take an enforcement
10-20 action against an obligor that is not authorized by law; or
10-21 (4) intentionally representing to a person that the
10-22 agency is a governmental agency authorized to enforce a child
10-23 support obligation.
10-24 (b) Subsection (a) does not prevent a registered agency
10-25 from:
10-26 (1) informing an obligor that the obligor may be
10-27 subject to penalties prescribed by law for failure to pay a child
11-1 support obligation; or
11-2 (2) taking, or threatening to take, an action
11-3 authorized by law for the enforcement of a child support obligation
11-4 by the agency.
11-5 Sec. 396.252. FRAUDULENT, DECEPTIVE, OR MISLEADING
11-6 REPRESENTATIONS. In enforcing a child support obligation, a
11-7 registered agency or employee of the agency may not:
11-8 (1) identify the registered agency by any other name
11-9 other than one by which the agency is registered with the
11-10 commission;
11-11 (2) falsely represent the nature of the child support
11-12 enforcement activities in which the agency is authorized by law to
11-13 engage; or
11-14 (3) falsely represent that an oral or written
11-15 communication is the communication of an attorney.
11-16 (Sections 396.253-396.300 reserved for expansion
11-17 SUBCHAPTER G. ADMINISTRATIVE ENFORCEMENT
11-18 Sec. 396.301. REVOCATION OF REGISTRATION. (a) After notice
11-19 and hearing, the commission may revoke the registration of a
11-20 registered agency that:
11-21 (1) fails to comply with this chapter or a rule
11-22 adopted under this chapter;
11-23 (2) does not pay a fee or other charge imposed by the
11-24 commission under this chapter; and
11-25 (3) fails to maintain and produce at the request of
11-26 the commission records attesting to the financial solvency of the
11-27 registered agency or other business records concerning client
12-1 accounts.
12-2 (b) The commission may permit a registered agency to take an
12-3 appropriate action to correct a failure to comply with this chapter
12-4 and not revoke the registration of the agency.
12-5 Sec. 396.302. ADMINISTRATIVE HEARING ON DENIAL, SUSPENSION,
12-6 OR REVOCATION OF REGISTRATION. (a) The commission may not deny or
12-7 suspend the registration of a private child support enforcement
12-8 agency under this chapter without first conducting an
12-9 administrative hearing.
12-10 (b) A hearing under this section or Section 396.301 is
12-11 subject to Chapter 2001, Government Code.
12-12 Sec. 396.303. BONA FIDE ERROR. A registered agency does not
12-13 violate this chapter if the action complained of resulted from a
12-14 bona fide error that occurred notwithstanding the use of reasonable
12-15 procedures to avoid the error.
12-16 Sec. 396.304. ADMINISTRATIVE INVESTIGATION OF COMPLAINT.
12-17 (a) A person may file with the commission a written complaint
12-18 against a registered agency for a violation of this chapter.
12-19 (b) Not later than the 30th day after the date on which the
12-20 commission receives a complaint under this section, the commission
12-21 shall initiate an investigation into the merits of the complaint.
12-22 (c) The commission may appoint a hearings officer to conduct
12-23 the investigation.
12-24 (d) A hearings officer appointed by the commission to
12-25 investigate a complaint may arrange for the services of a qualified
12-26 mediator and attempt to:
12-27 (1) resolve the complaint and any differences between
13-1 the parties; and
13-2 (2) reach a settlement, without the requirement of
13-3 further investigation.
13-4 (e) The commission may delegate to a hearings officer
13-5 appointed to investigate a complaint under this section the
13-6 authority to dismiss the complaint, after an initial investigation
13-7 and after notice to each affected party and an opportunity for
13-8 hearing, for lack of sufficient evidentiary basis.
13-9 (f) An individual aggrieved by a decision of the commission
13-10 or hearings officer under this section may appeal the decision to a
13-11 district court in Travis County.
13-12 (g) The commission shall provide for an annual public
13-13 inspection of an investigation report of a complaint filed under
13-14 this section.
13-15 (Sections 396.305-396.350 reserved for expansion
13-16 SUBCHAPTER H. CIVIL REMEDIES
13-17 Sec. 396.351. CIVIL ACTION. (a) In addition to any other
13-18 remedy provided by this chapter, a person may bring an action for:
13-19 (1) injunctive relief to enjoin or restrain a
13-20 violation of this chapter; and
13-21 (2) actual damages incurred as a result of a violation
13-22 of this chapter.
13-23 (b) A person who prevails in an action brought under this
13-24 section is entitled to recover court costs and reasonable
13-25 attorney's fees.
13-26 (c) On a finding by a court that an action under this
13-27 section was brought in bad faith or for purposes of harassment, the
14-1 court shall award the defendant attorney's fees reasonably related
14-2 to the work performed and costs.
14-3 Sec. 396.352. SERVICE OF PROCESS OUTSIDE STATE. (a) A
14-4 registered agency that is located in another state or a private
14-5 child support enforcement agency that engages in the business of
14-6 child support enforcement in this state in violation of this
14-7 chapter is considered to have submitted to the jurisdiction of the
14-8 courts of this state with respect to an action brought under this
14-9 chapter.
14-10 (b) A foreign agency engaging in business in this state in
14-11 violation of this chapter is considered to have appointed the
14-12 commission as the agency's agent for service of process in any
14-13 action, suit, or proceeding arising from a violation of this
14-14 chapter.
14-15 Sec. 396.353. REMEDIES UNDER OTHER LAW. (a) A violation of
14-16 this chapter is a deceptive trade practice under Subchapter E,
14-17 Chapter 17, Business & Commerce Code, and is actionable under that
14-18 subchapter.
14-19 (b) This chapter does not affect or alter a remedy at law or
14-20 in equity otherwise available to an obligor, obligee, governmental
14-21 entity, or other legal entity.
14-22 SECTION 2. This Act takes effect September 1, 2001, except
14-23 that the requirement of Chapter 396, Finance Code, as added by this
14-24 Act, that a private child support enforcement agency be registered
14-25 applies only on and after January 1, 2002.