79S20649 KEG-F
By: Keffer of Eastland H.B. No. 74
A BILL TO BE ENTITLED
AN ACT
relating to the collection of certain delinquent obligations by the
office of the attorney general.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2107.003, Government Code, is amended to
read as follows:
Sec. 2107.003. COLLECTION BY ATTORNEY GENERAL,
COMPTROLLER, OR OUTSIDE AGENT. (a) Except as provided by Section
2107.004 [Subsection (c)], a state agency shall report an
uncollected and delinquent obligation to [request] the attorney
general for collection on or before the 120th day after the date the
obligation becomes past due or delinquent [to collect an obligation
before the agency may employ, retain, or contract with a person
other than a full-time employee of the state agency to collect the
obligation].
(b) The attorney general:
(1) shall provide legal services for collection of the
obligation;
(2) may authorize the requesting state agency to
employ, retain, or contract, subject to approval by the attorney
general, with one or more persons to collect the obligation; or
(3) if the attorney general determines it to be
economical and in the best interest of the state, may contract with
one or more persons [a person other than a full-time employee of the
agency] to collect the [an] obligation [that the attorney general
cannot collect].
(c) The comptroller may employ, retain, or contract with a
person other than a full-time state employee to collect delinquent
obligations that are owed the comptroller in the comptroller's
official capacity, are not collected through normal collection
procedures, and do not meet the guidelines adopted for collection
by the attorney general. A proposed contract under this subsection
shall be reviewed by the attorney general and may include a
collection fee computed on the amounts collected under the
contract.
(d) The agency contracting under Subsection (b) is entitled
to recover from the obligor, in addition to the amount of the
obligation, the costs incurred in undertaking the collection,
including the costs of a contract under this section. The obligor
is liable for costs of recovery under this section in an amount not
to exceed 30 percent of the sum of the amount of the obligation and
any penalty and interest due on the obligation.
(e) A contract formed under Subsection (b) must provide for
the compensation due to the contractor. The amount of the
compensation may not exceed 30 percent of the sum of the collected
amount of:
(1) the obligation;
(2) any penalty; and
(3) any interest.
(f) A contract formed under Subsection (b) or (c) may permit
or require the contractor to pursue a judicial action to collect the
amount of the obligation in a proper court in or outside of this
state.
(g) In a suit in a Texas state court brought by a contractor
to collect an obligation under this section, the state is not:
(1) required to post security for costs;
(2) liable for costs; and
(3) liable for fees for:
(A) service of process;
(B) attorneys ad litem;
(C) arbitration; or
(D) mediation.
(h) An amount collected under a contract formed under
Subsection (b), including the costs of recovery and court costs or
other costs, shall be deposited in the fund or account to which the
obligation was required to be deposited. The contracting agency
shall pay the compensation due under the contract to the contractor
and shall pay to the applicable court any court costs collected.
(i) The contracting agency shall require a person
contracting under Subsection (b) to post a bond or other security in
an amount the contracting agency determines is sufficient to cover
all revenue or other property of the state that is expected to come
into the possession or control of the contractor in the course of
providing contract services.
(j) A person who contracts under Subsection (b) is an agent
of this state for purposes of determining priority of a claim to be
collected under the contract with respect to claims of other
creditors. The contractor does not exercise any sovereign power of
the state.
(k) The contracting state agency may provide a person
contracting under Subsection (b) any information, including
confidential information, that the agency is not prohibited from
sharing under an agreement with another state or with the United
States and that is:
(1) in the custody of the agency holding the claim; and
(2) necessary to the collection of the obligation.
(l) A person acting under a contract formed under Subsection
(b) or (c) and each employee or agent of that person is subject to
all prohibitions against the disclosure of confidential
information obtained from the contracting agency, the reporting
state agency, or their employees. A contractor or the contractor's
employee or agent who discloses confidential information in
violation of the prohibition is subject to the same penalties for
that disclosure as would apply to the contracting agency or its
employees.
(m) The contracting agency shall require a person who
contracts under Subsection (b) to obtain and maintain insurance
adequate to provide reasonable coverage for damages negligently,
recklessly, or intentionally caused by the contractor or the
contractor's employee or agent in the course of collecting an
obligation under the contract and to protect this state from
liability for those damages. The state is not liable for and may
not indemnify a person acting under a contract under Subsection (b)
for damages negligently, recklessly, or intentionally caused by the
contractor or the contractor's employee or agent in the course of
collecting an obligation under the contract.
(n) In addition to grounds for termination provided by the
contract terms, the attorney general or the contracting agency, as
applicable, may terminate a contract formed under Subsection (b) if
the contractor or the contractor's employee or agent:
(1) violates the federal Fair Debt Collection
Practices Act (15 U.S.C. Section 1692 et seq.);
(2) discloses confidential information to a person not
authorized to receive the information; or
(3) performs any act that results in a final judgment
for damages against this state.
SECTION 2. Section 2254.102(c), Government Code, is amended
to read as follows:
(c) This subchapter does not apply to a contract:
(1) with an agency to collect an obligation under
Section 2107.003(b); or
(2) for legal services entered into by an institution
of higher education under Section 153.006, Education Code.
SECTION 3. This Act takes effect December 1, 2005.