Chapter 487 Oregon Laws 2001

AN ACT

SB 183

Relating to recovery of cost of care by Department of Corrections; creating new provisions; and amending ORS 115.125, 116.093, 179.610, 179.620, 179.640, 179.653, 179.655, 179.660, 179.701, 179.711, 179.731, 179.740, 179.745, 179.770 and 430.180.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 179.610 is amended to read:

179.610. As used in ORS 179.610 to 179.770, unless the context requires otherwise:

(1) “Agency” means either the Mental Health and Developmental Disability Services Division for a person in a state institution described in ORS 179.321 (1) or the Department of Corrections for a person in a state institution described in ORS 179.321 (2).

[(1)] (2) “Authorized representative” means an individual or entity appointed under authority of ORS chapter 125, as guardian or conservator of a person, who has the ability to control the person’s finances, and any other individual or entity holding funds or receiving benefits or income on behalf of any person.

[(2)] (3) “Care” means all services rendered by the state institutions as described in ORS 179.321 or by the Mental Health and Developmental Disability Services Division or the Department of Corrections on behalf of those institutions. These services include, but are not limited to, such items as medical care, room, board, administrative costs and other costs not otherwise excluded by law.

[(3)] (4) “Decedent’s estate” has the meaning given “estate” in ORS 111.005 (15).

[(4) “Division” means the Mental Health and Developmental Disability Services Division of the Department of Human Services.]

(5) “Person,” “person in a state institution” or “person at a state institution,” or any similar phrase, means an individual who is or has been at a state institution described in ORS 179.321.

(6) “Personal estate” means all income and benefits as well as all assets, including all personal and real property of a living person, and includes assets held by the person’s authorized representative and all other assets held by any other individual or entity holding funds or receiving benefits or income on behalf of any person.

SECTION 2. ORS 179.620 is amended to read:

179.620. (1) A person and the personal estate of the person, or a decedent’s estate, is liable for the full cost of care. Full cost of care is established according to ORS 179.701.

(2) While the person is liable for the full cost of care, the maximum amount a person is required to pay toward the full cost of care shall be determined according to the person’s ability to pay. Ability to pay is determined as provided in ORS 179.640.

(3) Upon the death of a person, the decedent’s estate shall be liable for any unpaid cost of care. The liability of the decedent’s estate is limited to the cost of care incurred on or after July 24, 1979. The decedent’s estate shall not include assets placed in trust for the person by other persons. Collection of any amount from a decedent’s estate shall be pursuant to ORS 179.740.

(4) Regardless of subsection (1) of this section and ORS 179.610 (6), assets held in trust by a trustee for a person are subject to laws generally applicable to trusts.

(5) Notwithstanding subsections (1) and (3) of this section, neither the Mental Health and Developmental Disability Services Division nor the Department of Corrections may [not] collect the cost of care from:

(a) Any assets received by or owing to a person and the personal estate of the person, or the decedent’s estate, as compensation from the state for injury, [or] death or, if the collection is being made by the Department of Corrections, the false imprisonment of the person that occurred when the person was in a state institution listed in ORS 179.321 [(1)] and for which the state admits liability or is found liable through adjudication; and

(b) Any real or personal property of the personal estate of the person, or the decedent’s estate, that the person or an authorized representative of the person can demonstrate was purchased solely with assets referred to in paragraph (a) of this subsection or partially with such assets, to the extent such assets were used in the purchase.

SECTION 3. ORS 179.640 is amended to read:

179.640. (1)(a) Both the Mental Health and Developmental Disability Services Division and the Department of Corrections shall establish rules for determining ability to pay for persons in their respective institutions. The rules adopted by each agency shall require, in addition to other relevant factors, consideration of the personal estate, the person’s need for funds for personal support after release, and the availability of third-party benefits such as, but not limited to, Medicare or private insurance. [The division] Each agency may also consider the probable length of stay at the state institution. Nothing in this section requires the Department of Corrections to investigate a person’s ability to pay or to issue an ability-to-pay order.

(b) When adopting rules under paragraph (a) of this subsection, the Department of Corrections shall consider the person’s needs for funds to pay for the support of the person’s children and to pay any monetary obligations imposed on the person as a result of the person’s conviction.

(2) In determining a person’s ability to pay, [the division] neither agency may [not] consider as part of the personal estate of the person or the decedent’s estate:

(a) Any assets received by or owing to the person and the personal estate of the person, or the decedent’s estate, as compensation from the state for injury, [or] death or, if the collection is being made by the Department of Corrections, the false imprisonment of the person that occurred when the person was in a state institution listed in ORS 179.321 [(1)] and for which the state admits liability or is found liable through adjudication; and

(b) Any real or personal property that the person or an authorized representative of the person can demonstrate was purchased solely with assets referred to in paragraph (a) of this subsection or partially with such assets, to the extent such assets were used in the purchase.

(3) A person and the authorized representative of the person, if any, shall provide all financial information requested by the [division] agency that is necessary to determine the person’s ability to pay. To determine ability to pay, the [division] agency may use any information available to the [division] agency, including information provided by the Department of Revenue from personal income tax returns pursuant to ORS 314.840, and elderly rental assistance claims. Upon request, the Department of Revenue shall release copies of tax returns to the [division] agency. [Where] When the person or the person’s authorized representative fails to provide evidence to demonstrate an inability to pay full cost of care, the [division] agency may determine the person has the ability to pay the full cost of care.

(4) The [division] agency shall provide actual notice to the person and any authorized representative, if known to the [division] agency, of its determination by issuing an ability-to-pay order. The order shall state the person’s full liability and the person’s determined ability to pay. Actual notice means receipt by the person and the authorized representative of notice. The notice shall include a copy of the ability-to-pay order, a description of the person’s appeal rights and the date upon which appeal rights terminate and state the address where a request for hearing may be mailed or delivered. At any time, the [division] agency may reissue an ability-to-pay order to notify an authorized representative as provided by ORS 179.653 (4).

(5) At any time during the person’s stay at the state institution or within 36 months from the date the person is released, if the [division] agency receives new financial information that shows a change in the person’s financial circumstances, the [division] agency shall consider the changed circumstances and issue a new ability-to-pay order.

(6) Orders issued after the person is released [shall] may not require the person to make payments toward the cost of care for more than 36 consecutive months following release. However, the [division] agency may collect beyond the 36-month period any payments that became due but were not paid within the 36 months following release. Any remaining balance of full cost of care shall be collected as provided in ORS 179.740.

(7) Notwithstanding ORS 183.315 (5), if a person or authorized representative disagrees with any ability-to-pay order issued pursuant to this section, the person or authorized representative may request a contested case hearing. To the extent practical, the hearing will be held at a location convenient to the person or the authorized representative. The request must be postmarked within 60 days from the date of the mailing of the ability-to-pay order. If the person or the authorized representative makes a timely request for a contested case hearing, the hearing and any appeal of the final hearing order shall be governed by ORS 183.413 to 183.497. If the person or the authorized representative fails to make a timely request for a contested case hearing, the ability-to-pay order shall be final and not subject to judicial review, except as subsequently modified by the [division] agency as provided in subsection (5) of this section.

(8) On appeal, regardless of other information presented, payment of the full cost of care may be ordered if the person or the authorized representative refuses to produce financial information that the Hearings Officer determines is relevant and must be produced.

SECTION 4. ORS 179.653 is amended to read:

179.653. (1) If any person or authorized representative refuses to pay for the cost of care as ordered by the Mental Health and Developmental Disability Services Division or the Department of Corrections under ORS 179.640, the amount unpaid plus interest shall be a lien in favor of the State of Oregon. The lien shall arise as each payment is due under the order and shall continue until the liability with interest is satisfied. The lien shall be upon the title to and interest in the real and personal property of the personal estate.

(2) Prior to the filing of a distraint warrant as provided in ORS 179.655 (2), the lien shall only be valid against:

(a) Property of the person;

(b) Assets held by any authorized representative bound by the ability-to-pay order; and

(3) Regardless of any other provision of law or statute that provides a procedure for establishing obligations, including the claim and payment provisions of ORS chapter 125, an authorized representative who has received notice and had an opportunity to request a contested case hearing shall comply with an ability-to-pay order upon demand by the [division] agency. The [division] agency may issue the demand any time after the order becomes final.

(4) An authorized representative who has not had an opportunity to request a contested case hearing, either because the authorized representative was not appointed at the time the ability-to-pay order became final, or was not given notice of the ability-to-pay order as required by ORS 179.640 (4), shall not be bound by the order of the [division] agency. To bind the authorized representative, the ability-to-pay order must be reissued and notice provided to the authorized representative pursuant to ORS 179.640 (4). The authorized representative shall have the same appeal rights as if the order had originally been issued to the authorized representative. After the order becomes final, the authorized representative shall be bound as provided in subsection (3) of this section. The [division shall] agency may not issue an execution of a lien or foreclose against property held by or in the control of the authorized representative until the authorized representative is bound by the order of the [division] agency.

(5) An authorized representative who is a trustee shall only be bound to the extent that the final order specifically finds that the trust assets of a trust fund are subject to claim by the [division] agency.

(6) If the authorized representative does not comply with the demand, the [division] agency may file with the probate court a motion to require the authorized representative to comply. If the authorized representative is a conservator or guardian appointed under ORS chapter 125, the motion shall be filed in that proceeding. The motion shall be accompanied by an affidavit stating that the order is final, that demand has been made on the authorized representative and that the order has not been complied with.

(7) The authorized representative may object to the motion only on grounds that the order is not final, that the order is not binding on the authorized representative as provided in this section or that all required payments have been made. The objection must be by affidavit.

(8) If the authorized representative objects by affidavit, the court shall hear the motion. If the court determines that the ability-to-pay order is final and binding on the authorized representative and that all required payments have not been made, the court shall order the authorized representative to comply with the ability-to-pay order.

(9) If the authorized representative fails to object by affidavit within 15 days of the filing of the motion, the court shall order the authorized representative to comply with the order. An authorized representative who willfully fails or refuses to comply may be found in contempt of court and may be held personally responsible.

(10) Nothing in this section shall affect the requirement that the [division] agency issue a new order in accordance with ORS 179.640 (5) if financial circumstances have changed.

SECTION 5. ORS 179.655 is amended to read:

179.655. (1) If any amount due the Mental Health and Developmental Disability Services Division or the Department of Corrections for the cost of care of a person is not paid within 30 days after it becomes due, and no provision is made to secure the payment by bond, deposit or otherwise, pursuant to rules adopted by the [division] appropriate agency, the [division] agency may issue a distraint warrant directed to any county of the state.

(2) After the receipt of the distraint warrant, the clerk of the county shall enter in the County Clerk Lien Record the name of the person, the amount for which the distraint warrant is issued and the date the distraint warrant is recorded. The amount of the distraint warrant shall become a lien upon the title to and interest in any property owned or later acquired by the debtor against whom it is issued, and it may be enforced by the [division] agency in the same manner as a judgment of the circuit court.

(3) In the event that an ability-to-pay order issued under ORS 179.640 (4) or (5) becomes final, and supersedes a previous final ability-to-pay order on which a distraint warrant had been issued, the [division] agency shall issue a new distraint warrant superseding the previous distraint warrant, and the lien shall conform to the new order.

(4) The [division] agency may direct a copy of the distraint warrant to the sheriff of any county of the state commanding the sheriff to levy upon and sell the real and personal property of the taxpayer found within that county, for the payment of the amount due, with interest, collection charge and the sheriff’s fee. The sheriff shall return the distraint warrant to the [division] agency and pay to it the money collected not less than 60 days from the date the copy of the distraint warrant was directed to the sheriff.

(5) The [division] agency may issue the directive provided in subsection (4) of this section to any agent of the [division] agency. In executing the distraint warrant, the agent shall have the same powers conferred by law upon sheriffs. However, the agent is not entitled to any fee or compensation in excess of actual expenses incurred in the performance of this duty.

SECTION 6. ORS 179.660 is amended to read:

179.660. If the Mental Health and Developmental Disability Services Division or the Department of Corrections believes a person at [a] one of its state [institution] institutions needs a guardian or conservator, or both, and one has not been appointed, the [division] agency may request that the district attorney institute proper proceedings for this appointment in the court having probate jurisdiction. The county of which the person is a resident, or was a resident at the time of admittance, shall be the basis for determining the appropriate district attorney to be contacted.

SECTION 7. ORS 179.701 is amended to read:

179.701. The cost-of-care rates for a person shall be determined by the Mental Health and Developmental Disability Services Division or the Department of Corrections, as appropriate. The rates established shall be reasonably related to current costs of the institutions as described in ORS 179.321. Current costs shall exclude costs of outpatient services as defined in ORS 430.010 (4) and any other costs not directly related to the care for a person at a state institution.

SECTION 8. ORS 179.711 is amended to read:

179.711. (1) Remittance of amounts due for care of persons at state institutions as provided in ORS 179.610 to 179.770 shall be made to the Mental Health and Developmental Disability Services Division or the Department of Corrections, as appropriate.

(2) The [division] agency shall refund any unearned payment for the care of a person at a state institution where payment has been made in advance and the person dies or is discharged before the end of the period for which payment was made. Any refund shall be paid to the person, to the authorized representative of the person or to the decedent’s estate if the person has died. All claims for refunds approved by the [division] agency shall be paid as provided in ORS 293.295 to 293.462. Any amounts necessary for payment of refunds are appropriated from the money collected by that agency under the provisions of ORS 179.610 to 179.770.

SECTION 9. ORS 179.731 is amended to read:

179.731. If the Mental Health and Developmental Disability Services Division or the Department of Corrections determines that collection of the amount payable under ORS 179.610 to 179.770 for the cost of care of a person would be detrimental to the best interests of the person or the [division] agency, the [division] agency may waive the collection of part or all of the amount otherwise payable.

SECTION 10. ORS 179.740 is amended to read:

179.740. (1) The Mental Health and Developmental Disability Services Division or the Department of Corrections, as appropriate, may file a claim against the decedent’s estate for any unpaid charges under ORS 179.620 (3). This shall be done in the same manner as claims of creditors and with the priorities provided in ORS 115.125.

(2) If, within 90 days following the person’s death, the person’s estate is not otherwise being probated, the [division] agency may petition any court of competent jurisdiction for the issuance of letters of administration or testamentary. This action would be for the purpose of collecting the full amount of unpaid cost of care as determined by ORS 179.701 and limited by ORS 179.620 (3). However, the [division shall] agency may not file a petition under this subsection until at least 90 days after the death of the person who was at the state institution and then only in the event that the person’s estate is not otherwise being probated.

(3) The [division] agency may settle any claim against the decedent’s estate during the pendency of the probate proceeding by accepting other security or in any other equitable manner. The [division] agency may waive all or part of the claim if it finds collection of this amount due to be inequitable.

(4) The [division shall] agency may not recover amounts [which] that exceed the total cost of care of the deceased person as computed under ORS 179.701 and limited by ORS 179.620 (3).

SECTION 11. ORS 179.745 is amended to read:

179.745. The State of Oregon, by and through the Mental Health and Developmental Disability Services Division or the Department of Corrections, may take title to real and personal property to carry out the provisions of ORS 179.620, 179.653, 179.655 and 179.740. With the written consent of the owner of real property or an authorized representative of the owner, the [division] agency may transfer real property under the provisions of ORS 270.100 to 270.190. The [division] agency may transfer personal property under rules adopted by the [division] agency. The proceeds, less costs, of any real or personal property transferred by the [division] agency under this section shall be credited to and deposited in the Mental Health and Developmental Disability Services Account established by ORS 430.180 or the Department of Corrections Account established by ORS 423.097, as appropriate.

SECTION 12. ORS 179.770 is amended to read:

179.770. (1) In accordance with any applicable provisions of ORS 183.310 to 183.550, both the Mental Health and Developmental Disability Services Division and the Department of Corrections may adopt any rules necessary to carry out ORS 179.610 to 179.770.

(2) Subject to any applicable provision of the State Personnel Relations Law, the [division] agency may employ employees necessary to carry out ORS 179.610 to 179.770.

SECTION 13. ORS 115.125 is amended to read:

115.125. (1) If the applicable assets of the estate are insufficient to pay all expenses and claims in full, the personal representative shall make payment in the following order:

(a) Support of spouse and children, subject to the limitations imposed by ORS 114.065.

(b) Expenses of administration.

(d) Debts and taxes with preference under federal law.

(e) Reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending the decedent.

(f) Taxes with preference under the laws of this state that are due and payable while possession of the estate of the decedent is retained by the personal representative.

(g) Debts owed employees of the decedent for labor performed within 90 days immediately preceding the date of death of the decedent.

(h) The claim of the Adult and Family Services Division for the net amount of public assistance, as defined in ORS 411.010, paid to or for the decedent, and the claim of the Mental Health and Developmental Disability Services Division or the Department of Corrections for care and maintenance of any decedent who was at a state institution to the extent provided in ORS 179.610 to 179.770.

(i) All other claims against the estate.

(2) If the applicable assets of the estate are insufficient to pay in full all expenses or claims of any one class specified in subsection (1) of this section, each expense or claim of that class shall be paid only in proportion to the amount thereof.

SECTION 14. ORS 116.093 is amended to read:

116.093. (1) Upon filing the final account and petition for decree of distribution, the personal representative shall fix a time for filing objections thereto in a notice thereof. Not less than 20 days before the time fixed in the notice, the personal representative shall cause a copy of the notice to be mailed to:

(a) Each heir at the last-known address of the heir, if the decedent died intestate.

(b) Each devisee at the last-known address of the devisee, if the decedent died testate.

(d) Any other person known to the personal representative to have or to claim an interest in the estate being distributed.

(2) The notice need not be mailed to the personal representative.

(3) Proof of the mailing to those persons entitled to notice shall be made by affidavit and filed in the estate proceeding at or before approval of the final account.

(4) If the Adult and Family Services Division or its authorized agent has presented a claim under ORS chapters 411 to 415 and ORS 416.010 to 416.270, 416.310 to 416.340 and 416.510 to 416.990 or 417.010 to 417.080, or the Mental Health and Developmental Disability Services Division or the Department of Corrections or [its] the authorized agent of the division or the department has presented a claim under ORS 179.620 (3), and the claim has not been settled or paid in full, the personal representative shall cause to be mailed to the division or department a copy of the final account at the same time, and shall make proof of the mailing in the same manner, as the notice provided for in this section.

SECTION 15. ORS 430.180 is amended to read:

430.180. (1) There is established in the General Fund of the State Treasury an account to be known as the Mental Health and Developmental Disability Services Account, to which all reimbursements to the Mental Health and Developmental Disability Services Division for cost and care of persons in state programs collected pursuant to ORS 179.610 to 179.770, 426.241, 427.108 and 430.165 shall be deposited.

(2) The moneys in the Mental Health and Developmental Disability Services Account are hereby continuously appropriated to the Mental Health and Developmental Disability Services Division of the Department of Human Services for the purposes of paying the expenses of those state programs and associated administrative costs for which revenues are collected pursuant to ORS 179.770, 426.241 and 430.165 and revenues collected for those programs established pursuant to ORS 427.104, 427.106 (1977 Replacement Part) and 427.108.

(3) The Mental Health and Developmental Disability Services Division shall keep a record of all moneys credited to and deposited in the Mental Health and Developmental Disability Services Account. The record shall indicate by separate cumulative accounts the source from which the moneys are derived.

(4) In order to facilitate financing the costs advanced as set forth in subsection (2) of this section, the division may at any time during the biennium transfer to the Mental Health and Developmental Disability Services Account, with the approval of the Director of the Oregon Department of Administrative Services, such funds as it deems necessary, not to exceed $4 million, from funds duly appropriated to the division for a biennial period. Such funds so transferred shall be retransferred from the Mental Health and Developmental Disability Services Account by the division to the appropriation from which the original transfer was made. The retransfers shall be accomplished prior to the last day of each biennial period.

SECTION 16. ORS 179.653 and 179.655 are added to and made a part of ORS 179.610 to 179.770.

Approved by the Governor June 21, 2001

Filed in the office of Secretary of State June 22, 2001

Effective date January 1, 2002

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