Chapter 66 Oregon Laws 2003

AN ACT

HB 2055

Relating to collection of debt; creating new provisions; amending ORS 293.231; and declaring an emergency.

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

SECTION 1. (1) Except as provided in ORS 1.202 and 293.231, if a public body, as defined in ORS 174.109, uses a private collection agency to collect a debt owed to the public body, the public body may add a reasonable fee to the amount of the debt, payable by the debtor, for the collection agency fee incurred or to be incurred.

(2) A fee may not be added under subsection (1) of this section unless the public body has provided notice to the debtor:

(a) Of the existence of the debt;

(b) That the debt may be assigned to a private collection agency for collection; and

(c) Of the amount of the fee that may be added to the debt under subsection (1) of this section.

(3) Except as provided by federal law, the public body may not add a fee under this section that exceeds the collection fee of the private collection agency.

SECTION 2. (1) As used in this section, “commercial debt” means any obligation for payment of money or thing of value arising out of an agreement or contract, express or implied, in which the transaction that is the subject of the agreement or contract is not primarily for personal, family or household purposes.

(2) A person using a private collection agency to collect a commercial debt owed to the person may add a reasonable fee to the amount of the commercial debt, payable by the debtor, for the collection agency fee incurred or to be incurred. A person may not add a fee under this section that:

(a) Exceeds the collection fee of the private collection agency; or

(b) Was not authorized in the agreement or contract creating the commercial debt.

SECTION 3. ORS 293.231 is amended to read:

293.231. (1) Except as provided in subsections (4), (5) and (6) of this section, a state agency, unless otherwise prohibited by law, shall offer for assignment every liquidated and delinquent account to a private collection agency or to the Department of Revenue as provided in ORS 293.250 not later than:

(a) One year from the date the account was liquidated if no payment has been received on the account within that year; or

(b) One year from the date of receipt of the most recent payment on the account.

(2) Nothing in subsection (1) of this section prohibits a state agency from offering for assignment a liquidated and delinquent account to a private collection agency at any time within the one-year period.

(3) If, after a reasonable time, the private collection agency is unable to collect the account, the private collection agency shall notify the state agency that assigned the account that it has been unable to collect the account and shall relinquish the account to the state agency. A private collection agency that collects an account under this section shall be held to the same standard of confidentiality, service and courtesy imposed on the state agency that assigned the account.

(4) If a state agency assigns a liquidated and delinquent account to the Department of Revenue as provided in ORS 293.250, the department shall have one year from the date of liquidation to collect a payment. If the department does not collect a payment within that one-year period or if one year has elapsed since the date of receipt of the most recent payment on the account, the department shall notify the state agency. The state agency shall then immediately offer for assignment the debt to a private collection agency.

(5) The provisions of subsection (1) of this section do not apply to a liquidated and delinquent account that is prohibited by state or federal law or regulation from assignment or collection.

(6) Notwithstanding subsection (1) of this section, a state agency may, at its discretion, choose not to offer for assignment to a private collection agency a liquidated and delinquent account that:

(a) Is secured by a consensual security interest in real or personal property;

(b) Is a court ordered judgment that includes restitution or a payment to the Department of Justice Crime Victims’ Assistance Section;

(c) Is in litigation, including bankruptcy, arbitration and mediation;

(d) Is a student loan owed by a student who is attending school;

(e) Is owed to a state agency by a local or state government or by the federal government;

(f) Is owed by a debtor who is hospitalized in a state hospital as defined in ORS 162.135 or who is on public assistance as defined in ORS 411.010;

(g) Is owed by a debtor who is imprisoned;

(h) Is less than $100, including penalties; or

(i) Would result in loss of federal funding if assigned.

(7) Nothing in this section prohibits a state agency from collecting a tax offset after a liquidated and delinquent account is assigned to a private collection agency.

(8) For the purposes of this section, a state agency shall be deemed to have offered for assignment an account if:

(a) The terms of the offer are of a type generally acceptable within the collections industry for the type of account offered for assignment; and

(b) The offer is made to a private collection agency that engages in collecting on accounts of the type sought to be assigned or is made generally available to private collection agencies through a bid or request for proposal process.

(9) A state agency that retains a private collection agency under this section may add a fee to the amount of the liquidated and delinquent account as provided in section 1 of this 2003 Act. A fee may not be added under this subsection unless the state agency has provided notice to the debtor:

(a) Of the existence of the debt;

(b) That the debt may be assigned to a private collection agency for collection; and

(c) Of the amount of the fee that may be added to the debt under this subsection.

(10) Except as provided by federal law, the state agency may not add a fee under subsection (9) of this section that exceeds the collection fee of the private collection agency.

SECTION 4. Sections 1 and 2 of this 2003 Act and the amendments to ORS 293.231 by section 3 of this 2003 Act apply to debts assigned to a private collection agency on or after the effective date of this 2003 Act.

SECTION 5. This 2003 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2003 Act takes effect on its passage.

Filed in the office of Secretary of State May 7, 2003

Effective date May 7, 2003

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