Chapter 1092 Oregon Laws 1999

Session Law

AN ACT

HB 3509

Relating to delinquent accounts owed to state agencies; creating new provisions; and amending ORS 293.240.

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

SECTION 1. As used in sections 2 to 4 of this 1999 Act, unless the context requires otherwise:

(1) "Payment" means a voluntary amount of money paid by a debtor to a state agency or an involuntary amount of money paid by a debtor through offset or garnishment.

(2) "State agency" means any officer, board, commission, department, division or institution in the executive or administrative branch of state government.

SECTION 2. (1) Not later than October 1 of each fiscal year, each state agency shall submit a report to the Legislative Fiscal Office that describes the status of that agency's liquidated and delinquent accounts and efforts made by that agency to collect liquidated and delinquent accounts during the previous fiscal year. The report required under this subsection shall be in a form prescribed by the Legislative Fiscal Office and shall include but not be limited to:

(a) Beginning balance and total number of all liquidated and delinquent accounts;

(b) New liquidated and delinquent accounts added during the last preceding fiscal year;

(c) Total collections of liquidated and delinquent accounts;

(d) Total amount and total number of liquidated and delinquent accounts that have been written off;

(e) Total number and ending balance of all liquidated and delinquent accounts;

(f) Total amount of liquidated and delinquent accounts turned over to private collection agencies and total amount collected by those agencies under section 3 of this 1999 Act; and

(g) Total number and total amount of all liquidated and delinquent accounts exempted under section 4 of this 1999 Act.

(2) The Legislative Fiscal Office shall produce an annual report not later than December 31 of each fiscal year on the status of liquidated and delinquent accounts of state agencies. The report shall be based on the reports submitted by state agencies as required in this section.

(3) A state agency that cannot meet the reporting requirements in subsection (1) of this section for the fiscal year ending June 30, 2000, shall report to the Legislative Fiscal Office the status of the agency's progress toward meeting the reporting requirements.

(4) All state agencies shall provide the report required by subsection (1) of this section for the fiscal year ending June 30, 2001, and every fiscal year thereafter.

SECTION 3. (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 service and courtesy imposed on a state agency that collects an 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 $25, 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.

SECTION 4. (1) A state agency may use rules adopted by the Oregon Department of Administrative Services for exempting liquidated and delinquent accounts from assignment to a private collection agency. The state agency shall provide documentation and justification for exempting liquidated and delinquent accounts from assignment.

(2) The Oregon Department of Administrative Services shall adopt rules governing the procedure that a state agency may follow in exempting a liquidated and delinquent account from assignment, including but not limited to adequacy of the documentation and justification that a state agency is required to provide under this section.

SECTION 5. ORS 293.240 is amended to read:

293.240. (1) If a state agency has made all reasonable efforts to collect money owed to it, including money owed on a liquidated and delinquent account that has been relinquished by a private collection agency under section 3 of this 1999 Act, and has determined that such money and any interest or penalties therefor are uncollectible, in accordance with criteria for uncollectibility formulated by the agency and approved by the Secretary of State and the Attorney General, which criteria shall include the right of offset, the agency may certify to the Secretary of State the amount of the money, interest and penalties, as accurately as can be determined. The Secretary of State may require submission by the agency of all relevant evidence and other information regarding the debt and may examine such records of any other state agency which may be pertinent in determining the uncollectibility of the debt, unless such examination is prohibited by specific provisions of law (except for the secretary's duty to audit the state agency), including but not limited to ORS 314.835 and 657.665.

(2) If the Secretary of State finds that the debt is uncollectible, in accordance with the criteria for uncollectibility of money due to that state agency, the Secretary of State shall direct the agency to write off the debt on its accounts in a manner approved by the Secretary of State.

(3) This section does not apply to debts owed to a state agency for which a procedure for compromise, release, discharge, waiver, cancellation or other form of settlement thereof for reasons other than uncollectibility is by law made specially applicable to such state agency.

SECTION 6. Section 3 of this 1999 Act becomes operative on January 1, 2000.

SECTION 7. Notwithstanding section 6 of this 1999 Act, section 3 of this 1999 Act does not apply to the Department of Revenue until July 1, 2001.

Approved by the Governor September 1, 1999

Filed in the office of the Secretary of State September 2, 1999

Effective date October 23, 1999

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