SSB 3253 (LSB 6250XC (29) 83)

SENATE FILE _____

BY  (PROPOSED COMMITTEE ON APPROPRIATIONS BILL BY CHAIRPERSON DVORSKY)

A BILL FOR

An Act relating to the collection of debt obligations owed the state and cities and establishing a state debt coordinator, providing a fee, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 8A.504, subsection 3, Code 2009, is amended to read as follows:
   3.  In the case of multiple claims to payments filed under this section, priority shall be given to claims filed by the child support recovery unit or the foster care recovery unit, next priority shall be given to claims filed by the clerk of the district court, next priority shall be given to claims filed by the college student aid commission, next priority shall be given to claims filed by the investigations division of the department of inspections and appeals, next priority shall be given to claims filed by a clerk of the district court, and last priority shall be given to claims filed by other state agencies. In the case of multiple claims in which the priority is not otherwise provided by this subsection, priority shall be determined in accordance with rules to be established by the director.
    Sec. 2.  Section 321.40, subsection 6, Code Supplement 2009, is amended to read as follows:
   6.  a.  The department or the county treasurer shall refuse to renew the registration of a vehicle registered to the applicant if the department or the county treasurer knows that the applicant has a delinquent account, charge, fee, loan, taxes, or other indebtedness owed to or being collected by the state, from information provided pursuant to sections 8A.504 and 421.17. An applicant may contest this action by requesting a contested case proceeding from the agency that referred the debt for collection pursuant to section 8A.504.  The department of revenue and the department of transportation shall notify the county treasurers through the distributed teleprocessing network of persons who owe such a delinquent account, charge, fee, loan, taxes, or other indebtedness.
   b.  The county treasurer of the county of the person’s residence and in which the person’s vehicle is registered, in cooperation with the department of revenue, may collect delinquent taxes including penalties and interest owed to the state from a person applying for renewal of a vehicle registration. The applicant may remit full payment of the taxes including applicable penalties and interest, along with a processing fee of five dollars, to the county treasurer at the time of registration renewal. Upon full payment of the required taxes including applicable penalties and interest, the processing fee, and the vehicle registration fee, the county treasurer shall issue the registration to the person. A county treasurer collecting on behalf of the department of revenue shall update the vehicle registration records through the distributed teleprocessing network on a daily basis for all persons who have paid taxes pursuant to this subsection. A county treasurer shall forward all funds collected for the department of revenue to the department of revenue. 
    Sec. 3.  Section 321.40, subsection 9, Code Supplement 2009, is amended to read as follows:
   9.  a.  The clerk of the district court shall notify the county treasurer of any delinquent court debt, as defined in section 602.8107, which is being collected by the centralized collection unit of the department of revenue pursuant to section 602.8107, subsection 3, or the county attorney pursuant to section 602.8107, subsection 4. The county treasurer shall refuse to renew the vehicle registration of the applicant upon such notification from the clerk of the district court in regard to such applicant.
   b.  If the applicant enters into or renews a payment plan that is satisfactory to the centralized collection unit of the department of revenue, the county attorney, or the county attorney’s designee, the centralized collection unit or the county attorney shall provide the county treasurer with written or electronic notice of the payment plan within five days of entering into such a plan. The county treasurer shall temporarily lift the registration hold on an applicant for a period of ten days if the treasurer receives such notice in order to allow the applicant to register a vehicle for the year. If the applicant remains current with the payment plan entered into with the centralized collection unit or the county attorney or the county attorney’s designee, subsequent lifts of registration holds shall be granted without additional restrictions.
    Sec. 4.  Section 321.152, Code 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  2A.  The five dollar processing fee charged by a county treasurer for collection of tax debt owed to the department of revenue pursuant to section 321.40, subsection 6, shall be retained for deposit in the county general fund.
    Sec. 5.  Section 321.153, Code 2009, is amended to read as follows:
   321.153  Treasurer’s report to department.
   1.  The county treasurer on the tenth day of each month shall certify to the department a full and complete statement of all fees and penalties received by the county treasurer during the preceding calendar month and shall remit all moneys not retained for deposit under section 321.152 to the treasurer of state.
   2.  The distributed teleprocessing network shall be used in the collection, receipting, accounting, and reporting of any fee collected through the registration renewal or title process, with sufficient time and financial resources provided for implementation.
   3.  This section does not apply to fees collected or retained by a county treasurer pursuant to participation in county issuance of driver’s licenses under chapter 321M.
   4.  This section does not apply to processing fees charged by a county treasurer for the collection of tax debt owed to the department of revenue pursuant to section 321.40.
    Sec. 6.  NEW SECTION.  364.22B  Collection of judgment debt.
   1.  As used in this section, “judgment debt” means any criminal penalty, any personal judgment for a civil penalty, or any personal or in rem judgment for the costs of abating a nuisance or other violation, owing to a city in any proceeding brought as a municipal infraction under section 364.22, or in a civil nuisance proceeding under chapter 657, or in a criminal proceeding for a misdemeanor violation under a city ordinance.
   2.  Judgment debt owing to a city is deemed delinquent if it is not paid within thirty days after the date it is assessed. An amount which was ordered by the court to be paid on a date fixed in the future is deemed delinquent if it is not received by the clerk of court within thirty days after the fixed date set out in the court order. If an amount was ordered to be paid in installments and an installment is not received within thirty days after the date it is due, the entire amount of the judgment debt is deemed delinquent.
   3.  a.  A city may contract with a private collection designee for the collection of judgment debt sixty days after the judgment debt in a case is deemed delinquent pursuant to subsection 2.
   b.  The contract shall provide for a collection fee of up to twenty-five percent of the amount of the balance of the judgment debt in a case deemed delinquent. The collection fee shall be added to the amount of the judgment debt deemed delinquent. The amount of the judgment debt deemed delinquent and the collection fee shall be owed by and collected from the defendant. The collection fee shall be used to compensate the private collection designee.
    Sec. 7.  Section 421.17, subsection 27, Code 2009, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  k.  A county treasurer may collect delinquent taxes, including penalties and interest, administered by the department in conjunction with renewal of a vehicle registration as provided in section 321.40, subsection 6, paragraph “b”, and rules adopted pursuant to this paragraph. County treasurers shall be given access to information required for the collection of delinquent taxes, including penalties and interest, as necessary to accomplish the purposes of section 321.40, subsection 6, paragraph “b”. The confidentiality provisions of sections 422.20 and 422.72 do not apply to information provided by the department to a county treasurer pursuant to this paragraph. A county treasurer collecting taxes, penalties, and interest administered by the department is subject to the requirements and penalties of the confidentiality laws of this state regarding tax or indebtedness information. The director shall adopt rules to implement the collection of tax debt as authorized in section 321.40 and this paragraph.
    Sec. 8.  Section 421.17, Code 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  31.  a.  To the extent permissible by federal law, to subpoena certain records held by a public or private utility company with respect to an individual who has a debt or obligation placed with the centralized collection unit of the department. The subpoena authority granted in this subsection may be used only after reasonable efforts have been made by the centralized collection unit to identify and locate the individual.
   b.  The department may subpoena customer records, but shall not request or require the disclosure of transaction information, account activity, or proprietary information.
   c.  A public or private utility company shall respond to the subpoenas. The subpoenas shall not be served more frequently than quarterly.
   d.  The burden of showing reasonable cause to believe that the documents or records sought by the subpoena are necessary to assist the department under this subsection shall be upon the director. In administering this subsection, the director and the department shall comply with all applicable state and federal laws pertaining to the confidentiality or privacy of individuals or public or private utility companies. The information and customer records obtained by the department pursuant to this subsection are confidential records and are not subject to requests for examination pursuant to chapter 22.
   e.  A public or private utility company shall not be held liable for any action arising as a result of providing the records described in paragraph “b” or for any other action taken reasonably and in good faith to comply with this subsection.
   f.  As used in this subsection, “public or private utility company” means a public utility, cable, video, or satellite television company, cellular telephone company, or internet service provider.
    Sec. 9.  Section 421.17A, subsection 4, Code 2009, is amended to read as follows:
   4.  Verification of accounts and immunity from liability.
   a.  The facility may contact a financial institution to obtain verification of the account number, the names and social security numbers listed for the account, and the account balance of an account held by an obligor. Contact with a financial institution may be by telephone or by written communication. The financial institution may require positive voice recognition and may require the telephone number of the authorized person from the facility before releasing an obligor’s account information by telephone.
   b.  The facility and financial institutions doing business in Iowa shall develop and operate a data match system, using automated data exchanges to the greatest extent feasible. The data match system shall, as provided in paragraph “c”, serve as the means by which each financial institution provides to the facility for each calendar quarter the name, record address, social security number or other taxpayer identification number, and other identifying information for each obligor who maintains an account at the institution, as identified by the facility by name and social security number or other taxpayer identification number.
   c.  (1)  A financial institution shall provide the information described in paragraph “b” through the process developed by the department of human services pursuant to section 252I.4, subsection 2, and a financial institution shall not be required to provide or match to a file more frequently than the financial institution provides information under the process described in section 252I.4, subsection 2.
   (2)  The facility and the department of human services shall enter into a cooperative agreement to implement paragraph “b” to the extent allowed by federal law, including Tit. IV, part D of the Social Security Act, at no additional cost to the department of human services.
   d.  (1)  The facility shall pay a reasonable fee to a financial institution for conducting the data match required in paragraph “c”. The amount of the fee shall not exceed the lesser of either one hundred fifty dollars for each quarterly data match conducted or the actual costs incurred by the financial institution for each quarterly data match conducted.
   (2)  Notwithstanding any other provision of law to the contrary, a financial institution shall be allowed a reasonable amount of time to submit a claim for a fee under this paragraph. The amount of time allowed shall be determined by the department by rule.
   b.  e.  The financial institution is immune from any civil or criminal liability which might otherwise be incurred or imposed for information released by the financial institution to the facility pursuant to this section.
   c.  f.  The financial institution or the facility is not liable for the cost of any early withdrawal penalty of an obligor’s certificate of deposit.
   g.  The information received by the facility is confidential and shall be used by the facility only in levy collection activities.
   h.  The director shall adopt rules for the administration of this subsection and for the implementation of the data match system.
    Sec. 10.  Section 421.17A, Code 2009, is amended by adding the following new subsections:
   NEW SUBSECTION.  9.  Immunity of financial institution.  A financial institution shall not be liable either for blocking access to or surrendering an individual’s assets in response to a levy action under this section or for any other action taken in good faith to comply with the requirements of this section.
   NEW SUBSECTION.  10.  Actions not precluded.  This section shall not be construed to preclude a financial institution from doing either of the following:
   a.  Recouping a deposit made to an individual’s account if the financial institution is lawfully entitled to do so.
   b.  Collecting standard or contractual account activity fees to the extent such fees are necessary to maintain the account during any period in which access to the account is blocked or encumbered.
    Sec. 11.  NEW SECTION.  421C.1  State debt coordinator —— established —— duties —— authority.
   1.  The office of the state debt coordinator is established within the department of revenue for administrative and budgetary purposes. The office is to be headed and administered by the state debt coordinator.
   a.  The governor shall appoint the coordinator, subject to senate confirmation. The coordinator shall possess an expert knowledge of and skills in the field of debt collection and have an intricate understanding of the workings of state government. The coordinator’s term of office shall be four years, beginning July 1 of the year of appointment and ending on June 30 of the year of expiration.
   b.  If a vacancy occurs in the office of the state debt coordinator, the vacancy shall be filled for the unexpired portion of the term in the same manner as the original appointment was made.
   c.  The coordinator shall not engage in any occupation, business, or profession that would interfere with or be inconsistent with the coordinator’s duties. The coordinator shall not serve on or under any committee of any political party or actively campaign on behalf of a candidate for elective office.
   2.  The duties of the coordinator shall include all of the following:
   a.  Coordinating the internal operations of the office and developing and implementing policies and procedures designed to ensure the efficient administration of the office.
   b.  Appointing all personnel deemed necessary for the administration of the functions of the office as provided by this chapter.
   c.  Preparing an annual budget for the office.
   d.  Developing and recommending legislative proposals deemed necessary for the continued efficiency of the office’s functions and reviewing legislative proposals related to matters within the office’s purview.
   e.  Reviewing the debt collection practices of each branch of state government, except the practices related to the collection of delinquent child support obligations.
   f.  Coordinating the collection efforts of each branch of state government.
   g.  Making recommendations to the general assembly to improve and increase debt collection efficiencies and practices.
   h.  Filing a notice of a lien and negotiating a settlement as provided in section 421C.2.
   i.  Managing the debt settlement program established in section 421C.3.
   j.  Accepting and maintaining county attorney collection reports required under section 602.8107, subsection 4.
   k.  Accepting and reviewing county attorney applications to the debt settlement program as required by section 421C.4.
   l.  Adopting rules deemed necessary for the administration of this chapter in accordance with chapter 17A.
   3.  The state debt coordinator shall have the authority to appoint a designee to carry out certain duties provided in this chapter.
   4.  Notwithstanding any other law to the contrary, the office of the state debt coordinator shall be provided access to all state debt collection information, including full viewing access to the Iowa court information system, for the purpose of collecting personal identifying information and collecting or coordinating debt collection efforts. This section does not apply to debt collection information related to delinquent child support obligations.
    Sec. 12.  NEW SECTION.  421C.2  Notice of lien in civil action.
   1.  When a debt obligation is owed the state, the state debt coordinator shall have a lien, to the extent of the debt obligation owed, upon all monetary claims which the debtor may have against third parties. A lien under this section is not effective unless the state debt coordinator files a notice of lien with the clerk of the district court in the county where the debtor resides and with the debtor’s attorney or other representative, if applicable. To be effective against a monetary claim, the notice of lien must be filed before a third party has concluded a final settlement with the debtor, the debtor’s attorney, or other representative. The third party shall obtain a written determination from the state debt coordinator concerning the amount of the lien before a settlement is deemed final for purposes of this section. A compromise, including but not limited to a settlement, waiver, or release, of a monetary claim under this section does not defeat the state debt coordinator’s lien except upon written agreement by the coordinator or the coordinator’s designee. A settlement, award, or judgment structured in any manner that does not include a debt obligation owed the state does not defeat the state court debt coordinator’s lien if there is any recovery by the debtor unless a written agreement has been entered into between the state debt coordinator or the coordinator’s designee and the debtor.
   2.  The state debt coordinator shall be provided viewing access to the Iowa court information system as provided in section 421C.1 to determine if a debtor owes a debt obligation to the state.
   3.  The state debt coordinator’s lien is valid and binding on an attorney, insurer, or other third party only upon monetary notice given by the state debt coordinator.
   4.  An insurer or attorney representing a debtor on a monetary claim upon which the state debt coordinator has a lien under this section shall notify the state debt coordinator prior to negotiating a settlement offer, if the insurer or attorney has actual knowledge of the lien.
   a.  Actual knowledge under this section shall include the notice to the attorney pursuant to subsection 1.
   b.  The mailing and deposit in a United States post office or public mailing box of the notice, addressed to the insurer, attorney, or other third party at its location used for service of original notice, is adequate legal notice of the lien.
   5.  Upon a judgment or settlement of a total claim by the debtor, of which the lien for delinquent court debt is a part, the court costs and reasonable attorney fees shall first be deducted from the total judgment or settlement. One-third of the remaining balance shall then be deducted and paid to the debtor. From the remaining balance, the lien of the department shall be paid. Any amount remaining shall be paid to the debtor.
   6.  The state debt coordinator may enforce its lien by a civil action against any liable third party if a judgment or settlement was paid to the debtor without notifying the state debt coordinator as provided in this section.
   7.  For purposes of this section the term “third party” includes an attorney, individual, institution, corporation, or public or private agency which is or may be liable to pay all or part of a debtor’s monetary claim.
    Sec. 13.  NEW SECTION.  421C.3  Debt settlement program.
   1.  As used in this section, “eligible debt” means all delinquent debt obligations owed the state, except as provided in subsection 2. “Eligible debt” includes any interest and penalties assessed against such debt obligations.
   2.  The coordinator shall establish a debt settlement program. The program shall apply to all delinquent debt obligations due that are classified as court debt pursuant to section 602.8107.
   3.  The following debt obligations are ineligible for the program:
   a.  Delinquent debt obligations that were imposed less than four years prior to the date of the application.
   b.  Victim restitution as defined in section 910.1.
   c.  Civil penalties assessed pursuant to section 321.218A, 321.32A, or 321J.17.
   d.  Jail fees charged pursuant to section 356.7.
   4.  The following persons are ineligible for the program:
   a.  A person whose income level exceeds two hundred percent of the United States poverty level as defined by the most recently revised poverty income guidelines published by the United States department of health and human services.
   (1)  The coordinator may determine that a person whose income is at or below two hundred percent of the United States poverty level as defined by the most recently revised poverty income guidelines published by the United States department of health and human services, is ineligible for the program if the debt coordinator determines the person is able to pay the full amount of the delinquent debt.
   (2)  In making the determination of a person’s ability to pay the full amount of the delinquent debt, the court shall consider not only the person’s income, but also the availability of any assets subject to execution, including but not limited to cash, stocks, bonds, and any other property which may be applied to the eligible debt.
   b.  A person who is in jail, prison, or who is under supervision during the period of incarceration or supervision.
   c.  A person paying delinquent court debt through an established payment plan with the clerk of the district court, with the centralized collection unit of the department of revenue or its designee, with a county attorney or the county attorney’s designee, or with a private collection designee.
   d.  A person who has previously participated in the program.
   5.  Under the program the state debt coordinator is authorized to forgive not more than fifty percent of all eligible debt obligations due.
   6.  The program shall provide that upon written application and payment of the agreed upon percentage of eligible debt obligation due to the state, the state shall forgive any remaining balance of eligible debt obligation due and shall not seek any contempt or civil action or criminal prosecution against the person related to the eligible debt obligation forgiven under the program. Upon the forgiveness of the remaining balance of the eligible debt pursuant to the program, the case in which the debt accrued shall be considered by the state as paid in full.
   7.  The written application shall contain all case numbers associated with the eligible debt obligation due and a general description of such debt.
   8.  Failure to pay the amount agreed upon by the date specified shall bar the person’s participation in the program for life.
   9.  A person who participates in the program shall relinquish all administrative and judicial rights to challenge the imposition and the amount of the eligible debt obligation owed.
   10.  If a driver’s license is reinstated as a result of participating in the program, the person shall be required to pay a reinstatement fee as provided in section 321.191, any civil penalty assessed pursuant to section 321.218A, 321A.32A, or 321J.17, and provide proof of financial responsibility pursuant to section 321A.17, if otherwise required by law.
   11.  Upon paying the amount required under subsection 5, the department of revenue shall provide the person with a certified document detailing the case numbers paid in full under the program. Any state department, agency, or branch shall, upon the filing of a certified document detailing the cases paid in full under the program, indicate in the records of the department, agency, or branch that the case is in fact paid in full with respect to the eligible debt obligations paid under the program.
   12.  The coordinator shall prepare and make available debt settlement application forms which contain requirements for approval of an application. The coordinator may deny an application that is inconsistent with this section.
   13.  Any department, agency, or branch shall cooperate with the state debt coordinator in administering the program.
   14.  The director of revenue shall establish an account and shall deposit in the account all receipts received under the program. Not later than the fifteenth day of each month, the director shall deposit amounts received with the treasurer of state for deposit in the general fund of the state.
   15.  The state debt coordinator shall submit an annual report by January 1 to the chairpersons and ranking members of the joint appropriations subcommittee on justice systems and the legislative services agency, detailing the amount of debt obligations settled under the program, including the classification of the debt settled and the county of residence of persons who had debt settled under the program or with a debt settlement designee as provided in section 421C.4.
    Sec. 14.  NEW SECTION.  421C.4  Debt settlement collection by designees.
   1.  As used in this section “county attorney” means a single county attorney office or a group of county attorney offices whose counties have entered into an agreement pursuant to chapter 28E pursuant to section 602.8107, subsection 4, to collect delinquent court debt.
   2.  The centralized collection unit of the department of revenue and a county attorney collecting delinquent court debt pursuant to section 602.8107, subsection 4, are eligible to act as the state debt coordinator’s designee under the debt settlement program. If the centralized collection unit of the department of revenue or a county attorney serves as the state debt coordinator’s designee the procedures of the program established in section 421C.3 apply to the designee except as otherwise provided in this section.
   3.  a.  In order to be eligible to settle debt under the program, a county attorney shall first make application to the state debt coordinator requesting authority to act as the state debt coordinator’s designee. The state debt coordinator shall approve each application, upon a showing of commitment to collect delinquent court debt pursuant to section 602.8107, subsection 4, and upon reaffirmation to continue collection efforts pursuant to section 602.8107, subsection 4. A county attorney is not eligible to participate in the debt settlement program if the county attorney has been deemed ineligible under section 602.8107, subsection 4, paragraph “g”.
   b.  If a county attorney is approved to act as the state debt coordinator’s designee under the debt settlement program any eligible court debt settled that is more than two years old shall be deposited with the clerk of the district court as provided in section 602.8107, subsection 4, and distributed to the county in accordance with section 602.8107, subsection 4. For purposes of calculating the amounts distributed to the county, the amounts collected by the county attorney when acting as the state debt coordinator designee shall be considered as any other debt collected under the county attorney collection program pursuant to section 602.8107, subsection 4. The remainder collected by the county attorney acting as the state debt coordinator’s designee shall be remitted to the state court administrator as provided in section 602.8107, subsection 4.
   4.  For those counties in which a county attorney is not acting as the state debt coordinator’s designee under the debt settlement program, or for cases the centralized collection unit is collecting upon, the centralized collection unit of the department of revenue may serve as the state debt coordinator’s designee.
    Sec. 15.  Section 422.20, subsection 3, paragraph a, Code 2009, is amended to read as follows:
   a.  Unless otherwise expressly permitted by section 8A.504, section 421.17, subsections 22, 23, and 26, sections and subsection 27, paragraph “k”, section 252B.9, section 421.17A, subsection 4, section 321.40, subsection 6, sections 321.120, 421.19, 421.28, 422.72, and 452A.63, and this section, a tax return, return information, or investigative or audit information shall not be divulged to any person or entity, other than the taxpayer, the department, or internal revenue service for use in a matter unrelated to tax administration.
    Sec. 16.  Section 422.72, subsection 3, paragraph a, Code 2009, is amended to read as follows:
   a.  Unless otherwise expressly permitted by section 8A.504, section 421.17, subsections 22, 23, and 26, sections and subsection 27, paragraph “k”, section 252B.9, section 421.17A, subsection 4, section 321.40, subsection 6, sections 321.120, 421.19, 421.28, 422.20, and 452A.63, and this section, a tax return, return information, or investigative or audit information shall not be divulged to any person or entity, other than the taxpayer, the department, or internal revenue service for use in a matter unrelated to tax administration.
    Sec. 17.  Section 602.8107, subsection 3, unnumbered paragraph 1, Code Supplement 2009, is amended to read as follows:
   Thirty days after court debt has been assessed, or if an installment payment is not received within thirty days after the date it is due, the judicial branch may shall assign a case to the centralized collection unit of the department of revenue or its designee to collect debts owed to the clerk of the district court for a period of sixty one hundred twenty days, unless a county attorney has filed with the clerk of the district court a full commitment to collect delinquent court debt pursuant to subsection 4. In addition, court debt which is being collected under an installment agreement pursuant to section 321.210B which is in default that remains delinquent may shall also be assigned to the centralized collection unit of the department of revenue or its designee for a period of one hundred twenty days.
    Sec. 18.  Section 602.8107, subsection 3, paragraph c, Code Supplement 2009, is amended by striking the paragraph.
    Sec. 19.  Section 602.8107, subsection 4, unnumbered paragraph 1, Code Supplement 2009, is amended to read as follows:
   The county attorney or the county attorney’s designee may collect court debt sixty days after the court debt is deemed delinquent pursuant to subsection 2. In order to receive a percentage of the amounts collected pursuant to this subsection, the county attorney must file annually with the clerk of the district court on or before July 1 a notice of full commitment to collect delinquent court debt and must file on the first day of each month a list of the cases in which the county attorney or the county attorney’s designee is pursuing the collection of delinquent court debt. The list shall include a list of cases where delinquent court debt is being collected under an installment agreement pursuant to section 321.210B, and a list of cases in default which are no longer being collected under an installment agreement but remain delinquent for all cases assigned to the county for collection by the court. The annual notice shall contain a list of procedures which will be initiated by the county attorney.
    Sec. 20.  Section 602.8107, subsection 4, paragraph f, Code Supplement 2009, is amended by striking the paragraph.
    Sec. 21.  Section 602.8107, subsection 4, Code Supplement 2009, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  g.  Beginning July 1, 2010, and every fiscal year thereafter, amounts collected and distributed pursuant to this subsection shall be equal to or greater than twenty-five thousand dollars for each county or twenty-five thousand dollars in the aggregate for counties that have entered into an agreement pursuant to chapter 28E. If a county, or counties that have entered into a chapter 28E agreement, fails to meet the minimum threshold established in this paragraph, the county, or counties under the chapter 28E agreement, shall be ineligible to participate in the county attorney collection program the following fiscal year. In the event a county is ineligible to collect under this program, the county may apply to the state debt coordinator established in section 421C.1 to reenter the program following the fiscal year of ineligibility.
   NEW PARAGRAPH.  h.  A county participating in the county attorney collection program shall file an annual collection report with the state debt coordinator established in section 421C.1. Counties that have entered into a chapter 28E agreement to participate in the county attorney collection program may file one report, detailing collections in each county that is a party to the agreement.
    Sec. 22.  Section 602.8107, subsection 5, paragraphs a and b, Code Supplement 2009, are amended to read as follows:
   a.  The judicial branch may shall contract with a private collection designee for the collection of court debt sixty one hundred twenty days after the court debt in a case is deemed delinquent pursuant to subsection 2 if the county attorney is not collecting the court debt in a case pursuant to subsection 4. The judicial branch shall solicit requests for proposals prior to entering into any contract pursuant to this subsection.
   b.  The contract shall provide for a collection fee equal of up to twenty-five percent of the amount of the court debt in a case deemed delinquent. The collection fee as calculated shall be added to the amount of the court debt deemed delinquent. The amount of the court debt deemed delinquent and the collection fee shall be owed by and collected from the defendant. The collection fee shall be used to compensate the private collection designee. The contract may also assess the private collection designee an initial fee for entering into the contract.
    Sec. 23.  Section 909.3, subsection 1, Code 2009, is amended to read as follows:
   1.  All fines imposed by the court shall be paid on the day the fine is imposed, and the person shall be instructed to pay such fines with the office of the clerk of the district court on the date of imposition.
    Sec. 24.  DEBT AMNESTY PROGRAM.
   1.  A debt amnesty program is established within the department of revenue for a period beginning July 1, 2010, through December 31, 2010, for any debt obligation eligible under section 421C.3.
   2.  A person who is in jail or prison, or who is under supervision, is not eligible for the program during the period of incarceration or supervision.
   3.  A person who is paying delinquent court debt through an established payment plan enumerated in section 421C.3, subsection 4, paragraph “c”, is also not eligible for the program.
   4.  Under the program the director of revenue is authorized to forgive not more than fifty percent of any eligible debt obligation due.
   5.  The program shall provide that upon written application and payment of the agreed upon percentage of eligible debt obligation due to the state, the state shall forgive any remaining balance of eligible debt obligation due and shall not seek any contempt or civil action, or criminal prosecution, against the person related to the eligible debt obligation forgiven under the program. Upon the forgiveness of the unpaid portion of the eligible debt pursuant to this program, the case in which the debt accrued shall be considered paid in full by the state.
   6.  The written application shall contain all case numbers associated with the eligible debt obligation due, and a general description of such debt.
   7.  Failure to pay the amount agreed upon by the date specified shall bar the person’s participation in the program.
   8.  A person who participates in the program shall relinquish all administrative and judicial rights to challenge the imposition and the amount of eligible debt obligation owed.
   9.  If a driver’s license is reinstated as a result of participating in the program, the person shall be required to pay a reinstatement fee as provided in section 321.191, any civil penalty assessed pursuant to section 321.218A, 321A.32A, or 321J.17, and provide proof of financial responsibility pursuant to section 321A.17, if otherwise required by law.
   10.  Upon paying the amount required under subsection 5, the department of revenue shall provide the person with a certified document detailing the case numbers paid in full under the program. Any state department, agency, or branch shall, upon the filing of a certified document detailing the cases paid in full under the program, indicate in the records of the department, agency, or branch that the case is in fact paid in full with respect to the eligible debt obligations paid under the program.
   11.  The director shall prepare and make available debt amnesty application forms which contain requirements for approval of an application. The director may deny an application that is inconsistent with this section.
   12.  In order to promote and market this program, the director of the Iowa lottery shall collaborate in the use of the television, print, and radio advertising.
   13.  The department of revenue shall cooperate with the state debt coordinator in administering this program and shall cooperate with the state debt coordinator in establishing the debt settlement program under section 421C.3.
   14.  The director of revenue shall establish an account and shall deposit in the account all receipts received under the program. Not later than the fifteenth day of each month, the director shall deposit amounts received with the treasurer of state for deposit in the general fund of the state.
   15.  The department of revenue by January 15, 2011, shall provide a report to the chairpersons and ranking members of the senate and house committee on appropriations and to the legislative services agency that details the amounts collected under the program, including the classification of debt collected and the county of residence of persons granted amnesty.
    Sec. 25.  COLLECTION OF COURT DEBT BY COUNTY TREASURERS —— INTENT —— STUDY.
   1.  It is the intent of the general assembly to implement the collection of court debt on behalf of the clerk of the district court at the time a person renews a motor vehicle registration beginning July 1, 2011.
   2.  The state court administrator, or the state court administrator’s designee, in cooperation with the Iowa state county treasurers association shall develop a plan to allow county treasurers to collect restitution and delinquent court debt on behalf of the clerk of the district court at the time a person appears before the county treasurer to renew a vehicle registration. The state court administrator shall submit a report of the plan to the general assembly on or before December 1, 2010.
    Sec. 26.  EFFECTIVE DATE.  The sections of this Act enacting sections 421C.3 and 421C.4 take effect January 1, 2011.
EXPLANATION
   This bill establishes a state debt coordinator and relates to the collection of state debt.
   The bill changes the priority of payment under the setoff program in Code section 8A.504 if multiple claims exist from various state agencies. Under the bill, claims filed by the clerk of the district court shall be paid prior to claims from the college student aid commission and claims filed by the investigations division of the department of inspections and appeals.
   The bill allows a county treasurer to collect delinquent state taxes from a person who is applying for renewal of a motor vehicle registration. Current law requires a county treasurer to refuse to renew a vehicle registration if the treasurer knows that the person has a delinquent account, charge, fee, loan, taxes, or other indebtedness owed to or being collected by the state. The person has to address the debt before the county treasurer can renew the registration of the person’s vehicle. The bill provides a process for collection of delinquent taxes, including penalties and interest, by the county treasurer in cooperation with the department of revenue. The county treasurer may collect the amount owed prior to issuing the registration renewal. The treasurer is required to update the vehicle records through the distributed teleprocessing network on a daily basis for persons who have paid taxes to the county treasurer and forward the amounts collected to the department of revenue.
   The bill allows the department of revenue to give county treasurers access to confidential information required for the collection of delinquent taxes. County treasurers are subject to requirements and penalties of confidentiality laws regarding tax or indebtedness information. The bill requires the director of revenue to adopt rules to implement the collection of delinquent taxes by county treasurers.
   If an applicant for renewal of a vehicle registration chooses to make payment to the county treasurer for delinquent taxes, the applicant is required to pay a $5 processing fee to the county treasurer, which is to be deposited in the county general fund.
   The bill allows the centralized collection unit of the department of revenue to lift the motor vehicle registration hold on a person who enters a payment plan with the unit to pay a court debt pursuant to Code section 602.8107, subsection 3.
   The bill allows the department of revenue to establish a data matching system with financial institutions to help identify and locate persons who have a debt obligation with the state.
   The bill allows the department of revenue to subpoena certain records held by public and private utilities, to the extent permissible by federal law, to be used to identify and locate a person who has a debt obligation placed with the centralized collection unit of the department.
   The bill permits a city to contract with a private collection designee for the collection of debts owed to a city related to criminal or civil penalties assessed by the city. The bill permits the private collection designee contracting with the city to charge a collection fee of up to 25 percent of the debt. The bill permits the fee to be added to the amount of the debt deemed delinquent and to be used to compensate the private collection designee.
   The bill establishes a state debt coordinator within the department of revenue for administrative and budgetary purposes. The governor shall appoint the coordinator, subject to senate confirmation. The bill requires the coordinator to possess an expert knowledge of and skills in the field of debt collection, and have an intricate understanding of the workings of state government. The term of office is for four years.
   The duties of the coordinator include reviewing the debt collection practices of each branch of state government, except the practices related to the collection of a delinquent child support obligation. The duties also include coordinating the collection efforts of each branch of state government, making recommendations to the general assembly to increase debt collection efficiencies and practices, filing a notice of a lien in certain civil court actions, and managing the debt settlement program created in the bill. The bill also permits the coordinator to appoint personnel deemed necessary to administer the office’s functions, adopt rules, and prepare an annual budget.
   Under the bill, when a debt obligation is owed the state the state debt coordinator shall have a lien, to the extent of the debt obligation owed, upon all monetary claims which the debtor may have against third parties. A lien is not effective under this provision unless the state debt coordinator files a notice of lien with the clerk of the district court in the county where the debtor resides and with the debtor’s attorney, if applicable. The bill requires the notice of lien to be filed before a third party has concluded a final settlement with the debtor, the debtor’s attorney, or other representative. The bill also requires a third party to obtain a written determination from the state debt coordinator concerning the amount of the lien before a settlement is deemed final. A compromise, including but not limited to a settlement, waiver or release, of a debt pursuant to the bill does not defeat the state debt coordinator’s lien except upon written agreement by the coordinator or the coordinator’s designee and the debtor.
   Under the bill, if the state debt coordinator files lien in a civil proceeding and a judgment is entered or a settlement is achieved by the debtor, the court costs and reasonable attorney fees shall first be deducted from this total judgment or settlement. The bill requires one-third of the remaining balance to be deducted and paid to the debtor. The bill requires the remaining balance to be used to pay the lien, and if there is a remaining balance after the payment of the lien, the remainder shall be paid to the debtor.
   Prior to negotiating a settlement offer, the bill requires an insurer or attorney representing a debtor on a claim upon which the state debt coordinator has a lien to notify the state debt coordinator of the claim if the insurer or attorney has actual knowledge of the lien. If the state debt coordinator mails notification of the lien to any insurer or other third party and any attorney for the debtor, if applicable.
   The bill permits the state debt coordinator to enforce its lien by a civil action against any liable third party if a settlement was paid to the debtor without notifying the state debt coordinator as provided in this section.
   The bill permits the state debt coordinator to have access to all state debt collection information, excluding delinquent child support obligations, and including the Iowa court information system for the purpose of identifying personal identifying information for the purpose of coordinating debt collection efforts.
   The bill creates a debt settlement program within the office of the state debt coordinator. The provisions creating the debt settlement program take effect January 1, 2011. The program applies to all debt obligations owed to the state that are classified as court debt pursuant to section 602.8107, except that the following debt obligations are ineligible for the program:  debt that has been assessed less than four years from the date of the application; restitution owed to a victim as defined in Code section 910.1; civil penalties assessed pursuant to Code section 321.218A, 321A.32A, or 321J.17; and jail fees charged pursuant to section 356.7.
   The bill provides that a person is not eligible for the debt settlement program unless the person has an income level at or below 200 percent of the United States poverty level as defined by the most recently revised poverty income guidelines published by the United States department of health and human services. A person who is incarcerated or under supervision is also not eligible for the program while the person is incarcerated or under supervision.
   The bill prohibits the state debt coordinator from forgiving more than 50 percent of all eligible debt obligations due.
   The bill provides that upon written application and payment of the agreed upon percentage of eligible debt obligation due to the state, the state shall forgive any remaining balance of eligible debt obligation due and shall not seek any contempt or civil action or criminal prosecution against the person related to the eligible debt obligation forgiven under the program. Upon the forgiveness of the remaining balance of the eligible debt pursuant to this program, the case under which the debt accrued shall be considered by the state as paid in full.
   The bill requires the written application to contain all case numbers associated with the eligible debt obligation due, and a general description of such debt.
   The bill provides that upon failure to pay the amount agreed upon by the date specified shall bar the person from the program for life. The bill prohibits a person from participating in the program more than once in the person’s lifetime.
   The bill requires a person participating in the program to relinquish all administrative and judicial rights to challenge the imposition and the amount of the eligible debt obligation owed.
   The bill provides that a person paying court debt through an established payment plan with the clerk of the district court, the centralized collection unit of the department of revenue or its designee, a county attorney or the county attorney’s designee, or a private collection designee is ineligible for the program.
   Under the bill, if a driver’s license is reinstated as a result of participating in the program, the person shall be required to pay a reinstatement fee as provided in Code section 321.191, any civil penalty assessed pursuant to Code section 321.218A, 321A.32A, or 321J.17, and provide proof of financial responsibility pursuant to Code section 321A.17, if otherwise required by law.
   Upon paying the amount of eligible debt agreed upon under the bill, the state debt coordinator shall provide the person with a certified document detailing the case numbers paid in full under the program. Any state department, agency, or branch shall, upon the filing of a certified document detailing the cases paid in full under the program, indicate in the records of the department, agency, or branch that the case is in fact paid in full with respect to the eligible debt obligations paid under the program.
   The bill requires the state debt coordinator to prepare and make available debt settlement application forms which contain requirements for approval of an application.
   The bill requires the director of revenue to establish an account and to deposit in the account all receipts received under the program. Not later than the 15th day of each month, the bill requires the director of revenue to deposit amounts received with the treasurer of state for deposit in the general fund of the state.
   The bill requires the state debt coordinator to submit an annual report by January 1 to the chairpersons and ranking members of the joint appropriations subcommittee on justice system and the legislative services agency, detailing the amount of debt obligations settled under the program including the classification of the debt settled, and the county of residence of persons who had debt settled under the program, including the county of residence for persons who settled debt with a debt settlement designee as provided in Code section 421C.4.
   The bill permits the centralized collection unit of the department of revenue or a county attorney collecting delinquent court debt to act as the state debt coordinator’s designee under the debt settlement program. If the centralized collection unit of the department of revenue or a county attorney serves as the state debt coordinator’s designee, the procedures of the program established in new Code section 421C.3 apply to the designee except as otherwise provided in the bill.
   If a county attorney desires to act as the state debt coordinator’s designee, the bill requires a county attorney or county attorneys acting under an agreement pursuant to Code chapter 28E to make application to the state debt coordinator requesting authority to act as the state debt coordinator’s designee. The state debt coordinator shall approve each application, upon a showing of commitment to collect delinquent court debt pursuant to Code section 602.8107, subsection 4, and upon reaffirmation to continue collection efforts pursuant to Code section 602.8107, subsection 4.
   The bill provides that if a county attorney is approved to act as the state debt coordinator’s designee under the debt settlement program, any eligible court debt settled that is more than two years old shall be deposited with the clerk of the district court as provided in Code section 602.8107, subsection 4, and distributed to the county in accordance with Code section 602.8107, subsection 4. For purposes of calculating the amounts distributed to the county, the bill requires the amounts collected by the county attorney when acting as the state debt coordinator designee shall be considered as any other debt collected under the county attorney collection program pursuant to Code section 602.8107, subsection 4. The bill requires the remainder collected by the county attorney acting as the state debt coordinator’s designee to be remitted to the state court administrator for distribution under Code section 602.8108.
   For those counties where a county attorney is not acting as the state debt coordinator’s designee under the debt settlement program, or for cases the centralized collection unit is collecting upon, the bill permits the centralized collection unit of the department of revenue to serve as the state debt coordinator’s designee.
   The bill also creates a debt amnesty program that mirrors the debt settlement program except the debt amnesty program is established within the department of revenue beginning on July 1, 2010, through December 31, 2010, and there is no income restriction for persons who want to participate in the program.
   The bill requires the department of revenue by January 15, 2011, to provide a report to the chairpersons and ranking members of the senate and house committee on appropriations, and to the legislative services agency, that details the amounts collected under the program including the classification of debt collected, and the county of residence of persons granted amnesty.
   Under the bill, beginning July 1, 2010, and every fiscal year thereafter, amounts collected and distributed pursuant to the county attorney collection program shall be equal to or greater than $25,000 for each county or $25,000 in the aggregate for counties that have entered into an agreement pursuant to Code chapter 28E. If a county or counties which have entered into a Code chapter 28E agreement fail to meet the minimum threshold established pursuant to the bill, the county or counties under the Code chapter 28E agreement shall be ineligible to participate in the county attorney collection program the following fiscal year. In the event a county is ineligible to collect under the county attorney collection program, the county may apply to the state debt coordinator to reenter the county attorney collection program following the fiscal year of ineligibility.
   The bill requires the judicial branch to assign all delinquent court debt cases to the centralized debt collection unit of the department of revenue for a period of 120 days after the debt is deemed delinquent unless the county attorney has committed to collecting the delinquent court in debt in the county. Currently, the judicial branch may assign delinquent court debt to the centralized collection unit for a period of 60 days. Current law and the bill permit the county attorney to collect delinquent court debt 60 days after the debt is deemed delinquent.
   The bill strikes the requirement that the centralized collection unit or the county attorney file with the clerk of the district court a notice of the satisfaction of each portion of the court debt paid under the centralized collection unit or county attorney collection program.
   The bill also requires the judicial branch to contract with a private collection designee for the collection of delinquent court debt 60 days after the debt was deemed delinquent if the county attorney is not collecting the court debt in the case.
   The bill establishes the collection fee for the private collection designee at up to 25 percent of the total amount of delinquent court debt owed. Current law establishes the collection fee at 25 percent of the total amount of the delinquent court debt owed.
   The bill expresses the general assembly’s intent to implement the collection of court debt at the time a person renews a motor vehicle registration beginning July 1, 2011. The state court administrator, in cooperation with the Iowa state county treasurers association, is required to develop a plan to allow county treasurers to collect restitution and delinquent court debt on behalf of a clerk of the district court at the time a person renews a vehicle registration. A report to the general assembly regarding the plan is due on or before December 1, 2010.