1. A surcharge shall be due and payable by the obligor on a support arrearage identified as difficult to collect and referred by the unit on or after January 1, 1998, to a collection entity under contract with the unit or other state entity. The amount of the surcharge shall be a percent of the amount of the support arrearage referred to the collection entity and shall be specified in the contract with the collection entity. For the purpose of this chapter, a "collection entity" includes but is not limited to a state agency, including the central collection unit of the department of revenue and finance, or a private collection agency. Use of a collection entity is in addition to any other legal means by which support payments may be collected. The unit shall continue to use other enforcement actions, as appropriate.
2. a. Notice that a surcharge may be assessed on a support arrearage referred to a collection entity pursuant to this section shall be provided to an obligor in accordance with one of the following as applicable:
(1) In the order establishing or modifying the support obligation. The unit or district court shall include notice in any new or modified support order issued on or after July 1, 1997.
(2) Through notice sent by the unit by regular mail to the last known address of the support obligor.
b. The notice shall also advise that any appropriate information may be provided to a collection entity for purposes of administering and enforcing the surcharge.
3. Arrearages submitted for referral and surcharge pursuant to this section shall meet all of the following criteria:
a. The arrearages owed shall be based on a court or administrative order which establishes the support obligation.
b. The arrearage is due for a case in which the unit is providing services pursuant to this chapter and one for which the arrearage has been identified as difficult to collect by the unit.
c. The obligor was provided notice pursuant to subsection 2 at least fifteen days prior to sending the notice of referral pursuant to subsection 4.
4. The unit shall send notice of referral to the obligor by regular mail to the obligor's last known address, with proof of service completed according to R.C.P. 106, at least thirty days prior to the date the arrearage is referred to the collection entity. The notice shall inform the obligor of all of the following:
a. The arrearage will be referred to a collection entity.
b. Upon referral, a surcharge is due and payable by the obligor.
c. The amount of the surcharge.
d. That the obligor may avoid referral by paying the amount of the arrearage to the collection services center within twenty days of the date of notice of referral.
e. That the obligor may contest the referral by submitting a written request for review of the unit. The request shall be received by the unit within twenty days of the date of the notice of referral.
f. The right to contest the referral is limited to a mistake of fact, which includes a mistake in the identity of the obligor, a mistake as to fulfillment of the requirements for referral under this subsection, or a mistake in the amount of the arrearages.
g. The unit shall issue a written decision following a requested review.
h. Following the issuance of a written decision by the unit denying that a mistake of fact exists, the obligor may request a hearing to challenge the surcharge by sending a written request for a hearing to the office of the unit which issued the decision. The request shall be received by the office of the unit which issued the decision within ten days of the unit's written decision. The only grounds for a hearing shall be mistake of fact. Following receipt of the written request, the unit which receives the request shall certify the matter for hearing in the district court in the county in which the underlying support order is filed.
i. The address of the collection services center for payment of the arrearages.
5. If the obligor pays the amount of arrearage within twenty days of the date of the notice of referral, referral of the arrearage to a collection entity shall not be made.
6. If the obligor requests a review or court hearing pursuant to this section, referral of the arrearages shall be stayed pending the decision of the unit or the court.
7. Actions of the unit under this section shall not be subject to contested case proceedings or further review pursuant to chapter 17A and any resulting court hearing shall be an original hearing before the district court. However, the department shall establish, by rule pursuant to chapter 17A, an internal process to provide an additional review by the administrator of the child support recovery unit or the administrator's designee.
8. If an obligor does not pay the amount of the arrearage, does not contest the referral, or if following the unit's review and any court hearing the unit or court does not find a mistake of fact, the arrearages shall be referred to a collection entity. Following the review or hearing, if the unit or court finds a mistake in the amount of the arrearage, the arrearages shall be referred to the collection entity in the appropriate arrearage amount. For arrearages referred to a collection entity, the obligor shall pay a surcharge equal to a percent of the amount of the support arrearage due as of the date of the referral. The surcharge is in addition to the arrearages and any other fees or charges owed, and shall be enforced by the collection entity as provided under section 252B.5. Upon referral to the collection entity, the surcharge is an automatic judgment against the obligor.
9. The director or the director's designee may file a notice of the surcharge with the clerk of the district court in the county in which the underlying support order is filed. Upon filing, the clerk shall enter the amount of the surcharge on the lien index and judgment docket.
10. Following referral of a support arrearage to a collection entity, the surcharge shall be due and owing and enforceable by a collection entity or the unit notwithstanding satisfaction of the support obligation or whether the collection entity is enforcing a support arrearage. However, the unit may waive payment of all or a portion of the surcharge if waiver will facilitate the collection of the support arrearage.
11. All surcharge payments shall be received and disbursed by the collection services center.
12. a. A payment received by the collection services center which meets all the following conditions shall be allocated as specified in paragraph "b":
(1) The payment is for a case in which arrearages have been referred to a collection entity.
(2) A surcharge is assessed on the arrearages.
(3) The payment is collected under the provisions of the contract with the collection entity.
b. A payment meeting all of the conditions in paragraph "a" shall be allocated between support and costs and fees, and the surcharge according to the following formula:
(1) The payment shall be divided by the sum of one hundred percent plus the percent specified in the contract.
(2) The quotient shall be the amount allocated to the support arrearage and other fees and costs.
(3) The difference between the dividend and the quotient shall be the amount allocated to the surcharge.
13. Any computer or software programs developed and any records used in relation to a contract with a collection entity remain the property of the department.
97 Acts, ch 175, §244
Referred to in § 252B.9, 252B.13A
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