H.F. 380 Section 1. Section 8A.504, subsection 1, paragraph a, Code 1 2013, is amended to read as follows: 2 a. “Collection entity” means the department of 3 administrative services and any other state agency that 4 maintains a separate accounting system and elects to establish 5 a debt collection setoff procedure for collection of debts owed 6 to the state or its agencies an agency . 7 Sec. 2. Section 8A.504, subsection 1, Code 2013, is amended 8 by adding the following new paragraph: 9 NEW PARAGRAPH . 0b. “Debtor” means a person who is liable 10 on a claim to an agency. 11 Sec. 3. Section 8A.504, subsection 1, paragraph b, Code 12 2013, is amended to read as follows: 13 b. “Person” does not include a state an agency. 14 Sec. 4. Section 8A.504, subsection 1, paragraph d, Code 15 2013, is amended to read as follows: 16 d. “State agency” “Agency” means a board, commission, 17 department, including the department of administrative 18 services, or other administrative office or unit of the 19 state of Iowa or any other state entity reported in the 20 Iowa comprehensive annual financial report, or a political 21 subdivision of the state, or an office or unit of a political 22 subdivision. “State agency” “Agency” does include the clerk 23 of the district court as it relates to the collection of a 24 qualifying debt. “State agency” “Agency” does not include the 25 general assembly or the governor. 26 Sec. 5. Section 8A.504, subsections 2, 3, and 5, Code 2013, 27 are amended to read as follows: 28 2. Setoff procedure. The collection entity shall establish 29 and maintain a procedure to set off against any claim owed to a 30 person debtor by a state an agency any liability of that person 31 debtor owed to a state an agency, a support debt being enforced 32 by the child support recovery unit pursuant to chapter 252B , 33 or such other qualifying debt. The procedure shall only apply 34 when at the discretion of the director it is feasible. The 35 -1- HF 380 (3) 85 ec/rj/md 1/ 7

H.F. 380 procedure shall meet the following conditions: 1 a. Before setoff, a person’s debtor’s liability to a state 2 an agency and the person’s debtor’s claim on a state an agency 3 shall be in the form of a liquidated sum due, owing, and 4 payable. 5 b. Before setoff, the state agency shall obtain and forward 6 to the collection entity the full name and social security 7 number of the person debtor liable to it the agency or to whom 8 a claim is owing who is a natural person. If the person debtor 9 is not a natural person, before setoff, the state agency shall 10 forward to the collection entity the information concerning the 11 person debtor as the collection entity shall, by rule, require. 12 The collection entity shall cooperate with other state agencies 13 in the exchange of information relevant to the identification 14 of persons debtors liable to or claimants of state agencies. 15 However, the collection entity shall provide only relevant 16 information required by a state an agency. The information 17 shall be held in confidence and used for the purpose of setoff 18 only. Section 422.72, subsection 1 , does not apply to this 19 paragraph. 20 c. Before setoff, a state an agency shall, at least 21 annually, submit to the collection entity the information 22 required by paragraph “b” along with the amount of each person’s 23 debtor’s liability to and the amount of each claim on the state 24 agency. The collection entity may, by rule, require more 25 frequent submissions. 26 d. Before setoff, the amount of a person’s debtor’s claim 27 on a state an agency and the amount of a person’s debtor’s 28 liability to a state an agency shall constitute a minimum 29 amount set by rule of the collection entity. 30 e. Upon submission of an allegation of liability by a 31 state an agency, the collection entity shall notify the state 32 agency whether the person debtor allegedly liable is entitled 33 to payment from a state an agency, and, if so entitled, shall 34 notify the state agency of the amount of the person’s debtor’s 35 -2- HF 380 (3) 85 ec/rj/md 2/ 7

H.F. 380 entitlement and of the person’s debtor’s last address known to 1 the collection entity. Section 422.72, subsection 1 , does not 2 apply to this paragraph. 3 f. (1) Upon notice of entitlement to a payment, the state 4 agency shall send written notification to that person debtor 5 of the state agency’s assertion of its rights to all or a 6 portion of the payment and of the state agency’s entitlement 7 to recover the liability through the setoff procedure, the 8 basis of the assertion, the opportunity to request that a 9 jointly or commonly owned right to payment be divided among 10 owners, and the person’s debtor’s opportunity to give written 11 notice of intent to contest the amount of the allegation. The 12 state agency shall send a copy of the notice to the collection 13 entity. An agency shall provide the debtor with an opportunity 14 to contest the liability. A state An agency subject to chapter 15 17A shall give notice, conduct hearings, and allow appeals in 16 conformity with chapter 17A . 17 (2) However, upon submission of an allegation of the 18 liability of a person debtor which is owing and payable to the 19 clerk of the district court and upon the determination by the 20 collection entity that the person debtor allegedly liable is 21 entitled to payment from a state an agency, the collection 22 entity shall send written notification to the person debtor 23 which states the assertion by the clerk of the district court 24 of rights to all or a portion of the payment, the clerk’s 25 entitlement to recover the liability through the setoff 26 procedure, the basis of the assertions, the person’s debtor’s 27 opportunity to request within fifteen days of the mailing of 28 the notice that the collection entity divide a jointly or 29 commonly owned right to payment between owners, the opportunity 30 to contest the liability to the clerk by written application 31 to the clerk within fifteen days of the mailing of the notice, 32 and the person’s debtor’s opportunity to contest the collection 33 entity’s setoff procedure. 34 g. Upon the timely request of a person debtor liable to 35 -3- HF 380 (3) 85 ec/rj/md 3/ 7

H.F. 380 a state an agency or of the spouse of that person debtor and 1 upon receipt of the full name and social security number of 2 the person’s debtor’s spouse, a state an agency shall notify 3 the collection entity of the request to divide a jointly or 4 commonly owned right to payment. Any jointly or commonly owned 5 right to payment is rebuttably presumed to be owned in equal 6 portions by its joint or common owners. 7 h. The collection entity shall , after the state agency has 8 sent notice to the person debtor liable or, if the liability 9 is owing and payable to the clerk of the district court, after 10 the collection entity has sent notice to the person debtor 11 liable, shall set off the amount owed to the agency against any 12 amount which a state an agency owes that person debtor . The 13 collection entity shall refund any balance of the amount to 14 the person debtor . The collection entity shall periodically 15 transfer amounts set off to the state agencies entitled to 16 them. If a person debtor liable to a state an agency gives 17 written notice of intent to contest an allegation, a state an 18 agency shall hold a refund or rebate until final disposition 19 of the allegation. Upon completion of the setoff, a state an 20 agency shall notify in writing the person debtor who was liable 21 or, if the liability is owing and payable to the clerk of the 22 district court, shall comply with the procedures as provided 23 in paragraph “j” . 24 i. The department of revenue’s existing right to credit 25 against tax due or to become due under section 422.73 is not to 26 be impaired by a right granted to or a duty imposed upon the 27 collection entity or other state agency by this section . This 28 section is not intended to impose upon the collection entity or 29 the department of revenue any additional requirement of notice, 30 hearing, or appeal concerning the right to credit against tax 31 due under section 422.73 . 32 j. If the alleged liability is owing and payable to the 33 clerk of the district court and setoff as provided in this 34 section is sought, all of the following shall apply: 35 -4- HF 380 (3) 85 ec/rj/md 4/ 7

H.F. 380 (1) The judicial branch shall prescribe procedures to 1 permit a person debtor to contest the amount of the person’s 2 debtor’s liability to the clerk of the district court. 3 (2) The collection entity shall, except for the procedures 4 described in subparagraph (1), prescribe any other applicable 5 procedures concerning setoff as provided in this subsection . 6 (3) Upon completion of the setoff, the collection entity 7 shall file, at least monthly, with the clerk of the district 8 court a notice of satisfaction of each obligation to the 9 full extent of all moneys collected in satisfaction of the 10 obligation. The clerk shall record the notice and enter a 11 satisfaction for the amounts collected and a separate written 12 notice is not required. 13 k. If the alleged liability is owing and payable to a 14 community college and setoff pursuant to this section is 15 sought, both of the following shall apply: 16 (1) In addition to satisfying other applicable setoff 17 procedures established under this subsection , the community 18 college shall prescribe procedures to permit a person debtor to 19 contest the amount of the person’s debtor’s liability to the 20 community college. Such procedures shall be consistent with 21 and ensure the protection of the person’s debtor’s right of due 22 process under Iowa law. 23 (2) The collection entity shall, except for the procedures 24 prescribed pursuant to subparagraph (1), prescribe any other 25 applicable procedures concerning setoff as provided in this 26 subsection . 27 l. If an alleged liability is owing and payable that would 28 allow a county to refuse to renew a vehicle registration, the 29 county shall, in addition to satisfying other applicable setoff 30 procedures established under this subsection, provide notice of 31 the alleged liability to a debtor when a vehicle registration 32 renewal statement is sent to the debtor by the county. 33 3. In the case of multiple claims to payments filed under 34 this section , priority shall be given to claims filed by the 35 -5- HF 380 (3) 85 ec/rj/md 5/ 7

H.F. 380 child support recovery unit or the foster care recovery unit, 1 next priority shall be given to claims filed by the clerk of 2 the district court, next priority shall be given to claims 3 filed by the college student aid commission, next priority 4 shall be given to claims filed by the investigations division 5 of the department of inspections and appeals, and last priority 6 shall be given to claims filed by other state agencies. In the 7 case of multiple claims in which the priority is not otherwise 8 provided by this subsection , priority shall be determined in 9 accordance with rules to be established by the director. 10 5. Under substantive rules established by the director, the 11 department shall seek reimbursement from other state agencies 12 to recover its costs for setting off liabilities. 13 Sec. 6. Section 99D.2, subsection 3, Code 2013, is amended 14 to read as follows: 15 3. “Claimant agency” means a state an agency as defined in 16 section 8A.504, subsection 1 , or the state court administrator 17 as defined in section 602.1101 . 18 Sec. 7. Section 99F.1, subsection 4, Code 2013, is amended 19 to read as follows: 20 4. “Claimant agency” means a state an agency as defined in 21 section 8A.504, subsection 1 , or the state court administrator 22 as defined in section 602.1101 . 23 Sec. 8. Section 234.8, Code 2013, is amended to read as 24 follows: 25 234.8 Fees for child welfare services. 26 The department of human services may charge a fee for 27 child welfare services to a person liable for the cost of the 28 services. The fee shall not exceed the reasonable cost of the 29 services. The fee shall be based upon the person’s ability 30 to pay and consideration of the fee’s impact upon the liable 31 person’s family and the goals identified in the case permanency 32 plan. The department may assess the liable person for the 33 fee and the means of recovery shall include a setoff against 34 an amount owed by a state an agency to the person assessed 35 -6- HF 380 (3) 85 ec/rj/md 6/ 7

H.F. 380 pursuant to section 8A.504 . In addition the department may 1 establish an administrative process to recover the assessment 2 through automatic income withholding. The department shall 3 adopt rules pursuant to chapter 17A to implement the provisions 4 of this section . This section does not apply to court-ordered 5 services provided to juveniles which are a charge upon the 6 state pursuant to section 232.141 and services for which the 7 department has established a support obligation pursuant to 8 section 234.39 . 9 -7- HF 380 (3) 85 ec/rj/md 7/ 7