| (a) Purpose. This rule sets forth procedures to establish
and determine the liability of each person responsible for an obligation
to the Texas Juvenile Justice Department (TJJD), whether that liability
can be established by statutory or common law. This rule also establishes
procedures for collecting delinquent obligations pursuant to §2107.002
of the Texas Government Code.
(b) Applicability. This rule does not apply to delinquent
obligations for child support, which are processed according to §385.9967
of this title.
(c) Definitions. The following words and terms have
the following meanings when used in this rule.
(1) Attorney general - The Office of the Attorney General
of Texas, acting through its Bankruptcy and Collections Division.
(2) Debtor - Any person or entity liable or potentially
liable for an obligation owed to TJJD or against whom a claim or demand
for payment has been made.
(3) Delinquent - Payment is past due by law or by customary
business practice, and all conditions precedent to payment have occurred
or been performed.
(4) Make demand - To deliver or cause to be delivered
by first class United States mail a writing setting forth the nature
and amount of the obligation owed to TJJD.
(5) Demand letter - A writing making demand.
(6) Obligation - A debt, judgment, claim, account,
fee, fine, tax, penalty, interest, loan, charge, or grant.
(7) Security - Any right to have property owned by
an entity with an obligation to TJJD sold or forfeited in satisfaction
of the obligation; and any instrument granting a cause of action in
favor of the State of Texas and/or TJJD against another entity and/or
that entity's property, such as a bond, letter of credit, or other
collateral that has been pledged to TJJD to secure an obligation.
(d) Procedures for Collecting Delinquent Obligations.
(1) When TJJD determines the liability of each person
responsible for an obligation, whether that liability can be established
by statutory or common law, TJJD's collection procedures shall apply
to every debtor, subject to reasonable tolerances established by TJJD.
(2) TJJD records shall contain and reflect the identity
of all persons liable on the obligation or any part thereof.
(3) TJJD records shall reflect the correct physical
address of the debtor's place of business, and, where applicable,
the debtor's residence. Where a fiduciary or trust relationship exists
between TJJD (or the state) as principal and the debtor as trustee,
an accurate physical address shall be maintained. A post office box
address should not be used unless it is impractical to obtain a physical
address or the post office box address is in addition to a correct
physical address maintained on TJJD's books and records.
(4) Demand letters shall be mailed in an envelope bearing
the notation "address correction requested" in conformity with 39
Code of Federal Regulations, Chapter III, Subchapter A, Part 3001,
Subpart C, Appendix A, §911. If an address correction is provided
by the United States Postal Service, the demand letter shall be re-sent
to that address prior to the referral procedures described herein.
Demand shall be made upon every debtor prior to referral of the account
to the attorney general. The final demand letter shall include a statement,
where practical, that the debt, if not paid, will be referred to the
attorney general.
(5) Where state law allows TJJD to record a lien securing
the obligation, TJJD shall file the lien in the appropriate records
of the county where the debtor's principal place of business, or,
where appropriate, the debtor's residence, is located or in such county
as may be required by law. The lien shall be filed as soon as the
obligation becomes delinquent or as soon as is practicable. After
referral of the delinquency to the attorney general, any lien securing
the indebtedness may not be released, except on full payment of the
obligation, without the approval of the attorney representing TJJD
in the matter.
(6) Where practicable, TJJD shall maintain individual
collection histories of each account in order to document attempted
contacts with the debtor, the substance of communications with the
debtor, efforts to locate the debtor and his/her assets, and other
information pertinent to collection of the delinquent account.
(7) Prior to referral of the obligation to the attorney
general, TJJD shall:
(A) verify the debtor's address and telephone number;
(B) transmit no more than two demand letters to the
debtor at the debtor's verified address. The first demand letter shall
be sent no later than 30 days after the obligation becomes delinquent.
The second demand letter shall be sent no sooner than 30 days, but
not more than 60 days, after the first demand letter. Where TJJD procedures,
statutory mandates, or the requirements of this section indicate that
a lawsuit on the account may be filed by the attorney general, the
demand letters shall so indicate;
(C) verify that the obligation is not legally uncollectible
or uncollectible as a practical matter, as follows:
(i) Bankruptcy. TJJD shall prepare and timely file
a proof of claim, when appropriate, in the bankruptcy case of each
debtor, subject to reasonable tolerances adopted by TJJD. Copies of
all such proofs of claims filed shall be sent to the attorney general
absent the granting of a variance. TJJD shall maintain records of
notices of bankruptcy filings, dismissals and discharge orders received
from the United States bankruptcy courts to enable TJJD to ascertain
whether the collection of the claim is subject to the automatic stay
provisions of the bankruptcy code or whether the debt has been discharged.
TJJD may seek the assistance of the attorney general in bankruptcy
collection matters where necessary, including the filing of a notice
of appearance and preparation of a proof of claim.
(ii) Limitations. If the obligation is subject to an
applicable limitations provision that would prevent suit as a matter
of law, the obligation shall not be referred unless circumstances
indicate that limitations have been tolled or are otherwise inapplicable.
(iii) Corporations. If a corporation has been dissolved,
has been in liquidation under Chapter 7 of the United States Bankruptcy
Code, or has forfeited its corporate privileges or charter, or, in
the case of a foreign corporation had its certificate of authority
revoked, the obligation shall not be referred unless circumstances
indicate that the account is clearly uncollectible.
(iv) Out-of-State Debtors. If the debtor is an individual
and is located out-of-state, or outside the United States, the matter
shall not be referred unless a determination is made that the domestication
of a Texas judgment in the foreign forum would more likely than not
result in collection of the obligation, or that the expenditure of
TJJD funds to retain foreign counsel to domesticate the judgment and
proceed with collection attempts is justified.
(v) Deceased Debtors. If the debtor is deceased, TJJD
shall file a claim in each probate proceeding administering the decedent's
estate. If such probate proceeding has concluded and there are no
remaining assets of the decedent available for distribution, the delinquent
obligation shall be classified as uncollectible and not be referred.
In cases where a probate administration is pending, or where no administration
has been opened, all referred obligations shall include an explanation
of any circumstances indicating that the decedent has assets available
to apply toward satisfaction of the obligation.
(8) Not later than the 90th day after the date an obligation
becomes delinquent, TJJD shall report the uncollected and delinquent
obligation to the attorney general for further collection efforts
as hereinafter provided.
(9) Reasonable tolerances adopted by the TJJD Finance
Division are listed below and determine when an obligation shall not
be referred to the attorney general for further collection. They are:
(A) amount of the obligation is less than $500;
(B) existence of any security;
(C) likelihood of collection through passive means
such as the filing of a lien where applicable;
(D) expense to TJJD and to the attorney general in
attempting to collect the obligation;
(E) availability of resources both within TJJD and
within the Office of the Attorney General to devote to the collection
of the obligation; or
(F) debt is uncollectible as set forth in paragraph
(7) of this subsection.
(10) TJJD may utilize the "warrant hold" procedures
of the Comptroller of Public Accounts authorized by the Texas Government
Code, §403.055, to ensure that no treasury warrants are issued
to debtors until the debt is paid.
(e) Referral to Attorneys for Collection.
(1) Suit on the Obligation by In-House Attorneys.
Cont'd... |
