| (A) Agencies seeking to use in-house attorneys to collect
delinquent obligations through court proceedings must submit a written
request to the attorney general's Bankruptcy and Collections Division.
Upon written approval, a state agency may file suit to collect a delinquent
obligation through an attorney serving as a full-time employee of
the agency. Where circumstances make it impractical to secure attorney
general approval for every delinquent obligation upon which a lawsuit
is to be filed, a state agency may apply to the attorney general for
an authorization to bring suit on particular types of obligations
through attorneys employed full-time by the agency. Such authorization,
if given, must be renewed at the beginning of each fiscal year.
(B) After an obligation is referred to agency attorneys
employed as in-house counsel, the obligation shall be reduced to judgment
against all entities legally responsible for the obligation where
the lawsuit and judgment will make collection of the obligation more
likely and the expenditure of agency resources in recovering judgment
on the obligation is justified.
(C) Where authorized by law, the agency shall plead
for and recover attorney's fees, investigative costs, and court costs
in addition to the obligation.
(D) Every judgment taken on a delinquent obligation
should be abstracted and recorded by the agency in every county where
the debtor: owns real property; operates an active business; is likely
to inherit real property; owns any mineral interest; or has maintained
a residence for more than one year.
(2) Referral to the attorney general.
(A) Agencies are encouraged to explore the exchange
of accounts with the Attorney General by computer tape or other electronic
data transfer and to discuss any variances as may be appropriate.
The agency and the Attorney General may agree upon an exchange of
certain minimum account information necessary for collection efforts
by the Attorney General.
(B) Agencies may refer individual accounts to the attorney
general after the procedures set forth in subsection (b)(6) - (8)
of this section. Individual accounts referred to the attorney general
should include by the following:
(i) copies of all correspondence between the agency
and the debtor;
(ii) a log sheet (see subsection (b)(5) of this section)
documenting all attempted contacts with the debtor and the result
of such attempts;
(iii) a record of all payments made by the debtor and,
where practicable, copies of all checks tendered as payment;
(iv) any information pertaining to the debtor's residence
and his assets; and
(v) copies of any permit application, security, final
orders, contracts, grants, or instrument giving rise to the obligation.
(C) Delinquent accounts upon which a bond or other
security is held shall be referred to the attorney general no later
than 60 days after becoming delinquent. All such accounts where the
principal has filed for relief under federal bankruptcy laws shall
be referred immediately, since collection of the security may obviate
the need to file a claim or to appear in the bankruptcy case.
(D) The attorney general may decide that a particular
obligation or class of obligations may be assigned after referral
to the appropriate division within the Office of the Attorney General.
(3) Referral to collection firms or private attorneys.
(A) Prior approval of attorney general. Except as provided
by §2107.003, Texas Government Code, no agency may contract with,
retain, or employ any person other than a full-time employee of the
agency to collect a delinquent obligation without prior written approval
of the attorney general. Any existing arrangements must receive the
written approval of the attorney general to be renewed or extended
in any fashion.
(i) Approval of contract with private firm or attorney.
Prior to contracting with, retaining, or employing a person other
than a full-time employee of the agency to collect a delinquent obligation,
an agency must submit a proposal to the attorney general requesting
the attorney general to collect the obligation(s). Any agency contracting
with any person other than a full-time employee of the agency for
the collection of a delinquent obligation must submit the proposed
contract to the attorney general for written approval. The proposal
must disclose any fee that the agency proposes to pay the private
collection firm or attorney. The attorney general may elect to undertake
representation of the agency on the same or similar terms as contained
in the proposed contract. If the attorney general declines or is unable
to perform the services requested, the attorney general may approve
the contract. If the attorney general decides that the agency has
not complied with this subsection, the attorney general may:
(I) decline to approve the contract; or
(II) require the agency to submit or resubmit a proposal
to the attorney general for collection of the obligation in accordance
with this subsection.
(ii) If the attorney general fails to act as set forth
in clause (i) of this subparagraph within 60 days of receipt of the
proposed contract or receipt of additional information requested,
the attorney general is deemed to have approved the contract in accordance
with this rule.
(B) Requirements of proposed contracts with private
persons presented for attorney general approval. In addition to information
required by other state laws, all contracts for collection of delinquent
obligations must contain or be supported by a proposal containing
the following:
(i) a description of the obligations to be collected
sufficient to enable the attorney general to determine what measures
are necessary to attempt to collect the obligation(s);
(ii) explicit terms of the basis of any fee or payment
for the collection of the obligation(s);
(iii) a description of the individual accounts to be
collected in the following respects:
(I) the total number of delinquent accounts;
(II) the dollar range;
(III) the total dollar amount;
(IV) a summary of the collection efforts previously
made by the agency; and
(V) the legal basis of the delinquent obligations to
be collected.
(C) Suggested requirements of proposed contracts with
private persons presented for attorney general approval. All contracts
for collection of delinquent obligations should contain provisions
stating the following:
(i) that litigation on the delinquent account is prohibited
unless the private person obtains specific written authorization from
the agency and the attorney general and complies with the requirements
of this rule;
(ii) that the person is required to place any funds
collected in an interest bearing account with amounts collected, plus
interest, less collections costs, payable to the agency on a monthly
basis or by direct deposit to the agency's account on a weekly basis
with the agency billing once a month; in either case a listing of
the accounts and amounts collected per account should be submitted
to the agency upon deposit of the funds;
(iii) that the person refer any bankruptcy notice to
the agency within three working days of receipt;
(iv) that the agency may recall any account without
charge;
(v) that the person may not settle or compromise the
account for less than the full amount owed (including collection costs
where authorized by statute or terms of the obligation) without written
authority from the agency;
(vi) that the person is not an agent of the agency
but is an independent contractor; and providing further that the person
will indemnify the agency for any loss incurred by his violation of
state and federal debt collection statutes or by the negligence of
the person, his employees or agents;
(vii) that any dispute arising under the contract be
submitted to a court of competent jurisdiction in Texas, unless any
other venue is statutorily mandated, in which case the specific venue
statute will apply, subject to any alternative dispute resolution
procedures adopted by the agency pursuant to Chapter 2009, Texas Government
Code.
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| Source Note: The provisions of this §59.2 adopted to be effective December 11, 1992, 17 TexReg 8283; amended to be effective October 23, 2001, 26 TexReg 8339; amended to be effective November 22, 2012, 37 TexReg 9085 |
