|(a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Attorney general--The Office of the Attorney General
(2) Debtor--Any person liable or potentially liable
for an obligation owed to the department 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) Department--The Texas Department of Motor Vehicles.
(5) Obligation--A debt, judgment, claim, account, fee,
fine, tax, penalty, interest, loan, charge, or grant.
(6) Person--An individual, corporation, organization,
business trust, estate, trust, partnership, association, and any other
(7) Security--Any right to have property owned by a
person or an entity with an obligation to the department sold or forfeited
in satisfaction of the obligation, and any instrument granting a cause
of action in favor of the department against a person, another entity,
or a person's or entity's property, such as a bond, letter of credit,
or other collateral that has been pledged to the department to secure
(b) Collection from contractors. If an obligation of
a contractor of the department is delinquent and the department owes
payment to that contractor, the department will subtract the amount
of the obligation from the payment if practical.
(c) Notification of obligation and demand letters.
(1) The department will send to the debtor written
notice of the obligation, such as an administrative enforcement order
that imposes a penalty or fine.
(2) If no satisfactory response is received within
30 days after the date that the notice is sent under paragraph (1)
of this subsection, the obligation becomes delinquent on the 31st
day after the date that notice is sent, unless the department's notice,
the law, or a department rule imposes a different deadline for payment.
The department will send the first demand letter not later than the
30th day after the date on which the obligation becomes delinquent.
(3) If no satisfactory response is received within
30 days after the day on which the first demand letter was sent, the
department will send the final demand letter no later than 60 days
after the date on which the first demand letter was sent. The final
demand letter will include a deadline by which the debtor must respond
and, if the department determines in accordance with subsection (e)
of this section that the obligation should be referred to the attorney
general, a statement that the obligation, if not paid, will be referred
to the attorney general.
(4) Each demand letter will set forth the nature and
amount of the obligation owed to the department and will be mailed
by first class United States mail, in an envelope bearing the notation
"address correction requested." If an address correction is provided
by the United States Postal Service, the department will resend the
demand letter to that address prior to referral to the attorney general.
(d) Records. When practicable, the department shall
retain a record of a delinquent obligation. A record shall contain
documentation of the following information:
(1) the identity of each person liable on all or any
part of the obligation;
(2) the physical address of the debtor's place of business;
(3) the physical address of the debtor's residence,
(4) a post office box address when it is impractical
to obtain a physical address, or when the post office box address
is in addition to a correct physical address;
(5) attempted contacts with the debtor;
(6) the substance of communications with the debtor;
(7) efforts to locate the debtor and the assets of
(8) state warrants that may be issued to the debtor;
(9) current contracts with the department;
(10) security interests that the department has against
any assets of the debtor;
(11) notices of bankruptcy, proofs of claim, dismissals
and discharge orders received from the United States bankruptcy courts;
(12) other information relevant to collection of the
(e) Referrals of a delinquent obligation to the attorney
(1) Prior to referral of a delinquent obligation to
the attorney general, the department shall:
(A) verify the debtor's address and telephone number;
(B) send a first and final demand letter to the debtor
in accordance with subsection (c) of this section;
(C) verify that the obligation is not considered uncollectible
under paragraph (2) of this subsection;
(D) prepare and file a proof of claim in the case of
a bankruptcy unless the department is represented by the attorney
(E) file a claim in the probate proceeding if the debtor
is deceased, unless the department is represented by the attorney
(2) The department will consider a delinquent obligation
uncollectible and will make no further effort to collect if the obligation:
(A) has been dismissed or discharged in bankruptcy;
(B) is subject to an applicable limitations provision
that would prevent collection as a matter of law;
(C) is owed by a corporation which has been dissolved,
is in liquidation under Chapter 7 of the United States Bankruptcy
Code, has forfeited its corporate privileges or charter, or, in the
case of a foreign corporation, had its certificate of authority revoked
unless circumstances indicate that the account is nonetheless collectible
or that fraud was involved;
(D) is owed by an individual who is located out-of-state,
or outside the United States, 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 department funds to retain foreign counsel to domesticate
the judgment and proceed with collection attempts is justified;
(E) is owed by a debtor who is deceased, where probate
proceeding have concluded, and where there are no remaining assets
available for distribution; or
(F) is owed by a debtor whose circumstances demonstrate
a permanent inability to pay or make payments toward the obligation.
(3) In making a determination of whether to refer a
delinquent obligation to the attorney general, the department will
(A) the expense of further collection procedures;
(B) the size of the debt;
(C) the existence of any security;
(D) the likelihood of collection through passive means
such as the filing of a lien;
(E) the availability of resources to collect the obligation;
(F) policy reasons or other good cause.
(4) The department will refer a delinquent obligation
to the attorney general for further collection efforts if the department
determines, in accordance with this subsection, that the delinquent
obligation should be referred.
(f) Supplemental and alternative collection procedures.
(1) Liens. The department, unless represented by the
attorney general, will record a lien securing the delinquent obligation
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 as soon as
is practicable. Unless the delinquent obligation has been paid in
full, any lien securing the indebtedness may not be released without
the approval of the attorney representing the department after the
matter has been referred to the attorney general.
(2) Warrants. The department will utilize the "warrant
hold" procedures of the Comptroller of Public Accounts authorized
by Government Code, §403.055, to ensure that no treasury warrants
are issued to debtors until the debt is paid.