State obligation recovery.

2016
State of Wyoming
16LSO-0052
Introduced
1.6

HOUSE BILL

NO.

HB0145

State obligation recovery.

Sponsored by:
Representative(s) Burkhart

A BILL

for

AN ACT relating to the administration of government; creating the state obligation recovery division within the office of the state auditor; authorizing the state obligation recovery division to collect obligations due to the state and other governmental entities; authorizing a court to suspend or revoke an obligor's driver's license or an obligor's professional, occupational or recreational license as specified; authorizing the attorney general to bring an action in the name of the state and to seek a writ of garnishment; providing for personal liability obligations due to the state as specified; providing a conflict of law provision; providing definitions; providing rulemaking authority; creating an account; authorizing positions as specified; providing appropriations; providing applicability; and providing for effective dates.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 9
‑
1
‑
418 through 9
‑
1
‑
42
3

are
created to read:

9
‑
1
‑
418
.

State obligation recovery division
; definitions
.

(a)

As used in
this act
:

(i
)

"Division" means the
state obligation recovery
division
within the office of the state auditor
;

(i
i
)

"Governmental entity" means a city, town, county, school district, special taxing district or community college
district;

(iii)

"Obligation" means any amount due to any governmental entity or the state for which payment has not
been received and shall include
debts,
unpaid fees,
taxes, including any tax collected by the department of revenue,
loans, overpayments, fines,
judgements,
forfeitures, surcharges, costs, interest, penalties and damages;

(
iv
)

"Obligor" means a person who owes or is responsible for any

obligation due to the state or any governmental entity;

(
v
)

"Past due" means any
obligation
the
state
has not r
eceived by the payment due date;

(vi)

"State" means
the state of Wyoming or any of its branches,
offices,
agencies, departments, boards, ins
trumentalities or institutions
, excluding the University of Wyoming
;

(vii)

"This act" me
ans W.S. 9
‑
1
‑
418 through 9
‑
1
‑
423
.

9
‑
1
‑
419
.

State obligation recovery division
; administrative duties
.

(a)

The
state obligation recovery division
is created within the
office of the state auditor
. The
division

shall:

(
i
)

Collect obligations due to the state or assist in the collection of obligations due to any governmental entity;

(ii)

Have authority to enter into agreements with obligors to provide for the payment of an obligation on an installment basis over a twelve (12) month or lesser period. Upon good cause shown by the obligor, the state obligation recovery division may extend the period during which the installment payments may be made for more than a twelve (12) month period;

(iii)

Have authority to enter into contracts to use the services of a collection agency licensed in Wyoming to assist in the collection of debts due the state;

(
i
v
)

Promulgate
rules
consistent with this act
governing the accounting, reporting, collection and management of
obligations
due to the state or any
governmental entity
;

(
v
)

P
repare quarterly and annual reports of the
obligations
due to the state or any
governmental entity
as provided by W.S. 9
‑
1
‑
42
3
(c)
;

(
v
i
)

E
stablish
standard time limits after which
the state
shall

refer a
n

obligation
to the
division
for collection
;

(v
ii
)

Establish standard time limits after which any governmental entity may refer an obligation to the division for collection;

(v
i
ii
)

B
e
a real party in interest for
any
obligation

referred to the
division

by the state or any governmental entity
.

(b)

The state auditor
shall appoint an administrative head
of the
division
who shall be licensed as provided in W.S. 33
‑
11
‑
102
and who shall carry out the statutory duties and any other duties
as
assigned by the state auditor for the purposes of this act.

(c)

In collecting

obligations
under this act, the
division
may:

(i)

Petition a court
of competent jurisdiction
for a
judicial determination that
an obligation
due to the
state or governmental entity is
in arrears and

seek a court order
to
withhold, suspend or restrict the
obligor's
driver's licen
se

as provided in W.S. 9
‑
1
‑
420 or an obligor's
professional, occupational or recreational license, certificate or permit as provided in W.S. 9
‑
1
‑
421
;

(ii)

Request the attorney general bring an action in the name of the state to collect any past due
obligations
due to the state
. The attorney general may seek a writ of garnishment pursuant to
W.S. 1
‑
15
‑
401
through 1
‑
15
‑
425
to collect an obligation
owed to the state
;

(i
ii
)

File a lien against the property of the
obligor
pursuant to Wyoming statutes or
pursue
any

other
remedy against the
obligor
otherwise provided by law
.

9
‑
1
‑
420
.

State obligation recovery division
;
driver's license suspension
.

(a)

A

district
court
, on motion of the
division
,

shall

conduct a hearing to
determine if an obligation

of more than five hundred dollars ($500.00)
is
due

to the state or other governmental
entity.
Upon
adjudication
that a
n
obligation

of more than five hundred dollars ($500.00)
is past due
,
t
he court
shall
issue an order
direct
ing

the department of transportation to withhold, suspend or restrict the

driver's license, as defined in W.S. 31
‑
7
‑
102(a)(xxv),

of the obligor
if the obligor is an individual or the sole proprietor of a business entity
.
The order shall d
irect the department of transportation to
send
, by certified mail,
notice to
the obligor
at the
obligor's last known address
of the driver's license withholding, suspension or restriction.
The notice shall
inform the obligor the
withholding, suspension or restriction shall remain in effect until the department of transportati
on is notified by the
division
that
the
obligor

is in compliance with the court order or has entered into
a payment plan approved by the
division
.

(b
)

If at any time
an obligor
has complied with the terms of the court order, or has entered into
a payment plan approved by the
division
, the
division

shall
promptly
notify
the department of transportation that the withholding, suspension or restriction may be lifted and the
driver's
license may be reinstated if the
obligor
is otherwise eligible for reinstatement.

(c
)

Nothing in this section shall prohibit subsequent orders
to withhold
,

suspend
or restrict an obligor's
driver's license
if the
obligor
is again subject to the provisions of this section.

(
d
)

The
division

shall adopt rules to ensure notice is provided in
a
timely manner to the department of transportation that a
n obligor
is in satisfactory compliance with the court order under this section. Upon receipt of the notice, the department of transportation shall reinstate the license unless the license was suspended or revoked for other reasons. The department of transportation shall adopt rules
to ensure the license is
reinstated
promptly
upon receipt of the notice.

(e
)

The discretion to modify any order of suspension under this section to allow driving privileges is limited as follows:

(i)

A person whose driving privileges have been suspended for nonpayment
of
an
obligation
owed to the state or any
governmental entity
may be granted limited driving pr
ivileges by the
department of transportation
for a period not to exceed one hundred twenty (120) days;

(ii)

A person granted limited driving privileg
es under this subsection by
the department of transportation
shall not be granted an extension of such privileges for twelve (12) months after the limited driving privileges expire unless the person has subsequently made full payment on
the
obligation
in arrears,
or is in full compliance with the
division
.

9
‑
1
‑
421
.

State recovery obligation division
; p
rofessional, occupational or recreational license suspension; notice and hearing.

(a)

A
district
court, on motion of the
division
,
shall
conduct a hearing to
determine if a
n obligation
of more than five hundred dollars ($500.00) is due to the state or other governmental entity. Upon adjudication that
an

obligation

of more than five hundred dollars ($500.00)
is past due, the court shall
:

(i)

Determine whether the obligor
has
a professional, occupational
or recreational
license, certificate or permit that is subject to withholdi
ng, suspension or restriction
by the state of Wyoming
;

(ii)

Issue
an order
to withhold, suspend or restrict
the obligor's
professional, occupational or recreational license, certificate or permit unless the obligor pays the obligation in full within thirty (30) days of the order or enters into a payment plan approved by the division
. The order shall direct the
appropriate licensing, certifying or permitting agency, board or commission to send
, by certified mail, notice to the obligor at the obligor's last known address of the
license, certificate or permit
withholding, suspension or restriction
.

The notice shall inform the obligor that the
withholding, suspension or restriction shall remain in effect until that agency, board or commission is notified by the division that the obligor is in compliance with the court order or has entered into a payment plan approved by the division.

(
b
)

If at any time
a
n obligor
has c
omplied wi
th the terms of the court order
or has entered into
a payment plan approved by the
division
, the

division

shall
promptly
notify the licensing, certifying or permitting agency
, board or commission
that the withholding, suspension or restriction may be lifted and the license, certificate or
permit may be reinstated if the
obligor
is otherwise eligible for reinstatement.

(
c
)

Nothing in this section shall prohibit subsequent orders
to withhold, suspend or restrict the
obligor's
professional, occupational or recreational license, certificate or permit
if the
obligor
is again subject to the provisions of this section.

(
d
)

The
division
shall adopt rules to ensure notice is provided in a timely manner to any licensing, certifying or permitting agency
, board or commission
that
a
n obligor
is in satisfactory compliance with the court order under this section. Upon receipt of the notice, the licensing, certifying or permitting agency shall
promptly
reinstate the license, certificate or permit unless the license, certificate or permit was suspended or revoked for other reasons.

9
‑
1
‑
42
2
.

State obligations; liability of officers, directors, partners and owners
; conflict of law.

(a)

A
ny officer or director of a corporation, manager of a limited liability company or partner of a partnership having at least twenty percent (20%) ownership interest of
the
corporation, limited l
iability company or partnership
or any owner of a sole proprietorship
sh
all be personally liable for
an obligation due to the state of Wyoming from the
corporation, limited liability company
, partnership
or sole proprietorship
. Liability under this sub
section shall:

(i)

Survive dissolution, reorganization, bankruptcy, receivership or assignment for the benefit of creditors of or by the corporation, partnership,
limited liability company
or sole proprietorship;

(ii)

Be initially determined by the division. The division's determination is final unless the person determined to be
liable
requests a hearing
on the determination.
The request for hearing shall be submitted
in writing
to the division no later than fifteen (15) days after the date notice of the determination is mailed to his address or the address of the corporation, partnership,
limited liability company
or sole proprietorship.

The
hearing shall be conducted
in accordance with the Wyoming Administrative Procedure Act

as a contested case before a hearing examiner of the of
fice of administrative hearings
. The hearing examiner
shall
recommend a decision
to the
administrative head of the division
. The administrative head of the division
shall
confirm a determination of liability only
upon finding
by a preponderance of the evidence that
ground
s
exist under this section for the determination
of liability
.

(b)

If the provisions of this section conflict with any other provision of law in this state, the provisions of this section shall control.

9
‑
1
‑
423
.

State obligation recovery division
; state
obligation recovery

a
ccount; reports
; confidentiality
.

(
a
)

Except as provided in subsection (b) of this section, a
ll money received by the
division

pursuant to
W.S. 9
‑
1
‑
418
through 9
‑
1
‑
423
shall be deposited with the stat
e treasurer and credited to an account of the
state
or any governmental entity
from which the obligation

originated
or to an
y other
account as
otherwise
directed by law
.

(b)

There is created the state
obligation recovery
account.
Notwithstanding any other provision of law, t
wenty
‑
five percent (25%) of the amounts collected
by the division pursuant to
this act

shall be credited to the
state
obligation recovery
account
for

administrative
and personnel
costs
.

In the event that
funds within the
state
obligation recovery
account exceed the
anticipated
annual operating budget for the division for the next fiscal year
,
funds in excess of the
annual
operating budget shall be credited
to the general fund.

(
c
)

The division
is intended to be
self sustaining and self funded.

The division shall
:

(i)

S
ubmit
quarterly
and annual
reports to
the
governor
and the
joint appropriations committee

disclosing the total
amounts of
obligations
collected and the
administrative
and personnel costs
of the
division
during the reporting period
;

(ii
)

Submit to the governor and the joint appropriations committee

by June 30 of each year a copy of the annual operating budget for the
division
for the next fiscal year. This annual operating budget shall be on forms as prescribed by the department of
administration and information.

(d)

Documents,
materials or other information

in the po
ssession of or control of the division
that are obtained by
or created by
the division in collecting obligation
s

due to the state or any governmental entity
s
hall be conf
idential by law and privileged and
shall not be subject to
the Wyoming Public Records Act.

Section 2
.

W.S. 9
‑
1
‑
415(
a)
, (b)(intro),
and
(e)
,
16
‑
4
‑
502
(a)
and (b)(intro)
and

39
‑
15
‑
107(b)(x)

are amended to read:

9
‑
1
‑
415
.

Collection of debts due the state; discharge of uncollectible debts.

(a)

Except as provided in subsections (e) and (f) of this section, any office
,

or
agency
, department
,
board, instrumentality
or institution
of the state
,

may use the services of a collection agency licensed in Wyoming to assist in the collection of
or any of its branches,
shall
report all
past due

debts due the state or any state office or agency

to the
state
obligation
recovery division for collection
.

(b)

Any debt

due and owing the state or any
office or agency of the state

of its branches, offices, agencies, departments, boards, instrumentalities or institutions
, which is determined to be uncollectible, shall be certified to the state auditor by the chief administrative officer of the agency

to which the debt is due

and the
state obligation recovery division
. The certification shall include:

(e)

Before any billing for services, collections or use of the services of
a collection agency

the
state obligation recovery division
, state institutions shall first make an administrative determination that all
statutory requirements relative to patient billing have been followed in each case. In the case of those state institutions defined by W.S. 25
‑
11
‑
101(a)(vii), the decision of whether to
contract with a collection agency
use the services of the
state obligation recovery division

shall be made by the department of health or the department of family services pursuant to W.S. 25
‑
11
‑
106.

16
‑
4
‑
502
.

Collection of debts due a governmental entity; discharge of uncollectible debts.

(a)

The governing body of any governmental entity may authorize the use of the services of
a collection agency licensed in Wyoming to assist
the
state obligation recovery division

in the collection of debts due the governmental entity.

(b)

Any debt due and owing
to a governmental entity, which is determined to be uncollectible, shall be certified to the governing body of the entity by the chief administrative officer of the entity to which the debt is
due

and, if applicable, the
state obligation recovery division
. The certification shall include:

39
‑
15
‑
107
.

Compliance; collection procedures.

(b)

Payment. The following shall apply:

(x)

The department
may enter into contracts with collection agencies

shall use the services of the state obligation recovery division
for required collection
services
on deficiencies of sales tax occurring under W.S. 39
‑
15
‑
101 through 39
‑
15
‑
111
.

from
and after the reporting period of January, 1989.

Any taxes collected by the
collection agencies
state obligation recovery division

shall be distributed in accordance with W.S.
9
‑
1
‑
422
and
39
‑
15
‑
111(
b)
;
. There is continuously appropriated from the general fund, to the department, an amount equal to the cost of collection under each contract but not to exceed fifty percent (50%) of the amounts collected by collection agencies, under a contract. The department shall expend those funds appropriated solely for collection agency services and may authorize in the contracts for those
services that collection agency costs be deducted from funds collected and remitted to the department. The contracts entered into under this paragraph shall not be for a term of more than two (2) years and shall be awarded only after competition;

Section 3
.

(a)

Nothing in this act shall be construed to modify or impair any
existing
contract
s for
collection agency
services
executed by the state of Wyoming or any city, town, county, school district, special taxing district or community college district
prior to J
an
ua
ry
1, 201
7
.

(b)

The division of state obligation recovery shall
prom
ulgate rules necessary to implement this act on or before J
anuary
1, 201
7
.

Section
4
.

The
office of
state auditor
is authorized
five
(
5
) additional full
‑
time permanent position
s
for the
state obligation recovery
division
.

Section
5
.

(a)

There is appropriated one million one hundred fifty
‑
six thousand seven hundred twenty
‑
three dollars ($1,156,723.00) from the general fund to the state auditor to implement
the purpose
s
of
this act. This appropriation shall be for the period beginning on
July 1
, 2016 and ending June 30, 2017. Notwithstanding any other provision of law, this appropriation shall not be transferred or expended for any other purpose. Any unobligated funds shall revert as provided by law on June 30, 2017.

(b)

There is appropriated six hundred six thousand six hundred eighteen dollars ($606,618.00) from the state obligation recovery account created by section 1
of
this act
to the state auditor
to implement
the purposes of
this act for the period beginning on
July

1
, 2017 and ending
June 30
, 2018. Notwithstanding any other provision of law, this appropriation shall not be transferred or expended for any other purpose. Any unobligated funds shall revert as provided by law on June 30, 2018.

Section
6
.

(a)

Except as provided in subsection (b) of this section, this act is effective
July 1, 2016
.

(b)

Section 2
of this act
is
effective
J
anuary
1
, 201
7
.
(END)

1
HB0145