28 TAC §§1.1701-1.1703
The Texas Department of Insurance proposes new §§1.1701-1.1703
concerning the collections of delinquent obligations. All state agencies are
required to report uncollected and delinquent obligations to the Attorney
General for collection efforts after a state agency has determined that normal
agency collection procedures have failed. Further, each state agency that
collects delinquent obligations owed to the agency must adopt rules to establish
procedures for the collection of delinquent obligations. These new sections
are necessary to establish agency procedures for referral for collection to
the Office of the Attorney General.
Section 1.1701 sets out the procedures for the referral of delinquent debts
to the Office of the Attorney General for collection. Section 1.1702 provides
that the department shall maintain records of all person or entities liable
for delinquent obligations. Section 1.1703 provides that the commissioner
may, for good cause, make exceptions to the procedures set forth in §1.1701.
Karen A. Phillips, Chief Financial Officer, has determined that for each
year of the first five years the proposed sections will be in effect, there
will be no fiscal impact to state and local governments as a result of the
enforcement or administration of the rule. There will be no measurable effect
on local employment or the local economy as a result of the proposal.
Ms. Phillips has determined that for each year of the first five years
the sections are in effect, the public benefits anticipated as a result of
the proposed sections will be the collection of outstanding funds owed to
the Texas Department of Insurance's Operating Fund Account. The proposed rules
do not impose economic costs on persons required to comply with the rule.
Any costs to persons are a result of debts owed to the state and not as a
result of the proposed rules. It is neither legal nor feasible to waive the
proposed rules for small or micro businesses because the businesses incurred
the debt and waiver of the rules would encourage businesses not to pay debts
owed to the state.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on July 31, 2000, to Lynda H. Nesenholtz, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box
149104, Austin, Texas, 78714-9104. An additional copy of the comment must
be simultaneously submitted to Karen A. Phillips, Mail Code 108-1A, Texas,
Department of Insurance, P.O. Box 149104, Austin, Texas, 78714-9104. Any requests
for a public hearing should be submitted separately to the Office of the Chief
Clerk.
The new sections are proposed under the Government Code §2107.002
and Insurance Code §36.001. Section 2107.002 provides that a state agency
that collects delinquent obligations owed to the agency shall establish procedures
by rule for collecting a delinquent obligation. Section 36.001 provides that
the Commissioner of Insurance may adopt rules and regulations to execute the
duties and functions of the Texas Department of Insurance only as authorized
by statute.
The following provision is affected by this proposal: Government Code, §2107.002
§1.1701.Referrals of Delinquent Obligations to the Office of the Attorney General for Collection.
(a)
The commissioner or the commissioner's designee shall decide
whether to refer a delinquent obligation to the attorney general for collection.
(b)
The department may, in its discretion, decline to refer
collection matters in which the amount to be collected would be less than
the total sum of expense to the department and the attorney general for travel,
employee time, court costs, and other relevant expenses.
(c)
Not later than 120 days after the department determines
that normal collection procedures for an obligation owed the department have
failed, the department shall report the uncollected and delinquent obligation
to the attorney general for further collection efforts. In making a determination
of whether to refer a matter to the attorney general, the department shall
consider:
(1)
the expense of further collection procedures;
(2)
the size of the debt;
(3)
the existence of any security;
(4)
the possibility of collection or satisfaction of the
debt through other means;
(5)
the likelihood of collection; and
(6)
any other relevant factors established by the department.
(d)
Prior to referring a matter to the attorney general, the
department shall:
(1)
verify the debtor's address and telephone number;
(2)
conclude that the obligation is not uncollectible;
and
(3)
transmit no more than two demand letters to the debtor
at the debtor's verified address.
(e)
The department may, for policy reasons or other good cause,
determine that a matter should be referred to the attorney general.
§1.1702.Records.
(a)
The department will maintain records identifying all persons
or entities liable for delinquent obligations and the correct physical address
of the debtor's place of business and/or residence, if available.
(b)
Such records should also contain collection histories on
each debtor showing, where applicable:
(1)
attempted contacts with the debtor,
(2)
efforts to locate the debtor,
(3)
efforts to locate assets of the debtor and the results
of such efforts,
(4)
state warrants that may be issued to the debtor, and
(5)
any other information considered to be relevant by
the department.
§1.1703.Exceptions.
For good cause, the commissioner may make exceptions to the procedures
in §1.1701 of this subchapter (relating to Referrals of Matters to the
Office of the Attorney General for Collection).
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on June 19, 2000.
TRD-200004312
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: July 30, 2000
For further information, please call: (512) 463-6327