Bill Summary for Bill Number SB06-202

Date: 04/06/2006

Final
BILL SUMMARY for SB06-202

HOUSE COMMITTEE ON FINANCE

Votes: View-->	Action Taken:
Refer Senate Bill 06-202 to the Committee of the W	PASS

12:50 PM -- Senate Bill 06-202 - Concerning the "Colorado Fair Debt Collection Practices Act"

Representative Vigil, prime sponsor, explained the provisions of the bill. The bill modifies the process for collecting debts due the state. Representative Vigil said that among other things, the bill:

eliminates the requirement that state agencies refer debts to the State Controller in the Department of Personnel and Administration when payment arrangements have been made;
extends the time for assigning certain debts to private collections agencies;
allows the department to collect debts on behalf of other political subdivisions of the state; and
clarifies that if a debt is litigated, the debtor is liable for attorney fees, costs, and fees in addition to the collection fee.

Representative Vigil closed by saying the bill also specifies that efforts to collect moneys owed to the state are not subject to civil liabilities under the "Colorado Fair Debt Collection Practices Act", and that the controller is subject to disciplinary action if he or she fails to comply with the act.

The following persons testified:

12:52 PM -- Ms. Jennifer Okes, Colorado Department of Personnel and Administration, testified in support of the bill. Ms. Okes said that the bill would allow for more efficient state debt collections.

Representative Judd and Ms. Okes discussed the provisions in the bill (pages 6 and 7) that allow charges for attorney and collection fees. Ms. Okes commented that the 25 percent provision for collection costs is a maximum rate. As an example of state agencies that assess a lower fee, central collections assesses a 15 percent fee when using a private collection agency. Attorney fees in some cases are assessed at an 18 percent fee. Mr. Okes concluded saying that the fee structure in the bill will allow the state to break even when costs are incurred to collect state debt.

Representative Judd asked Mr. Greg Mecham from the department to respond to questions regarding the state debt collection process.

12:57 PM -- Mr. Greg Mecham, Central Collections, Colorado Department of Personnel and Administration, discussed the collections process used by the state. Generally, when looking at damage provisions in the bill, fees may be charged for a check that bounces to cover NSF fees. Mr. Mecham closed by saying since the 1970s or 1980s, debtors owe the state about $300 million in total debt. This amount is much less than total debt owed to states other than Colorado.


BILL:	SB06-202
TIME:	01:04:50 PM
MOVED:	Vigil
MOTION:	Refer Senate Bill 06-202 to the Committee of the Whole. The motion passed on a 10-0-3 vote.
SECONDED:	Frangas
		VOTE
	Benefield	Yes
	Cloer	Excused
	Crane	Yes
	Frangas	Yes
	Garcia	Yes
	Harvey	Yes
	Jahn	Yes
	Kerr	Yes
	Marshall	Excused
	Massey	Excused
	McCluskey	Yes
	Judd	Yes
	Vigil	Yes
Final YES: 10 NO: 0 EXC: 3 ABS: 0 FINAL ACTION: PASS

01:07 PM

Adjourn.