First Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 15-0225.01 Bart Miller x2173 HOUSE BILL 15-1056 HOUSE SPONSORSHIP Coram, SENATE SPONSORSHIP Hodge, House Committees Senate Committees Business Affairs and Labor Judiciary A BILL FOR AN ACT Concerning disclosure of information for asset recovery, and, in connection therewith, making an appropriation. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill allows a judgment creditor to file a petition in court to compel the department of labor and employment to disclose certain information about a judgment debtor. Judgment creditors must follow federal requirements for protecting any information disclosed and may not share it with other persons. A civil penalty of $1,000 may be assessed against a judgment creditor who fails to comply with these requirements. The bill appropriates from cash funds $233,358 and 4.0 FTE to the department of labor and employment and $228,738 and 3.0 FTE to the judicial department to implement the bill. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add article 51.3 to title 13 as follows: ARTICLE 51.3 Disclosure of Information for Asset Recovery 13-51.3-101. Definitions. As used in this article, unless the context otherwise requires: (1) "Department" means the department of labor and employment. (2) "judgment creditor" and "judgment debtor" have the meanings set forth in section 13-54.5-101. 13-51.3-102. Disclosure of information for asset recovery - court order - procedures - restrictions on use of information - penalties. (1) The department shall disclose to a judgment creditor holding a monetary judgment against a person only the name and address of the judgment debtor's current employer, or employers, if more than one, as contained in the department's wage and employment information database and only if the judgment creditor: (a) Has obtained a money judgment against the judgment debtor from a court of competent jurisdiction; (b) Obtains a court order requiring the disclosure of information in accordance with subsection (2) of this section; and (c) Complies with requirements of subsection (3) of this section. (2) A court that enters a money judgment against an individual shall, regardless of whether the judgment creditor has exhausted other remedies, grant an order requiring the department to disclose the name and address of the judgment debtor's current employer or employers if both of the following conditions are met: (a) The judgment creditor files a motion with the court and, if so required by the Colorado rules of civil procedure, serves a copy of the motion on the judgment debtor. The judgment debtor may oppose the motion on grounds that the judgment is void or expired. (b) If the judgment debtor opposes the motion, the court holds a hearing within fourteen days after the timely filing with the court and service of the objection upon the judgment creditor and denies or overrules the objection. (3) When a court order is granted under subsection (2) of this section, the judgment creditor shall: (a) Provide to the department a certified copy of the court order requiring disclosure; (b) (I) Execute a user agreement and data access contract with the department and pay the applicable fee associated with the user agreement and data access contract. (II) The department may charge the judgment creditor a one-time initiation fee attributed to the execution of the required user agreement and data access contract as determined in rules adopted by the department under section 24-4-103, C.R.S. The initiation fee may not exceed five hundred dollars. (III) The department may charge the judgment creditor an annual renewal fee attributed to the execution of the required user agreement and data access contract as determined in rules adopted by the department under section 24-4-103, C.R.S. The annual renewal fee may not exceed two hundred dollars. (c) (I) Pay the department a reasonable fee that reflects the actual cost of processing the request as determined in rules adopted by the department under section 24-4-103, C.R.S. The department shall transfer all fees collected under this subsection (3) to the state treasurer, who shall credit the moneys to the judgment debtor disclosure fund created in section 24-1-121, C.R.S. (II) The fee paid under subparagraph (I) of this paragraph (c) may be recovered by the judgment creditor as a taxable litigation cost. (d) Comply with the data safeguard and security measures described in 20 CFR 603.9 with respect to information received from the department under this section. (4) If a judgment creditor complies with subsection (3) of this section, the department shall provide to the judgment creditor the name and address of the judgment debtor's current employer or employers within seven business days after receiving the certified court order. (5) A judgment creditor may not: (a) Use the information obtained under this section for a purpose other than satisfying the judgment between the judgment creditor and the judgment debtor; or (b) Share the information with any other person except for law enforcement officials, regulators, or as otherwise required by law or court order. (6) (a) The department, with just cause and at its own expense, may audit a judgment creditor receiving information under this section for compliance with the data safeguard and security measures of 20 CFR 603.9. (b) The department may pay the costs associated with conducting an audit under this subsection (6) only from funds in the judgment debtor disclosure fund created under section 24-1-121 (1.7), C.R.S. (7) (a) If a judgment creditor fails to comply with the data safeguard and security measures under 20 CFR 603.9, the judgment creditor, after a court finding of willful noncompliance, is subject to a civil penalty of not more than one thousand dollars for each violation as follows: (I) The attorney general, on the attorney general's behalf or on behalf of the department, may file an action in district court to seek and enforce the civil penalty; and (II) The prevailing party is entitled to an award of its reasonable attorney fees, court costs, and investigative expenses. (b) If the judgment creditor is found to be the prevailing party, all fees, court costs, and investigative expenses required to be paid to the judgment creditor must be paid out of the judgment debtor disclosure fund created in section 24-1-121 (1.7), C.R.S. (8) When collecting on any debt arising from past due orders, obligations, fines, or fees due to the state or any political subdivision within the state, any fees or costs, including designated contractual costs and fees, of the privately retained counsel or a collection agency are added to the amount due and placed for collection, whether or not the debt has been reduced to judgment. Exclusive of the accrual of interest and court costs, any fees or costs may not exceed twenty-five percent of the amount to be collected unless additional reasonable attorney fees are awarded by a court of competent jurisdiction. 13-51.3-103. Disposition of civil penalties, attorney fees, court costs, and investigative expenses recovered. The department shall transmit all civil penalties, attorney fees, court costs, and investigative expenses collected under section 13-51.3-102 to the state treasurer, who shall credit them to the general fund. SECTION 2. In Colorado Revised Statutes, 24-1-121, add (1.7) as follows: 24-1-121. Department of labor and employment - judgment debtor disclosure fund - creation. (1.7) There is hereby created in the state treasury the judgment debtor disclosure fund. The fund consists of moneys from fees collected under section 13-51.3-103, C.R.S., for requests for disclosure of current employer information on judgment debtors. The moneys in the fund are subject to annual appropriation by the general assembly for the direct and indirect costs incurred by the department of labor and employment in processing requests for disclosure of current employer information on judgment debtors under section 13-51.3-102, C.R.S. The state treasurer shall credit all interest derived from the deposit and investment of moneys in the fund to the fund. At the end of any fiscal year, all unexpended and unencumbered moneys in the fund remain in the fund and are not transferred to the general fund or any other fund. SECTION 3. Appropriation. (1) For the 2015-16 state fiscal year, $233,358 is appropriated to the department of labor and employment for use by the division of unemployment insurance. This appropriation is from the judgment debtor disclosure fund created in section 24-1-121 (1.7), C.R.S., and is based on an assumption that the division will require an additional 4.0 FTE. To implement this act, the division may use this appropriation as follows: (a) $213,358 and 4.0 FTE for program costs for personal services and operating expenses; and (b) $20,000 for the purchase of computer center services. (2) For the 2015-16 state fiscal year, $228,738 is appropriated to the judicial department for use by the trial courts. This appropriation is from the judicial stabilization cash fund created in section 13-32-101 (6), C.R.S., and is based on an assumption that the trial courts will require an additional 3.0 FTE. To implement this act, the trial courts may use this appropriation as follows: (a) $221,138 and 3.0 FTE for trial court programs for personal services; and (b) $7,600 for trial court programs for operating expenses. (3) For the 2015-16 state fiscal year, $70,656 is appropriated to the judicial department. This appropriation is from the judicial stabilization cash fund created in section 13-32-101 (6), C.R.S. To implement this act, the trial courts may use this appropriation for courthouse capital expenses. (4) For the 2015-16 state fiscal year, $20,000 is appropriated to the governor - lieutenant governor - state planning and budgeting for use by the office of information technology. This appropriation is from reappropriated funds received from the department of labor and employment out of the appropriation made in paragraph (b) of subsection (1) of this section. To implement this act, the office of information technology may use this appropriation for the provision of computer center services for the department of labor and employment. SECTION 4. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.