Assembly Bill No. 488

Assembly Bill No. 488-Assemblymen Ohrenschall, Anderson, Freeman, Price, Nolan, Carpenter, Sandoval, Manendo, Koivisto and Perkins

May 15, 1997
____________

Referred to Committee on Judiciary

SUMMARY--Provides for collection of child support by private collection agencies under certain circumstances. (BDR 11-49)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.

AN ACT relating to child support; providing for the collection of delinquencies through private collection agencies rather than district attorneys under certain circumstances; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

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Section 1 Chapter 125B of NRS is hereby amended by adding thereto the provisions set forth as sections 2 and 3 of this act.
Sec. 2 1. Each board of county commissioners in a county whose population is 100,000 or more shall, and each board of county commissioners in a county whose population is less than 100,000 may, select a collection agency licensed pursuant to chapter 649 of NRS to collect child support and obligations incidental to the establishment of child support, pursuant to the judgments or orders of the district court in and for the county. The boards of two or more counties included in a judicial district may jointly select a single collection agency.
2. The collection agency must be selected by competitive bidding, for a contract of not more than 3 years. The rate of payment may not exceed 15 percent of amounts in arrears, as described in subsection 6 of NRS 425.3837, and 10 percent of other amounts, payable as collected.
3. If the license of the collection agency is suspended or revoked or is not renewed, the contract is terminated by operation of this section on the effective date of the suspension, revocation or expiration of the license.
Sec. 3 1. Except as otherwise provided in subsection 4, each judgment or order entered or issued on or after October 1, 1997, that establishes or enforces an obligation for the support of a child must, if a collection agency has been selected for the county:
(a) Provide for the collection of the amounts due under it by the collection agency in the same manner as those amounts would otherwise be collected by the district attorney of that county; and
(b) Include an additional amount payable by the obligor equal to the charge made by the agency for the collection.
2. The obligee, with the permission of the court, may choose a collection agency other than the one selected for the county, but the amount payable by the obligor must not exceed the limit imposed by the provisions of section 2 of this act.
3. The collection agency is responsible for the collection and remittance of the amounts due to the obligee and for prosecuting any legal proceedings necessary to enforce the obligation.
4. The obligor and obligee may agree, subject to approval by the court, for the direct payment of the amounts due by the obligor to the obligee. If a direct payment is not made when due and the obligee applies to a court to enforce payment or applies for public assistance:
(a) The agreement for direct payment ceases to be effective;
(b) Future payments must be made through the selected collection agency; and
(c) The obligor shall pay the additional amount described in paragraph (b) of subsection 1.
Sec. 4 NRS 125B.095 is hereby amended to read as follows:
125B.095 1. If an installment of an obligation to pay support for a child, whether the obligation arises from the judgment of a court of this or another state or from expedited process, becomes delinquent in the amount owed for 1 month's support, a penalty must be added by operation of this section to the amount of the installment. This penalty must be included in a computation of arrearages by a court of this state and may be so included in a judicial or administrative proceeding of another state.
2. The amount of the penalty is 10 percent per annum, or portion thereof, that the installment remains unpaid. Each district attorney , [or] other public agency or collection agency in this state undertaking to enforce an obligation to pay support for a child shall enforce the provisions of this section.
3. As used in this section, "expedited process" has the meaning ascribed to it in NRS 125B.140.
Sec. 5 NRS 125B.150 is hereby amended to read as follows:
125B.150 1. The district attorney of the county of residence of the child or a parent who does not have physical custody of the child shall take such action as is necessary to establish parentage of the child and locate and take legal action, including the establishment or adjustment of an obligation of support, against a parent who has a duty to support the child when requested to do so by the custodial parent or a public agency which provides assistance to the parent or child. If the court for cause transfers the action to another county, the clerk of the receiving court shall notify the district attorney of that county, and that district attorney shall proceed to prosecute the cause of action and take such further action as is necessary to establish parentage , [and] to establish or adjust the obligation of support and , if a collection agency is not selected for the county pursuant to section 2 of this act, to enforce the payment of support pursuant to this chapter or chapter 31A, 126, 130 or 425 of NRS.
2. In a county where the district attorney has deputies to aid him in the performance of his duties, the district attorney shall designate himself or a particular deputy as responsible for performing the duties imposed by subsection 1.
3. Except as otherwise provided in NRS 126.101, the district attorney and his deputies do not represent the parent or the child in the performance of their duties pursuant to this chapter and chapter 31A, 126, 130 or 425 of NRS, but are rendering a public service as representatives of the state.
4. Officials of the welfare division of the department of human resources are entitled to access to the information obtained by [the] a district attorney or collection agency if that information is relevant to the performance of their duties. The district attorney or his deputy shall inform each person who provides information pursuant to this section concerning the limitations on the confidentiality between lawyer and client under these circumstances.
5. Disclosures of criminal activity by a parent or child are not confidential.
6. [The] A district attorney or collection agency shall inform each parent who applies for [his] assistance in this regard that a procedure is available to collect unpaid support from any refund owed to the parent who has a duty to support the child because an excessive amount of money was withheld to pay his federal income tax. The district attorney or collection agency shall submit to the welfare division all documents and information it requires to pursue such a collection if:
(a) The applicant is not receiving public assistance.
(b) The district attorney or collection agency has in his or its records:
(1) A copy of the order of support for a child and any modifications of the order which specify their date of issuance and the amount of the ordered support;
(2) A copy of a record of payments received or, if no such record is available, an affidavit signed by the custodial parent attesting to the amount of support owed; and
(3) The current address of the custodial parent.
(c) From the records in his or its possession, the district attorney or collection agency has reason to believe that the amount of unpaid support is not less than $500.
Before submitting the documents and information to the welfare division, the district attorney or collection agency shall verify the accuracy of the documents submitted relating to the amount claimed as unpaid support and the name and social security number of the parent who has a duty to support the child. If the district attorney or collection agency has verified this information previously, he or it need not reverify [it] the information before submitting it to the welfare division.
7. The welfare division shall adopt such regulations as are necessary to carry out the provisions of subsection 6.
Sec. 6 NRS 125B.160 is hereby amended to read as follows:
125B.160 1. Each district attorney [, clerk of the court or county clerk who] or collection agency that collects and disburses payments for support of a child shall report to the welfare division of the department of human resources any information required by the division regarding support for children, including information concerning the collection and disbursements of support and the establishment of paternity.
2. The state welfare administrator shall adopt regulations prescribing the forms for, and the arrangement of, the material to be submitted and the schedule for the reporting of the required information.
Sec. 7 NRS 125B.170 is hereby amended to read as follows:
125B.170 1. The enforcing authority may release information concerning a responsible parent's obligation or failure to pay support for a child to an agency of the kind defined in 15 U.S.C. § 1681a(f), except that the information may be given to the agency only after notice of the proposed disclosure has been sent to the responsible parent and he has had 20 days to correct the information.
2. The enforcing authority may collect from an agency that requests such information a fee not to exceed the actual cost of providing the information.
3. The welfare division shall adopt regulations concerning the disclosure of information pursuant to this section, prescribing the content of the notice of the proposed disclosure and establishing procedures for the responsible parent to correct any of the information to be disclosed.
4. As used in this section, "enforcing authority" means the welfare division of the department of human resources , [or] the district attorney [.] or a collection agency selected pursuant to section 2 of this act or chosen pursuant to section 3 of this act.
Sec. 8 NRS 31A.010 is hereby amended to read as follows:
31A.010 As used in this chapter, unless the context otherwise requires:
1. "Court" means the district court or any judicial or administrative procedure established in this or any other state or territory or the District of Columbia to facilitate the collection of an obligation for the support of a child.
2. "Enforcing authority" means the welfare division , [or] the district attorney [.] or a collection agency selected pursuant to section 2 of this act or chosen pursuant to section 3 of this act.
3. "Income" includes, but is not limited to, wages, salaries, bonuses, commissions and compensation as an independent contractor.
4. "Welfare division" means the welfare division of the department of human resources.
Sec. 9 NRS 31A.095 is hereby amended to read as follows:
31A.095 1. If an employer wrongfully refuses to honor a notice to withhold wages and commissions or knowingly misrepresents the income of an employee, the district attorney or, if a collection agency has been selected for the county pursuant to section 2 of this act, the selected collection agency or the agency chosen by an obligee may apply for and the court may issue an order directing the employer to appear and show cause why he should not be subject to the penalty prescribed in subsection 2 of NRS 31A.120.
2. At the hearing on the order to show cause the court, upon a finding that the employer wrongfully refused to honor the notice to withhold or knowingly misrepresented an employee's income:
(a) May order the employer to comply with the notice to withhold wages and commissions;
(b) May order the employer to provide accurate information concerning the employee's income;
(c) May fine the employer pursuant to subsection 2 of NRS 31A.120; and
(d) Shall require the employer to pay the amount the employer failed or refused to withhold from the responsible parent's salary.
Sec. 10 NRS 425.347 is hereby amended to read as follows:
425.347 1. A governmental entity which issues a license to do business in this state shall, upon request of the division, submit to the division information regarding the name and address of each natural person who holds such a license and any pertinent changes in that information.
2. A board or commission which issues occupational or professional licenses or permits pursuant to Title 54 of NRS shall, upon request of the division, submit to the division information regarding the name and address of each person who holds such a license or permit and any pertinent changes in that information.
3. The division shall periodically provide the information obtained pursuant to this section to the district attorneys , [and] other public agencies and collection agencies selected pursuant to section 2 of this act or chosen pursuant to section 3 of this act in this state [collecting] to collect support for children.
Sec. 11 NRS 425.348 is hereby amended to read as follows:
425.348 1. Each district attorney , [or] other public agency or collection agency in this state collecting support for children shall compare the information received pursuant to NRS 425.347 against its cases to identify any person who is in arrears and holds such a license or permit.
2. The district attorney , [or] other public agency or collection agency shall notify each person so identified, by first-class mail, to give him an opportunity to satisfy the claim before notice is given to the issuer of the license or permit of the arrearage.
3. If the person does not satisfy the arrearage, the district attorney , [or] other public agency or collection agency shall report the fact of the arrearage to the issuer of the license or permit. The division shall similarly notify the issuer of the license or permit when the person thereafter pays the arrearage or otherwise satisfies the claim.
Sec. 12 NRS 425.370 is hereby amended to read as follows:
425.370 1. Whenever the division provides public assistance on behalf of a child, the division and the prosecuting attorney shall take appropriate action to establish paternity and , if a collection agency is not selected for the county pursuant to section 2 of this act, to enforce the responsible parent's duty to pay for the care, support and maintenance of the dependent child.
2. As to any other child under the age of 18 years, the division and the prosecuting attorney, if required by the Social Security Act (42 U.S.C. §§ 301 et seq.), upon application therefor, may take appropriate action to establish paternity and , if a collection agency is not selected for the county pursuant to section 2 of this act, to enforce the responsible parent's duty of support.
Sec. 13 NRS 425.380 is hereby amended to read as follows:
425.380 1. The district attorney is responsible for establishing paternity and , if a collection agency is not selected for the county pursuant to section 2 of this act, securing support pursuant to [NRS 425.260 to 425.440, inclusive,] this chapter in cases referred by the division.
2. The attorney general may assist any district attorney upon request.
3. If a district attorney fails or refuses to perform this duty in a particular case in which assistance is granted, or in which establishment of paternity or enforcement of support is required, the attorney general may undertake to perform this duty and may exercise in connection therewith all powers of the district attorney provided by law.
Sec. 14 NRS 425.3837 is hereby amended to read as follows:
425.3837 1. Each district attorney , [or] other public agency or collection agency collecting support for children shall send a notice by first-class mail to each person who is in arrears in the payment for the support of a child. The notice must include a statement of the amount of the arrearage and the information set forth in subsection 2.
2. If the person does not satisfy the arrearage pursuant to subsection 6 or submit to the district attorney , [or] other public agency or collection agency a written request for a hearing within 20 days after he receives the notice required by subsection 1, the district attorney , [or] other public agency or collection agency shall report the name of that person to the department of motor vehicles and public safety.
3. If a person requests a hearing within the period prescribed in subsection 2, a hearing must be held pursuant to NRS 425.3832. The master shall notify the person of his recommendation at the conclusion of the hearing or as soon thereafter as is practicable. If the master determines that the person is in arrears in the payment for the support of a child, he shall include in the notice the information set forth in subsection 4.
4. If the master determines that a person who requested a hearing pursuant to subsection 2 is in arrears in the payment for the support of a child and the district court issues an order approving the recommendation of the master, the district attorney , [or] other public agency or collection agency shall report the name of that person to the department.
5. The district attorney , [or] other public agency or collection agency shall, within 5 days after the person who is in arrears in the payment for the support of a child satisfies the arrearage pursuant to subsection 6, notify the department that [the person] he is no longer in arrears in the payment for the support of a child.
6. For the purposes of this section:
(a) A person is in arrears in the payment for the support of a child if:
(1) He owes more than $1,000 in payments for the support of a child which are past due and is delinquent for not less than 2 months in payments for the support of a child or any payments ordered by a court for arrearages in such payments; or
(2) He has failed to provide medical insurance for a child as required by a court order.
(b) A person who is in arrears in the payment for the support of a child may satisfy the arrearage by:
(1) Paying all of the past due payments;
(2) If unable to pay all past due payments, paying the amount of the overdue payments for the preceding 12 months which a court has determined are in arrears; or
(3) If the arrearage is for a failure to provide and maintain medical insurance, providing proof that the child is covered under a policy, contract or plan of medical insurance.
(c) A person shall be deemed to have received a notice 3 days after it is mailed, by first-class mail, postage prepaid, to [that person] him at his last known address.
Sec. 15 NRS 425.410 is hereby amended to read as follows:
425.410 [Whenever,] When, as a result of any assignment or action, support [money] is paid by the responsible parent, [such payment shall] the payment must be made through the division upon written notice by the division to the responsible parent, or to the [clerk of the court or] district attorney or collection agency if appropriate, that the child for whom [a support] an obligation of support exists is receiving public assistance, or that the division has undertaken to secure support for the child for whom [a support] the obligation exists.
Sec. 16 NRS 483.443 is hereby amended to read as follows:
483.443 1. The department shall, upon receiving notification from a district attorney , [or] other public agency or collection agency collecting support for children that a court has determined a person is in arrears in the payment for the support of a child pursuant to NRS 425.3837, send a written notice to that person that his license is subject to suspension. The notice must include:
(a) The reason for the suspension of the license;
(b) The information set forth in subsections 2, 3 and 4; and
(c) Any other information the department deems necessary.
2. If a person who receives a notice pursuant to subsection 1 does not satisfy the arrearage as required in NRS 425.3837 within 30 days after he receives the notice, the department shall suspend his license.
3. The department shall reinstate the driver's license of a person whose license was suspended pursuant to this section if it receives:
(a) A notice from the district attorney , [or] other public agency or collection agency pursuant to NRS 425.3837 that the person has satisfied the arrearages pursuant to that section; and
(b) Payment of the fee for reinstatement of a suspended license prescribed in NRS 483.410.
4. The department shall not require a person whose driver's license was suspended pursuant to this section to submit to the tests and other requirements which are adopted by regulation pursuant to subsection 1 of NRS 483.495 as a condition of the reinstatement of his license.
Sec. 17 If a collection agency is selected for a county pursuant to section 2 of this act, each obligation for the support of a child which is delinquent and unsatisfied in that county on October 1, 1997, and for which the obligee has applied to the district attorney for assistance in collection must be assigned for collection to the collection agency for the county. The district attorney shall deliver the files pertaining to such obligations in his possession to the collection agency on or before the first Monday of January 1998.
Sec. 18 1. This act becomes effective upon passage and approval for the purpose of selecting collection agencies by boards of county commissioners pursuant to section 2 of this act. Each board of county commissioners in a county whose population is 100,000 or more shall make its first selection on or before October 1, 1997.
2. For all other purposes, this act becomes effective on October 1, 1997.