Substitute House Bill No. 6701

Public Act No. 01-207

AN ACT CONCERNING ENHANCEMENTS TO THE CHILD SUPPORT ENFORCEMENT SYSTEM.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 4a-18 of the general statutes is repealed and the following is substituted in lieu thereof:

To assist in locating parents who have deserted their children and other persons liable for support of dependents, the Commissioner of Administrative Services, the Commissioner of Public Safety, [or] the Commissioner of Social Services or a support enforcement officer of the Superior Court may request and shall receive information from the records of all departments, boards, bureaus or other agencies, including law enforcement agencies of this state and the same are authorized and required to provide such information promptly as is necessary for this purpose, provided, only information directly bearing on the identity and whereabouts of a person owing or asserted to be owing an obligation of support shall be furnished by such departments, boards, bureaus or other agencies as requested and used or transmitted by the Commissioner of Administrative Services, the Commissioner of Public Safety, [or] the Commissioner of Social Services or a support enforcement officer of the Superior Court pursuant to the authority conferred by this section. The Commissioner of Social Services, acting by and through the IV-D agency, or a support enforcement officer of the Superior Court may make such information available only to federal agencies and public officials and agencies of this state, other states and the political subdivisions of this state and other states seeking to locate parents who have deserted their children and other persons liable for support of dependents for the purpose of enforcing their liability for support.

Sec. 2. Section 17b-93 of the general statutes is amended by adding subsection (e) as follows:

(NEW) (e) The Commissioner of Social Services shall adopt regulations, in accordance with chapter 54, establishing criteria and procedures for adjustment of the claim of the state of Connecticut under subsection (a) of this section. The purpose of any such adjustment shall be to encourage the positive involvement of noncustodial parents in the lives of their children and to encourage noncustodial parents to begin making regular support payments.

Sec. 3. Section 36a-800 of the general statutes is repealed and the following is substituted in lieu thereof:

As used in sections 36a-800 to 36a-810, inclusive, as amended by this act, unless the context otherwise requires:

(1) "Consumer collection agency" means any person engaged in the business of collecting or receiving for payment for others of any account, bill or other indebtedness from a consumer debtor, including any person who, by any device, subterfuge or pretense, makes a pretended purchase or takes a pretended assignment of accounts from any other person or municipality of such indebtedness for the purpose of evading the provisions of sections 36a-800 to 36a-810, inclusive, as amended by this act. It includes persons who furnish collection systems carrying a name which simulates the name of a consumer collection agency and who supply forms or form letters to be used by the creditor, even though such forms direct the consumer debtor to make payments directly to the creditor rather than to such fictitious agency. "Consumer collection agency" further includes any person who, in attempting to collect or in collecting such person's own accounts or claims from a consumer debtor, uses a fictitious name or any name other than such person's own name which would indicate to the consumer debtor that a third person is collecting or attempting to collect such account or claim. "Consumer collection agency" does not include (A) an individual employed on the staff of a licensed consumer collection agency, or by a creditor who is exempt from licensing, when attempting to collect on behalf of such consumer collection agency, (B) persons not primarily engaged in the collection of debts from consumer debtors who receive funds in escrow for subsequent distribution to others, including, but not limited to, real estate brokers and lenders holding funds of borrowers for payment of taxes or insurance, (C) any public officer or a person acting under the order of any court, (D) any member of the bar of this state, and (E) a person who services loans or accounts for the owners thereof when the arrangement includes, in addition to requesting payment from delinquent consumer debtors, the providing of other services such as receipt of payment, accounting, record-keeping, data processing services and remitting, for loans or accounts which are current as well as those which are delinquent. Any person not included in the definition contained in this subsection is, for purposes of sections 36a-645 to 36a-647, inclusive, a "creditor", as defined in subdivision (3) of section 36a-645;

(2) "Consumer debtor" means any natural person, not an organization, who has incurred indebtedness or owes a debt for personal, family or household purposes, including current or past due child support, or who has incurred indebtedness or owes a debt to a municipality due to a levy by such municipality of a personal property tax;

(3) "Creditor" means a person, including a municipality, who retains, hires, or engages the services of a consumer collection agency;

(4) "Municipality" means any town, city or borough, consolidated town and city, consolidated town and borough, district as defined in section 7-324 or municipal special services district established under chapter 105a;

(5) "Organization" means a corporation, partnership, association, trust or any other legal entity or an individual operating under a trade name or a name having appended to it a commercial, occupational or professional designation.

Sec. 4. Subsection (a) of section 36a-801 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) No person shall act within this state as a consumer collection agency, unless such person holds a license then in force from the commissioner authorizing such person so to act. A consumer collection agency is acting within this state if it (1) has its place of business located within this state; (2) has its place of business located outside this state and collects from consumer debtors who reside within this state for creditors who are located within this state; [or] (3) has its place of business located outside this state and regularly collects from consumer debtors who reside within this state for creditors who are located outside this state; or (4) has its place of business located outside this state and is engaged in the business of collecting child support for creditors located within this state from consumer debtors who are located outside this state.

Sec. 5. (NEW) For the purposes of Part XII of chapter 669 of the general statutes, any person who is engaged in the business of collecting child support pursuant to subsection (a) of section 36a-801 of the general statutes shall be a consumer collection agency.

Sec. 6. Section 36a-805 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) No consumer collection agency shall: (1) Furnish legal advice or perform legal services or represent that it is competent to do so, or institute judicial proceedings on behalf of others; (2) communicate with debtors in the name of an attorney or upon the stationery of an attorney, or prepare any forms or instruments which only attorneys are authorized to prepare; (3) purchase or receive assignments of claims for the purpose of collection or institute suit thereon in any court; (4) assume authority on behalf of a creditor to employ or terminate the services of an attorney unless such creditor has authorized such agency in writing to act as [his] such creditor's agent in the selection of an attorney to collect the creditor's accounts; (5) demand or obtain in any manner a share of the proper compensation for services performed by an attorney in collecting a claim, whether or not such agency has previously attempted collection thereof; (6) solicit claims for collection under an ambiguous or deceptive contract; (7) refuse to return any claim or claims upon written request of the creditor, claimant or forwarder, which claims are not in the process of collection after the tender of such amounts, if any, as may be due and owing to the agency; (8) advertise or threaten to advertise for sale any claim as a means of forcing payment thereof, unless such agency is acting as the assignee for the benefit of creditors; (9) refuse or fail to account for and remit to its clients all money collected which is not in dispute within sixty days from the last day of the month in which said money is collected; (10) refuse or intentionally fail to return to the creditor all valuable papers deposited with a claim when such claim is returned; (11) refuse or fail to furnish at intervals of not less than ninety days, upon the written request of the creditor, claimant or forwarder, a written report upon claims received from such creditor, claimant or forwarder; (12) commingle money collected for a creditor, claimant or forwarder with its own funds or use any part of a creditor's, claimant's or forwarder's money in the conduct of its business; (13) add any charge or fee to the amount of any claim which it receives for collection or knowingly accept for collection any claim to which any charge or fee has already been added to the amount of the claim unless the consumer debtor is legally liable therefor, in which case, the charge or collection fee may not be in excess of fifteen per cent of the amount actually collected on the debt; (14) use or attempt to use or make reference to the term "bonded by the state of Connecticut", "bonded" or "bonded collection agency" or any combination of such terms or words, except that the word "bonded" may be used on the stationery of any such agency in type not larger than twelve-point; or (15) engage in any activities prohibited by sections 36a-800 to 36a-810, inclusive, as amended by this act.

(b) No consumer collection agency shall impose a charge or fee for any child support payments collected through the efforts of a governmental agency. If the imposition of a charge or fee is permitted under section 10 of this act, no consumer collection agency shall impose a charge or fee for the collection of any child support overdue at the time of the contract in excess of twenty-five per cent of overdue support actually collected.

Sec. 7. (NEW) No consumer collection agency may collect child support payments unless such consumer collection agency has entered into a written agreement with the creditor to whom the child support is owed. The agreement shall specify the charge or fee for collecting the child support and state, in bold type, that child support collection services are offered by the state of Connecticut or any other state for a nominal fee.

Sec. 8. Subsection (c) of section 46b-213w of the general statutes is repealed and the following is substituted in lieu thereof:

(c) The Department of Social Services shall distribute to all employers in this state a standard notice and claim form, written in clear and simple language, which shall include:

(1) Notice that money will be withheld from the employee's wages for child support and health insurance;

(2) Notice [that] of the amount [the first one hundred forty-five dollars per week] of disposable earnings that are exempt from the income withholding order;

(3) Notice that the amount of the income withholding order may not exceed the maximum permitted by federal law under Section 1673 of Title 15 of the United States Code, together with a statement of the obligor's right to claim any other applicable state or federal exemptions;

(4) Notice of the right to object to the validity or enforcement of such income withholding order in a court in this state and of the right to seek modification of the underlying support order in the court of continuing exclusive jurisdiction;

(5) Notice of the right to seek the assistance of the Child Support Enforcement Bureau of the Department of Social Services and the toll-free telephone number at which the bureau can be contacted;

(6) A claim form which shall include (A) a list of the most common defenses and exemptions to such income withholding order in a manner which allows the obligor to check any of the defenses and exemptions which apply; (B) a space where the obligor may briefly explain [his] the obligor's claim or defense; (C) a space where the obligor may initiate a request for services to modify the support order; (D) a space for the obligor to provide [his] the obligor's address and the name of the town in which [he] the obligor principally conducts [his] the obligor's work for the employer; (E) a space for the obligor to sign [his] the obligor's name; (F) the address of the Bureau of Child Support Enforcement of the Department of Social Services to which the claim form is to be sent in order to contest the validity or enforcement of the income withholding order or to initiate a request for modification; and (G) space for the employer to state the date upon which the form was actually delivered to the obligor.

Sec. 9. Subsection (a) of section 52-362d of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Whenever an order of the Superior Court or a family support magistrate for support of a minor child or children is issued and such payments have been ordered to be made to the state acting by and through the IV-D agency and the person against whom such support order was issued owes past-due support in the amount of five hundred dollars or more, the state shall have a lien on any property, real or personal, in which such person has an interest to enforce payment of such past-due support after first providing such person with notice of intent to place such lien, and an opportunity for a hearing before a hearing officer to contest the amount of such past-due support. The lien for past-due child support shall be secured by the IV-D agency pursuant to procedures contained in the general statutes applicable to the type of property to be secured. Any such lien on real property may, at any time during which the obligor owes the amount of past-due child support secured by such lien, be foreclosed in an action brought in a court of competent jurisdiction by the Commissioner of Social Services in a title IV-D case or by the person to whom the child support is due. When past-due support is owing both to a family and to the state, the proceeds of the lien shall be applied to the family's current and past-due support first and, when [that] such support is satisfied, to the state's past-due support. A lien for past-due support arising in any other state shall be given full faith and credit by this state provided such other state has complied with its procedural rules relating to recording or serving of liens.

Sec. 10. Subsections (c) to (e), inclusive, of section 52-362d of the general statutes are repealed and the following is substituted in lieu thereof:

(c) The [Comptroller] Connecticut Lottery Corporation, upon notification by the Commissioner of Social Services that money is due from any person as a result of a claim for support which has been assigned to the state pursuant to section 17b-77 or is to be paid to the state acting by and through the IV-D agency, shall withhold [any order upon the Treasurer for payment due] from any lottery winnings [pursuant to chapter 226] payable to such person [unless the amount payable is first reduced by] under the provisions of chapter 226 or chapter 229a the amount of such claim for support owed to an individual for any portion of support which has not been assigned to the state and then [by] the amount of such claim for support owed to the state, provided the [Comptroller] Connecticut Lottery Corporation shall notify such person that (1) [an order upon the Treasurer for payment has] lottery winnings have been withheld as a result of the amount due for such support, and (2) [he] such person has the right to a hearing before a hearing officer designated by the Commissioner of Social Services if [he] such person contests the amount of the alleged claim for support. The [Comptroller] Connecticut Lottery Corporation shall [submit an order to the Treasurer for payment to] pay such persons in accordance with any decisions of the hearing officer or the court upon appeal of the hearing officer's decision.

(d) Whenever an order of the Superior Court or a family support magistrate for support of a minor child or children is issued and such payments have been ordered through the IV-D agency, and the obligor against whom such support order was issued owes overdue support under such order in the amount of five hundred dollars or more, the IV-D agency, as defined in subdivision (12) of subsection (b) of section 46b-231, or [the] Support Enforcement [Division] Services of the Superior Court may notify (1) any state or local agency with authority to distribute benefits to such obligor including, but not limited to, unemployment compensation and workers' compensation, (2) any person having or expecting to have custody or control of or authority to distribute any amounts due such obligor under any judgment or settlement, (3) any financial institution holding assets of such obligor, and (4) any public or private entity administering a public or private retirement fund in which such obligor has an interest that such obligor owes overdue support in a IV-D support case. Upon receipt of such notice, such agency, person, institution or entity shall withhold delivery or distribution of any such benefits, amounts, assets or funds until receipt of further notice from the IV-D agency.

(e) In IV-D cases in which a notice is sent pursuant to subsection (d) of this section, the IV-D agency shall notify the obligor that such benefits, amounts, assets or funds have been withheld as a result of overdue support in a IV-D support case in accordance with an order of the Superior Court or family support magistrate. The IV-D agency shall further notify the agency, person, institution or entity to whom notice was sent pursuant to subsection (d) of this section as follows: (1) Upon expiration of the time for requesting a hearing specified in section 17b-60, to make payment to the state from any such benefits, amounts, assets or funds withheld in accordance with subsection (d) of this section to satisfy such overdue support and any current support obligation provided, in the case of retirement funds, such payment shall only be made in accordance with a withholding order issued under section 52-362, as amended by this act, when the obligor is entitled to receive retirement benefits from such fund; (2) upon payment of such overdue support by such obligor, to release or distribute, as appropriate, such benefits, amounts, assets or funds to such obligor; or (3) upon issuance of a decision by the hearing officer or the court upon appeal of such officer's decision, to take such other action as may be ordered by such officer or such court, and such agency, person, institution or entity shall forthwith comply with such notice received from the IV-D agency.

Sec. 11. (NEW) The Commissioner of Social Services shall establish an arrearage adjustment program in which the past due support owed by any obligor assigned and payable to the state acting by and through the IV-D agency may be adjusted. The commissioner, in deciding whether to adjust any arrearage of an obligor, shall consider among other factors, the likelihood of compliance with support obligations, the noncustodial parent's involvement in the life of any such child and any other contribution to the emotional well-being of any such child.

Sec. 12. This act shall take effect July 1, 2001.

Approved July 13, 2001