DAR File No. 43802

Administrative Services, Debt Collection

Rule R21-2

Office of State Debt Collection Administrative Procedures

Notice of Proposed Rule

(Amendment)

DAR File No.: 43802
Filed: 06/13/2019 12:41:58 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Revisions to Section R21-2-10 were made to improve the procedures for hearings in informal adjudicative proceedings. These revisions include: 1) clarifying the required information for the hearing notice; 2) allowing the requesting party to bring documentation, witnesses, and legal counsel; 3) allowing the cost of the hearing to be added to the debt if the Office prevails, in order to deter frivolous hearing requests; and 4) allowing a requesting party to withdraw a request for a hearing if it is at least three days before the hearing. Previous language in this section was also eliminated that allowed a hearing officer to deny a hearing in certain circumstances. This change protects the due process right to a hearing for a complainant. The revision in Subsection R21-2-13(1) changes the time required to request a change in a presiding officer from 24 hours to two business days prior to the hearing. This will provide a more reasonable amount of time to arrange for a different presiding officer.

Summary of the rule or change:

The added language explains administrative hearing requests, including scheduling, location, date, and time. Also, what to bring to the hearing, and the time limit to withdraw the request for the hearing, or time to request a change of presiding officer.

Statutory or constitutional authorization for this rule:

• Section 63G-4-203
• Section 63G-4-202

Anticipated cost or savings to:

the state budget:

These rule changes will not result in any additional costs to the state. The state may realize cost savings if the Office of State Debt Collection (Office) prevails in a hearing and the hearing cost is added to the debt. The Office expect 10 to 25 hearings per year with an average cost per hearing of $150 to $300. However, the Office cannot accurately measure the portion of the amount added that will be collected. The Office expects the additional amount that will be collected will average less than $2,000 per year.

local governments:

These rule changes will not result in any additional costs to the local governments. These rule changes do not affect local governments.

small businesses:

If small businesses who have a debt and request an administrative hearing, if the decision is in favor of the Office, the cost of the hearing will be added to the balance owed by the business. However, rarely do these hearings involve small businesses. Therefore, the amount cannot be estimated.

persons other than small businesses, businesses, or local governmental entities:

If a person has a debt with the state and requests an administrative hearing, they may have costs added to their balance owed if the Office prevails in the complaint. The expected cost of a hearing is $150 to $300.

Compliance costs for affected persons:

There are no compliance costs for affected persons.

Comments by the department head on the fiscal impact the rule may have on businesses:

I have reviewed these changes with the Division of Finance Director and believe that these changes are reasonable and warranted.

Tani Downing, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Administrative Services
Debt Collection
Room 4130 STATE OFFICE BLDG
450 N STATE ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• John Reidhead at the above address, by phone at 801-538-3095, by FAX at 801-538-3244, or by Internet E-mail at jreidhead@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/31/2019

This rule may become effective on:

08/07/2019

Authorized by:

John Reidhead, Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2020	FY 2021	FY 2022
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

These rule changes will have no effect on non-small businesses.

 

The Executive Director of the Department of Administrative Services, Tani Downing, has reviewed and approved this fiscal analysis.

 

 

R21. Administrative Services, Debt Collection.

R21-2. Office of State Debt Collection Administrative Procedures.

R21-2-1. Purpose.

The purpose of this rule is to establish the form of adjudicative proceedings, provide procedures and standards for the conduct of informal hearings, and provide procedures and standards for orders resulting from the administrative process.

 

R21-2-2. Authority.

This rule establishes procedures for informal adjudicative proceedings as required by Sections 63G-4-202 and 63G-4-203 of the Utah Administrative Procedures Act.

 

R21-2-3. Definitions.

In addition to terms defined in Sections 63A-3-501 and 63G-4-103, the following terms are defined below as follows:

(1) "Delinquent" means any account receivable for which the state has not received payment in full by the payment demand date.

(2)(a) "Participate" means present relevant information to the presiding officer within the time period described by statute or rule for requesting a hearing; and

(b) if a hearing is scheduled, "participate" means attend the hearing.

(3) "Payment demand date" is the date by which the agency requires payment for the account receivable that an entity has incurred.

 

R21-2-4. Designation of Presiding Officers.

All matters over which the office has jurisdiction and which are subject to Section 63G-4-202 will be presided over by the office director or designee.

 

R21-2-5. Form of Proceeding.

All adjudicative proceedings commenced by the office or commenced by other persons affected by the office's actions shall be informal adjudicative proceedings.

 

R21-2-6. Adjudicative Proceedings.

(1) The following actions are considered to be adjudicative proceedings:

(a) All hearings which lead to the establishment of an Order to collect delinquent accounts receivable owed to an agency of the State;

(b) All hearings which lead to the amending of an Administrative Order; and

(c) All hearings which lead to the setting aside of an Administrative Order.

 

R21-2-7. Service of Notice and Orders.

Notices, orders, written decisions, or any other documents for which service is required or permitted to be made by Title 63G, Chapter 4 may be served using methods provided in Title 63G, Chapter 4 or outlined by the Utah Rules of Civil Procedures.

 

R21-2-8. Procedures for Informal Adjudicative Proceedings.

The procedures for informal adjudicative proceedings will be as follows:

(1) The presiding officer will issue an order of default unless the entity does one of the following in response to service of a notice of office action:

(a) pays the entire delinquent account receivable in full; or

(b) participates as provided in Section R21-2-11;

(2) The presiding officer shall schedule a hearing if available under Section R21-2-9 and the entity requests it in writing within the following time periods:

(a) within 30 days of service of a notice of agency action requesting payment in full of a delinquent accounts receivable;

(b) within 20 days of service of a notice of agency action in all other adjudicative proceedings; or

(c) before an order is issued by the presiding officer.

(3) Within a reasonable time after the close of an informal adjudicative proceeding, the presiding officer shall issue a signed order in writing which states the following:

(a) the decision;

(b) the reason for the decision;

(c) a notice of the right to administrative and judicial review available to the parties; and

(d) the time limits for filing an appeal or requesting reconsideration.

(4) The presiding officer's order shall be based on the facts appearing in the office files (the record) and on the facts presented in evidence at any hearings.

(5) A copy of the presiding officer's order shall be promptly mailed to each of the parties.

 

R21-2-9. Availability of Hearing in Informal Adjudicative Proceedings.

(1) A hearing is permitted in an informal adjudicative proceeding if:

(a) the entity in a properly filed request for hearing or in the course of participation raises a genuine issue as to a material fact as provided in Section R21-2-10; and

(b) participates in an office conference.

 

R21-2-10. Hearings in Informal Adjudicative Proceedings.

(1) All hearing requests shall be [referred to the presiding officer appointed to conduct hearings.]recorded by the office.

(2) The [presiding officer]office shall give timely notice [of the date and time of the hearing to all parties.]to the requesting party informing them that:

(a) an administrative hearing has been scheduled, including the time, date, and location of the hearing;

(b) the requesting party may bring any documentation, witnesses, and/or legal representation to the hearing;

(c) if the resulting decision is in favor of the Office, the cost of the hearing may be added to the balance owed; and

(d) the requesting party has the option to withdraw their request for a hearing in writing at least three business days prior to the hearing.

[(3) Before granting a hearing regarding a delinquent account receivable, the presiding officer appointed to conduct the hearing may decide whether or not the respondent raises a genuine issue as to a material fact. If the presiding officer determines that there is no genuine issue as to a material fact, he may deny the request for hearing, and close the adjudicative proceeding.

(4) If the respondent objects to the denial of the hearing, he may raise that objection as grounds for relief in a request for reconsideration.

(5) There is no genuine issue as to a material fact if:

(a) the evidence gathered by the office and the evidence presented for acceptance by the entity are sufficient to establish the delinquent obligation of the entity under applicable law; and

(b) no other evidence in the record or presented for acceptance by the entity in the course of entity's participation conflicts with the evidence to be relied upon by the presiding officer in issuing an order.]

[(6)](3) Evidence upon which a presiding officer may rely in issuing an order when there has been no hearing:

(a) documented information from agency sources;

(b) failure of the entity to produce upon request of the presiding officer canceled checks, or alternative documentation, as evidence of payments made; or

(c) failure of the entity to produce a record kept by a financial institution, the agency initially servicing the debt, the office or its designee, showing payments made.

 

R21-2-11. Telephonic Hearings.

Telephonic hearings will be held at the discretion of the presiding officer unless the entity specifically requests that the hearing be conducted face to face.

 

R21-2-12. Procedures and Standards for Orders Resulting from Service of a Notice of Office Action.

(1) If the entity agrees with the notice of action, it may stipulate to the facts and to the amount of the debt and obligation to be paid. A stipulation and order based on that stipulation is prepared by the office for the entity's signature. Orders based on stipulation are not subject to reconsideration or judicial review.

(2) If the entity participates by attending a preliminary conference or otherwise presents relevant information to the presiding officer, but does not reach an agreement with the office or is unavailable to sign a stipulation, and does not request a hearing, the presiding officer shall issue an order based on that participation.

(3) If the entity requests a hearing and participates by attending the hearing, the presiding officer who conducts the hearing shall issue an order based upon the hearing.

(4) If the entity fails to participate as follows, the presiding officer shall issue an order of default, based on whether or not:

(a) the entity fails to participate by presenting relevant information and does not request a hearing in response to the notice of office action;

(b) after proper notice the entity fails to attend a preliminary conference scheduled by the presiding officer to consider matters which may aid in the disposition of the action; or

(c) after proper notice the entity fails to attend a hearing scheduled by the presiding officer pursuant to a written request for a hearing.

(5) The default order is taken for the amount specified in the notice of action which was served on the entity plus accrued interest, penalties and applicable collection costs from the date of the action until paid in full by the entity at the interest rate specified in the default order. The entity may seek to have the default order set aside, in accordance with Section 63G-4-209.

(6) If an entity's request for a hearing is denied under Section R21-2-10, the presiding officer issues an order based upon the information in the office file.

(7) Notwithstanding any prior agreements which sets terms for the payment of the delinquent account receivable, the office reserves the right to intercept state tax refunds or other State payments to the entity to satisfy the debt represented by the delinquent account receivable.

 

R21-2-13. Conduct of Hearing in Informal Adjudicative Proceedings.

(1) The hearing shall be conducted by a duly qualified presiding officer. No presiding officer shall hear a contested case if it is alleged and proved that good cause exists for the removal of the presiding officer assigned to the case. The party or representative requesting the change of presiding officer shall make the request in writing, and the request shall be filed and called to the attention of the presiding officer not less than [24 hours]two business days in advance of the hearing.

(2) Duties of the presiding officer:

(a) Based upon the notice of office action, objections thereto, if any, and the evidence presented at the hearing, the presiding officer shall determine the liability and responsibility, if any, of the parties.

(b) The presiding officer conducting the hearing may:

(i) regulate the course of hearing on all issues designated for hearing;

(ii) receive and determine procedural requests, rule on offers of proof and evidentiary objections, receive relevant evidence, rule on the scope and extent of cross-examination, and hear argument and make determination of all questions of law necessary to the conduct of the hearing;

(iii) request testimony under oath or affirmation administered by the presiding officer;

(iv) upon motion, amend the notice of office action to conform to the evidence.

(3) Rules of Evidence:

(a) Discovery is prohibited, but the office may issue subpoenas or other orders to compel production of necessary evidence.

(b) Any person who is a party to the proceedings may call witnesses and present such oral, documentary, and other evidence and comment on the issues and conduct such cross-examination of any witness as may be required for a full and true disclosure of all facts relevant to any issue designated for fact hearing and as may affect the disposition of any interest which permits the person participating to be a party.

(c) Any evidence may be presented by affidavit rather than by oral testimony subject to the right of any party to call and examine or cross-examine the affiant.

(d) All relevant evidence shall be admitted.

(e) Official notice may be taken of all facts of which judicial notice may be taken in the courts of this state.

(f) All parties shall have access to information contained in the office's files and to all materials and information gathered in the hearing, to the extent permitted by law.

(g) Intervention is prohibited.

(4) Rights of the parties: A party appearing before the presiding officer for the purpose of a hearing may be represented by a licensed attorney, or, after leave of the presiding officer, any other person designated to act as the party's representative for the purpose of the hearing. The office's supporting evidence for the office's claim shall be presented at a hearing before the presiding officer by a representative of the office. The supporting evidence may, at the office's discretion, be presented by a representative from the office of the Attorney General.

 

R21-2-14. Order Review.

Nothing in this rule prohibits a party from filing a request for reconsideration or for judicial review as provided in the Sections 63G-4-302 and 63G-4-401.

 

R21-2-15. Reconsideration.

Either the entity or the office may request reconsideration in accordance with Section 63G-4-302 once during an informal adjudicative proceeding.

 

R21-2-16. Setting Aside Administrative Orders.

(1) The office may set aside an administrative order for any of the following reasons:

(a) a rule or policy was not followed when the order was taken;

(b) the entity was not properly served with a notice of office action;

(c) the entity was not given due process; or

(d) the order has been replaced by a judicial order which covers the same time period.

(2) the office shall notify the entity of its intent to set the order aside by serving the entity with a notice of office action. The notice shall be signed by the presiding officer at the level which issued the order.

(3) If after serving the entity with a notice of office action, the presiding officer determines that the order shall be set aside, the office shall notify the entity.

 

R21-2-17. Amending Administrative Orders.

(1) The office may amend an order for either of the following reasons:

(a) a clerical mistake was made in the preparation of the order; or

(b) the time periods covered in the order overlap the time periods in another order for the same participants.

(2) The office shall notify the entity of its intent to amend the order by serving the entity with a notice of office action. The notice shall be signed by the presiding officer at the level which issued the order.

(3) If after serving the entity with a notice of agency action, the presiding officer determines that the order shall be amended, the office shall provide a copy of the amended order to the entity.

 

KEY: accounts receivable, adjudicative process

Date of Enactment or Last Substantive Amendment: [August 13, 2002]2019

Notice of Continuation: March 17, 2017

Authorizing, and Implemented or Interpreted Law: 63G-4-202; 63G-4-203