H-2614.1  _______________________________________________

                    SUBSTITUTE HOUSE BILL 1512

          _______________________________________________

State of Washington      55th Legislature     1997 Regular Session

By House Committee on Government Administration (originally sponsored by Representatives Mulliken, Sheldon, Sherstad, Dunn, Boldt and Chandler)

Read first time 03/05/97.

Collecting the cost of governmental entities using collection agencies.

    AN ACT Relating to the use of collection agencies by governmental entities; and amending RCW 19.16.500.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

    Sec. 1.  RCW 19.16.500 and 1982 c 65 s 1 are each amended to read as follows:

    (1)(a) Agencies, departments, taxing districts, political subdivisions of the state, counties, and ((incorporated)) cities may retain, by written contract, collection agencies licensed under this chapter for the purpose of collecting public debts owed by any person, including any debt that is being collected on behalf of a third party, such as crime victim restitution or child support.

(b) Any governmental entity as described in (a) of this subsection using a collection agency may add a reasonable fee, payable by the debtor, to the outstanding debt for the collection agency fee incurred or to be incurred.  The amount to be paid for collection services shall be left to the agreement of the governmental entity and its collection agency or agencies, but a contingent fee of up to fifty percent of the first one hundred thousand dollars of the unpaid debt per account and up to thirty-five percent of the unpaid debt over one hundred thousand dollars per account is reasonable, and a minimum fee of the full amount of the debt up to one hundred dollars per account is reasonable.  Any fee agreement entered into by a governmental entity is presumptively reasonable.

    (2) No debt may be assigned to a collection agency unless (a) there has been an attempt to advise the debtor (i) of the existence of the debt and (ii) that the debt may be assigned to a collection agency for collection if the debt is not paid, and (b) at least thirty days have elapsed from the time ((the)) notice was ((sent)) attempted.

    (3) Collection agencies assigned debts under this section shall have only those remedies and powers which would be available to them as assignees of private creditors.

    (4) For purposes of this section, the term debt shall include fines and other debts, including the fee required under subsection (1)(b) of this section.

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