BILL REQ. #:  H-1420.1 

Read first time 02/04/09.   Referred to Committee on Financial Institutions & Insurance.

     AN ACT Relating to restricting the ability of collection agencies to report public debt to consumer reporting agencies; and amending RCW 19.16.500.

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

Sec. 1   RCW 19.16.500 and 1997 c 387 s 1 are each amended to read as follows:
     (1)(a) Agencies, departments, taxing districts, political subdivisions of the state, counties, and 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 restitution that is being collected on behalf of a crime victim.
     (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 notice was attempted; and
     (c) The governmental entity establishes in contract with the collection agency that the collection agency may not report the debt to a consumer reporting agency.
     (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.