The bill allows a private collection agency or privately retained attorney collecting on any debt arising from past-due orders, obligations, fines, or fees due to the state, or to any political subdivision within the state, to add to the amount due that has been placed for collection all fees, costs, and costs of collection, including designated contractual attorney fees and costs that are awarded by a court of competent jurisdiction. Exclusive of the accrual of interest and court costs, any fees, costs, and costs of collection may not exceed 18% in the aggregate unless additional reasonable attorney fees are awarded by a court of competent jurisdiction.
Under current law, the department of personnel may add a collection fee to the amount of a debt's principal and accruing interest referred to the state controller except where other specific statutory authority, requirements under federal programs, or written agreement with the debtor provide otherwise. The collection fee may include a fee to recover the collection costs incurred by either the controller, private counsel, or private collection agencies, but in no case shall the aggregate fee for the controller or private collection agencies exceed 21%. The bill lowers this limit to 18%.
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)