Section 209.1 - [Effective 11/14/2024] Collection of Debts(a) Purpose. The purpose of this section is to comply with Government Code, §2107.002, which requires a state agency that collects delinquent obligations owed to the state agency to establish procedures by rule for collecting a delinquent obligation.(b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Attorney general--The Office of the Attorney General of Texas.(2) Debtor--Any person liable or potentially liable for an obligation owed to the department or against whom a claim or demand for payment has been made.(3) Delinquent--Payment is past due by law or by customary business practice, and all conditions precedent to payment have occurred or been performed.(4) Department--The Texas Department of Motor Vehicles.(5) Obligation--A debt, judgment, claim, account, fee, fine, tax, penalty, interest, loan, charge, or grant.(6) Security--Any right to have property owned by a person with an obligation to the department sold or forfeited in satisfaction of the obligation, and any instrument granting a cause of action in favor of the department against a person or a person's property, such as a bond, letter of credit, or other collateral that has been pledged to the department to secure an obligation.(c) Notification of obligation and demand letters.(1) The department shall send to the debtor written notice of the obligation, such as an administrative enforcement order that imposes a penalty or fine.(2) If no satisfactory response is received within 30 days after the date that the notice is sent under paragraph (1) of this subsection, the obligation becomes delinquent on the 31st day after the date that notice is sent, unless the department's notice, the law, or a department rule imposes a different deadline for payment. The department shall send the first demand letter not later than the 30th day after the date on which the obligation becomes delinquent.(3) If no satisfactory response is received within 30 days after the day on which the first demand letter was sent, the department shall send the final demand letter no later than 60 days after the date on which the first demand letter was sent. The final demand letter shall include a deadline by which the debtor must respond and, if the department determines in accordance with subsection (e) of this section that the obligation shall be referred to the attorney general, a statement that the obligation, if not paid, shall be referred to the attorney general.(4) Each demand letter must set forth the nature and amount of the obligation owed to the department and must be mailed by first class United States mail, in an envelope that shall bear the notation "Return Service Requested." If an address correction is provided by the United States Postal Service, the department shall resend the demand letter to that address prior to referral to the attorney general.(d) Records. When practicable, the department shall retain a record of a delinquent obligation. A record shall contain documentation of the following information: (1) the identity of each debtor;(2) the correct physical address of the debtor's place of business;(3) the correct physical address of the debtor's residence, where applicable;(4) an accurate physical address for the trustee when a fiduciary or trust relationship exists between the department as principal and the debtor as trustee;(5) a post office box address when it is impractical to obtain a physical address, or when the post office box address is in addition to a correct physical address for the debtor;(6) attempted contacts with the debtor;(7) the substance of communications with the debtor;(8) efforts to locate the debtor and the assets of the debtor;(9) state warrants that may be issued to the debtor;(10) current contracts the debtor has with the department;(11) security interests that the department has against any assets of the debtor;(12) notices of bankruptcy, proofs of claim, dismissals and discharge orders received from the United States bankruptcy courts regarding the debtor; and(13) other information relevant to collection of the delinquent obligation.(e) Referrals of a delinquent obligation to the attorney general.(1) Prior to referral of a delinquent obligation to the attorney general, the department shall: (A) verify the debtor's address and telephone number;(B) send a first and final demand letter to the debtor in accordance with subsection (c) of this section;(C) verify that the obligation is not considered uncollectible under paragraph (2) of this subsection;(D) prepare and file a proof of claim in the case of a bankruptcy when appropriate based on advice from the attorney general; and(E) file a claim in each probate proceeding administering the decedent's estate if the debtor is deceased.(2) The department shall consider a delinquent obligation uncollectible and shall make no further effort to collect if the obligation is not legally collectible or is uncollectible as a practical matter. Examples of an obligation that is not legally collectible or is uncollectible as a practical matter include an obligation, which: (A) has been discharged in bankruptcy;(B) is subject to an applicable limitations provision that would prevent a lawsuit as a matter of law, unless circumstances indicate that the applicable limitations provision has been tolled or is otherwise inapplicable;(C) is owed by an individual who is located out-of-state, or outside the United States, unless a determination is made that the domestication of a Texas judgment in the foreign forum would more likely than not result in collection of the obligation, or that the expenditure of department funds to retain foreign counsel to domesticate the judgment and proceed with collection attempts is justified;(D) is owed by a debtor who is deceased, where each probate proceeding has concluded, and where there are no remaining assets available for distribution; or(E) is owed by a debtor whose circumstances demonstrate a permanent inability to pay or make payments toward the obligation.(3) Except as advised otherwise by the attorney general, the department shall not refer a delinquent obligation to the attorney general unless the delinquent obligation exceeds $2,500.(4) The department shall refer a delinquent obligation to the attorney general for further collection efforts if the department determines, in accordance with this subsection, that the delinquent obligation shall be referred.(f) Supplemental and alternative collection procedures. (1) Liens. Where state law allows a state agency to record a lien securing the obligation, the department shall file the lien in the appropriate records of the county where the debtor's principal place of business, or, where appropriate, the debtor's residence, is located or in such county as may be required by law as soon as the obligation becomes delinquent or as soon as is practicable. Unless the delinquent obligation has been paid in full, any lien securing the indebtedness may not be released without the approval of the attorney representing the department after the matter has been referred to the attorney general.(2) Warrant Holds. The department shall utilize the "warrant hold" procedures of the Comptroller of Public Accounts authorized by Government Code, §403.055, to ensure that no treasury warrants are issued to a debtor and no electronic funds transfers are made to a debtor until the debt is paid, unless an exception applies.43 Tex. Admin. Code § 209.1
The provisions of this §209.1 adopted to be effective February 4, 2010, 35 TexReg 660; amended by Texas Register, Volume 39, Number 48, November 28, 2014, TexReg 9368, eff. 12/7/2014; Amended by Texas Register, Volume 49, Number 45, November 8, 2024, TexReg 8949, eff. 11/14/2024