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Utah House rejects stricter limits on municipal use of collection agencies; bill filed after narrow vote
Summary
A bill to let smaller Utah municipalities contract with private collection agencies to pursue unpaid municipal debts failed on the House floor after heated debate over timing, privacy and credit-report impacts; the House voted 37–36 against passage and the measure will be filed.
Representative Mark Walker brought House Bill 361 to the floor to allow municipalities to employ private collection agencies and provide those agencies names and addresses of debtors to recover small municipal debts. "A municipality may employ a collection agency for the purpose of collecting a debt," Walker said while reading the short bill to colleagues, adding the change is intended "to help facilitate some of the smaller municipalities."
Debate focused on guardrails: Representative Hogue offered an amendment to permit referral to collectors only when a debt had been delinquent more than 180 days; he argued collection agencies can add fees and that a fixed waiting period protects residents. Walker opposed the 180-day threshold, saying it would be too lenient and that municipalities should be able to pursue longstanding unpaid obligations sooner. After discussion and substitute proposals (one to require 90 days), the House rejected the substitute amendment on a roll call of 23–44.
Members raised practical and privacy concerns. Representative Ray said his cities had been barred from using collection agencies because the names and addresses pulled from license-plate information were deemed protected by BCI, leaving municipalities to pay attorney rates near $150 an hour to collect small fines. "We were told that we'd have to start our own collection agency or contract with an attorney at about a hundred and $50 an hour," Ray said. Representative Romero warned that turning a $40 ticket over to a collector "would appear on their credit report" if unpaid, and he said that consequence made him reluctant to support the bill.
Representative Dave Clark noted the state's own debt-collection contract process: the state competitively bids a percentage fee and three agencies currently accept collection work; "that fee currently stands at 14.9%," Clark said when floor colleagues asked what collectors are paid.
After the final vote on the bill, House leadership announced HB361 received 37 yes votes and 36 no votes; the chair declared the bill failed and ordered it filed. The record shows multiple attempts to add time-based limitations and other controls failed or were narrowly defeated during floor debate.
The House record does not list a follow-up or additional change; representatives indicated local governments retain various contracting options but the specific statute change proposed in HB361 will not move forward from this session.
