Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
|
STATE FUND |
FY 2008 |
FY 2009 |
FUTURE YEARS |
|
General Revenue Fund (GRF) |
|||
|
Revenues |
Potential gain in court
judgments and civil penalties, timing and magnitude uncertain |
Potential gain in court
judgments and civil penalties, timing and magnitude uncertain |
|
|
Expenditures |
- 0 - |
Potential minimal
enforcement cost increase |
Potential minimal
enforcement cost increase |
|
Consumer
Protection Enforcement Fund (Fund 631) |
|||
|
Revenues |
- 0 - |
- 0 - |
- 0 - |
|
Expenditures |
- 0 - |
Potential minimal
enforcement cost increase |
Potential minimal
enforcement cost increase |
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2008 is July 1, 2007 – June 30, 2008.
·
Office of the Attorney General workload. The administrative, investigative, and enforcement duties assigned to
the Office of the Attorney General under the bill would most likely be
performed by its Consumer Protection Section, whose funding is split between
the Consumer Protection Enforcement Fund (Fund 631) and the General Revenue
Fund (GRF). Presumably, any additional
annual operating expenses that could be generated as a result of performing
these administrative, investigative, and enforcement duties might be offset by
additional revenues that could be collected and deposited in the GRF. However, the Office of the Attorney General
is uncertain if future revenues will adequately cover the potential costs
created by the bill.
·
GRF revenues. The bill may generate
additional state revenues from two sources:
(1) court-awarded reasonable attorney's fees and costs of investigation
and litigation, and (2) civil penalties of no more than $10,000 for each violation
of an assurance of discontinuance. The
timing and magnitude of these potential sources of revenue are uncertain. As the bill does not contain any special
crediting provisions, such revenues, if collected, would be deposited in the
state treasury to the credit of the GRF.
|
LOCAL
GOVERNMENT |
FY 2008 |
FY 2009 |
FUTURE YEARS |
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|
Counties |
||||||
|
Revenues |
(1) Potential gain in
court judgments, timing and magnitude uncertain; (2) Potential minimal gain
in court filing fee and
services costs |
(1) Potential gain in
court judgments, timing and magnitude uncertain; (2) Potential minimal gain
in court filing fee and services costs |
(1) Potential gain in
court judgments, timing and magnitude uncertain; (2) Potential minimal gain
in court filing fee and services costs |
|||
|
Expenditures |
Potential prosecution and
adjudication cost increase, not likely to exceed minimal on an ongoing basis |
Potential prosecution and
adjudication cost increase, not likely to exceed minimal on an ongoing basis |
Potential prosecution and
adjudication cost increase, not likely to exceed
minimal on an ongoing basis |
|||
Note: For most local governments, the fiscal year is the calendar year. The school district fiscal year is July 1 through June 30.
·
Civil actions. It is
possible that the bill's civil action remedy will generate additional work for
county prosecutors and courts of common pleas.
The former would be permitted to bring certain civil actions; the latter
would have subject matter jurisdiction over any such actions brought by a
county prosecutor or the Attorney General.
As of this writing, LSC fiscal staff has not collected any information
suggesting that the bill will generate a large number of new civil actions for
any given county prosecutor or associated court of common pleas.
·
County revenues. The bill
may generate additional county revenues from:
(1) court-awarded reasonable attorney's fees and costs of investigation
and litigation, the timing and magnitude of which is uncertain, and (2) filing
fee and service costs collected by courts of common pleas adjudicating civil
actions brought against violators, likely to be minimal at most on an ongoing
basis.
|
|
The bill makes changes to
Ohio's current Debt Adjusting Law.
Specifically, the bill distinguishes between "debt adjusting"
and "debt settlement service," establishes a distinct set of
regulations for debt settlement service providers, and authorizes the Attorney
General or a county prosecutor to bring a civil action to enforce the bill's
debt settlement regulations. Existing
regulations and remedies associated with "debt adjusting" are
unchanged by the bill.
State fiscal effects
Office of the Attorney
General
Under current law, a person
injured by a violation of the Debt Adjusting Law has a cause of action and is
entitled to the same private remedies available to a consumer under the
Consumer Sales Protection Act. Under
that Act, the Office of the Attorney General also has enforcement power and the
authority to bring such actions on behalf of the aggrieved parties. By making the distinction between "debt
adjusting" and "debt settlement service," a new and different
enforcement remedy would be available to the Attorney General or a county
prosecutor relative to regulating those engaged in "debt settlement
service," as defined by the bill.[1] The bill also requires a debt settlement
service provider to file a financial statement annually with the Attorney
General's Consumer Protection Section.
Workload and expenditures
The state's administrative,
investigative, and enforcement duties relative to the regulation of debt
settlement providers would be assigned to the Attorney General's Consumer
Protection Section, whose funding is split between the Consumer Protection
Enforcement Fund (Fund 631) and the General Revenue Fund (GRF). At the time of this writing, it appears that
the Office of the Attorney General is uncertain as to how, if at all, the
bill's debt settlement provider regulations will affect its annual consumer
protection enforcement workload and related operating costs. That said, the Attorney General's staff has
indicated some concern relative to the duty and cost of handling annual
financial statements.
From LSC fiscal staff's
perspective, the bill may only minimally affect the Consumer Protection
Section's workload. In fact, the bill
could be interpreted as being clarifying in nature. While it is possible that some existing cases may no longer be prosecuted
utilizing the enforcement guidelines of the Consumer Sales Protection Act,
these cases would instead be prosecuted under the guidelines set forth in the
bill. As such, it is doubtful that the
bill would generate many new cases, if any.
In fact, it may make it easier to enforce regulatory matters as they
relate to the actions of debt settlement service providers.
Revenues
The bill may generate
additional state revenues from two sources:
(1) court-awarded reasonable attorney's fees and costs of investigation
and litigation, and (2) civil penalties of no more than $10,000 for each
violation of an assurance of discontinuance.
The timing and magnitude of these potential sources of revenue are
uncertain. As the bill does not contain
any special crediting provisions, such revenues, if collected, would be
deposited in the state treasury to the credit of the GRF.
Local fiscal effects
Counties
Expenditures. It is possible that the bill's civil action remedy will generate
additional work for county prosecutors and courts of common pleas. The former would be permitted to bring
certain civil actions; the latter would have subject matter jurisdiction over
any such actions brought by a county prosecutor or the Attorney General. As of this writing, LSC fiscal staff has not
collected any information suggesting that the bill will generate a large number
of new civil actions for any given county prosecutor or associated court of
common pleas.
The bill's impact could
arguably be minimized as it appears to be the case that debt settlement service
providers currently fall under the existing Debt Adjusting Law and its
associated civil and criminal remedies.
Thus, the bill may not create new cases, but instead provide an
alternative civil remedy.
Revenues. The bill may generate additional county
revenues from: (1) court-awarded reasonable
attorney's fees and costs of investigation and litigation, the timing and
magnitude of which is uncertain, and (2) filing fee and service costs collected
by courts of common pleas adjudicating civil actions brought against violators,
likely to be minimal at most on an ongoing basis.
LSC fiscal staff: Jamie L. Doskocil, Senior Budget Analyst
[1] Debt settlement service, as defined by the bill, means the negotiation, adjustment, or settlement of a consumer's debt without holding, receiving, or disbursing the debtor's funds.