Could a South Carolina town send unpaid municipal court fines to a private collection agency?

Plain-English summary

Moncks Corner used South Carolina’s Setoff Debt Collection Program to recover municipal court fines from state tax refunds. Its town attorney asked whether it could also report unpaid fines to a credit collection agency when a person did not file a return or receive a refund. The Attorney General concluded in 2009 that a town could not do so without specific statutory authority.

The letter distinguished laws that expressly let certain state agencies hire collection agencies for other debts. It found no comparable authorization for a town’s outstanding court fines. The opinion also noted the Nonresident Traffic Violator Compact but did not treat that license-suspension process as authority to use a private collection agency.

Currency note

This opinion was issued in 2009. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Could Moncks Corner use tax refunds to collect municipal court fines? A: The opinion described the town as participating in a statutory setoff program that could apply a state refund to delinquent court fines.

Q: Could the town send those fines to a collection agency instead? A: The Attorney General concluded it could not do so in the absence of specific statutory authority.

Q: Did the traffic compact authorize a collection agency? A: The opinion described the compact as allowing license suspension for failure to comply with a traffic citation, but did not identify it as authority to report fines to a collector.

Q: Why did the AG mention other agencies’ collection powers? A: The letter contrasted statutes expressly allowing certain state agencies to use collection agencies with the lack of similar authority for a town’s court fines.

Background and statutory framework

The town already participated in a state program that allowed setoff of amounts owed to a claimant agency against funds, including tax refunds, due a taxpayer. The opinion quoted the Setoff Debt Collection Act’s broad definition of delinquent debt, including court-imposed amounts. It also noted a traffic compact concerning license suspension after failure to comply with a citation.

The town wanted another collection method for people without state tax refunds. The Attorney General identified specific statutes allowing the Department of Revenue and Employment Security Commission to contract with collection agencies for their debts, but found no express authority for a town to turn municipal court fines over to such an agency. That statutory gap controlled the answer.

Citations and references

Statutes discussed: The Setoff Debt Collection Act, S.C. Code Ann. §§ 12-56-10 et seq., including Section 12-56-20(4); the Nonresident Traffic Violator Compact; and provisions authorizing certain state agencies to contract with collection agencies.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/august-25-2009/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/03/williams-j-b-os-8857-8-25-09-setoff-debt-collection-program.pdf

Original opinion text

H ENRY M CM ASTER
ATI"ORNEY G ENERAL

August 25, 2009

John B. Williams, Esquire
Moncks Comer Town Attorney
209 East Main Street
Moncks Comer, South Carolina 29461
Dear Mr. Williams:

In a letter to this office you referenced that the Town of Moncks Corner participates in the Municipal Association's Setoff Debt Collection Program pursuant to this State' s Setoff Debt Collection Act, S.C. Code Ann. §§ 12-56-10 et seq. Pursuant to such provisions, the Town can collect fines owed to the municipal court by offsetting a refund received by an individual that files a State income tax return. As stated in an opinion of this office dated August 3, 2001, pursuant to such provisions, the State Department of Revenue is authorized to setoff any funds, including tax refunds, due a taxpayer against a delinquent of a taxpayer owed to a claimant agency. A "delinquent debt,, is defined by Section 12-56-20(4) as
... a sum due and owing a claimant agency, including collection costs, court costs, fines, penalties, and interest which have accrued through contract, subrogation, tort, operation of law, or other legal theory regardless of whether there is an outstanding judgment for that sum which is legally collectible and for which a collection effort has been or is being made. It does not include sums owed to county hospitals when the hospital and the debtor have entered into a written payment agreement and the debtor is current in meeting the obligations of the agreement. "Delinquent debt" also includes any fine. penalty, cost. fee. assessment. surcharge. service charge, restitution, or other amount imposed by a court or as a direct consequence of a final court order which is received by or payable to the clerk of the appropriate court or treasurer of the entity where the court is located. (emphasis added). Such statute appears to distinguish between a particular ''sum due and owing a claimant agency...for which a collection effort has been or is being made.... ,, and other delinquent debts, including a fine or penalty imposed by a court. No reference is made as to fines or penalties being turned over to a collection agency. You also referenced this State's Nonresident Traffic Violator Compact, S.C. Code Ann.§§ 56-25- 10 et seq. which authorizes the suspension of a driver's license for failing to comply with the terms of a traffic citation. You indicated that the Town Administrator has inquired about the REMBERT c. DENN1S B UILDING •

POST O FFICE Box ll549 • COLUMBlA, SC 29211-1549 • TELEPHONE 803-734-3970 • FACSIMILE 803-253-6283

Mr. Williams
Page2
August 25, 2009
propriety of reporting outstanding court fines of individuals who do not file a State income tax return, or receive a refund for the same, to a credit collection agency for the purpose of debt collection. You have questioned whether such action would be appropriate as a means of collecting such outstanding fines in addition to proceeding pursuant to the Nonresident Traffic Violator Compact. As to whether fines and penalties may generally be turned over to a collection agency, I am unaware of any State statutory provisions specifically providing for such. However, the State Department of Revenue is specifically authorized pursuantto S. C. Code Ann. § 12-4-340 " ... for the purposes of collecting delinquent taxes due from a taxpayer, may contract with a collection agency, within or without the State, for the collection of delinquent taxes, including penalties and interest as provided in Section 12-54-227." See also: S.C. Code Ann. § 41-31-390(B)(as to the State Employment Security Commission, "[ t]he commission may contract with a collection agency or the Department of Revenue for the purpose of collecting delinquent payments of contributions, interest, penalties, employment security administrative contingency assessments, and any other reasonable costs authorized by subsection (A)." In my research I have found that at least in Tennessee, there is specific statutory authority, Tenn. Code Ann.§ 40-24-105(c) which authorizes a district attorney general or the criminal or general sessions court clerk to retain an agent to collect fines. Referencing the above, in the absence of specific statutory authority expressly permitting such, in the opinion of this office, a town would not be permitted to report outstanding court fines of individuals who do not file a State income tax return, or receive a refund for the same, to a credit collection agency for the purpose of debt collection. Such would not appear to be an appropriate means of collecting such outstanding fines. With kind regards, I am, Very truly yours, Henry McMaster

~~e~ General

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By:

REVIEWED AND APPROVED BY:

Deputy Attorney General

Charles H. Richardson
Senior Assistant Attorney General