Agenda Item   



                                                                                                                        ASR Control  23-000981




legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

Probation   (Approved)

Department contact person(s):

Daniel Hernandez (714) 645-7001 



Tawnya Medina (714) 645-7013



Subject:  Approve Standard Agreement with State Franchise Tax Board for Debt Collection


      ceo CONCUR

County Counsel Review

Clerk of the Board


Approved Agreement to Form




3 Votes Board Majority




    Budgeted: Yes

Current Year Cost:   $37,500

Annual Cost: FY 24/25: $75,000
FY 25/26 $75,000
FY 26/27 $37,500




    Staffing Impact:


# of Positions:            

Sole Source:   Yes

    Current Fiscal Year Revenue: $12,500

   Funding Source:     GF:100%

County Audit in last 3 years: No

   Levine Act Review Completed: N/A


    Prior Board Action:         Yes, 5/25/21 #9, 10/31/2017 #23, 12/9/2014 # 14,12/6/2011 #11




Approve the revenue generating Standard Agreement with the state Franchise Tax Board for the collection of unpaid court ordered fines, forfeitures and penalties effective January 1, 2024, through December 31, 2026, and authorize the Chief Probation Officer, or designee, to execute the Standard Agreement.







Approval of the revenue generating Standard Agreement with the state Franchise Tax Board to provide for collection services of unpaid court ordered debts that are generally delinquent beyond 90 days and exceed $100 in total will increase the recovery of outstanding debt.






Revenue and Taxation Code (RTC) sections 19280-19283 and Penal Code sections 1463.010-1463.012 provide authority and guidelines for the County to collect fines, state or local penalties, bail forfeitures, restitution fines, restitution orders or any other amounts imposed by a Superior Court of the State of California. Specific direction for the County to refer debts to the Franchise Tax Board (FTB) Court-Ordered Debt Collections Program for collection of debt that are in excess of $100 and more than 90 days delinquent is included in RTC sections 19280-198283. As allowed by RTC section 19282(b), the FTB invoices Probation 15 percent of any amounts collected to offset the costs of administering the program. A reconciliation is made at the end of the year to the actual cost of collections, and the excess administration fee collected, if any, is returned to the County.


Since 2004, Agreements have been in place with the FTB for these services, with the most recent Agreement ratified by the Board of Supervisors (Board) on May 5, 2021, for the term of January 1, 2021, through December 31, 2023. Included below is a table of debt collected for the last two Agreement terms:


Standard Agreement Term

Amount Collected

Board Date

ASR Number









* Debt collected through 10/23/23.


Legislative impact

Assembly Bill 1869 was passed by the Legislature and signed into law by Governor Newsom in September 2020. This legislation repeals the authority of counties to charge defendants for numerous fees imposed in the criminal legal system, including: administering probation and mandatory supervision, processing arrests and citations, administering home detention programs, continuous electronic monitoring programs, work furlough programs and work release programs. The provisions of the law took effect July 1, 2021.

Assembly Bill 177 was passed by the Legislature and signed into law by Governor Newsom in September 2021. The legislation further repeals and eliminates the authority of counties to impose 17 additional administrative fees and/or costs on criminal defendants and orders vacated any portion of a judgment imposing those fees and/or costs. It includes, administrative fees related to the collection of fines, restitution fines, and restitution orders; and the costs of drug testing during probation. This legislation took effect  January 1, 2022.

These legislative changes have resulted in a significant decline in debt collected and costs related to this contract. AB 1869 and AB 177 impacted fines and fees will not be collected under this agreement.

As required by the state, the Standard Agreement includes a provision for the County to indemnify, defend and hold harmless the state, its officers, agents and employees from any and all claims and losses accruing or resulting to any person, firm or corporation who may be injured or damaged by County.  CEO Risk Management has reviewed and approved the Indemnification provision.


Sole Source Justification

The proposed Agreement is a sole source agreement. There are no public agencies other than FTB that are authorized by law to accept referrals from counties and to implement the collection of court-ordered debts. There are third-party/private collections agencies awarded Master Agreements by the Judicial Council of California that collect on various court fees in general. Accounts must still be referred to FTB for collection since these vendors cannot collect on delinquent accounts directly. These vendors charge collection fees that average 22.5 percent for administration in addition to the 15 percent FTB administrative fee. FTB utilizes collection tools (e.g., tax interception, wage garnishment and accessibility to the state database) to find the locations and employers of the debtors not available at the local level.


The Orange County Preference Policy is not applicable to this contract award.


The proposed Standard Agreement is valid and enforceable only if sufficient funds are made available by the Budget Act of the current year and/or any subsequent year for the FTB’s-Court-Ordered Debt Collections Program, and is subject to additional restrictions, limitations and conditions.  The Agreement also includes a clause that allows either party to terminate the proposed Standard Agreement for any reason, upon 30-days’ written notice.






Appropriations and Revenue from this Standard Agreement are included in Probation's FY 2023-24 Budget and will be included in the budgeting process for future years.


Probation is projecting the amount collected will be $500,000 per year. Pursuant to Section 19282(b) of the Revenue Taxation Code, FTB will retain 15% from the amount collected. The amount of revenue Probation will receive is projected below, with the remainder going to the state.


Revenue projections for each fiscal year included in the Agreement are as follows:

FY 2023-24: $ 12,500

FY 2024-25: $ 25,000

FY 2025-26: $ 25,000

FY 2026-27: $ 12,500












Attachment A – Standard Agreement 95999 between Orange County Probation and the State of California Franchise Tax Board
Attachment B – Penal Code Sections 1463.010-1463.012
Attachment C – Revenue and Tax Code Sections 19280-19283
Attachment D – Assembly Bill 1869
Attachment E – Assembly Bill 177
Attachment F – Risk Assessment or Modification of Insurance Terms
Attachment G - Contract Summary Form