New Notice Requirements for Waivers and Remissions of Certain Monetary Obligations

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On December 1, 2017, two new rules will kick in for waivers and remissions of costs, fines, and restitution. Today’s post offers some preliminary thoughts on those new rules.

The rules for waiving monetary obligations in criminal cases—court costs in particular—have evolved quickly over the past 6 years. In 2011, the General Assembly made costs applicable by default in active cases, instituted a rule that costs could be waived only when the court found “just cause” for the waiver, and began tracking waivers more carefully. In 2012 the legislature required written findings on the determination of “just cause.” In 2014, costs waivers began to be tracked by individual judge. I discussed the latest such report here.

The General Assembly added two new rules on waivers and remissions during this year’s legislative session. One pertains to restitution and the other applies to any court fines and costs.

Restitution. Session Law 2017-16 added new G.S. 15A-1340.39, which says that “[n]o court may remit all or part of an order of restitution entered pursuant to G.S. 15A-1340.34 without providing notice and an opportunity to be heard to the district attorney and the victim, victim’s estate, or any other entity to which the order directs restitution to be paid.” The notice must be provided by first-class mail at least 15 days prior to the hearing. At the hearing, the district attorney and the victim have the right to be heard and to make an objection to the remission of all or part of the restitution. If, after the hearing, the court finds that remission is “warranted and serves the interests of justice,” the court may remit.

The new statute goes on to say that remission of an order of restitution “does not abridge the right of a victim or the victim’s estate to bring a civil action against the defendant for damages arising out of the offense committed by the defendant.” G.S. 15A-1340.39(c). However, recall that under existing law, any amount paid by the defendant as restitution must be credited against a subsequent civil judgment in favor of the same victim. G.S. 15A-1340.37(a).

For crimes covered under the Crime Victims’ Rights Act, if restitution is remitted or modified, Community Corrections will still be required to give notice to the victim within 30 days of the modification. G.S. 15A-837(a)(4).

The new rule is effective December 1, 2017 and applicable to orders for remission entered on or after that date. I read that to include people already on probation before that date who have a restitution order remitted after it. Assuming the timing can be coordinated, it seems like a probation hearing would generally be a good time to address to address the issue (rather than holding a second hearing at least 15 days later).

Fines and costs. Under S.L. 2017-57 (the budget), G.S. 7A-304(a) is amended to say that “[n]o court may waive or remit all or part of any court fines or costs without providing notice and opportunity to be heard by all government entities directly affected.” Using a structure similar to the restitution provision described above, the law says the court must provide notice to any affected government entities at least 15 days prior to the hearing, by first-class mail to the address provided for receipt of court costs paid pursuant to the order.

Though structurally similar to the restitution provision, the fine and cost waiver provision is different in several important ways.

First, the fine and cost provision is likely to come into play much more often than the restitution provision. Costs apply by default in every case, but we know from the annual cost waiver report that they are waived or otherwise not assessed pretty frequently (according to last year’s report, costs were imposed about 900,000 times and waived or not assessed about 100,000 times). Under the new rule, every waiver (full or partial) would need to be preceded by at least 15 days’ notice to all the government entities directly affected by it. Likewise with any decision later in the life of a case (perhaps at a probation hearing) to remit an obligation that was not waived at sentencing. For what it’s worth I read the reference to “court costs” to refer to what I call “true court costs”—the specific amounts either referenced in G.S. 7A-304(a) or incorporated by reference therein (listed here). So, waivers of things like probation supervision fees and house arrest fees would not trigger the hearing requirement. Still, it will come up a lot.

Second, because the fine and cost provision applies both to remissions and to waivers allowed at sentencing, it’s bound to raise some challenges as to timing. Sentencing hearings where the court is contemplating a cost waiver would need to be continued or bifurcated to allow time for proper notice to the directly affected parties. And though the revised statute doesn’t actually mention having the defendant present at the time the waiver hearing, he or she probably has a right to be there, too (not to mention his or her lawyer). Cf. State v. Arrington, 215 N.C. App. 161 (2011) (holding that a defendant did not have a right to be present when the $250 community service fee was imposed because it was a non-discretionary byproduct of the sentence).

Third, who are the “directly affected” government entities when it comes to costs and fines? Unlike restitution, where the victim or victims are generally pretty clearly identified on the restitution worksheet, court costs ultimately wind up getting dispersed to many different entities across state government—like the General Fund, counties, the sheriffs’ supplemental pension, and the court system, to name a few. Are all of them “directly affected” by a contemplated waiver, such that representatives from each should be noticed by first-class mail for every hearing? To the extent that many slivers of the cost pie flow first to the state and then back out to the targeted beneficiary, perhaps the State Treasurer is the entity most directly affected. As for fines, the affected party would be the public schools. But even for them it’s not crystal clear who would represent their interests at the hearing.

Fourth, supposing there is a hearing on a waiver or remission, what would it look like? The statute says the directly affected parties have the right to be heard and to make an objection to the remission or waiver. Presumably the hearing would take place only in cases where the court had at least preliminarily indicated a decision to waive or remit, and that decision must have been based on just cause—such as the defendant’s indigence, or the fact that the court has imposed active time. What might the directly affected party say in response? That they just really need the money? That the defendant is not actually indigent?

Finally, the fine and cost provision has an effective date that is different from the restitution provision. The fine and cost provision applies to all cases arising on or after December 1, 2017. I interpret that as, roughly, offenses committed on or after that date. It does not apply to people already awaiting trial or on probation for earlier offenses whose costs or fines are waived after December 1. So, unlike the restitution provision, there will be a little bit of lag time between the law’s effective date and the first time the courts will need to apply it in practice. [In a memo issued on November 13, 2017, the Administrative Office of the Courts interpreted “arising on or after” to include any point at which a court is contemplating waiving costs. That would include older offenses sentenced after December 1, 2017, and perhaps also probation hearings occurring on or after that date.]

I suppose this is one of those posts that raises more questions than answers. Some posts are like that. But it’s at least important to know that these laws, though not effective yet, are on the horizon. In its July 31 memorandum to court officials on court costs and fees, the Office of General Counsel of the Administrative Office of the Courts noted that it will issue additional guidance on the cost waiver provision before it comes into effect.

6 comments on “New Notice Requirements for Waivers and Remissions of Certain Monetary Obligations

  1. Wow. So was the bill titled “An Act to Further Punish Poor People and Ensure that they Probably Will Not be able to Comply with their Court Obligations?”

    It seems to me that the easiest way to waive fees/costs/etc. in an appropriate case would be for a judge to style an order to say that this judgment will take effect on a date 15 days from that day, and that on that date any affected parties may show up on that date and make objection should they so choose, and the clerk is directed to provide them notice of the same.

    • The statute requires the Court to send via first-class postage its notice to the “directly affected” governmental agencies. Since the money goes through the clerk’s office first then who-knows-where a legitimate claim can be made that none of these governmental agencies are “directly affected.” All are indirectly affected. None of the money goes directly to the agencies. The money goes indirectly to the agencies. Since none of the agencies are directly affected, the Court is not required to send first-class mail to those agencies notifying them of the hearing in 15 days over waiver of costs. Obviously this is not what the general assembly had in mind when they concocted this plan to screw poor people, but the general assembly chose the wording. They should have said “agencies receiving” the money or some such rather than “directly affected.”

  2. Couldn’t the presiding judge avoid this lengthy and complicated process by simply converting any costs owed to a civil judgment? Seems to me that this would not trigger any of the notice requirements in this new statute since the costs are not actually being waived, just changing the penalty for non-payment from criminal to civil.

  3. […] under G.S. 7A-350, and—come December 1—notice and hearing for affected parties (discussed here). In that regard it’s in the same family as other some other practices I’ve discussed on the […]

  4. Jamie – the statute says the notice from the court must go to “the address provided for receipt of court costs paid pursuant to the order.” It says singular “address” rather than plural “addresses.” When someone pays the clerk of court for court costs, what does the clerk of court do with the money? Does the clerk send it on to a central processing address from which it is dispersed to the various agencies? If so, then the statute requires only one first-class postage notice to go out per order on conviction of a defendant, not the prohibitively expensive and time-consuming mailing of a dozen or more notices. Also, can’t hundreds of notices be consolidated into one mailing with a list of each case file number? It would still be cumbersome, but a daily mailing of the court calendar with each waiver candidate marked might satisfy this statute.

    Is there an actual “address provided for receipt of court costs paid” or is the money electronically deposited? If there is no actual address provided then compliance with this part of the statute is an impossibility. The court could then provide a blanket notice via e-mail to the NC governmental agencies’ lawyer, the Attorney General, and give notice that all waiver hearings for cases decided at least 15 days from the date of that notice will be heard immediately after judgments and failure to be present in court at that time will be a waiver of the agencies’ right to be heard and make objection.

    Is there any way to send the bill for first-class postage to the general assembly? How about assessing the costs against the State rather than against the Defendant? The statute says the costs must be assessed. The statute does not specify against whom the costs are to be assessed. Common sense tells us the costs are to be assessed against the defendant, however common sense also tells us that an indigent defendant will not be assessed and that defendants with active sentences will not be assessed. Assess the State.

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