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HOUSE BILL NO. 168
INTRODUCED BY B. KASTEN
BY REQUEST OF THE DEPARTMENT OF REVENUE
AN ACT REVISING STATUTES RELATING TO THE COLLECTION OF CERTAIN DEBTS BY THE STATE; TRANSFERRING THE AUTHORITY FOR DEBT COLLECTION FROM THE DEPARTMENT OF ADMINISTRATION TO THE DEPARTMENT OF REVENUE; SPECIFYING A HEARING PROCEDURE FOR COLLECTION OF DEBTS; AUTHORIZING THE DEPARTMENT OF REVENUE TO ENTER INTO AGREEMENTS WITH THE UNITED STATES, WITH OTHER STATES, AND WITH AGENCIES OF OTHER STATES FOR THE OFFSET OF TAXES OWED TO THOSE ENTITIES AGAINST MONTANA TAX REFUNDS; REQUIRING RECIPROCITY IN OFFSET AGREEMENTS; AMENDING SECTIONS 17-4-101, 17-4-105, AND 17-4-111, MCA; AND PROVIDING AN EFFECTIVE DATE AND AN APPLICABILITY DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 17-4-101, MCA, is amended to read:
"17-4-101. Definitions. In this part, the following definitions apply unless the context indicates otherwise:
(1) "Agency" includes:
state offices, departments, divisions, boards, commissions, councils, committees, institutions, university units,
political subdivisions, and other entities or instrumentalities of this state government;
(b) with respect to delinquent taxes that the department is requested to collect, state and local entities whose personal property taxes are collected by the county treasurer; and
(c) the federal internal revenue service.
(2) "Department" means the department of
administration revenue provided for in 2-15-1301."
Section 2. Section 17-4-105, MCA, is amended to read:
"17-4-105. Authority to collect debt -- offsets. (1) Once a debt of an agency has been transferred to the department, the department may collect it. The department may contract with commercial collection agents for recovery of debts owed to agencies.
(2) The department shall, when appropriate, offset any amount due an agency from a person or entity against any amount, including refunds of taxes, owing the person or entity by an agency. The department may not exercise this right of offset until the debtor has first been notified by the department and been given an opportunity for a hearing pursuant to 15-1-211. An offset may not be made against any amount paid out as child support collected by the department of public health and human services. The department shall deduct from the claim and draw warrants for the amounts offset in favor of the respective agencies to which the debt is due and for any balance in favor of the claimant. Whenever insufficient to offset all amounts due the agencies, the amount available must be applied first to debts owed by reason of the nonpayment of child support and then in the manner determined appropriate by the department.
The department of revenue retains the power to offset tax refunds due individuals against taxes owed the state.
The department of revenue may not exercise this right of offset until the taxpayer has been notified by the department of
revenue and been given the opportunity to request a review. (b) Within 30 days following mailing of notification, the taxpayer may request a review of the asserted liability. If a
review is requested, the department of revenue shall conduct an informal review conference, which is not subject to the
contested case procedures of the Montana Administrative Procedure Act. (c) Appeal from the decision of the department of revenue after the review conference may be taken to the state tax
appeal board. (d) A taxpayer is not entitled to a review conference for a tax offset if the tax liability has been the subject matter of any
proceeding conducted for the purpose of determining its validity and a decision made as a result of that proceeding has
become final. The department may enter into an agreement with the federal government to offset against tax refunds
payable by the federal government and pay to this state those taxes or other debts owed to an agency of this state.
(b) (i) The department may enter into an agreement with another state or an agency of another state to offset against tax refunds payable by the other state or agency of the other state and pay to this state those taxes or other debts owed to this state or an agency of this state.
(ii) To facilitate an agreement of the kind authorized by subsection (3)(b)(i), the department may enter into an agreement that allows the other state or agency of the other state to offset against tax refunds payable by this state the whole or part of an amount owed for taxes to the other state or agency of the other state. However, the department may enter into an agreement of the type authorized by this subsection (3)(b)(ii) only if the other state or agency of the other state allows this state or an agency of this state to offset against tax refunds owed by the other state or agency of the other state taxes or other debts owed to this state or an agency of this state.
(c) A state or agency of another state entering into an agreement with the department pursuant to subsection (3)(b)(ii) may not exercise the offset against tax refunds unless the other state or agency of the other state has notified the taxpayer of the taxes due and has given the taxpayer an opportunity for review or appeal of the tax debt. Another state or agency of another state intending to offset taxes shall provide the department with proof of notification and opportunity for review or appeal before the offset is exercised.
(4) (a) A debt owed to the department of public health and human services or being collected by the department of public health and human services on behalf of any person or agency may be offset by the department if the debt is being enforced or collected by the department of public health and human services under Title IV-D of the Social Security Act.
(b) The debt need not be determined to be uncollectible as provided for in 17-4-104 before being transferred to the department for offset. The debt must have accrued through written contract, court judgment, or administrative order.
(c) Within 30 days following the notification provided for in subsection (2), the person owing a debt described in subsection (4)(a) may request a hearing. The request must be in writing and be mailed to the department. The person owing a debt is not entitled to a hearing if the amount of the debt has been the subject matter of any proceeding conducted for the purpose of determining the validity of the debt and a decision made as a result of that proceeding has become final. The hearing must initially be conducted by teleconferencing methods and is subject to the provisions of the Montana Administrative Procedure Act. The department of public health and human services shall adopt rules governing the hearing procedures.
(5) If the department determines that a person or entity has refused or neglected to file a claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of the person or entity. If the claim is approved by the department, the claim has the same force and effect as though filed by the person or entity. The amount due any person or entity from the state or any agency of the state is the net amount otherwise owing the person or entity after any offset, as provided in this section."
Section 3. Section 17-4-111, MCA, is amended to read:
"17-4-111. Right of hearing to aggrieved persons.
Any A person aggrieved from a decision or an action taken under
this part shall have has the right to present his the grievances in the same manner as provided by 17-4-105(3) 17-4-105(4)(c)
and subject to the contested case procedures of the Montana Administrative Procedure Act for taxpayer appeals."
Section 4. Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].
Section 5. Effective date. [This act] is effective July 1, 1999.
Section 6. Applicability. [This act] applies to refunds or payments made after December 31, 1999.
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Latest Version of HB 168 (HB0168.ENR)
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