UNAPPROVED DRAFT BILL -- Subject to Change Without Notice!
BILL NO.
INTRODUCED BY
(Primary Sponsor)
A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING FOR A CENTRAL REVENUE PROCESSING CENTER FOR STATE GOVERNMENT; GENERALLY REVISING THE LAW RELATED TO STATE AGENCY DEBT COLLECTIONS; PROVIDING FOR LIQUIDATED DAMAGES, INTEREST, AND PENALTIES; AMENDING SECTIONS 15-1-708, 17-4-101, 17-4-102, 17-4-103, 17-4-105, 17-4-106, 17-4-107, 17-4-108, 17-4-110, 17-4-111, AND 20-25-312, MCA; AND REPEALING SECTIONS 17-4-104, 17-4-109, 39-51-1307, AND 39-51-3207, MCA."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-1-708, MCA, is amended to read:
"15-1-708. Release of lien. (1) Upon payment in full of the unpaid tax plus penalty, if any, and accumulated interest, the department shall release the lien acquired by filing the warrant for distraint.
(2) Upon partial payment or whenever the department determines that a release or partial release of the lien will facilitate the collection of the unpaid tax, penalty, and interest, the department may release or may partially release the lien acquired by filing the warrant for distraint. The department may release the lien if it determines that the lien is unenforceable.
(3) (a) After making all reasonable efforts to collect unpaid taxes, penalties, and interest on the taxes and penalties, the
department may determine a debt to be uncollectible. Upon determining that a debt is uncollectible, the department may
transfer the debt to the department of administration for collection as provided in 17-4-104.
(b) Subject to approval by the department, reasonable Reasonable fees or costs of collection incurred by the department
of administration may be added to the amount of the debt, including added fees or costs. The debtor is liable for repayment
of the amount of the debt plus fees or costs added pursuant to this subsection. All money collected must be returned to the
department to be applied to the debt, except that all fees or costs collected must be retained by the department of
administration. If less than the full amount of the debt is collected, the department of administration shall retain only a
proportionate share of the collection fees or costs."
Section 2. Section 17-4-101, MCA, is amended to read:
"17-4-101. Definitions. In As used in this part, unless the context clearly indicates otherwise, the following definitions
apply unless the context indicates otherwise:
(1) "Agency" or "state agency" includes means:
(a) all offices, departments, divisions, boards, commissions, councils, committees, institutions, university units, political
subdivisions, and other entities or instrumentalities an agency, as defined in 2-3-102, of this state government. The term
does not include an agency, as defined in 2-3-102, of local 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) "Another state" means a state other than Montana and includes the District of Columbia and an agency of the other state or District of Columbia.
(3) "Debt" means a past-due legally enforceable debt.
(2)(4) "Department" means the department of revenue provided for in 2-15-1301.
(5) "Federal government" means an agency or department of, or person authorized by law to act on behalf of, the government of the United States.
(6) "Local government entity" means a local government entity as defined in 2-7-501.
(7) "Remittance" means a payment.
(8) "Revenue processing center" means the central debt collection and remittance and processing service described in 17-4-103."
Section 3. Section 17-4-102, MCA, is amended to read:
"17-4-102. Settlement of accounts Accounts of persons indebted to or debtors of state. (1) The department may:
(a) examine and settle the accounts of persons indebted to agencies, certify the amount owed, and give the person a discharge;
(b) require a person presenting an account for settlement to be sworn and to answer, orally or in writing, as to any facts relating to the account.
(2) The certificate referred to in subsection (1)(a) must show by whom the payment is to be made, the amount of the payment, and the fund into which the payment is to be deposited. The certificates must be numbered in order, beginning with number 1 at the commencement of each fiscal year.
(3) If the department determines that a person has refused or neglected to file a claim within a reasonable time, the director of the state agency owing the amount shall file the claim on behalf of the person. If the claim is approved by the department, the claim has the same force and effect as if it were filed by the person and may be offset as provided in 17-4-105."
Section 4. Section 17-4-103, MCA, is amended to read:
"17-4-103. Revenue processing center -- Collection collection of claims and processing of remittances by
department. (1) (a) The department may shall:
(a) establish and maintain a revenue processing center to provide central debt collection and remittance processing services for all state agencies;
(b) in cooperation with state agencies, establish policies and a plan for transfer of all debt collection and remittance processing services to the department except those services the department determines should not be transferred because:
(i) performance of the service by the state agency is reasonably necessary for customer convenience;
(ii) transfer would involve costs that substantially outweigh anticipated benefits; or
(iii) transfer would displace existing cost-effective services; and
(c) maintain cost records and bill state agencies for services received.
(2) The department may:
(a) enter into an agreement with a local governmental entity, another state, or the federal government to provide debt collection and remittance processing services;
(b) pay for and allocate to state agencies as part of the services rendered the cost of any performance audit of the revenue processing center performed by or at the direction of the legislative auditor;
(c) facilitate transfer of appropriated funds and custody and control of accounts, equipment, facilities, and employees from the state agencies to the department as may be necessary to implement the revenue processing center; and
(d) accept federal funds and gifts and donations for any purpose provided in this section.
(3) In providing debt collection and remittance processing services, the department may examine the collection of money due an agency and:
(a) institute suits:
(i) in its name for official delinquencies in relation to the assessment, collection, and payment of the revenue;
(ii) against persons who possess public money or property and fail to pay over or deliver the money or property; and
(iii) against debtors of the agencies. the recovery of money or property in
(b) The the courts of the Lewis and Clark county County where the seat of government is located have jurisdiction,
without regard to the residence of the debtor or defendants, over the collection suits authorized by this section.;
(2)(b) state an account with and assess liquidated damages of 25% and interest at the rate of 12% a year, accrued at 1%
a month or fraction of a month from the date of failure, to any person who:
(i) Whenever a person has money or other personal property that belongs to the state by escheat or otherwise or has
been entrusted with the collection, management, or disbursement of money, bonds, or interest accruing from the money or
bonds, belonging to or held in trust by the state,; and
(ii) fails to render an account of the money or personal property to and make settlement with the department within the
time prescribed by law or, when a particular time is not specified, fails to render an account and make settlement or fails to
pay into the state treasury the money belonging to the state, upon being required to do so by the department, within 20 30
days after the requisition, date of written notice by the department shall state an account with that person, charging 25%
damages and interest at the rate of 10% a year from the time of the failure. A copy of the account in a suit is prima facie
evidence of the things stated in the account, but when the department cannot for want of information state an account, the
department may in an action aver that fact and allege generally the amount of money or other property due or belonging to
the state.;
(c) contract with commercial collection agents;
(d) subject to 17-4-105, after written notice affording the person subject to offset an opportunity for hearing as provided in 17-4-111, offset any amount due to, against any amount owed by, one or more state agencies; and
(e) enter into a mutual tax refund offset agreement with the federal government or another state.
(3) (a) The department may assist in the collection of a delinquent account owing to an agency and may separately
charge the agency that transferred the debt for the cost of assistance. The department may designate the percentage of
collected proceeds to be retained for the cost of assistance. The cost of assistance for collecting personal property taxes that
would otherwise be collected by the county treasurer must be allocated in the same manner in which the taxes are
distributed.
(b) A delinquent personal property tax usually collected by the county treasurer may be collected by the department only
on request of the board of county commissioners. The request must be accompanied by proof of the amount of tax due and
proof of the delinquency. The board shall also provide proof that, at least 30 days before making the request, the county has
notified the delinquent taxpayer by mail of the board's intention to request assistance from the department.
(4) The department may provide a collection service for the general purpose of centralizing the collection of all debts
owed to agencies."
Section 5. Section 17-4-105, MCA, is amended to read:
"17-4-105. Authority to collect debt -- Application of funds and 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. Except as provided in subsection (2), the department shall apply a
remittance:
(a) for a debt in the following order:
(i) payment of any administrative or collection fee;
(ii) payment of any accrued interest;
(iii) payment of any accrued penalty; and
(iv) payment of the principal balance of the debt; and
(b) for other than a debt, as directed in any invoice or writing accompanying the remittance or, if no written directions accompany it, as the department determines.
(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. The department may apply a remittance as provided in an agreement to settle or compromise a debt.
(3) (a) If one or more debts is owed to one or more state agencies, local government entities, the federal government, or another state, the department must apply any offset in the following order:
(i) crime victim restitution as provided in 46-18-237;
(ii) child support as provided in Title 40, chapter 5;
(iii) any tax provided by Montana law;
(iv) state agency debt;
(v) local government entity debt;
(vi) federal government debt; and
(vii) debt of another state.
(b) Debts of equal priority must be offset in the order the debts accrued.
(4) An offset may not be made against any amount paid out as child support collected by the department of public health and human services.
(5) The department shall deduct from the claim and draw warrants for the amounts offset in favor of the respective
agencies creditors 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.
(3) (a) 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 6. Section 17-4-106, MCA, is amended to read:
"17-4-106. Agency owed debt to receive all Application of money collected -- exception and remittances
processed. (1) (a) All money Money collected by the department on debts transferred to the department by the various
agencies, except funds collected under 17-4-103(3), must be applied as follows:
(i) if for a state agency, deposited as a deposit to the account or fund of the state agency to which the debt was originally
owed.;
(ii) if for a local government agency A county shall apply a for delinquent personal property tax collection by the
department to the payment of, to the taxpayer's most delinquent personal property taxes or portion of the taxes.; and
(iii) in all other cases, as provided by agreement or in absence of agreement as directed by the local government entity, federal government, or other state to which the debt is owed.
(b) Costs of collection for delinquent personal property tax must be allocated in the same manner the taxes are distributed.
(2) Funds collected under 17-4-103(3) must be deposited in an account in the internal service fund for the cost of
assistance of debt collection by the department. Funds deposited in excess of the amount appropriated for operation of the
debt collection program must be carried forward into the next fiscal year for operation of the debt collection program. Any
excess carried forward into the next fiscal year must be used to reduce the designated percentage of the collected proceeds
charged to the various agencies. A remittance processed by the department must be applied as provided by agreement or in
absence of agreement as directed by the state agency, local government entity, federal government, or other state for which
the remittance is being processed."
Section 7. Section 17-4-107, MCA, is amended to read:
"17-4-107. Writeoff procedures. The department may establish procedures for canceling and writing off accounts
receivable carried on the books of the various a debt of a state agencies agency if the accounts have been transferred to the
department pursuant to 17-4-104 and are that it determines is uncollectible or if the continued pursuance of the collection of
the accounts which would cost the state more than the amount collected."
Section 8. Section 17-4-108, MCA, is amended to read:
"17-4-108. Circumstances under which previously written-off debt may be collected. If a debt previously written
off under 17-4-107 subsequently becomes collectible, the department shall proceed to collect the money due pursuant to
17-4-105(1) and 17-4-106 it as provided in this part."
Section 9. Section 17-4-110, MCA, is amended to read:
"17-4-110. State agencies to adopt rules Rulemaking authority. (1) The department may adopt rules to implement
the revenue processing center and statewide plan provided in 17-4-103.
(2) All state agencies shall adopt rules and forms to participate in and carry out the provisions of this part."
Section 10. Section 17-4-111, MCA, is amended to read:
"17-4-111. Right of hearing to aggrieved persons. (1) (a) A Except as provided in subsection (2), within 30 days of
the date of any notice provided in this part, a person aggrieved from by a decision or an action taken or to be taken under
this part has the right to present the grievances in the same manner as provided by 17-4-105(4)(c) and subject to the
contested case procedures of the Montana Administrative Procedure Act for taxpayer appeals review as provided in
15-1-211.
(b) The department may, and at the request of the applicable state agency, local government entity, federal government, or other state shall, refer the dispute for resolution in accordance with that entity's dispute resolution procedures.
(c) Notwithstanding any other provision in this part, each state agency, local government entity, federal government, and other state retains the authority to resolve a dispute, compromise a claim, end collection action, and refer a matter for civil action.
(2) If a debt has been the subject of any proceeding conducted for the purpose of determining its validity or amount and a decision made as a result of that proceeding has become final, a person owing a debt is not entitled to review to determine its validity or amount."
Section 11. Section 20-25-312, MCA, is amended to read:
"20-25-312. Motor vehicle regulation -- enforcement of regulations -- appeals. (1) The regents may authorize the president of each unit to:
(a) assess fees for parking on campus subject to the approval of the regents after the regents' consultation with the respective student governing body of the unit;
(b) assess fines in accordance with a published schedule for violations of motor vehicle or parking regulations of each
unit in an amount not to exceed $10 per for each offense;
(c) order the removal of vehicles parked in violation of motor vehicle regulations of each unit at the expense of the violator;
(d) establish a system of appeals at each unit concerning parking violations;
(e) withhold the amount of any unpaid parking fine from any amount owing any student, employee, or faculty member,
subject to the provisions of 17-4-105 after written notice affording the person subject to offset an opportunity for hearing as
provided in 17-4-111;
(f) prohibit a student from registering if said student has unpaid parking assessments or fines outstanding resulting from on-campus motor vehicle or parking violations within the previous year.
(2) The proceeds from fines and fees collected shall be remitted to the unit at which collections are made to be used for appropriate maintenance and construction of parking facilities and for traffic control."
NEW SECTION. Section 12. Repealer. Sections 17-4-104, 17-4-109, 39-51-1307, and 39-51-3207, MCA, are repealed.
- END -
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