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Prepared by Riley Boudreaux.
Broadwater HB No. 629
(KEYWORD, SUMMARY, AND DIGEST as amended by Senate committee
amendments)
REVENUE DEPARTMENT. Establishes the office of debt recovery at the Dept. of
Revenue for the collection of delinquent debts owed to certain governmental entities
DIGEST
Present law provides for the establishment and organization of the Department of Revenue
(DOR) and all of the offices that are part of the department.
Proposed law retains present law and adds the office of debt recovery, hereinafter "office",
within DOR which shall be responsible for the collection of tax payable to DOR and may be
responsible for the collection of delinquent debts, accounts, or claims due on behalf of all
other state agencies which refer delinquent debt to the office for collection, as well as
political subdivisions which enter into formal agreements with the department.
Proposed law requires all debts owed to "agencies" [defined as entities which are authorized
to perform any function of state government in the executive branch] to be referred to either
the attorney general's office or to the office of debt recovery for collection. Requires all
"agencies" which do not have a contract with the attorney general's office for debt collection
on or before January 1, 2014, to refer all delinquent debts to the office for collection when
the debt is final and has been delinquent for 60 days.
Proposed law requires "agencies" to refer "non-final delinquent debts" to the attorney
general’s office for collection when the debt has been delinquent for 60 days pursuant to
referral guidelines established by the attorney general which are incorporated into agreements
between the attorney general and other agencies or pursuant to rules promulgated by the
attorney general pursuant to the Administrative Procedure Act.
"Delinquent debt" is defined as a "final" debt that is 60 days or more past due. "Final" means
the amount due is no longer negotiable and that the debtor has no further right of
administrative or judicial review.
"Non-final delinquent debt” is defined as any debt that an agency has notified a debtor is
owed but the debt remains unpaid, due, or negotiable for a period of 60 days or more and
such debt is not final and the debtor has further administrative or judicial review rights to
challenge the validity of the debt or the amount owed.
Defines "debt" as any legally collectible, liquidated sum due and owing an agency, or due
and owing a person and collectible by any agency, or a judgment, order of the court, or bond
forfeiture which is properly certified by the clerk and which orders the payment of a fine or
other court ordered penalty. Excludes debt due and owing to an agency pursuant to certain
federal program and overpaid unemployment compensation benefits or unpaid contributions
or reimbursements pursuant to Louisiana Employment Security Law.
Proposed law requires the department to charge the debtor a fee not to exceed 25% of the
total delinquent debt liability. Fees collected according to the provisions of proposed law are
to be retained by the office after the debt is collected and be divided in accordance with an
agreement between the office and the Attorney General after payment of costs set forth in the
agreement.
Proposed law requires money collected by the office for delinquent debt to be used solely and
exclusively each fiscal year as follows:
1. Five million dollars per fiscal year for 5 consecutive fiscal years must be appropriated
by the legislature to the Office of State Police for a training academy class. Page 2 of 6
Prepared by Riley Boudreaux.
2. The remainder of the monies collected after the above appropriation must be
transferred to the agencies which referred the delinquent debt to the office in
proportion that the amount of the agency's debt collected bears to the total debt
collected by the office within 30 days after the end of the month in which the money
was collected.
3. After the 5-fiscal-year period all the money must be transferred to the referring
agencies.
The money received by the agencies must be designated as self-generated revenues of the
agency.
Proposed law permits the office to collect delinquent debts owed to political subdivisions
pursuant to a formal agreement with the department.
Proposed law requires that all debts be final and authenticated by the agency or participating
political subdivision prior to being referred to either the office or the attorney general.
Further requires the office to comply with all state and federal law applicable to the
collection of the debt and for the state to assume all liability for its actions without recourse
to the agency or political subdivision owed the debt.
Proposed law provides that if the secretary of DOR determines that the office requires the
additional assistance of legal counsel, the secretary must first seek assistance from the office
of the attorney general. If the attorney general is unable to or declines to offer legal counsel,
the secretary is authorized to contract with a third-party for such services; however, any
contract entered into by the secretary is subject to review by the Legislative Auditor.
Proposed law authorizes the office to use a participating agency's or political subdivision's
statutory collection authority to collect delinquent debts. The office may also use authority
granted in present law regarding offset from income tax refunds or other accounts payable
by the state for any delinquent debt transferred by state agencies or political subdivisions.
Grants the secretary discretion to determine which collection method or combination of
methods is most suitable to collect the delinquent debt.
Proposed law authorizes the office to withhold, offset, levy, garnish, or seize payments of
progressive slot machine annuities and cash gaming winnings in collecting delinquent debt.
Proposed law authorizes the office to submit a request for the suspension, revocation or
denial of any type of professional or other license, permit, or certification to the entity or
body that governs, regulates, or issues them and the office is authorized to "assume the
obligation for the payment of such services in order to collect delinquent debt." The
Louisiana Supreme Court is requested to consider rules and regulations relative to attorneys
licensed to practice law consistent with the proposed law.
Proposed law authorizes state agencies to transmit data to the office deemed necessary to aid
in the collection efforts of the office. Requires the secretary to establish and maintain
centralized electronic debt registry to compile the information provided by state agencies and
participating political subdivisions. The data compiled in the registry shall be available to the
office and the attorney general for cross-referencing and for the identification of debtors
necessary for the collection of delinquent debt; however, all data, records, and files utilized
for debt collection shall be deemed confidential and privileged, and no person shall divulge
or disclose any information obtained from such records and files except in the administration
and enforcement of these provisions. However, except as provided for in tax law
confidentiality provisions or in "any other applicable provision of law", information
concerning the identity of a debtor, the amount of the debt owed, and the amount of any
collections or settlements shall be a public record subject to disclosure under the Public
Records Law.
Proposed law provides that compilation of tax data in the electronic registry by the department
shall not be a violation of present law relative to confidentiality of tax records, and any Page 3 of 6
Prepared by Riley Boudreaux.
information or data gathered by the department and the office may be used for purposes of
collecting tax and non-tax debt.
Proposed law requires the department to promulgate rules and regulations in accordance with
the APA to implement the provisions of proposed law. Further provides that any rule
promulgated by the department shall be construed in favor of the secretary.
Proposed law authorizes the secretary to enter into reciprocal collection and offset of
indebtedness agreements with the federal government.
Proposed law requires the office to evaluate and recommend any uncollectible debt for sale
or securitization in accordance with present law after the office exercises and employs its
collection methods and tools.
Proposed law requires that the operations of the office be subject to annual review by the Cash
Management Board.
Proposed law authorizes the department and the office to establish and use an electronic
"financial institution data match system" for comparison of certain account information held
by financial institutions with the department and office's databases of state tax and state non-
tax debtors against whom an assessment or judgment for debt owed to the state has become
final.
Requires a financial institution or its processor to provide to the department or the office, the
name, record address, social security number or other taxpayer identification number, any
other identifying information, and an average daily account balance for the most recent 30 day
period, for each calendar quarter for each account owner who maintains an account at such
institution and who the office purports is a tax or non-tax debtor.
Requires the department or office to pay a participation fee to each financial institution that
actually receives a data match request file. The participation fee shall be for actual costs
incurred for conducting the data match. However, in order to receive the participation fee,
the financial institution must be FDIC insured and the financial institution must show it has
incurred costs under present law and proposed law. The department or office may require a
financial institution to submit paperwork such as invoices and other documentation to
substantiate the costs that have been incurred. After actual costs are established by a financial
institution, the office shall automatically remit payment to the financial institution on a
quarterly basis without the financial institution having to resubmit additional paperwork each
quarter thereafter.
Provides that if a financial institution assesses a fee to its customer for processing a state tax
or state non-tax levy received from the office or the department, the fee shall be collected by
the financial institution from the proceeds of the customer’s account before any account
proceeds are remitted to the office or the department to satisfy the state tax or state non–tax
levy. Provides that any fees paid according to the provisions of proposed law shall not be
comprised of or constitute any amounts due to a financial institution for its compliance with
present law.
Provides that if a financial institution or its processor has a current data match system
developed or used to comply with the child support data match system, the financial
institution or its processor may use that system to comply with the provisions of proposed law.
Provides that for La. domiciled financial institutions having no branch offices outside the
state, the office or its data match vendor shall ensure that compliance with proposed law and
present law may be accomplished with a single data match file. Louisiana domiciled
institutions having no branch offices outside the state, or their processor, shall not be required
to process multiple data match files.
Provides that a financial institution may, but is not required to, disclose to its depositors or
account holders that the department or the office has the authority to request and receive
certain identifying information for state tax and non-tax debt collection purposes. Page 4 of 6
Prepared by Riley Boudreaux.
Prohibits a financial institution, including its directors, officers, employees, or other agents,
from incurring liability to any person as a result of providing account information to the
department or office in compliance with a request that conforms to the provisions of proposed
law. Further prohibits a financial institution, including any of its directors, officers,
employees, or other agents, from incurring civil or criminal liability for any disclosure of
information made in accordance with proposed law.
Provides that the department or office shall be responsible for the reconciliation and tracking
of data and information regarding the number of sent data match request files, received
completed data match accounts, and amounts paid. The department shall also be responsible
for tracking and reporting all statistical information regarding financial data match activities
to the Commissioner of Administration or his designee every six months and to report the
information to the Joint Legislative Committee on the Budget every session prior to the last
day of each legislative session.
Proposed law requires the department, office, and their designated vendor for the data match
program, to keep all information received from financial institutions confidential, and any
employee, agent or representative of the department, office, and their designated vendor is
prohibited from disclosing that information to any other third party.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 6:333(B) and R.S. 36:451(C); Adds R.S. 6:333(F), R.S. 36:458(H), and R.S.
47:1676 and 1677)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the
original bill.
1. Added authorization for the office to exercise authority pursuant to present law
relative to the suspension or denial of drivers' licenses, the suspension, revocation,
or denial of hunting or fishing licenses, or to withhold, offset, levy, garnish, or
seize payments of progressive slot machine annuities and cash gaming winnings
in collecting delinquent debt.
2. Added authorization for the office to withhold, offset, levy, or garnish gaming
winnings in collecting delinquent debt.
3. Added federal or state taxpayer identification numbers to the information a
referring agency must certify before sending the delinquent debt to the office or
the attorney general for collection.
4. Required the office to evaluate and recommend any uncollectible debt for sale or
securitization after the office exercises its collection methods and tools.
House Floor Amendments to the engrossed bill.
1. Deletes requirement for the secretary of the Dept. of Revenue to waive penalties
which exceed $5,000 receive approval of the board of tax appeals.
2. Adds authority for the secretary of the Dept. of Revenue to promulgate rules in
accordance with the APA including the establishment of a voluntary disclosure
program and the remittance or waiver of any portion of penalties provided by
present law.
3. Changes the date in which state agencies have to enter into contracts with the
Attorney General's office for debt collection in order to avoid sending delinquent
debt to the office of debt collection from January 1, 2013 to July 1, 2013. Page 5 of 6
Prepared by Riley Boudreaux.
4. Adds provision that the term "debt" shall not include legally collectible liquidated
sum due and owning pursuant to certain federal programs, state tax debt, or sums
due on account of overpayment of certain unemployment compensation.
5. Adds requirement that contracts entered into by the secretary for the collection of
delinquent debt on behalf of the state shall be subject to review by the Cash
Management Review Board and subject to audit by the Legislative Auditor.
6. Adds provision that if the secretary determines the office requires the assistance
of additional legal counsel, the secretary shall first seek assistance from the
Attorney General. If the Attorney General declines to offer assistance, the
secretary may contract with a third-party for such services. However, the contract
shall be subject to review by the Cash Management Review Board and subject to
audit by the Legislative Auditor.
7. Establishes the "Debt Recovery Fund", as a special treasury fund for the deposit
of monies collected pursuant to proposed law for the collection of delinquent debt.
Further requires that a portion of the monies in the fund be appropriated to any
state agency which referred its delinquent debt to the office for collection to be
used solely for purposes of federal reimbursements.
8. Provides that compilation of tax data in the electronic registry by the department
shall not be a violation of present law relative to confidentiality of tax records, and
any information or data gathered by the department and the office may be used for
purposes of collecting tax and non-tax debt.
9. Authorizes the establishment of an electronic financial institution data match
system for comparison of certain account information held by financial institutions
with the databases of the department and the office of state tax and non-tax
debtors.
10.Adds provision that a financial institution may, but is not required to, disclose to
its depositors or account holders that the department or the office has the authority
to request and receive certain identifying information for state tax and non-tax
debt collection purposes.
11.Adds prohibition that a financial institution, including its directors, officers,
employees, or other agents, incur liability to any person as a result of providing
account information to the department or office in compliance with a request that
conforms to the provisions of proposed law. Further prohibits a financial
institution, including any of its directors, officers, employees, or other agents,
from incurring civil or criminal liability for any disclosure of information made
in accordance with proposed law.
12.Adds requirement that the department or office to pay a participation fee to each
financial institution that actually receives a data match request file. The
participation fee shall be for actual costs incurred for conducting the data match.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal Affairs
to the reengrossed bill
1. Provides that the office of debt recovery and the office of the attorney general are
to "jointly serve" as collection entities to collect delinquent state debt.
2. Deletes the requirement that the money collected for delinquent debts be deposited
in a Debt Recovery Fund to be appropriated by the legislature, with a requirement
that a "portion" be appropriated to any state agency which referred its delinquent
debt to the office to be used solely for purposes of federal reimbursements. Instead, Page 6 of 6
Prepared by Riley Boudreaux.
requires a 5-year, $5 million appropriation to the Office of State Police for a
training academy class, and the remainder of the money to be transferred to the
agencies which referred the delinquent debt to be designated as their self-generated
revenue.
3. Changes the requirement that the 25% fee collected on the debts be divided equally
between the office and the attorney general after all of the expenses incurred in the
initial establishment of the office and of debt collection in the office of the attorney
general are paid. Instead, requires the fees to be divided in accordance with an
agreement between the office and the Attorney General after payment of costs set
forth in the agreement.
4. Includes as "debt" subject to the proposed law state tax debt collected under Title
47.
5. Changes the date when agencies which do not have a contract with the attorney
general's office for debt collection must refer all 60-day delinquent debts to the
office for collection from July 1, 2013 to January 1, 2014.
6. Requires agencies to refer "non-final delinquent debts" to the attorney general’s
office for collection when the debt has been delinquent for 60 days. Defines "non-
final delinquent debt” as any debt that an agency has notified a debtor is owed but
the debt remains unpaid, due, or negotiable for a period of 60 days or more and the
debt is not final and the debtor has further administrative or judicial review rights
to challenge the validity of the debt or the amount owed.
7. Deletes a specific provision requiring any contract entered into by the secretary of
DOR "for legal services" to be subject to review by the Cash Management Review
Board, but retains a provision requiring board review of any contract entered into
by the secretary "for the collection of delinquent debt on behalf of the state."
8. Restores a requirement in present law that the DOR obtain board of tax appeals
approval for waivers of penalty in excess of $5,000.
9. Deletes a provision which would have authorized the office itself to suspend,
revoke, deny, or request the suspension, revocation, or denial of any license,
professional license, or permit issued, granted, or renewed by the state.
10.Requests the Louisiana Supreme Court to consider rules and regulations relative
to attorneys licensed to practice law consistent with the proposed law on
suspension, revocation, or denial of professional licenses for debt.